10-K

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000, OR


            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 0-19529

                                   ALTEON INC.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

                 DELAWARE                                 13-3304550
      -------------------------------              --------------------------
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                  Identification No.)


             170 WILLIAMS DRIVE, RAMSEY, NEW JERSEY           07446
            ---------------------------------------------------------
           (Address of principal executive offices)        (Zip Code)


                                  (201)934-5000
             ------------------------------------------------------
              (Registrant's telephone number, including area code)


           Securities Registered Pursuant to Section 12(b) of the Act:

                                                     Name of Exchange
       Title of Each Class                          On Which Registered
- --------------------------------------            -----------------------
Common Stock, Par Value $.01 per share            American Stock Exchange

           Securities Registered Pursuant to Section 12(g) of the Act:
                                      NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes   X     No
    -----     ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the equity stock held by non-affiliates of the
Registrant, based on the American Stock Exchange closing price of the Common
Stock ($4.35 per share), as of February 28, 2001, was $97,862,680.

At February 28, 2001, 22,537,635 shares of the Registrant's Common Stock, par
value $.01 per share, were outstanding.


                       Documents Incorporated By Reference

  Document                                        Where Incorporated
- ------------------------------                    ------------------
Proxy Statement for 2001                               Part III
Annual Meeting of Stockholders
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                                     PART 1

ITEM 1.     BUSINESS.

OVERVIEW

           We are a product-based biopharmaceutical company engaged in the
discovery and development of oral drugs for the treatment of diseases of aging
and diabetes. Our product candidates represent novel approaches to some of the
largest pharmaceutical markets, such as cardiovascular and kidney diseases. Two
of our compounds are in clinical development; several others are undergoing
pre-clinical testing. These pharmaceutical candidates were developed as a result
of our understanding of the Advanced Glycosylation End-product ("A.G.E.")
pathway, a fundamental pathological process and inevitable consequence of aging
that may result in many medical disorders.

         A.G.E.s are glucose/protein complexes that form as a result of
circulating blood glucose reacting with proteins. These A.G.E. complexes
subsequently interact and bond with other proteins (crosslink), resulting in
"hardened" (stiffened) arteries, toughened tissues and impaired flexibility and
function of many body organs. In healthy individuals, this pathological
A.G.E.-formation process occurs slowly as the body ages. In diabetic patients,
the rate of A.G.E. accumulation and the extent of protein crosslinking are
accelerated because of high glucose levels. We believe that A.G.E.s are a major
factor contributing to many of the disorders of aging and diabetes, including
cardiovascular, kidney and eye diseases.

         Our current research and drug development activities targeting the
A.G.E. pathway take three directions: the breaking of A.G.E. crosslinks between
proteins in order to reverse damage (A.G.E. Crosslink Breakers); the prevention
or inhibition of A.G.E. formation (A.G.E.-Formation Inhibitors); and the
reduction of the A.G.E. burden through a novel class of anti-hyperglycemic
agents, Glucose Lowering Agents, ("GLA"). We believe that we were the first
company to focus on the development of compounds to treat diseases caused by
A.G.E. formation and crosslinking. Since our inception, we have created an
extensive library of novel compounds targeting the A.G.E. pathway, and have
actively pursued patent protection for these discoveries. We have 98 issued
United States patents and over 80 issued foreign patents focused primarily on
A.G.E. technology.

         ALT-711 is our lead product candidate in a class of proprietary
compounds known as A.G.E. Crosslink Breakers. ALT-711 offers the possibility of
the first therapeutic approach to "breaking" A.G.E. crosslinks, the benefit of
which may be to reverse tissue damage caused by aging and diabetes, thereby
restoring flexibility and function. We are initially developing ALT-711 for the
treatment of cardiovascular disease, and have completed a 93-patient,
placebo-controlled safety, efficacy and pharmacology trial of ALT-711, known as
a Phase IIa clinical trial. In January 2001, we announced that these study
results showed that patients who received ALT-711 experienced a statistically
significant (p less than or equal to 0.05) and clinically meaningful reduction
in pulse pressure, defined as the difference between systolic and diastolic
blood pressures. Results also showed a clinically meaningful increase in large
artery compliance, an indicator of greater vascular flexibility and volume
capacity. Additionally, the drug was well tolerated. The results of the Phase
IIa trial were accepted to be presented at the Special Sessions Presentation of
"Late Breaking Clinical Trials" at the American College of Cardiology Annual
Scientific Session in March 2001.

         These positive results suggest that ALT-711 is a novel potential
therapy for isolated systolic hypertension, a disease that occurs as a result of
vascular stiffening due to age or diabetes. We plan to initiate a Phase IIb
efficacy trial to further assess ALT-711's activity in isolated systolic
hypertension ("ISH"). Additionally, we are evaluating potential clinical trials
in other therapeutic indications where the compound may address significant
unmet needs.

         We are actively evaluating product development opportunities from our
library of compounds. Pimagedine, our clinical lead A.G.E.-Formation Inhibitor,
and ALT-946, a pre-clinical lead second-generation A.G.E.-Formation Inhibitor,
are being considered for further development. In addition, we are utilizing our
technical expertise in the field of diabetes to develop compounds focused on
glucose regulation and control. We are evaluating our lead GLA compounds to
determine the most appropriate pre-clinical development course.

         We were incorporated in Delaware in October 1986 under the name
Geritech Inc. Our name was changed to Alteon Inc. in August 1991.


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OUR BUSINESS STRATEGY

         Our strategy is to develop drug candidates from our existing portfolio
of new chemical entities. Because of the novel mechanism of action of our
compounds, we are seeking to position these compounds to address large medical
needs that are unmet by existing therapies. We will seek, as appropriate, to
selectively out-license our drug candidates. As we continue clinical development
of ALT-711, we will determine if it is appropriate to retain development and
marketing rights for one or several indications in North America, while at the
same time continuing to evaluate potential corporate partnerships for the
further development and ultimate marketing of the compound. In addition to
ALT-711, we have identified compounds in multiple chemical classes that we
believe warrant further evaluation and potential development.

MARKETS OF OPPORTUNITY

         The pre-clinical and clinical data generated to date on our
A.G.E.-Formation Inhibitors and A.G.E. Crosslink Breakers demonstrates clear and
consistent findings across several species, including rats, dogs, non-human
primates and man.

         These development and research efforts have led us to an initial focus
on cardiovascular disease, including ISH, as well as complications of diabetes.
Targeting the A.G.E. pathway may impact a number of medical disorders related to
aging and diabetes, thus potentially broadening our markets of opportunity.

Cardiovascular Disease

         According to the American Heart Association, nearly 60 million
Americans have one or more types of cardiovascular disease. Cardiovascular
disease has been the number one killer of Americans since the early 1900's. The
latest World Health Organization - International Society of Hypertension
guidelines for the management of hypertension emphasize the importance of pulse
pressure and arterial stiffness (hardening) as predictors of general
cardiovascular risk. Currently available hypertensive agents reduce pressure on
the vessel wall in such a manner as to lower both systolic and diastolic blood
pressures without affecting pulse pressure. Our approach increases large
arterial elasticity in such a manner as to increase the volume of the large
artery and thereby reduce pulse pressure beyond what would be expected from
restoring the dynamic range of the vessel wall with a reduction in blood
pressure alone. Pharmacologic intervention targeting the stiffness of the
cardiovascular system may decrease the incidence and severity of complications
such as left ventricular hypertrophy and congestive heart failure. Published
studies have shown that a 10mm Hg reduction in pulse pressure correlates with a
35% reduction in cardiovascular mortality.

     Isolated Systolic Hypertension

         ISH is defined as elevated systolic blood pressure (greater than 160mm
Hg) accompanied by normal diastolic blood pressure (less than 90mm Hg). ISH,
which affects over eight million Americans, is primarily a consequence of
age-related stiffening of the large arteries. It is associated with a
significantly increased risk of overall mortality, cardiovascular mortality and
congestive heart failure and is not adequately treated by existing therapies.
The ability of ALT-711 to decrease pulse pressure and increase large artery
compliance (see "A.G.E. Crosslink Breakers - ALT-711") offers an opportunity to
provide a treatment option specifically for ISH. Though other hypertensive
agents are being used to treat ISH, ALT-711 is the first drug to show direct
activity against this condition by targeting stiff vessel disease that causes
this form of hypertension. We believe that because ALT-711 exerts its activity
by a mechanism uniquely different from currently available therapies, its
benefits will be over and above current standard treatment.

Complications of Diabetes

         The Diabetes Control and Complications Trial ("DCCT"), a multi-center
clinical trial conducted by the National Institutes of Health, demonstrated that
elevated blood glucose levels significantly increase the rate of progression of
eye, kidney, blood vessel and nerve complications from diabetes. More than 50%
of people with diabetes in the United States develop diabetic complications that
range from mild to severe.


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     Overt Nephropathy

         Kidney disease is a significant cause of morbidity and mortality in
patients with Type 1 and Type 2 diabetes. It is a chronic and progressive
disease. One of the early signs of kidney damage is microalbuminuria
(characterized by leakage of small amounts of protein into the urine), which
progresses to overt nephropathy (characterized by leakage of large amounts of
protein into the urine) and ultimately to End-Stage Renal Disease ("ESRD"),
advanced kidney disease requiring dialysis. Approximately 34% of patients with
Type 1 diabetes and approximately 10-15% of patients with Type 2 diabetes
develop nephropathy. As of 1995, there were approximately 1,000,000 diabetics
diagnosed with kidney disease in the United States.

         In a Phase II/III trial in diabetic patients with overt nephropathy,
the ACTION trial, Pimagedine therapy showed a statistically significant
reduction in urinary protein excretion, though it did not reach statistical
significance in its primary endpoint, the time to doubling of serum creatinine.
In addition, our pre-clinical candidate, ALT-946, has shown a protective effect
on the kidneys in a pre-clinical study.

     Retinopathy

         Approximately nine out of 10 people with diabetes eventually develop a
complication that affects the eyes known as diabetic retinopathy. Retinopathy
affects the blood vessels inside the eye and can lead to blindness. Each year,
approximately 12,000 to 24,000 people lose their sight because of diabetes. The
incidence and severity of retinopathy increases with the duration of diabetes.
Though not a primary endpoint in the Phase II/III ACTION trial, Pimagedine
therapy did result in a statistically significant reduction in the progression
of retinopathy. In addition, we believe that ALT-711 may have an impact on
retinopathy.

     Cardiovascular Disease

         A significant portion of diabetic individuals develops cardiovascular
disease due to the high levels of blood glucose and A.G.E.s within the body.

Other Diseases

         We are actively evaluating other potential indications for our
compounds, including the treatment of patients on peritoneal dialysis, with
urological conditions, scleroderma and other dermatologic conditions.

OUR TECHNOLOGY:  THE A.G.E. PATHWAY IN AGING AND DIABETES

         A.G.E.s are permanent glucose structures that form when glucose binds
to the surface of proteins. As the body ages, A.G.E. complexes form on proteins
continuously and naturally, though slowly, at a rate dependent upon glucose
levels and on the body's natural ability to clear these pathological structures.
A.G.E. complexes subsequently crosslink to other proteins, causing a progressive
loss of flexibility and function in various tissues, blood vessels and organs.

         The formation and crosslinking of A.G.E.s is a well-known process in
food chemistry, where it is called the Maillard Reaction. The toughening and
discoloration of food during the cooking process and after prolonged storage
occurs, in part, as a result of the formation of complexes between sugars and
the amino acids of proteins.

         The harmful consequences of A.G.E. formation in man was proposed in
1986 by our scientific founders as an outgrowth of a research effort focused on
diabetes. The A.G.E. crosslink has been found to be unique in biology and is
prevalent in animal models of aging and diabetes. Scientific literature suggests
that the formation and crosslinking of A.G.E.s is an inevitable part of the
aging process that leads to a loss of flexibility and function in body tissues,
organs and vessels.

         The A.G.E. pathway may provide the scientific explanation for how and
why many of the medical complications of the aging process occur with higher
frequency and earlier in life in diabetic patients. Diabetic individuals form
excessive amounts of A.G.E.s earlier in life than do non-diabetic individuals,
due primarily to higher levels of blood sugar. For this reason, diabetes may be
viewed as an accelerated form of aging.


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         A.G.E.s and A.G.E. crosslinks are considered to be likely causative
factors in the development of many age-related and diabetic disorders, including
those associated with the cardiovascular and renal systems. For example,
proteins in the body, such as collagen and elastin, which play an important role
in maintaining the elasticity of the cardiovascular system, are prime targets
for A.G.E. crosslinking. This mechanical process can impair the normal function
of contractile organs, such as blood vessels and cardiac muscle, which depend on
flexibility for normal function. Loss of flexibility of the vasculature may lead
to a number of cardiovascular disorders including ISH, which creates increased
workload for the heart and may lead to heart failure.

         The foundation for our technology is the experimental evidence that
intervention and treatment along the pathway towards A.G.E. crosslink formation
would be likely to provide significant benefit in slowing or reversing the
development of the serious pathologies that develop in the diabetic and aging
populations. ALT-711 and Pimagedine are the lead compounds resulting from our
research in this field.

         Studies conducted in animal models of diabetes or aging at numerous
independent institutions worldwide demonstrate that A.G.E.s are a major factor
contributing to many of the disorders of aging and diabetes, including
cardiovascular, kidney and eye diseases, as well as atherosclerosis. Recent
human clinical studies we performed confirm that impacting the A.G.E. pathway
can have a significant beneficial effect on such disease states.

         The following chart illustrates the process of A.G.E. formation and
crosslinking and is qualified by the more detailed description in the text. It
also highlights those areas within the A.G.E. cascade where we are attempting to
offer pharmaceutical agents to intervene therapeutically.

[           NOTE:  THE PRINTED COPY OF THIS FORM 10-K CONTAINS A GRAPHICAL     ]
[           REPRESENTATION OF THE FOLLOWING.  THE "I" REPRESENTS ARROWS        ]
[           POINTING FROM "GLUCOSE LOWERING AGENTS" TO "GLUCOSE + PROTEINS,"   ]
[           FROM "A.G.E.-FORMATION AND CROSSLINK INHIBITORS" TO "A.G.E.S," AND ]
[           FROM "A.G.E. CROSSLINK BREAKERS" TO "CROSSLINKED A.G.E.S"          ]

OUR TECHNOLOGY PLATFORM AND PRODUCT PIPELINE
                                                                            
           Glucose / Proteins   ====>                A.G.E.s   ====>                       Crosslinked A.G.E.s
                   I                                     I                                       I
           Glucose Lowering                        A.G.E. Formation                         A.G.E. Crosslink
                Agents                               and Crosslink                             Breakers
                                                      Inhibitors

- -  New Chemical Class                    -     9 New Chemical Classes              -    4 New Chemical Classes
    (51 Compounds)                             (852 Compounds)                          (375 Compounds)
- -  New Mechanism                         -     New Mechanism                       -    New Mechanism
   -  Improves pancreas function               -  Blocks A.G.E. cascade                 -  Breaks A.G.E. crosslinks
   -  Increases insulin production             -  Improves kidney function              -  Restores vascular function
   -  Restores insulin sensitivity       -     Effect additive to ACE                   -  Restores heart function
                                               Inhibitors                          -    Activity unlike any known
                                                                                        drug
Lead Compounds:

   ALT-4037                                   Pimagedine                               ALT-711
   --------                                   ----------                               -------
   Pre-Clinical Lead                          Phase II/III                             Phase II Candidate
   Type II Diabetes                           Diabetic Disease                         Cardiovascular Disease

                                              ALT-946
                                              -------
                                              Pre-Clinical Lead



         We incurred research and development expenditures of $6,022,000,
$10,598,000 and $24,592,000 for the years ended December 31, 2000, 1999 and
1998, respectively.


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A.G.E. Crosslink Breakers

         By "breaking" A.G.E. crosslinks, these novel classes of compounds may
have an impact on a number of medical disorders where loss of flexibility or
elasticity leads to a loss in function. Our lead clinical candidate, ALT-711,
has demonstrated in a Phase IIa trial the ability to reverse tissue damage and
restore function to the cardiovascular system.

         Additionally, we are evaluating development of the breaker class for
several other indications where A.G.E.s and A.G.E. crosslinking lead to abnormal
function. Early clinical experience in human studies of ALT-711 suggests that
urinary elastic dysfunction (leading to urinary incontinence) is a potential
therapeutic target. The scientific literature also points to the possible
utility of breaker compounds in ophthalmic and dermatological conditions, stiff
joint disorders and treatment of complications in patients undergoing peritoneal
dialysis.

         We have identified four distinct chemical classes of A.G.E. crosslink
breakers, and have a library of more than 375 compounds.

     ALT-711

         Through its unique mechanism of action, ALT-711 is the first compound
that breaks A.G.E.-derived crosslinks between proteins, both in vitro and in
vivo. The compound is under Phase II clinical evaluation in cardiovascular
disease, as well as in various pre-clinical models to assess its potential in a
variety of disease states.

         Studies in animal models in several laboratories around the world have
demonstrated rapid reversal of impaired cardiovascular functions with ALT-711.
In these pre-clinical models, ALT-711 reverses the stiffening of arteries, as
well as stiffening of the heart, that accompanies the development of aging and
diabetes. Pre-clinical studies of ALT-711 conducted by researchers from The
National Institute on Aging and Johns Hopkins Geriatric Center demonstrated the
ability of the compound to significantly reduce arterial stiffness in elderly
Rhesus monkeys. In this primate study, administration of ALT-711 every other day
for three weeks was found to significantly reduce aortic stiffness with the
maximum improvement in vessel wall flexibility occurring at the six-week
evaluation after the end of treatment with ALT-711. Baseline weight, fasting
blood glucose, creatinine and cholesterol did not change after treatment. In a
pre-clinical study of ALT-711 in aged dogs, administration of ALT-711 for one
month resulted in an approximate 40% decrease in age-related ventricular
stiffness, or hardening of the heart. This decrease was accompanied by an
overall improvement in cardiac function. Reductions in blood pressure that have
been observed in animal models of diabetic hypertension suggest that ALT-711
also may prove beneficial in the treatment of systolic hypertension in the
elderly or in the diabetic.

         ALT-711 is a small, easily synthesized compound with a rapid mode of
action. It is well absorbed from an oral tablet formulation. Since June 1998,
five Phase I safety and dose escalation studies have been conducted. These
trials have shown the drug to be well tolerated.

         In April 2000, we initiated a Phase IIa clinical trial of ALT-711 at
nine clinical sites in the United States to evaluate effects of the compound on
the cardiovascular system. This trial was a double blind, placebo-controlled
study evaluating the safety, efficacy and pharmacology of ALT-711. The trial
enrolled 93 patients over the age of 50 with measurably stiffened
cardiovasculature, including systolic blood pressure of at least 140mm Hg and
pulse pressure of at least 60mm Hg. Patients were randomized to receive oral
doses of either 210 mg of ALT-711 or placebo once daily for eight weeks.
Patients were evaluated for cardiovascular elasticity and function as measured
by pulse pressure, cardiovascular compliance, pulse wave velocity and cardiac
output. Under this protocol, ALT-711 treatment was in addition to the best
available therapeutic regimen chosen by the treating physicians.

         In January 2001, we announced that these study results showed that
patients who received ALT-711 experienced a statistically significant (p[less
than, equal to] 0.05) and clinically meaningful reduction in the arterial pulse
pressure, defined as the difference between systolic and diastolic blood
pressures. Results also showed a clinically meaningful increase in large artery
compliance, an indicator of greater vascular flexibility and volume capacity,
using a traditional measurement of the ratio of stroke volume to pulse pressure.
Additionally, the drug was well tolerated. This Phase IIa data was accepted to
be presented at the Special Sessions Presentation of "Late Breaking Clinical
Trials" at the American College of Cardiology Annual Scientific Session in March
2001.

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         Based on the positive results of this trial, we plan to initiate a
Phase IIb efficacy trial of ALT-711. The timing and extent of ALT-711's clinical
development will be determined by our ability to secure additional financing.

A.G.E.-Formation Inhibitors

         A.G.E.-formation inhibitors are designed to prevent glucose/protein
formation and crosslinking. We believe that this class of compounds may have
broad applications in slowing down the key complications of diabetes.

         We have identified nine distinct chemical classes of A.G.E.-formation
inhibitors, encompassing a library in excess of 800 compounds. Further
development of the A.G.E. inhibitor class of compounds is subject to further
funding.

     Pimagedine

         Pimagedine is our lead compound in the A.G.E.-formation inhibitor
class. We conducted a randomized double-blind, placebo-controlled, multi-center,
Phase II/III clinical trial to evaluate the safety and efficacy of Pimagedine in
Type 1 diabetic patients with overt nephropathy, the ACTION I trial. The primary
objective of the trial was to evaluate the safety and efficacy of Pimagedine in
preserving kidney function in Type 1 patients. The trial enrolled 690 patients
at 56 investigational sites in the United States and Canada. Patients were
treated for a minimum of two years and received twice daily oral doses of
Pimagedine, adjusted for kidney function. Under this protocol, Pimagedine
treatment was in addition to the best available therapeutic regimen chosen by
the treating physicians.

         In November 1998, we announced results of an analysis of data from the
ACTION I trial. Although the results showed that Pimagedine reduced the risk of
doubling of serum creatinine, the study's primary endpoint, the data did not
reach statistical significance. However, Pimagedine therapy did result in a
statistically significant and clinically meaningful reduction of urinary protein
excretion. Pimagedine also reduced, to a statistically significant extent,
cholesterol and triglycerides as well as the progression of retinopathy.
Additional data suggested a trend toward improvements in other measures of
kidney function including estimated creatinine clearance and glomerular
filtration rate. The drug was generally well tolerated.

         In addition to evaluating oral Pimagedine in overt nephropathy, we have
completed acute toxicity studies in animals with an intravenous formulation of
Pimagedine. Animal studies have demonstrated that Pimagedine, when given prior
to or after indication of stroke by occlusion of the middle cerebral artery,
reduced the volume of tissue death by 30%. We have filed an investigational new
drug application ("IND") with the United States Food and Drug Administration
("FDA").

         We are actively exploring partnering and regulatory pathways for the
continued development of Pimagedine and expect to pursue development if funding
is obtained.

     ALT-946

         ALT-946 is the pre-clinical lead candidate in our A.G.E.- formation
inhibitor class of compounds. A study of ALT-946 in diabetic rats demonstrated
that ALT-946 had a protective effect on the kidneys, and that ALT-946 was more
potent than Pimagedine in inhibiting A.G.E. crosslinking, both in vitro and in
vivo. We continue to evaluate ALT-946 in pre-clinical testing.

Glucose Lowering Agents

         High glucose levels (hyperglycemia of diabetes) accelerate the rate of
A.G.E. formation and crosslinking. Controlling glucose levels has been shown to
slow the rate of progression of diabetic complications. The GLA Program arose
from a search of plant-derived natural products that would exhibit a beneficial
profile of glucose and lipid lowering of Type 2 diabetes. Several pre-clinical
candidates that display these beneficial properties have been evaluated. They
have demonstrated the ability to lower glucose and lipids, restore insulin
sensitivity and stimulate increased insulin production.

         We have identified one chemical class of GLA, which includes more than
50 compounds.

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     ALT-4037

         ALT-4037 has been identified as the pre-clinical lead in the glucose
lowering agent class of compounds. ALT-4037 is a novel compound that lowers
glucose and lipids, restores normal pancreatic sensing of glucose, stimulates
greater production of insulin and restores insulin sensitivity in skeletal
muscle and fat in animal models of Type 2 diabetes. Additional development is
subject to further funding.

CORPORATE STRATEGIC ALLIANCES

Yamanouchi

         We granted to Yamanouchi Pharmaceutical Co., Ltd. ("Yamanouchi") an
exclusive license to commercialize our A.G.E.-related technology in Japan, South
Korea, Taiwan and The People's Republic of China (the "Yamanouchi Territory") in
exchange for royalty payments on net sales, if any. Yamanouchi has the right to
terminate the agreement upon 90 days' prior written notice. This license expires
as to each product in each licensed country upon the later of 15 years from the
date of the agreement, the expiration of the last patent applicable to the
product or five years after the first commercial sale of the product in the
country. Pursuant to the license agreement, we granted to Yamanouchi the right
to manufacture Pimagedine bulk material for sale in the Yamanouchi Territory.

Roche

         In December 1994, we entered into an exclusive licensing arrangement
with Roche Diagnostics GmbH ("Roche") for our technology for diagnostic
applications. Under this alliance, we will be entitled to receive royalties
based on net sales of research and commercial assays developed by Roche and
based on our A.G.E. technology. Roche received exclusive worldwide rights to the
technology for diagnostic applications outside the Yamanouchi Territory. The
agreement gives Roche discretion over commercial development of diagnostic
applications. Roche may terminate the license agreement upon 90 days' prior
written notice.

         Under the agreement, Roche agreed to develop immunoassays to detect
A.G.E.-hemoglobin, ApoB-A.G.E. and A.G.E.-serum protein/peptides. Development of
reagents and formats for the A.G.E. competitive ELISA and a procedure for
measuring hemoglobin-A.G.E. was completed in 1998. This research assay is
currently being evaluated at a number of institutes and medical universities in
Germany. Continuation of the program to adapt these reagents to automated
clinical assays is contingent upon FDA approval of Pimagedine and would advance
along with any product launch of Pimagedine.

Gamida

         In November 1995, we entered into clinical testing and distribution
agreements with Gamida for Life ("Gamida"). Under these agreements, Gamida
conducted, at its own expense, a Phase II multi-site clinical trial in Israel,
in accordance with the protocol developed by us, to evaluate Pimagedine in
patients with diabetes and elevated serum cholesterol levels. Gamida will
receive the exclusive right to distribute Pimagedine, if successfully developed
and approved for marketing, in Israel, Bulgaria, Cyprus, Jordan and South
Africa. The distribution agreement is for a term ending 10 years after the date
of regulatory approval for the sale of Pimagedine in Israel; thereafter, it will
be automatically renewed for successive three-year periods unless terminated by
either party on the last day of the initial or renewal term.

IDEXX

         In June 1997, we entered into a license and supply agreement with IDEXX
Laboratories, Inc. ("IDEXX"), pursuant to which we licensed Pimagedine to IDEXX
as a potential therapeutic in companion animals (dogs, cats and horses) and its
A.G.E. diagnostics technology for companion animal use. IDEXX will be
responsible for the development, licensing and marketing of Pimagedine and
A.G.E. diagnostics for such use on a worldwide basis. We will be entitled to
receive milestone payments and royalties on sales of the licensed products. To
date, IDEXX has not developed any such products.


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HemoMax

         In October 2000, we entered into an agreement with HemoMax, LLC
("HemoMax") for the development of a novel technology designed to increase the
delivery of oxygen to tissues in the body through enhanced blood circulation.
Under the agreement, HemoMax will fund the pre-clinical development of compounds
arising from the technology, and we will directly manage the development
programs. HemoMax has granted us an exclusive right of first refusal to acquire
the HemoMax technology. In addition, based on the achievement of certain
milestones, we will receive 15% ownership of HemoMax. While this technology is
not currently a part of our main technology platform, we entered into this
relationship because it represents an opportunity to participate in the
development of and potentially acquire a technology that complements our
cardiovascular activities with ALT-711.

ACADEMIC RESEARCH AND LICENSE AGREEMENTS

Washington University, St. Louis

         In June 1995, we obtained an exclusive, worldwide, royalty-bearing
license from Washington University for patents covering the use of Pimagedine as
an inhibitor of inducible nitric oxide synthase ("iNOS"). The agreement requires
us to pay certain licensing fees upon the attainment of development milestones
as well as a royalty on net sales or a share of sub-licensing profits on
products covered by the patents. The license also covers patents developed
through any subsequent research collaboration between the parties that we agree
to fund.

The Rockefeller University

         Pursuant to an agreement with Rockefeller University, we have
exclusive, worldwide and perpetual rights to the technology and inventions
relating to A.G.E.s and other protein crosslinking, including those relating to
the complications of aging and diabetes. See "--Patents, Trade Secrets and
Licenses."

The Picower Institute for Medical Research

         Pursuant to an agreement with The Picower Institute, a not-for-profit
biomedical science institution, we have received an exclusive worldwide,
royalty-bearing license for certain commercial health care applications of
A.G.E.-related inventions. See "--Patents, Trade Secrets and Licenses."

MANUFACTURING

         We have no manufacturing facilities for either production of bulk
chemicals or the manufacturing of pharmaceutical dosage forms. We rely on
third-party contract manufacturers to produce the raw materials and chemicals
used as the active drug ingredients in our products used in clinical trials, and
we expect to rely on third parties to perform the tasks necessary to process,
package and distribute these products in finished form.

         We will inspect third-party contract manufacturers and their
consultants to confirm compliance with current Good Manufacturing Practice
("cGMP") required for pharmaceutical products. We believe we will obtain
sufficient quantities of bulk chemicals at reasonable prices to satisfy
anticipated needs. There can be no assurance, however, that we can continue to
meet our needs for supply of bulk chemicals or that manufacturing limitations
will not delay clinical trials or possible commercialization. See "--Corporate
Strategic Alliances."

MARKETING AND SALES

         We plan to market and sell our products, if successfully developed and
approved, directly or through co-promotion or other licensing arrangements with
third parties. Such arrangements may be exclusive or nonexclusive and may
provide for marketing rights worldwide or in a specific market.

         For certain of our products, we have licensed exclusive marketing
rights, formed joint marketing arrangements or granted distribution rights
within specified territories with its corporate partners, Yamanouchi, Roche,
Gamida and IDEXX. See "--Corporate Strategic Alliances."

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PATENTS, TRADE SECRETS AND LICENSES

         Proprietary protection for our product candidates, processes and
know-how is important to our business. We aggressively file and prosecute
patents covering our proprietary technology, and, if warranted, will defend our
patents and proprietary technology. As appropriate, we seek patent protection
for our proprietary technology and products in the United States and Canada and
in key commercial European and Asia/Pacific countries. We also rely upon trade
secrets, know-how, continuing technological innovation and licensing
opportunities to develop and maintain our competitive position.

         As of December 31, 2000, our patent estate of owned and/or licensed
patent rights consisted of 98 issued patents and one allowed United States
patent application, none of which expire prior to 2005, and 30 pending patent
applications in the United States, the majority of which are A.G.E.-related. We
also own or have exclusive rights to over 80 issued patents in Europe, Japan,
Australia and Canada.

         We have four issued United States patents and three issued foreign
patents, including one from the European Patent Office, as well as 22 pending
patent applications in the United States, covering certain novel compounds in
the A.G.E. crosslink breaker category. These patents and additional patent
applications contain compound, composition and method of treatment claims for
several chemical classes of crosslink breaker compounds.

         Pimagedine is not protected by a composition-of-matter patent but is
protected by a series of use patents. In 1992, a United States patent on the use
of Pimagedine was issued to Rockefeller University and subsequently exclusively
licensed to us with claims relating to the inhibition of A.G.E. formation. The
patent claims the new use of a known agent for the treatment of the
complications of aging and diabetes. In 1994, corresponding patents were granted
in France, Germany, Italy, the United Kingdom and other European countries. A
corresponding patent was issued in Japan in 1995. We continue to pursue and
patent chemical analogs of known A.G.E.-formation inhibitors, as well as novel
compounds having potential inhibitory properties.

         We believe that our licensed and owned patents provide a substantial
proprietary base that will allow us and our collaborative partners to
commercialize products in this field. There can be no assurance, however, that
pending or future applications will issue, that the claims of any patents which
do issue will provide any significant appreciation of our technology or that our
directed discovery research will yield compounds and products of therapeutic and
commercial value.

         In 1987, we acquired an exclusive, royalty-free, worldwide license
(including the right to sub-license to others) to issued patents, patent
applications and trade secrets from Rockefeller University relating to the
A.G.E.-formation and crosslinking technology currently under development by us.
Additional patent applications have since been filed on discoveries made in
support of the technology from research conducted at Rockefeller University, The
Picower Institute and our laboratories. Pursuant to our agreement with The
Picower Institute, certain patentable inventions and discoveries relating to
A.G.E. technology have been licensed exclusively to us. In consultation with us,
The Picower Institute is responsible for the worldwide filing and prosecution of
patent applications and maintenance of patents for such inventions. We will
contribute 50% of the cost of such activities.

         We intend to continue to focus our research and development efforts on
the synthesis of novel compounds and on the search for additional therapeutic
applications to expand and broaden our rights within our technological and
patent base. We are also prepared to in-license additional technology that may
be useful in building our proprietary position.

         Where appropriate, we utilize trade secrets and unpatentable
improvements to enhance our technology base and improve our competitive
position. We require all employees, scientific consultants and contractors to
execute confidentiality agreements as a condition of engagement. There can be no
assurance, however, that we can limit unauthorized or wrongful disclosures of
unpatented trade secret information.

         We believe that our estate of licensed and owned issued patents, if
upheld, and pending applications, if granted and upheld, will be a substantial
factor in our success. The patent positions of pharmaceutical firms, including
ours, are generally uncertain and involve complex legal and factual questions.
Consequently, even though we are currently prosecuting such patent applications
in the United States and foreign patent offices, we do not know whether any of
such applications will result in the issuance of any additional patents or, if
any additional patents are


                                       10
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issued, whether the claims thereof will provide significant proprietary
protection or will be circumvented or invalidated.

         Competitors or potential competitors have filed for or have received
United States and foreign patents and may obtain additional patents and
proprietary rights relating to compounds or processes competitive with those of
ours. Accordingly, there can be no assurance that our patent applications will
result in patents being issued or that, if issued, the claims of the patents
will afford protection against competitors with similar technology; nor can
there be any assurance that others will not obtain patents that we would need to
license or circumvent. See "--Competition."

         Our success will depend, in part, on our ability to obtain patent
protection for its products, preserve our trade secrets and operate without
infringing on the proprietary rights of third parties. There can be no assurance
that our current patent estate will enable us to prevent infringement by third
parties or that competitors will not develop competitive products outside the
protection that may be afforded by the claims of such patents. To the extent we
rely on trade secrets and unpatented know-how to maintain our competitive
technological position, there can be no assurance that others may not develop
independently the same or similar technologies. Failure to maintain our current
patent estate or to obtain requisite patent and trade secret protection, which
may become material or necessary for product development, could delay or
preclude us or our licensees or marketing partners from marketing their products
and could thereby have a material adverse effect on our business, financial
condition and results of operations.

GOVERNMENT REGULATION

         We and our products are subject to comprehensive regulation by the FDA
in the United States and by comparable authorities in other countries. These
national agencies and other federal, state and local entities regulate, among
other things, the pre-clinical and clinical testing, safety, effectiveness,
approval, manufacturing, labeling, marketing, export, storage, record keeping,
advertising and promotion of our products.

         The process required by the FDA before our products may be approved for
marketing in the United States generally involves (i) pre-clinical new drug
laboratory and animal tests, (ii) submission to the FDA of an IND, which must
become effective before clinical trials may begin, (iii) adequate and
well-controlled human clinical trials to establish the safety and efficacy of
the drug for its intended indication, (iv) submission to the FDA of a new drug
application ("NDA") and (v) FDA review of the NDA in order to determine, among
other things, whether the drug is safe and effective for its intended uses.
There is no assurance that the FDA review process will result in product
approval on a timely basis, if at all.

         Pre-clinical tests include laboratory evaluation of product chemistry
and formulation, as well as animal studies to assess the potential safety and
efficacy of the product. Certain pre-clinical tests are subject to FDA
regulations regarding current Good Laboratory Practices. The results of the
pre-clinical tests are submitted to the FDA as part of an IND and are reviewed
by the FDA prior to the commencement of clinical trials or during the conduct of
the clinical trials, as appropriate.

         Clinical trials are conducted under protocols that detail such matters
as the objectives of the study, the parameters to be used to monitor safety and
the efficacy criteria to be evaluated. Each protocol must be submitted to the
FDA as part of the IND. Further, each protocol must be reviewed and approved by
an institutional review board.

         Clinical trials are typically conducted in three sequential phases,
which may overlap. During Phase I, when the drug is initially given to human
subjects, the product is tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion. Phase II involves studies in a limited
patient population to (i) evaluate preliminarily the efficacy of the product for
specific, targeted indications, (ii) determine dosage tolerance and optimal
dosage and (iii) identify possible adverse effects and safety risks. Phase
II/III trials are undertaken in order to further evaluate clinical efficacy and
to further test for safety within an expanded patient population. The FDA may
suspend clinical trials at any point in this process if it concludes that
clinical subjects are being exposed to an unacceptable health risk.

         We will need FDA approval of our products, including a review of the
manufacturing processes and facilities used to produce such products before such
products may be marketed in the United States. The process of obtaining
approvals from the FDA can be costly, time-consuming and subject to
unanticipated delays. There can be no assurance that the FDA will grant
approvals of our proposed products, processes or facilities on a timely basis,
if


                                       11
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at all. Any delay or failure to obtain such approvals would have a material
adverse effect on our business, financial condition and results of operations.
Moreover, even if regulatory approval is granted, such approval may include
significant limitations on indicated uses for which a product could be marketed.

         Among the conditions for NDA approval is the requirement that the
prospective manufacturer's manufacturing procedures conform to cGMP
requirements, which must be followed at all times. In complying with those
requirements, manufacturers (including a drug sponsor's third-party contract
manufacturers) must continue to expend time, money and effort in the area of
production and quality control to ensure compliance. Domestic manufacturing
establishments are subject to periodic inspections by the FDA in order to
assess, among other things, cGMP compliance. To supply a product for use in the
United States, foreign manufacturing establishments must comply with cGMP and
are subject to periodic inspection by the FDA or by regulatory authorities in
certain of such countries under reciprocal agreements with the FDA.

         Both before and after approval is obtained, a product, its manufacturer
and the holder of the NDA for the product are subject to comprehensive
regulatory oversight. Violations of regulatory requirements at any stage,
including the pre-clinical and clinical testing process, the approval process,
or thereafter (including after approval) may result in various adverse
consequences, including the FDA's delay in approving or refusal to approve a
product, withdrawal of an approved product from the market and/or the imposition
of criminal penalties against the manufacturer and/or NDA holder. In addition,
later discovery of previously unknown problems may result in restrictions on
such product, manufacturer or NDA holder, including withdrawal of the product
from the market. Also, new government requirements may be established that could
delay or prevent regulatory approval of our products under development.

         The FDA has implemented accelerated approval procedures for certain
pharmaceutical agents that treat serious or life-threatening diseases and
conditions, especially where no satisfactory alternative therapy exists. We
cannot predict the ultimate impact, however, of the FDA's accelerated approval
of procedures on the timing or likelihood of approval of any of our potential
products or those of any competitor. In addition, the approval of a product
under the accelerated approval procedures may be subject to various conditions,
including the requirement to verify clinical benefit in post-marketing studies,
and the authority on the part of the FDA to withdraw approval under streamlined
procedures if such studies do not verify clinical benefit.

         For marketing outside the United States, we will have to satisfy
foreign regulatory requirements governing human clinical trials and marketing
approval for drugs and diagnostic products. The requirements governing the
conduct of clinical trials, product licensing, pricing and reimbursement vary
widely from country to country. We do not currently have any facilities or
personnel outside of the United States.

         In addition to regulations enforced by the FDA, we are also subject to
regulation under the Occupational Safety and Health Act, the Environmental
Protection Act, the Toxic Substances Control Act, the Resource Conservation and
Recovery Act and other present and potential future federal, state or local
regulations. Our research and development involves the controlled use of
hazardous materials, chemicals and various radioactive compounds. Although we
believe that our safety procedures for handling and disposing of such materials
comply with the standards prescribed by state and federal regulations, the risk
of accidental contamination or injury from these materials cannot be completely
eliminated. In the event of such an accident, we could be held liable for any
damages that result and any such liability could exceed our resources.

COMPETITION

         We believe that A.G.E.s are a major factor contributing to many of the
disorders of aging and diabetes, including cardiovascular, kidney and eye
diseases. We are aware of several biotechnology companies that are developing
A.G.E.-formation inhibitors. We have no knowledge of any company that has an
A.G.E. crosslink breaker compound in clinical development. Many companies are
pursuing research and development of compounds for cardiovascular and kidney
diseases and the lowering of glucose levels.

         Many of our potential competitors have substantially greater financial,
technical and human resources than ours and may be better equipped to develop,
manufacture and market products. In addition, many of these companies have
extensive experience in pre-clinical testing and human clinical trials. These
companies may develop and introduce products and processes competitive with or
superior to ours.

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         Our competition will be determined, in part, by the potential
indications for which our compounds are developed and ultimately approved by
regulatory authorities. For certain of our potential products, an important
factor in competition may be the timing of market introduction of our or our
competitors' products. Accordingly, the relative speed with which we can develop
products, complete the clinical trials and approval processes and supply
commercial quantities of the products to the market are important competitive
factors. We expect that competition among products approved for sale will be
based on, among other things, product efficacy, safety, reliability,
availability, price and patent position. Our competitive position also depends
upon our ability to attract and retain qualified personnel, obtain protection or
otherwise develop proprietary products or processes and secure sufficient
capital resources.

         A broad range of drugs is under development that could reduce or
eliminate the market for any product developed by us. For example, competitive
drugs based on other therapeutic mechanisms may be efficacious in treating
cardiovascular disease or diabetic complications. The development by others of
non-A.G.E.-related treatment modalities could render our products
non-competitive or obsolete. Therapeutic approaches being pursued by others
include curing cardiovascular disease or diabetic complications via gene therapy
or cell transplantation, as well as pharmaceutical intervention with agents such
as the aldose reductase inhibitors.

         Angiotensin converting enzyme inhibitors, angiotensin receptor
blockers, calcium channel blockers, beta-blockers and diuretics are effective
treatments for essential hypertension, a disease characterized by increased
peripheral vascular resistance (essential hypertension closely related to
diastolic blood pressure). ISH, characterized by increased stiffness of the
large arteries, is not usually associated with increased peripheral vascular
resistance. In the absence of any marketed products that address the underlying
pathology of ISH patients, treatments approved for essential hypertension are
currently being prescribed to treat hypertension in these patients. However,
these agents are of limited value where stiffness of the large arteries is the
underlying pathology.

         Results of the DCCT showed that tight glucose control reduced the
incidence of diabetic complications. Numerous companies are pursuing other
methods to manage glucose control and to reduce the incidence of diabetic
complications. In addition, several companies have initiated research with drugs
that inhibit vascularization as a potential treatment of diabetic retinopathy.
In the event one or more of these initiatives are successful, the market for
some of our products may be reduced or eliminated.

MEDICAL AND CLINICAL ADVISORS

         Our Medical and Clinical Advisors consist of individuals with
recognized expertise in the medical and pharmaceutical science and related
fields who advise us about present and long-term scientific planning, research
and development. These advisors consult and meet with our management informally
on a frequent basis. All advisors are employed by employers other than us and
may have commitments to, or consulting or advisory agreements with, other
entities that may limit their availability to us. These companies may also be
competitors of ours. The advisors have agreed, however, not to provide any
services to any other entities that might conflict with the activities that they
provide us. Each member also has executed a confidentiality agreement for our
benefit.

         The following persons are Medical and Clinical Advisors:

         George L. Bakris, M.D., F.A.C.P., F.C.P., Professor of Preventive and
         Internal Medicine, Vice Chairman, Department of Preventive Medicine and
         Director, Hypertension/Clinical Research Center, Rush-Presbyterian/St.
         Luke's Medical Center; President, American College of Clinical
         Pharmacology.

         Leslie Z. Benet, Ph.D., Professor UCSF, School of Pharmacy, Department
         of Biopharmaceutical Sciences; Chairman of the Board, AvMax, Inc.;
         former Chairman, Department of Biopharmaceutical Sciences of UCSF.

         Michael A. Brownlee, M.D., Anita and Jack Saltz Professor of Diabetes
         Research, Departments of Medicine and Pathology, Albert Einstein
         College of Medicine.

         Edward D. Frohlich, M.D., Distinguished Scientist of the Alton Ochsner
         Medical Foundation; Professor of Medicine and Physiology at Louisiana
         State University; Clinical Professor of Medicine and Adjunct Professor
         of Pharmacology at Tulane University; President, Society of Geriatrich
         Cardiology.

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   14
         Richard J. Glassock, M.D., M.A.C.P., Professor Emeritus, UCLA School of
         Medicine; Past-President, National Kidney Foundation; Past-President,
         American Society of Nephrology.

         Jan Lessem, M.D., Ph.D., F.A.C.C., Chief Medical Officer and Vice
         President, Clinical Research and Development, OraPharma, Inc.; former
         Vice President and Corporate Officer, Drug Strategy and Medical
         Director, Takeda America, Inc.; former Director of Clinical
         Investigations, SmithKline Beecham Pharmaceuticals.

         Lawrence Resnick, M.D., Professor of Medicine, Division of
         Hypertension, New York Presbyterian Hospital/Weill Medical College of
         Cornell Medical Center.

         Mark E. Williams, M.D., Director of Dialysis, Joslin Diabetes Center;
         Chairman, National Scientific Council on Diabetic Kidney Disease,
         National Kidney Foundation.

EMPLOYEES

         As of February 28, 2001, we employed 26 persons (eight of whom held a
Ph.D., M.D. or other advanced degree), of whom 13 were engaged in research and
development and 13 were engaged in administration and management. We believe
that we have been successful in attracting skilled and experienced personnel.
Our employees are not covered by collective bargaining agreements, but all
employees are covered by confidentiality agreements. We believe that our
relationship with our employees is good.

FORWARD-LOOKING STATEMENTS AND CAUTIONARY STATEMENTS

         Statements in this Form 10-K that are not statements or descriptions of
historical facts are "forward-looking" statements under Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 and are subject to numerous risks and
uncertainties. These forward-looking statements and other forward-looking
statements made by us or our representatives are based on a number of
assumptions. The words "believe," "expect," "anticipate," "intend," "estimate"
or other expressions, which are predictions of or indicate future events and
trends and which do not relate to historical matters, identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements as they involve risks and uncertainties, and actual
results could differ materially from those currently anticipated due to a number
of factors, including those set forth in this section and elsewhere in this Form
10-K. These factors include, but are not limited to, the risks set forth below.
The forward-looking statements represent our judgment and expectations as of the
date of this Report. We assume no obligation to update any such forward-looking
statements.

WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT ADDITIONAL FUNDING TO MEET OUR NEEDS OR
TO ALLOW US TO CONTINUE THE RESEARCH, PRODUCT DEVELOPMENT, PRE-CLINICAL TESTING
AND CLINICAL TRIALS OF OUR PRODUCT CANDIDATES.

         We anticipate that our existing available cash and cash equivalents and
short-term investments will be adequate to satisfy our working capital
requirements for our current operations into 2002. We will require substantial
new funding in order to continue the research, product development, pre-clinical
testing and clinical trials of our product candidates, including ALT-711 and
Pimagedine. We will also require additional funding for operating expenses, the
pursuit of regulatory approvals for our product candidates and the establishment
of marketing and sales capabilities. Our future capital requirements will depend
on many factors, including continued scientific progress in our research and
development programs, the size and complexity of these programs, progress with
pre-clinical testing and clinical trials, the time and costs involved in
obtaining regulatory approvals, the costs involved in filing, prosecuting and
enforcing patent claims, competing technological and market developments, the
establishment of additional collaborative arrangements, the cost of
manufacturing arrangements, commercialization activities and the cost of product
in-licensing and strategic acquisitions, if any. We cannot be certain that our
cash reserves and other liquid assets will be adequate to satisfy our capital
and operating requirements.

         We intend to seek funding through arrangements with corporate
collaborators and through public or private sales of our securities, including
equity securities, when and if conditions permit. In addition, we may pursue
opportunities to obtain debt financing, including capital leases, in the future.
We cannot be certain, however, that additional funding will be available on
reasonable terms, if at all. Any additional equity financing would be dilutive
to our stockholders. If adequate funds are not available, we may be required to
curtail significantly or eliminate one or more of our research and development
programs. If we obtain funds through arrangements with collaborative partners or
others, we may be required to relinquish rights to certain of our technologies
or product candidates.

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WE MAY NOT SUCCESSFULLY DEVELOP OR DERIVE REVENUES FROM ANY PRODUCTS.

         All of our product candidates are in research or clinical development.
We cannot be certain that we will succeed in the development and marketing of
any therapeutic or diagnostic product. To achieve profitable operations, we
must, alone or with others, successfully identify, develop, introduce and market
proprietary products. Such products will require significant additional
investment, development and pre-clinical and clinical testing prior to potential
regulatory approval and commercialization.

         We have not yet requested or received regulatory approval for any
product from the FDA or any other regulatory body. Before obtaining regulatory
approvals for the commercial sale of any of our products under development, we
must demonstrate through pre-clinical studies and clinical trials that the
product is safe and effective for use in each target indication. The results
from pre-clinical studies and early clinical trials may not be predictive of
results that will be obtained in large-scale testing, and we cannot be certain
that any clinical trials we undertake will demonstrate sufficient safety and
efficacy to obtain the requisite regulatory approvals or will result in
marketable products.

         The development of new pharmaceutical products is highly uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early stages of development may not reach the market for a number
of reasons. Potential products may be found ineffective or cause harmful side
effects during pre-clinical testing or clinical trials, fail to receive
necessary regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical, fail to achieve market acceptance or be precluded from
commercialization by proprietary rights of third parties. We cannot be certain
that we will undertake additional clinical trials or that our product
development efforts will be successfully completed, that required regulatory
approvals can be obtained or that any products, if introduced, will be
successfully marketed or achieve customer acceptance. We do not expect any of
our products, including ALT-711 and Pimagedine, to be commercially available for
a number of years, if at all.

WE MAY NEVER GENERATE PROFITS.

         All of our revenues to date have been generated from collaborative
research agreements and financing activities, or interest income earned on these
funds. We have not received any revenues from product sales. We cannot be
certain that we will realize product revenues on a timely basis, if at all.

         At December 31, 2000, we had an accumulated deficit of $134,011,000. We
anticipate that we will incur substantial, potentially greater losses in the
future. We cannot be certain that our products under development will be
successfully developed or that our products, if successfully developed, will
generate revenues sufficient to enable us to earn a profit. We expect to incur
substantial additional operating expenses over the next several years as our
research, development and clinical trial activities increase. We do not expect
to generate revenues from the sale of products, if any, for a number of years.
Our ability to achieve profitability depends, in part, on our ability to enter
into agreements for product development, obtain regulatory approval for our
products and develop the capacity or enter into agreements, for the manufacture,
marketing and sale of any products. We cannot be certain that we will obtain
required regulatory approvals, or successfully develop, manufacture,
commercialize and market product candidates or that we will ever achieve product
revenues or profitability.

         Based on the performance of our stock, we repriced certain employee
stock options on February 2, 1999, in order to bolster employee retention. As a
result of this repricing, options to purchase 1.06 million shares of stock were
repriced and certain vesting periods related to these options were modified or
extended. This repricing may have a material adverse impact on future financial
performance based on an amendment to the Accounting Principals Board Opinion No.
25 ("APB Opinion No. 25"), "Accounting for Stock Issued to Employees." This
amendment requires us to record compensation expense, which is adjusted every
quarter, for increases or decreases in the fair market value of the repriced
options based on changes in our stock price from the value at July 1, 2000,
until the repriced options are exercised, forfeited or expire.

WE MAY NOT BE ABLE TO FORM AND MAINTAIN THE COLLABORATIVE RELATIONSHIPS THAT OUR
BUSINESS STRATEGY REQUIRES.

         Our strategy for developing and deriving revenues from our products
depends, in large part, upon entering into arrangements with research
collaborators, corporate partners and others.

         We have established collaborative arrangements with Yamanouchi, Gamida,
Roche and IDEXX with respect to the development of drug therapies and
diagnostics utilizing our scientific platforms. To succeed, we will have to


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develop additional relationships. We are seeking to establish new collaborative
relationships to provide the funding necessary for continuation of our product
development, but we cannot be certain that such effort will be successful. If we
are unable to enter into or manage additional collaborations, our programs may
suffer and we may be unable to develop products.

OUR DEPENDENCE ON COLLABORATIVE RELATIONSHIPS MAY LEAD TO DELAYS IN PRODUCT
DEVELOPMENT AND DISPUTES OVER RIGHTS TO TECHNOLOGY.

         We will, in some cases, be dependent upon outside partners to conduct
pre-clinical testing and clinical trials and to provide adequate funding for our
development programs. Our corporate partners may have all or a significant
portion of the development and regulatory approval responsibilities. Failure of
the corporate partners to develop marketable products or to gain the appropriate
regulatory approvals on a timely basis, if at all, would have a material adverse
effect on our business, financial condition and results of operations.

         In most cases, we will not be able to control the amount and timing of
resources that our corporate partners devote to our programs or potential
products. If any of our corporate partners breached or terminated its agreements
with us or otherwise failed to conduct its collaborative activities in a timely
manner, the pre-clinical or clinical development or commercialization of product
candidates or research programs could be delayed, and we would be required to
devote additional resources to product development and commercialization or
terminate certain development programs.

         We cannot be certain that disputes will not arise in the future with
respect to the ownership of rights to any technology we develop with third
parties. These and other possible disagreements between us and collaborators
could lead to delays in the collaborative research, development or
commercialization of product candidates or could require or result in litigation
or arbitration, which would be time-consuming and expensive and would have a
material adverse effect on our business, financial condition and results of
operations.

         Any corporate partners we have may develop, either alone or with
others, products that compete with the development and marketing of our
products. Competing products, either developed by the corporate partners or to
which the corporate partners have rights, may result in their withdrawal of
support with respect to all or a portion of our technology, which would have a
material adverse effect on our business, financial condition and results of
operations.

WE MAY NOT BE ABLE TO PROTECT THE PROPRIETARY RIGHTS THAT ARE CRITICAL TO OUR
SUCCESS.

         Our success will depend on our ability to obtain patent protection for
our products, preserve our trade secrets, prevent third parties from infringing
upon our proprietary rights and operate without infringing upon the proprietary
rights of others, both in the United States and abroad.

         We cannot be certain that competitors will not develop competitive
products outside the protection that may be afforded by the claims of our
patents. We are aware that other parties have been issued patents and have filed
patent applications in the United States and foreign countries with respect to
other agents which impact A.G.E. or A.G.E. crosslink formation.

         The degree of patent protection afforded to pharmaceutical inventions
is uncertain and our potential products are subject to this uncertainty.
Pimagedine is not a novel compound and is not covered by a composition-of-matter
patent. The patents covering Pimagedine are use patents containing claims
covering therapeutic indications and the use of Pimagedine to inhibit A.G.E.
formation. Competitors may develop and commercialize Pimagedine or
Pimagedine-like products for indications outside of the protection provided by
the claims of our use patents. Physicians, pharmacies and wholesalers could then
substitute for our Pimagedine products. Substitution for our Pimagedine products
would have a material adverse effect on our business, financial condition and
results of operations. Use patents may afford a lesser degree of protection in
certain foreign countries due to their patent laws. In addition, although we
have several patent applications pending to protect proprietary technology and
potential products, we cannot be certain that these patents will be issued, that
the claims of any patents which do issue will provide any significant protection
of our technology or products, or that we will enjoy any patent protection
beyond the expiration dates of our currently issued patents.

         We also rely upon unpatented trade secrets and improvements, unpatented
know-how and continuing technological innovation to maintain, develop and expand
our competitive position, which we seek to protect, in


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part, by confidentiality agreements with our corporate partners, collaborators,
employees and consultants. We also have invention or patent assignment
agreements with our employees and certain, but not all, corporate partners and
consultants. We cannot be certain that relevant inventions will not be developed
by a person not bound by an invention assignment agreement. We cannot be certain
that binding agreements will not be breached, that we would have adequate
remedies for such breach, or that our trade secrets will not otherwise become
known to or be independently discovered by competitors.

WE CANNOT BE CERTAIN THAT REGULATORY APPROVALS WILL BE OBTAINED FOR OUR
PRODUCTS.

         Our research, pre-clinical testing and clinical trials of our product
candidates are, and the manufacturing and marketing of our products will be,
subject to extensive and rigorous regulation by numerous governmental
authorities in the United States and in other countries where we intend to test
and market our product candidates.

         Prior to marketing, any product we develop must undergo an extensive
regulatory approval process. This regulatory process, which includes
pre-clinical testing and clinical trials, and may include post-marketing
surveillance, of each compound to establish its safety and efficacy, can take
many years and can require the expenditure of substantial resources. Data
obtained from pre-clinical and clinical activities is susceptible to varying
interpretations that could delay, limit or prevent regulatory approval. In
addition, we may encounter delays or rejections based upon changes in FDA policy
for drug approval during the period of product development and FDA regulatory
review of each submitted NDA. We may encounter similar delays in foreign
countries. We cannot be certain that regulatory approval will be obtained for
any drugs we develop. Moreover, regulatory approval may entail limitations on
the indicated uses of the drug. Further, even if regulatory approval is
obtained, a marketed drug and its manufacturer are subject to continuing review
and discovery of previously unknown problems with a product or manufacturer
which may have adverse effects on our business, financial condition and results
of operations, including withdrawal of the product from the market. Violations
of regulatory requirements at any stage, including pre-clinical testing and
clinical trials, the approval process or post-approval, may result in various
adverse consequences including the FDA's delay in approving, or its refusal to
approve, a product withdrawal of an approved product from the market and the
imposition of criminal penalties against the manufacturer and NDA holder. None
of our products has been approved for commercialization in the United States or
elsewhere. We cannot be certain that we will be able to obtain FDA approval for
any products. Failure to obtain requisite governmental approvals or failure to
obtain approvals of the scope requested will delay or preclude our licensees or
marketing partners from marketing our products or limit the commercial use of
such products and will have a material adverse effect on our business, financial
condition and results of operations.

WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH BIOTECHNOLOGY COMPANIES AND
ESTABLISHED PHARMACEUTICAL COMPANIES IN THE DEVELOPMENT AND MARKETING OF CURES
AND THERAPIES FOR DIABETES, CARDIOVASCULAR DISEASES AND THE OTHER CONDITIONS FOR
WHICH WE SEEK TO DEVELOP PRODUCTS.

         We are engaged in pharmaceutical fields characterized by extensive
research efforts and rapid technological progress. Many established
pharmaceutical and biotechnology companies with resources greater than ours are
attempting to develop products that would be competitive with our products.
Other companies may succeed in developing products that are safer, more
efficacious or less costly than any we may develop and may also be more
successful than us in production and marketing. Rapid technological development
by others may result in our products becoming obsolete before we recover a
significant portion of the research, development or commercialization expenses
incurred with respect to those products.

         Certain technologies under development by other pharmaceutical
companies could result in a cure for diabetes or the reduction of the incidence
of diabetes and its complications. For example, a number of companies are
investigating islet cell transplantation as a possible cure for Type 1 diabetes.
Results of a study conducted by the National Institutes of Health, known as the
DCCT, published in 1993, showed that tight glucose control reduced the incidence
of diabetic complications. Several pharmaceutical companies have introduced new
products for glucose control for the management of hyperglycemia in Type 2
diabetes. In addition, several large companies have initiated or expanded
research, development and licensing efforts to build a diabetic pharmaceutical
franchise focusing on diabetic nephropathy, neuropathy, retinopathy and related
conditions. An example of this is research seeking anti-angiogenesis drugs for
the potential treatment of diabetic retinopathy. It is possible that one or more
of these initiatives may reduce or eliminate the market for some of our
products.

                                       17
   18
         In addition, a broad range of cardiovascular drugs are under
development by many pharmaceutical and biotechnology companies. It is possible
that one or more of these initiatives may reduce or eliminate the market for
some of our products.

EFFORTS TO REDUCE HEALTH CARE COSTS MAY AFFECT OUR OPERATIONS.

         Our business, financial condition and results of operations may be
materially adversely affected by the continuing efforts of government and
third-party payers to contain or reduce the costs of health care through various
means. For example, in certain foreign markets, pricing and/or profitability of
prescription pharmaceuticals are subject to government control. In the United
States, we expect that there will continue to be federal and state initiatives
to control and/or reduce pharmaceutical expenditures. In addition, increasing
emphasis on managed care in the United States will continue to put pressure on
pharmaceutical pricing. Cost control initiatives could decrease the price that
we receive for any products we may develop and sell in the future and have a
material adverse effect on our business, financial condition and results of
operations. Further, to the extent that cost control initiatives have a material
adverse effect on our corporate partners, our ability to commercialize our
products may be adversely affected.

         Our ability to commercialize pharmaceutical products may depend, in
part, on the extent to which reimbursement for the products will be available
from government health administration authorities, private health insurers and
other third-party payers. Significant uncertainty exists as to the reimbursement
status of newly approved health care products, and third-party payers, including
Medicare, are increasingly challenging the prices charged for medical products
and services. We cannot be certain that any third-party insurance coverage will
be available to patients for any products developed by us. Government and other
third-party payers are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new therapeutic
products and by refusing in some cases to provide coverage for uses of approved
products for disease indications for which the FDA has not granted labeling
approval. If adequate coverage and reimbursement levels are not provided by
government and other third-party payers for our products, the market acceptance
of these products would be adversely affected.

WE HAVE NO EXPERIENCE IN MARKETING OR SALES AND MAY HAVE TO RELY ON OTHERS TO
MARKET AND SELL ANY PRODUCTS WE MAY DEVELOP, WHICH MAY IMPAIR OUR ABILITY TO
DELIVER PRODUCTS.

         For certain of our products, we have licensed exclusive marketing
rights to our corporate partners or formed collaborative marketing arrangements
within specified territories in return for royalties to be received on sales, a
share of profits or beneficial transfer pricing. These agreements are terminable
at the discretion of our partners upon as little as 90 days' prior written
notice. If the licensee or marketing partner terminates an agreement or fails to
market a product successfully, our business, financial condition and results of
operations may be adversely affected.

         We currently have no experience in marketing or selling pharmaceutical
products. In order to achieve commercial success for any approved product, we
must either develop a marketing and sales force or, where appropriate or
permissible, enter into arrangements with third parties to market and sell our
products. We cannot be certain that we will develop successfully marketing and
sales experience, or that we will be able to enter into marketing and sales
agreements with others on acceptable terms, if at all, or that any such
arrangements, if entered into, will not be terminated. If we develop our own
marketing and sales capability, it will compete with other companies that
currently have experienced, well funded and larger marketing and sales
operations. To the extent that we enter into co-promotion or other sales and
marketing arrangements with other companies, revenues will depend on the efforts
of others, and we cannot be certain that their efforts will be successful.

WE HAVE NO EXPERIENCE IN MANUFACTURING PRODUCTS AND MAY HAVE TO RELY ON OTHERS
TO MANUFACTURE ANY PRODUCTS WE MAY DEVELOP, WHICH MAY IMPAIR OUR ABILITY TO
DEVELOP OR DELIVER PRODUCTS.

         We have no experience in manufacturing products for commercial purposes
and do not have manufacturing facilities. Consequently, we are dependent on
contract manufacturers for the production of products for development and
commercial purposes. The manufacture of our products for clinical trials and
commercial purposes is subject to cGMP regulations promulgated by the FDA. In
the event that we are unable to obtain or retain third-party manufacturing for
our products, we will not be able to commercialize such products as planned. We
cannot be certain that we will be able to enter into agreements for the
manufacture of future products with manufacturers whose facilities and
procedures comply with cGMP and other regulatory requirements. Our current


                                       18
   19
dependence upon others for the manufacture of our products may adversely affect
our profit margin, if any, on the sale of future products and our ability to
develop and deliver such products on a timely and competitive basis.

USE OF ANY PRODUCTS WE DEVELOP MAY RESULT IN LIABILITY CLAIMS.

         The use of any of our potential products in clinical trials and the
sale of any approved products, including the testing and commercialization of
ALT-711 or Pimagedine, may expose us to liability claims resulting from the use
of products or product candidates. These claims might be made directly by
consumers, pharmaceutical companies or others. We maintain product liability
insurance coverage for claims arising from the use of our products in clinical
trials. However, coverage is becoming increasingly expensive, and we cannot be
certain that we will be able to maintain insurance or, if maintained, that
insurance can be acquired at a reasonable cost or in sufficient amounts to
protect us against losses due to liability that could have a material adverse
effect on our business, financial conditions and results of operations. We
cannot be certain that we will be able to obtain commercially reasonable product
liability insurance for any product approved for marketing in the future or that
insurance coverage and our resources would be sufficient to satisfy any
liability resulting from product liability claims. A successful product
liability claim or series of claims brought against us could have a material
adverse effect on our business, financial condition and results of operations.

WE MAY BE UNABLE TO ATTRACT AND RETAIN THE KEY PERSONNEL ON WHOM OUR SUCCESS
DEPENDS.

         We are highly dependent on the principal members of our management and
scientific staff. The loss of services of any of these personnel could impede
the achievement of our development objectives. Furthermore, recruiting and
retaining qualified scientific personnel to perform research and development
work in the future will also be critical to our success. We cannot be certain
that we will be able to attract and retain personnel on acceptable terms given
the competition between pharmaceutical and health care companies, universities
and non-profit research institutions for experienced scientists. In addition, we
rely on consultants to assist us in formulating our research and development
strategy. All of our consultants are employed outside of us and may have
commitments to or consulting or advisory contracts with other entities that may
limit their availability to us.

OUR OPERATIONS INVOLVE A RISK OF INJURY OR DAMAGE FROM HAZARDOUS MATERIALS.

         Our research and development activities involve the controlled use of
hazardous materials, chemicals and various radioactive compounds. Although we
believe that our safety procedures for handling and disposing of hazardous
materials comply with the standards prescribed by state and federal regulations,
the risk of accidental contamination or injury from these materials cannot be
completely eliminated. In the event of an accident, we could be held liable for
any damages or fines that result. Such liability could have a material adverse
effect on our business, financial condition and results of operations.

ITEM 2.     PROPERTIES.

         We lease a 37,000 square foot building in Ramsey, New Jersey, which
contains our executive and administrative offices and research laboratory space.
The lease, which commenced on November 1, 1993, has a 10-year term. In addition,
the lease has two five-year renewal options.

ITEM 3.     LEGAL PROCEEDINGS.

         On July 13, 2000 and August 8, 2000, Colby S. Parks and Marion H. Parks
filed suits against us in the United States District Court for the Middle
District of North Carolina and the Superior Court of Chatham County, North
Carolina, respectively, claiming unspecified damages for injuries Mr. Parks
allegedly sustained as a result of his participation in one of our Pimagedine
clinical trials. Our liability insurance carrier is defending these actions.

         On October 20, 2000, Charles L. Grimes, one of our stockholders, and
his wife, Jane Gillespie Grimes, filed a complaint against us in the Court of
Chancery in Delaware, claiming breach of an alleged oral agreement with us which
would have purportedly entitled Mr. Grimes to purchase 10% of our private
placement of $6,235,000 of common stock and warrants in September 2000. We
believe the suit is without merit and intend to defend it vigorously.

                                       19

   20

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.

                                     PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

          In our quarterly report on Form 10-Q for the quarter ended September
30, 2000, we reported that in September 2000, we had entered into an agreement
to sell 2,834,088 shares of common stock (the "Shares") and warrants to purchase
1,133,636 shares of common stock (the "Warrants") to the parties named therein
in a private placement. We indicated that the closing of the sale of one-half of
the Shares and Warrants was completed on September 29, 2000, and that there
would be a subsequent closing of the sale of the remainder of the Shares and
Warrants. This subsequent closing of the remaining one-half of the Shares and
Warrants was completed on November 28, 2000.

          Our Common Stock traded on the American Stock Exchange ("Amex") since
August 7, 2000, under the symbol "ALT." Prior to August 7, 2000, our Common
Stock was traded on the Over-the-Counter Bulletin Board ("OTCBB") under the
symbol "ALTN." The following table sets forth, for the calendar periods
indicated, the range of high and low sale prices for our Common Stock on Amex or
OTCBB, as applicable:




                  2000                                       High       Low
                  ----                                     --------   --------
                                                                
                  First Quarter....................        $ 5.0000   $ 0.9062
                  Second Quarter...................          3.6250     1.5000
                  Third Quarter....................          3.5625     2.1250
                  Fourth Quarter...................          8.3125     2.8750




                  1999                                       High       Low
                  ----                                     --------   --------
                                                                
                  First Quarter....................        $ 1.6875   $ 0.6875
                  Second Quarter...................          1.0625     0.6250
                  Third Quarter....................          1.4375     0.5625
                  Fourth Quarter...................          1.3438     0.5000


          As of February 28, 2001, there were 318 holders of the Common Stock.
On February 28, 2001, the last sale price reported on the Amex for the Common
Stock was $4.35 per share.

          We have neither paid nor declared dividends on our Common Stock since
our inception and do not plan to pay dividends in the foreseeable future. Any
earnings that we may realize will be returned to finance our growth.

          The market prices for securities of biotechnology and pharmaceutical
companies, including ours, have historically been highly volatile, and the
market has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. Factors, such as fluctuations in our operating results, announcements
of technological innovations or new therapeutic products by us or others,
clinical trial results, developments concerning agreements with collaborators,
governmental regulation, developments in patent or other proprietary rights,
public concern as to safety of drugs developed by us or others, future sales of
substantial amounts of Common Stock by existing stockholders and general market
conditions, can have an adverse effect on the market price of the Common Stock.


                                       20
   21
ITEM 6. SELECTED FINANCIAL DATA.

          The selected financial data set forth below should be read in
conjunction with the audited financial statements and related notes included
elsewhere in this Annual Report on Form 10-K. The selected financial data for
the five years ended December 31, 2000, has been derived from our audited
financial statements.



                                                                              Years Ended December 31,
                                                     -------------------------------------------------------------------------
                                                       2000            1999            1998            1997            1996
                                                     ---------       ---------       ---------       ---------       ---------
                                                                       (in thousands, except per share data)
                                                                                                      
STATEMENT OF OPERATIONS DATA:
Revenues:
     Investment income ........................      $     570       $     835       $   1,321       $   1,510       $   2,295
     Other income .............................           --               600            --              --              --
                                                     ---------       ---------       ---------       ---------       ---------
         Total revenues .......................            570           1,435           1,321           1,510           2,295
Expenses:
     Research and development .................          6,022          10,598          24,592          23,264          17,494
     Elimination of previously accrued
         loss contingency .....................           --              --            (1,771)           --              --
     General and administrative ...............          4,422           4,357           4,842           3,633           3,517
     Non-cash stock compensation ..............          1,244            --              --              --              --
     Interest .................................           --              --                 4              25              47
                                                     ---------       ---------       ---------       ---------       ---------
         Total expenses .......................         11,688          14,955          27,667          26,992          21,058
                                                     ---------       ---------       ---------       ---------       ---------
Loss before income tax benefit ................        (11,118)        (13,520)        (26,346)        (25,412)        (18,763)
Income tax benefit ............................          1,548           2,588            --              --              --
                                                     ---------       ---------       ---------       ---------       ---------
Net loss ......................................         (9,570)        (10,932)        (26,346)        (25,412)        (18,763)
Preferred stock dividends
     and discount amortization ................          2,945           2,707           2,207           1,091            --
                                                     ---------       ---------       ---------       ---------       ---------
Net loss applicable to common
    stockholders ..............................      $ (12,515)      $ (13,639)      $ (28,553)      $ (26,503)      $ (18,763)
                                                     =========       =========       =========       =========       =========
Basic and diluted loss per share to
    common stockholders .......................      $   (0.63)      $   (0.72)      $   (1.57)      $   (1.60)      $   (1.20)
                                                     =========       =========       =========       =========       =========
Weighted average common shares used in
     computing basic and diluted loss per share         19,861          19,055          18,211          16,566          15,640
                                                     =========       =========       =========       =========       =========

BALANCE SHEET DATA:
Cash, cash equivalents and
     short-term investments ...................      $   9,955       $  12,370       $  24,132       $  28,974       $  34,500
Working capital ...............................          9,754          10,425          20,093          22,390          26,542
Total assets ..................................         13,389          15,021          27,652          33,508          40,139
Long-term capital lease obligations ...........           --              --              --              --               162
Accumulated deficit ...........................       (134,011)       (121,496)       (107,857)        (79,303)        (52,800)
Stockholders' equity ..........................         11,453          12,827          23,338          26,455          31,371


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

OVERVIEW

          We are a product-based biopharmaceutical company engaged in the
discovery and development of oral drugs for the treatment of diseases of aging
and diabetes. Our product candidates represent novel approaches to some of the
largest pharmaceutical markets, such as cardiovascular and kidney diseases. Two
of our compounds are in clinical development; several others are undergoing
pre-clinical testing. These pharmaceutical candidates were developed as a result
of our understanding of the Advanced Glycosylation End-product ("A.G.E.")
pathway, a fundamental pathological process and inevitable consequence of aging
that may result in many medical disorders.

          Our lead compound, ALT-711, is initially being developed for
cardiovascular indications, including ISH. We recently completed a Phase IIa
trial to evaluate the effect of ALT-711 on cardiovascular compliance. Based on
the positive results of this trial, we plan to initiate a Phase IIb efficacy
trial of ALT-711.

          We are pursuing development of other compounds from our library of
A.G.E. crosslink breakers and A.G.E.-formation inhibitors in additional aging-
and diabetes-related pathologies.



                                       21
   22
          As we continue clinical development of ALT-711, we will determine if
it is appropriate to retain development and marketing rights for one or several
indications in North America, while at the same time continuing to evaluate
potential corporate partnerships for the further development and ultimate
marketing of the compound in other territories throughout the world.

          Since our inception in October 1986, we have devoted substantially all
of our resources to research, drug discovery and development programs. To date,
we have not generated any revenues from the sale of products and do not expect
to generate any such revenues for a number of years, if at all. We have incurred
an accumulated deficit of $134,011,000 as of December 31, 2000, and expect to
incur operating losses, potentially greater than losses in prior years, for a
number of years.

          We have financed our operations through proceeds from an initial
public offering of Common Stock in 1991, a follow-on offering of Common Stock
completed in 1995, and private placements of common and preferred equity
securities, revenue from present and former collaborative relationships,
reimbursement of certain of our research and development expenses by our
collaborative partners, investment income earned on cash balances and short-term
investments and the sale of a portion of our New Jersey State Net Operating
Losses carryforwards.

          In September 2000, we entered into an agreement with several investors
pursuant to which we sold them, in a private placement, an aggregate of
2,834,088 shares of common stock and warrants to purchase 1,133,636 shares of
common stock (the "Warrants") for an aggregate purchase price of $6,235,000. The
exercise price of the Warrants is $3.40 per share, while the term is seven
years.

          In March 2000, the Financial Accounting Standards Board ("FASB")
released Interpretation No. 44, "Accounting for Certain Transactions Involving
Stock Compensation, An Interpretation of APB Opinion No. 25." The interpretation
became effective on July 1, 2000, but in some circumstances applies to
transactions that occur prior to the effective date. Under the interpretation,
stock options that are repriced must be accounted for as variable-plan
arrangements until the options are exercised, forfeited or expire. This
requirement applies to any options repriced after December 15, 1998. On February
2, 1999, we repriced certain stock options. The total compensation expense
resulting from the repricing and included in net loss for the year ended
December 31, 2000, is $1,244,000.

          In 2000 and 1999, we sold $14.1 million and $27.6 million,
respectively, of our gross State net operating loss carryforwards and $590,000
and $645,000, respectively, of our State research and development tax credit
carryforwards under the State of New Jersey's Technology Business Tax
Certificate Transfer Program (the "Program"). The Program allowed qualified
technology and biotechnology business in New Jersey to sell unused amounts of
net operating loss carryforwards and defined research and development tax
credits for cash. The proceeds from the sale in 2000 and 1999 were $1,548,000
and $2,588,000, respectively, and such amounts were recorded as a tax benefit in
the statements of operations. The proceeds from the sale of the net operating
loss carryforwards and the research and development tax credit carryforwards
sold in 2000 were received on January 8, 2001.

          Our business is subject to significant risks including, but not
limited to, (i) our ability to obtain funding, (ii) the risks inherent in our
research and development efforts, including clinical trials, (iii) uncertainties
associated with obtaining and enforcing our patents and with the patent rights
of others, (iv) the lengthy, expensive and uncertain process of seeking
regulatory approvals, (v) uncertainties regarding government reforms and product
pricing and reimbursement levels, (vi) technological change and competition,
(vii) manufacturing uncertainties and (viii) dependence on collaborative
partners and other third parties. Even if our product candidates appear
promising at an early stage of development, they may not reach the market for
numerous reasons. Such reasons include the possibilities that the products will
prove ineffective or unsafe during clinical trials, will fail to receive
necessary regulatory approvals, will be difficult to manufacture on a large
scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties. These risks and others
are discussed under the heading "Forward-Looking Statements and Cautionary
Statements."


                                       22
   23
RESULTS OF OPERATIONS

     Years Ended December 2000, 1999, 1998

          Revenues

          Total revenues for 2000, 1999 and 1998 were $570,000, $1,435,000 and
$1,321,000, respectively. Revenues were derived from interest earned on cash and
cash equivalents and short-term investments, and in 1999, the $600,000 payment
under an option agreement with Taisho Pharmaceutical Co., Ltd., pursuant to
which they were granted an option by us (which expired without being exercised)
to acquire a license to ALT-711 in certain territories. The decrease in revenues
in 2000 over 1999 was attributed to a decrease in cash and cash equivalents and
short-term investment balances and the absence of the option payment in 2000.

          Operating Expenses

          Total expenses decreased to $11,688,000 in 2000, from $14,955,000 in
1999 and $27,667,000 in 1998, and consisted primarily of research and
development expenses. Research and development expenses were $6,022,000 in 2000,
$10,598,000 in 1999 and $24,592,000 in 1998. Research and development expenses
decreased in 2000, from 1999, by $4,576,000, or 43.2%. This decrease was
primarily related to the closure of the ACTION I and ESRD trials and decreased
personnel-related expenses, offset by increased expenses related to the ALT-711
Phase IIa costs. Research and development expenses decreased in 1999, from 1998,
by $13,994,000, or 56.9%, due to the decreased expenses related to the closure
of the ACTION I and ESRD trials and personnel-related expenses.

          General and administrative expenses were $4,422,000 in 2000,
relatively unchanged from $4,357,000 in 1999 and $4,842,000 in 1998. In January
2000, and March 2000, we completed a downsizing of our associates. We undertook
the downsizing to reduce operating expenses in order to preserve our existing
capital resources for research and development programs.

          Non-cash stock compensation expense totaled $1,244,000 in 2000, which
resulted from certain stock options being repriced.

          Net Loss

          At December 31, 2000, we had available Federal net operating loss
carryforwards, which expire in various amounts from the years 2006 through 2020,
of approximately $125.9 million for income tax purposes and State net operating
loss carryforwards, which expire in the years 2001 through 2007, of
approximately $81.8 million. In addition, we had Federal research and
development credit carryforwards of approximately $4.9 million and State
research and development tax credit carryforwards of approximately $2.2 million.
We had net losses of $9,570,000 in 2000, $10,932,000 in 1999 and $26,346,000 in
1998.

LIQUIDITY AND CAPITAL RESOURCES

          We had cash, cash equivalents and short-term investments at December
31, 2000, of $9,955,000 compared to $12,370,000 at December 31, 1999. This is a
decrease in cash, cash equivalents and short-term investments for the twelve
months ended December 31, 2000, of $2,415,000. This consisted of $8,986,000 of
cash used in operations, consisting primarily of research and development
expenses, personnel and related costs and facility expenses and approximately
$62,000 of capital expenditures. This was offset by $6,636,000 of financing
activities related to a private placement of common stock and proceeds from
stock option exercises. As of December 31, 2000, we had invested $7,444,000 in
capital equipment and leasehold improvements.

          In September 2000, we entered into an agreement with several investors
pursuant to which we sold them, in a private placement, an aggregate of
2,834,088 shares of common stock and warrants to purchase 1,133,636 shares of
common stock (the "Warrants") for an aggregate purchase price of $6,235,000. The
exercise price of the Warrants is $3.40 per share, while the term is seven
years.

          In 2000 and 1999, we sold $14.1 million and $27.6 million,
respectively, of our gross State net operating loss carryforwards and $590,000
and $645,000, respectively, of our State research and development tax credit
carryforwards under the Program. The Program allowed qualified technology and
biotechnology business in New


                                       23
   24
Jersey to sell unused amounts of net operating loss carryforwards and defined
research and development tax credits for cash. The proceeds in 2000 and 1999
were $1,548,000 and $2,588,000, respectively, and such amounts were recorded as
a tax benefit in the statements of operations. The proceeds from the sale of the
net operating loss carryforwards and the research and development tax credit
carryforwards sold in 2000 were received on January 8, 2001.

          We anticipate that our existing available cash and cash equivalents
and short-term investments will be adequate to satisfy our working capital
requirements for our current operations into 2002.

          The amount of our future capital requirements will depend on numerous
factors, including the progress of our research and development programs, the
conduct of pre-clinical tests and clinical trials, the development of regulatory
submissions, the costs associated with protecting patents and other proprietary
rights, the development of marketing and sales capabilities and the availability
of third-party funding.

          Because of our long-term capital requirements, we may seek access to
the public or private equity markets whenever conditions are favorable. We may
also seek additional funding through corporate collaborations and other
financing vehicles, potentially including off-balance sheet financing through
limited partnerships or corporations. There can be no assurance that such
funding will be available at all or on terms acceptable to us. If adequate funds
are not available, we may be required to curtail significantly one or more of
our research or development programs. If we obtain funds through arrangements
with collaborative partners or others, we may be required to relinquish rights
to certain of our technologies or product candidates.

          Our current priorities are the evaluation and possible continued
development of ALT-711, our lead A.G.E. Crosslink Breaker candidate, and the
continued development of Pimagedine. We are focusing our resources on the
development of ALT-711. As we continue clinical development of ALT-711, we will
determine if it is appropriate to retain development and marketing rights for
one or several indications in North America, while at the same time, continuing
to evaluate potential corporate partnerships for the further development and
ultimate marketing of the compound throughout the world. We have also decided to
pursue the continued development of Pimagedine and are actively seeking one or
more corporate partners. We believe that additional development of this compound
and other product candidates will require us to find sources of funding.

          Effective August 7, 2000, our Common Stock was approved for listing on
the American Stock Exchange under the symbol "ALT."

          In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes certain of the SEC's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. The adoption of SAB 101 had no impact on the accompanying financial
statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          Our exposure to market risk for changes in interest rates relates
primarily to our investment in marketable securities. We do not use derivative
financial instruments in our investments. Our investments consist primarily of
debt instruments of the U.S. government, government agencies, financial
institutions and corporations with strong credit ratings. The table below
presents principal amounts and related weighted average interest rates expected
by maturity date for our investment portfolio. There are no maturities after
2001, and our exposure is limited based on the short-term nature of these
investments.



                                                     2001
                                                     ----
                                              
                Assets
                Cash equivalents:
                    Fixed rate ............       $3,600,328
                    Average interest rate ..         6.72%

                Short-term investments:
                    Fixed rate .............      $6,354,479
                    Average interest rate ..         6.64%

                Total investment securities:      $9,954,807
                    Average interest rate ..         6.66%




                                       24
   25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

          a)   The financial statements required to be filed pursuant to this
Item 8 are appended to this Annual Report on Form 10-K. A list of the financial
statements filed herewith is found at "Index to Financial Statements and
Schedules" on page 28.

          b)   The unaudited quarterly financial data for the two-year period
ended December 31, 2000 is as follows:



                                                                  Net Loss
                                                 Loss Before    Applicable to
                                                 Income Tax        Common        Basic/Diluted
                         Revenues    Expenses      Benefit      Stockholders     Loss Per Share
                         --------    --------     ---------     ------------     --------------
                                         (in thousands, except per share amounts)
                                                                  
     2000
     First Quarter       $    166    $  2,762     $ (2,596)       $ (3,305)        $  (0.17)
     Second Quarter           143       2,402       (2,259)         (2,983)           (0.15)
     Third Quarter            110       3,339       (3,229)         (3,977)           (0.20)
     Fourth Quarter           151       3,185       (3,034)         (2,250)           (0.11)
                         --------    --------     --------        --------         --------
        Total Year       $    570    $ 11,688     $(11,118)       $(12,515)        $  (0.63)

     1999
     First Quarter       $    278    $  5,623     $ (5,345)       $ (5,992)        $  (0.32)
     Second Quarter           227       4,240       (4,013)         (4,681)           (0.25)
     Third Quarter            370       2,489       (2,119)         (2,808)           (0.15)
     Fourth Quarter           560       2,602       (2,043)           (158)           (0.00)
                         --------    --------     --------        --------         --------
        Total Year       $  1,435    $ 14,954     $(13,520)       $(13,639)        $  (0.72)


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

          Not applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

          The information called for by Item 10 is incorporated by reference
from the information under the caption "Election of Directors," "Executive
Officers" and "Section 16(a) Beneficial Ownership Reporting Compliance" in our
Proxy Statement for our 2001 Annual Meeting of Stockholders to be held on June
5, 2001.

ITEM 11. EXECUTIVE COMPENSATION.

          The information called for by Item 11 is incorporated by reference
from the information under the caption "Executive Compensation" in our Proxy
Statement for our 2001 Annual Meeting of Stockholders to be held on June 5,
2001.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          The information called for by Item 12 is incorporated by reference
from the information under the caption "Security Ownership of Certain Beneficial
Owners and Management" in our Proxy Statement for our 2001 Annual Meeting of
Stockholders to be held on June 5, 2001.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          Not applicable.




                                       25
   26
                                     PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a) Financial Statements:

          Our audited financial statements, financial statement schedules and
the Report of Independent Public Accountants are appended to this Annual Report
on Form 10-K. Reference is made to the "Index to Financial Statements and
Schedules" on page 28.

     (b) Reports on Form 8-K.

          On December 14, 2000, we filed a current report on Form 8-K, dated
December 6, 2000, announcing the appointment of a Medical Director.

          On November 8, 2000, we filed a current report on Form 8-K, dated
October 17, 2000, regarding the grant of a patent.

          On October 20, 2000, we filed a current report on Form 8-K, dated
October 10, 2000, announcing that we entered into an agreement with HemoMax,
LLC.

          On October 5, 2000, we filed a current report on Form 8-K, dated
September 29, 2000, announcing that we entered into an agreement for the private
placement of common stock and warrants.

     (c) Exhibits.

          The exhibits required to be filed are listed on the Index to Exhibits
attached hereto, which is incorporated herein by reference.





                                       26
   27
                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized this 1st day of March
2001.

                                 ALTEON INC.

                                 By: /s/ Kenneth I. Moch
                                    ------------------------------------------
                                      Kenneth I. Moch
                                      President and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.



Signature                            Title                                              Date
- ---------                            -----                                              ----
                                                                                  
/s/ Mark Novitch                     Chairman of the Board                              March 1, 2001
- ----------------
Mark Novitch


/s/ Kenneth I. Moch                  President and Chief Executive Officer              March 1, 2001
- -------------------                  (principal executive officer)
Kenneth I. Moch


/s/ Elizabeth O'Dell                 Vice President, Finance and Administration,        March 1, 2001
- --------------------                 Secretary and Treasurer (principal finance
Elizabeth O'Dell                     and accounting officer)


/s/ Edwin Bransome, Jr. M.D.         Director                                           March 1, 2001
- ----------------------------
Edwin Bransome, Jr. M.D.


/s/ Marilyn G. Breslow               Director                                           March 1, 2001
- ----------------------
Marilyn G. Breslow


/s/ Alan J. Dalby                    Director                                           March 1, 2001
- -----------------
Alan J. Dalby


/s/ David McCurdy                    Director                                           March 1, 2001
- -----------------
David McCurdy


/s/ George M. Naimark, Ph.D.         Director                                           March 1, 2001
- ----------------------------
George M. Naimark, Ph.D.




                                       27
   28
Form 10-K - Item 14(a)(1)
Alteon Inc.
Index to Financial Statements and Schedules



                                                                             Page
                                                                             ----
                                                                          

Report of Independent Public Accountants - Arthur Andersen LLP .........      29

Financial Statements:

        Balance Sheets at December 31, 2000 and 1999 ...................      30

        Statements of Operations for the years ended
             December 31, 2000, 1999 and 1998 ..........................      31

        Statements of Stockholders' Equity for the years ended
             December 31, 2000, 1999 and 1998 ..........................      32

        Statements of Cash Flows for the years ended
             December 31, 2000, 1999 and 1998 ..........................      33

        Notes to Financial Statements ..................................      34





                                       28
   29
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Alteon Inc.:

We have audited the accompanying balance sheets of Alteon Inc. (a Delaware
corporation) as of December 31, 2000 and 1999, and the related statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Alteon Inc. as of December 31,
2000 and 1999, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.



                                              ARTHUR ANDERSEN LLP

Roseland, New Jersey
January 15, 2001





                                       29
   30
                                   ALTEON INC.
                                 BALANCE SHEETS

                                     ASSETS




                                                                      December 31,        December 31,
                                                                         2000                1999
                                                                     -------------       -------------
                                                                                   
Current Assets:

     Cash and cash equivalents ................................      $   3,600,328       $   5,335,529
     Short-term investments ...................................          6,354,479           7,034,258
     Other current assets .....................................          1,735,660             248,983
                                                                     -------------       -------------

          Total current assets ................................         11,690,467          12,618,770

     Property and equipment, net ..............................          1,696,082           2,399,305
     Deposits and other assets ................................              2,815               2,815
                                                                     -------------       -------------

          Total assets ........................................      $  13,389,364       $  15,020,890
                                                                     =============       =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                   
Current Liabilities:

     Accounts payable .........................................      $     304,779       $     431,000
     Accrued expenses .........................................          1,631,579           1,763,202
                                                                     -------------       -------------

          Total current liabilities ...........................          1,936,358           2,194,202
                                                                     -------------       -------------

Stockholders' Equity:

     Preferred Stock, $0.01 par value,
          1,993,329 shares authorized, and 912 and 839
          of Series G and 2,739 and 2,518 of Series H shares
          issued and outstanding, as of December 31, 2000 and
          December 31, 1999, respectively .....................                 37                  34

     Common Stock, $0.01 par value,
          40,000,000 shares authorized, and 22,399,660 and
          19,189,701 shares issued and outstanding, as of
          December 31, 2000 and December 31, 1999, respectively            223,997             191,897

     Additional paid-in capital ...............................        145,241,265         134,129,513

     Accumulated deficit ......................................       (134,011,423)       (121,496,049)

     Accumulated other comprehensive (loss)/income ............               (870)              1,293
                                                                     -------------       -------------

          Total stockholders' equity ..........................         11,453,006          12,826,688
                                                                     -------------       -------------

Total liabilities and stockholders' equity ....................      $  13,389,364       $  15,020,890
                                                                     =============       =============





      The accompanying notes are an integral part of these balance sheets.



                                       30
   31
                                   ALTEON INC.
                            STATEMENTS OF OPERATIONS




                                                                     Year ended December 31,
                                                         ----------------------------------------------
                                                             2000             1999             1998
                                                         ------------     ------------     ------------
                                                                                  
Revenues:

  Investment income .................................    $    570,444     $    834,661     $  1,320,538
  Other income ......................................            --            600,000             --
                                                         ------------     ------------     ------------

        Total revenues ..............................         570,444        1,434,661        1,320,538
                                                         ------------     ------------     ------------

Expenses:

  Research and development ..........................       6,022,315       10,598,008       24,591,769
  Elimination of previously accrued loss contingency             --               --         (1,770,975)
  General and administrative ........................       4,422,146        4,356,447        4,842,176
  Non-cash stock compensation .......................       1,243,669             --               --
  Interest ..........................................            --               --              3,610
                                                         ------------     ------------     ------------

        Total expenses ..............................      11,688,130       14,954,455       27,666,580
                                                         ------------     ------------     ------------

Loss before income tax benefit ......................     (11,117,686)     (13,519,794)     (26,346,042)

Income tax benefit ..................................       1,547,763        2,588,210             --
                                                         ------------     ------------     ------------

Net loss ............................................      (9,569,923)     (10,931,584)     (26,346,042)

  Preferred stock dividends and discount amortization       2,945,451        2,707,844        2,207,205
                                                         ------------     ------------     ------------

Net loss applicable to common stockholders ..........    $(12,515,374)    $(13,639,428)    $(28,553,247)
                                                         ============     ============     ============

Basic and diluted loss per share to
  common stockholders ...............................    $      (0.63)    $      (0.72)    $      (1.57)
                                                         ============     ============     ============

Weighted average common shares used in computing
  basic and diluted loss per share ..................      19,860,847       19,054,750       18,210,902
                                                         ============     ============     ============



        The accompanying notes are an integral part of these statements.



                                       31
   32
                                   ALTEON INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY




                                               Preferred Stock                   Common Stock
                                       ------------------------------    -----------------------------
                                          Shares            Amount           Shares          Amount
                                       -------------    -------------    -------------   -------------
                                                                             
Balances at
DECEMBER 31, 1997 ..................             942    $           9       17,922,319   $     179,223
 Net loss ..........................            --               --               --              --
 Change in unrealized gains/(losses)            --               --               --              --

 Comprehensive loss ................            --               --               --              --

 Issuance of Series H preferred
  stock valued at $10,000 per
  share to Genentech, Inc., net
  of transaction costs .............           2,254               23             --              --
 Issuance of Series G and H
  preferred stock dividends ........             133                1             --              --
 Conversion of Series G preferred
  stock to common stock ............            (243)              (2)         822,204           8,222
 Preferred stock discount
  amortization .....................            --               --               --              --
 Exercise of employee stock
  options ..........................            --               --             70,217             702
 Deferred compensation expense
  in connection with the issuance
  of non-qualified stock options
  and options granted to non-
  employees ........................            --               --               --              --
                                       -------------    -------------    -------------   -------------
DECEMBER 31, 1998 ..................           3,086               31       18,814,740         188,147
 Net loss ..........................            --               --               --              --
 Change in unrealized gains/(losses)            --               --               --              --

 Comprehensive loss ................            --               --               --              --

 Issuance of Series G and H
  preferred stock dividends ........             271                3             --              --
 Exercise of employee stock
  options ..........................            --               --            374,961           3,750
 Deferred compensation expense
  in connection with the issuance
  of non-qualified stock options
  and options granted to non-
  employees ........................            --               --               --              --
                                       -------------    -------------    -------------   -------------
DECEMBER 31, 1999 ..................           3,357               34       19,189,701         191,897
 Net loss ..........................            --               --               --              --
 Change in unrealized gains/(losses)            --               --               --              --

 Comprehensive loss ................            --               --               --              --

 Issuance of Series G and H
  preferred stock dividends ........             294                3             --              --
 Exercise of employee stock
  options ..........................            --               --            375,871           3,759
 Private placement of common
  stock and warrants ...............            --               --          2,834,088          28,341
 Compensation expense related to
  variable plan employee
  stock options ....................            --               --               --              --
 Deferred compensation expense
  in connection with the issuance
  of non-qualified stock options
  and options granted to non-
  employees ........................            --               --               --              --
                                       -------------    -------------    -------------   -------------
DECEMBER 31, 2000 ..................           3,651    $          37       22,399,660   $     223,997
                                       =============    =============    =============   =============




                                                                          Accumulated
                                         Additional                          Other           Total
                                          Paid-in        Accumulated     Comprehensive    Stockholders'
                                          Capital          Deficit        Income (Loss)      Equity
                                       -------------    -------------    -------------    -------------
                                                                              
Balances at
DECEMBER 31, 1997 ..................   $ 105,585,019    $ (79,303,374)   $      (5,941)   $  26,454,936
 Net loss ..........................            --        (26,346,042)            --        (26,346,042)
 Change in unrealized gains/(losses)            --               --              7,709            7,709
                                                                                          -------------
 Comprehensive loss ................            --               --               --        (26,338,333)
                                                                                          -------------
 Issuance of Series H preferred
  stock valued at $10,000 per
  share to Genentech, Inc., net
  of transaction costs .............      22,543,706             --               --         22,543,729
 Issuance of Series G and H
  preferred stock dividends ........       1,327,768       (1,327,768)            --                  1
 Conversion of Series G preferred
  stock to common stock ............          (8,220)            --               --               --
 Preferred stock discount
  amortization .....................         879,437         (879,437)            --               --
 Exercise of employee stock
  options ..........................         195,451             --               --            196,153
 Deferred compensation expense
  in connection with the issuance
  of non-qualified stock options
  and options granted to non-
  employees ........................         481,872             --               --            481,872
                                       -------------    -------------    -------------    -------------
DECEMBER 31, 1998 ..................     131,005,033     (107,856,621)           1,768       23,338,358
 Net loss ..........................            --        (10,931,584)            --        (10,931,584)
 Change in unrealized gains/(losses)            --               --               (475)            (475)
                                                                                          -------------
 Comprehensive loss ................            --               --               --        (10,932,059)
                                                                                          -------------
 Issuance of Series G and H
  preferred stock dividends ........       2,707,841       (2,707,844)            --               --
 Exercise of employee stock
  options ..........................         162,691             --               --            166,441
 Deferred compensation expense
  in connection with the issuance
  of non-qualified stock options
  and options granted to non-
  employees ........................         253,948             --               --            253,948
                                       -------------    -------------    -------------    -------------
DECEMBER 31, 1999 ..................     134,129,513     (121,496,049)           1,293       12,826,688
 Net loss ..........................            --         (9,569,923)            --         (9,569,923)
 Change in unrealized gains/(losses)            --               --             (2,163)          (2,163)
                                                                                          -------------
 Comprehensive loss ................            --               --               --         (9,572,086)
                                                                                          -------------
 Issuance of Series G and H
  preferred stock dividends ........       2,945,448       (2,945,451)            --               --
 Exercise of employee stock
  options ..........................         500,786             --               --            504,545
 Private placement of common
  stock and warrants ...............       6,103,151             --               --          6,131,492
 Compensation expense related to
  variable plan employee
  stock options ....................       1,243,669             --               --          1,243,669
 Deferred compensation expense
  in connection with the issuance
  of non-qualified stock options
  and options granted to non-
  employees ........................         318,698             --               --            318,698
                                       -------------    -------------    -------------    -------------
DECEMBER 31, 2000 ..................   $ 145,241,265    $(134,011,423)   $        (870)   $  11,453,006
                                       =============    =============    =============    =============



        The accompanying notes are an integral part of these statements.


                                       32
   33
                                   ALTEON INC.
                            STATEMENTS OF CASH FLOWS



                                                                           Year ended December 31,
                                                              -----------------------------------------------
                                                                   2000             1999             1998
                                                              -------------    -------------    -------------
                                                                                       
Cash flows from operating activities:
    Net loss ..............................................   $  (9,569,923)   $ (10,931,584)   $ (26,346,042)

Adjustments to reconcile net loss to cash
  used in operating activities:
    Depreciation and amortization .........................         765,601          743,820          678,773
    Amortization of deferred compensation .................         318,698          253,948          481,872
    Non-cash compensation expense related
      to variable plan employee stock options .............       1,243,669             --               --

Changes in operating assets and liabilities:
    Other current assets ..................................      (1,486,677)          25,162          194,535
    Other assets ..........................................            --            257,265            1,278
    Accounts payable and accrued expenses .................        (257,844)      (2,119,073)      (2,577,746)
                                                              -------------    -------------    -------------

        Net cash used in operating activities .............      (8,986,476)     (11,770,462)     (27,567,330)
                                                              -------------    -------------    -------------

Cash flows from investing activities:
    Capital expenditures ..................................         (62,377)        (157,969)        (480,566)
    Purchases of marketable securities ....................     (11,550,202)     (54,461,475)    (115,976,783)
    Sales and maturities of marketable securities .........      12,227,817       60,719,408      111,241,889
    Restricted cash .......................................            --               --            620,400
                                                              -------------    -------------    -------------

        Net cash provided by (used in) investing activities         615,238        6,099,964       (4,595,060)
                                                              -------------    -------------    -------------

Cash flows from financing activities:
    Net proceeds from issuance of common stock ............       6,636,037          166,441          196,153
    Net proceeds from issuance of preferred stock .........            --               --         22,543,729
    Payments under capital lease obligations ..............            --               --           (161,581)
                                                              -------------    -------------    -------------

        Net cash provided by financing activities .........       6,636,037          166,441       22,578,301
                                                              -------------    -------------    -------------

Net decrease in cash and cash equivalents .................      (1,735,201)      (5,504,057)      (9,584,089)
Cash and cash equivalents, beginning of period ............       5,335,529       10,839,586       20,423,675
                                                              -------------    -------------    -------------

Cash and cash equivalents, end of period ..................   $   3,600,328    $   5,335,529    $  10,839,586
                                                              =============    =============    =============

Supplemental disclosures of cash flow information:
       Cash paid for interest .............................   $        --      $        --      $       3,610
                                                              =============    =============    =============


        The accompanying notes are an integral part of these statements.


                                       33
   34
                                   ALTEON INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization and Business

          Alteon Inc. ("Alteon" or the "Company") is a product-based
biopharmaceutical company engaged in the discovery and development of oral drugs
for the treatment of diseases of aging and diabetes. The Company's product
candidates represent novel approaches to some of the largest pharmaceutical
markets, such as cardiovascular and kidney diseases. The Company conducts its
business in one operating segment. Alteon's proprietary technology focuses on
Advanced Glycosylation End-products ("A.G.E.s"). A.G.E.s ultimately form
crosslinks with adjacent proteins, leading to a loss of flexibility and function
in body tissues, vessels and organs. All of the Company's products are in
research or development, and no revenues have been generated from product sales.
The Company's lead A.G.E. Crosslink Breaker compound, ALT-711, is initially
being developed for cardiovascular indication, including isolated systolic
hypertension ("ISH"). Alteon recently completed a Phase IIa trial to evaluate
the effect of ALT-711 on cardiovascular compliance. Based on the positive
results of this trial, the Company plans to initiate a Phase IIb efficacy trial
of ALT-711. The Company is seeking a corporate partner to help fund the
continued development of its lead A.G.E.-Formation Inhibitor, Pimagedine, based
on the results of a Phase II/III trial of Pimagedine in Type 1 diabetic patients
with overt nephropathy. Alteon is also pursuing the development of a novel
series of glucose lowering agent compounds.

          The Company's business is subject to significant risks including, but
not limited to, (i) its ability to obtain funding, (ii) its uncertainty of
future profitability, (iii) the risks inherent in its research and development
efforts, including clinical trials, (iv) uncertainties associated with obtaining
and enforcing its patents and with the patent rights of others, (v) the lengthy,
expensive and uncertain process of seeking regulatory approvals, (vi)
uncertainties regarding government reforms and product pricing and reimbursement
levels, (vii) technological change and competition, (viii) manufacturing
uncertainties and (ix) dependence on collaborative partners and other third
parties. Even if the Company's product candidates appear promising at an early
stage of development, they may not reach the market for numerous reasons. Such
reasons include the possibilities that the products will prove ineffective or
unsafe during clinical trials, will fail to receive necessary regulatory
approvals, will be difficult to manufacture on a large scale, will be
uneconomical to market or will be precluded from commercialization by
proprietary rights of third parties. Alteon will require substantial additional
funding in order to continue the research, product development, pre-clinical
testing and clinical trials of its product candidates. If adequate funding is
not available, the Company may be required to curtail significantly one or more
of its research or development programs and other Company activities.

     Pervasiveness of Estimates

          The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.



                                       34
   35
                                   ALTEON INC.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


     Cash and Cash Equivalents and Short-Term Investments

          Cash and cash equivalents include cash and highly liquid investments,
which have a maturity of less than three months at the time of purchase.
Short-term investments are considered available-for-sale and are recorded at
fair market value, as determined by quoted market value. As of December 31,
2000, short-term investments were invested in debt instruments of the U.S.
government, government agencies, financial institutions and corporations with
strong credit ratings. They consist of the following:



                                               December 31,
                                         -----------------------
                                            2000         1999
                                         ----------   ----------
                                                
       U.S. government agency funds...   $2,651,255   $     --
       Corporate obligations .........    3,703,224    7,034,258
                                         ----------   ----------
                                         $6,354,479   $7,034,258
                                         ==========   ==========


          The amortized cost of short-term investments was $6,353,732 and
$7,033,844 at December 31, 2000 and December 31, 1999, respectively. Gross
unrealized gains or losses are not significant.

     Property and Equipment

          Property and equipment are stated at cost. Depreciation and
amortization are computed using the straight-line method over the useful lives
of owned assets, which range from three to five years. Leasehold improvements
and equipment under capital leases are amortized using the straight-line method
over the shorter of the lease term or the useful life of the assets.

     Research and Development

          Expenditures for research and development are charged to operations as
incurred.

     Stock-Based Compensation

          The Company accounts for employee stock-based compensation under
Accounting Principles Board Opinion No. 25 ("APB Opinion No. 25") and related
interpretations.

     Net Loss Per Share

          Basic loss per share is computed by dividing net loss applicable to
common stockholders by the weighted average number of shares outstanding during
the year. Diluted loss per share is the same as basic loss per share, as the
inclusion of common stock equivalents would be antidilutive.

     Comprehensive Income/(Loss)

          The only comprehensive income/(loss) items the Company has are
unrealized gains/(losses) on available-for-sale investments and net loss.



                                       35
   36
                                   ALTEON INC.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


     Recently Issued Accounting Standards

          In June 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 138 ("SFAS 138"), "Accounting for
Certain Derivative Instruments and Certain Hedging Activities, an Amendment of
FASB Statement No. 133." SFAS No. 138 was issued to address a limited number of
issues causing implementation difficulties for entities that apply SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," issued in June
1998. SFAS No. 133 and SFAS No. 138 require that all derivatives be measured at
fair value and recognized as assets or liabilities on the balance sheet. Changes
in the fair value of derivatives should be recognized in either net
income/(loss) or other comprehensive income/(loss), depending on the designated
purpose of the derivative. The Company is required to and will adopt SFAS No.
133 and SFAS No. 138 in the first quarter of 2001. Based on the Company's
current activities, the Company does not believe that adoption of these
pronouncements will have a material impact on the Company's results of
operations, cash flows or financial position.

          In March 2000, the FASB released Interpretation No. 44, "Accounting
for Certain Transactions Involving Stock Compensation, An Interpretation of APB
Opinion No. 25." The interpretation became effective on July 1, 2000, but in
some circumstances applies to transactions that occurred prior to the effective
date. Under the interpretation, stock options that are repriced must be
accounted for as variable-plan arrangements until the options are exercised,
forfeited or expire. This requirement applies to any options repriced after
December 15, 1998. On February 2, 1999, the Company repriced certain stock
options (See Note 7). The total non-cash stock compensation expense resulting
from the repricing for the year ended December 31, 2000, is $1,244,000, which
includes research and development charges of $353,000 and general and
administrative charges of $891,000.

          In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes certain of the SEC's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. The adoption of SAB 101 had no impact on the accompanying financial
statements.

     Reclassifications

          Certain prior year amounts have been reclassified to conform to
current year presentation.

NOTE 2 -- PROPERTY AND EQUIPMENT



                                                                 December 31,
                                                          --------------------------
                                                             2000           1999
                                                          -----------    -----------
                                                                   
          Laboratory equipment ........................   $ 1,167,780    $ 1,261,640
          Furniture and equipment .....................       686,560        682,124
          Computer equipment ..........................       374,589        360,713
          Leasehold improvements ......................     5,215,069      5,215,069
                                                          -----------    -----------
                                                            7,443,998      7,519,546
          Less: Accumulated depreciation & amortization    (5,747,916)    (5,120,241)
                                                          -----------    -----------
                                                          $ 1,696,082    $ 2,399,305
                                                          ===========    ===========


          Depreciation and amortization expense was $765,601, $743,820 and
$678,773 for the years ended December 31, 2000, 1999 and 1998, respectively.



                                       36
   37
                                   ALTEON INC.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


NOTE 3 -- COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT

          In December 1997, Alteon and Genentech, Inc. ("Genentech") entered
into a stock purchase agreement and a development collaboration and license
agreement providing for the development and marketing of Pimagedine, a
second-generation A.G.E.-Formation Inhibitor. Pursuant to the stock purchase
agreement, Genentech purchased Common Stock, Series G Preferred Stock and Series
H Preferred Stock for an aggregate purchase price of $37,544,000 (See Note 7).
Genentech's obligations to purchase shares of Alteon's stock terminated December
31, 1998. Pursuant to a letter agreement dated February 11, 1999 between Alteon
and Genentech, the development collaboration and license agreement terminated
effective June 30, 1999.

NOTE 4 -- OTHER DEVELOPMENT AGREEMENTS

          In 1989, Alteon and Yamanouchi Pharmaceutical Co., Ltd. ("Yamanouchi")
formed a strategic alliance to develop and commercialize the Company's A.G.E.
technology. Under this arrangement, the parties agreed to collaborate on further
research and development, and the Company granted to Yamanouchi an exclusive
license to commercialize the Company's technology in Japan, South Korea, Taiwan
and The People's Republic of China.

          In June 1995, the Company obtained an exclusive, worldwide,
royalty-bearing license from Washington University for patents covering the use
of Pimagedine as an inhibitor of inducible nitric oxide synthase. The agreement
requires the Company to pay certain licensing fees upon the attainment of
development milestones as well as a royalty on net sales or a share of
sub-licensing profits of products covered by the patents. The license also
covers patents developed through any subsequent research collaboration between
the parties, which Alteon agrees to fund.

          In August 1999, Alteon and Taisho Pharmaceutical Co., Ltd. ("Taisho")
entered into an agreement under which Taisho was granted an exclusive option
through December 31, 1999, to acquire a license to Alteon's lead A.G.E.
Crosslink Breaker, ALT-711, for Japan, South Korea, Taiwan and The People's
Republic of China for a non-refundable option fee of $600,000. This amount is
reflected in other income in the statement of operations. The option expired on
December 31, 1999.

          In October 2000, Alteon entered into an agreement with HemoMax, LLC
("HemoMax") for the development of a novel technology designed to increase the
delivery of oxygen to tissues in the body through enhanced blood circulation.
Under the agreement, HemoMax will fund the pre-clinical development of compounds
arising from the technology, and Alteon will directly manage the development
programs. HemoMax has granted Alteon an exclusive right of first refusal to
acquire the HemoMax technology. In addition, based on the achievement of certain
milestones, Alteon will receive 15% ownership of HemoMax. While this technology
is not currently a part of our main technology platform, we entered into this
relationship because it represents an opportunity to participate in the
development of and potentially to acquire a technology that complements our
cardiovascular activities with ALT-711.

          Alteon's commercial partners may develop, either alone or with others,
products that compete with the development and marketing of the Company's
products. Competing products, either developed by the commercial partners or to
which the commercial partners have rights, may result in their withdrawal of
support with respect to all or a portion of the Company's technology, which
would have a material adverse effect on the Company's business, financial
condition and results of operations.

          The Company has also entered into various arrangements with
independent research laboratories to conduct studies in conjunction with the
development of the Company's technology. The Company receives certain rights to
inventions or discoveries that may arise from this research.



                                       37
   38
                                   ALTEON INC.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


NOTE 5 -- ACCRUED EXPENSES



                                                        December 31,
                                                  ------------------------
                                                     2000          1999
                                                  ----------    ----------
                                                          
          Accrued clinical trial expense .....    $  848,745    $  923,756
          Accrued professional fees ..........       291,000       145,769
          Accrued payroll and related expenses       167,680       402,288
          Accrued rent .......................       155,585       210,498
          Accrued patent fees ................       111,529        20,000
          Other ..............................        57,040        60,891
                                                  ----------    ----------
                                                  $1,631,579    $1,763,202
                                                  ==========    ==========


          The Company's headquarters and research facility rent is being
expensed on a straight-line basis over the 10-year lease period (See Note 6).

NOTE 6 -- CONTINGENCIES AND COMMITMENTS

     Contingencies

          In December 1990, the Company and Marion Merrell Dow, Inc., which was
subsequently acquired by an affiliate of Hoechst AG and renamed Hoechst Marion
Roussel, Inc. ("HMRI"), formed a strategic alliance to develop and commercialize
the Company's A.G.E. technology for therapeutics in the areas of diabetic and
aging complications. In 1996, HMRI ended the collaboration as a result of HMRI's
continuing prioritization of its new product pipeline, and the Company regained
all rights granted to HMRI covering the Company's technology. In June 1998, the
Company and HMRI resolved various open issues arising from the termination of
their collaboration. As a result, the previously established accrual in the
amount of $1.8 million has been eliminated and credited to the statement of
operations.

     Commitments

          The Company leases its headquarters and research facility and related
equipment and furniture under non-cancelable operating leases. As of December
31, 2000, future minimum rentals under operating leases that have initial or
remaining non-cancelable terms in excess of one year are as follows:



                                     Operating
                                      Leases
                                    ----------
                                 
                  2001 ........     $  536,500
                  2002 ........        536,500
                  2003 ........        447,000
                  Thereafter...           --
                                    ----------
                                    $1,520,000
                                    ==========


          Rent expense for each of the years in the three-year period ended
December 31, 2000, was $586,294, $573,962 and $584,510, respectively.


                                       38
   39
                                   ALTEON INC.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


NOTE 7 -- STOCKHOLDERS' EQUITY

     Common/Preferred Stock Issuances

          In September 2000, Alteon entered into an agreement with several
investors pursuant to which we sold them, in a private placement, an aggregate
of 2,834,088 shares of common stock and warrants to purchase 1,133,636 shares of
common stock (the "Warrants") for an aggregate purchase price of $6,235,000. The
exercise price of the Warrants is $3.40 per share, while the term is seven
years.

          In December 1997, the Company and Genentech entered into a stock
purchase agreement pursuant to which Genentech agreed to buy shares of Common
Stock, Series G Preferred Stock and Series H Preferred Stock (See Note 3). In
December 1997, Genentech purchased Common Stock and Series G Preferred Stock for
an aggregate purchase price of $15,000,000. On July 27, 1998 and October 1,
1998, Genentech purchased $8,000,000 and $14,544,000 respectively, of Series H
Preferred Stock. As of December 31, 2000 and 1999, respectively, approximately
$2,945,000 and $2,708,000 of Preferred Stockholder Dividends and amortization of
Preferred Stock conversion discount were recorded. Series G Preferred Stock and
Series H Preferred Stock Dividends are payable quarterly in shares at a rate of
8.5%. Each share of Series G Preferred Stock and Series H Preferred Stock is
convertible upon 70 days' prior written notice into a number of shares of Common
Stock determined by dividing $10,000 by the average of the closing sales price
of the Common Stock, as reported on the American Stock Exchange for the 20
business days immediately preceding the date of conversion.

     Stock Option Plan

          The Company has established two stock option plans for its employees,
officers, directors, consultants and independent contractors. Options to
purchase up to 4,192,000 shares of Common Stock may be granted under the first
plan and options to purchase up to 4,000,000 shares of common stock may be
granted under the second plan.

          The plans are administered by a committee of the Board of Directors,
which may grant either non-qualified or incentive stock options. The committee
determines the exercise price and vesting schedule at the time the option is
granted. Options vest over various periods and may expire no later than 10 years
from date of grant. Each option entitles the holder to purchase one share of
Common Stock at the indicated exercise price. The plans also provide for certain
antidilution and change in control rights, as defined.

          The following table summarizes the activity in the Company's stock
options:



                                                       Exercise      Weighted Average
                                                      Price Range     Exercise Price
                                          Options      Per Share        Per Share
                                        -----------   ------------   ----------------
                                                            
          Balance, December 31, 1997     3,659,440                       $  6.51
          Granted ..................     1,232,950    0.88 - 8.50           1.98
          Exercised ................       (70,217)   0.30 - 8.63           2.79
          Canceled .................       (22,913)   3.88 - 15.00          8.72
                                        ----------                       -------
          Balance, December 31, 1998     4,799,260                       $  5.39
          Granted ..................     1,928,701    0.78 - 1.125          0.99
          Exercised ................      (374,961)   0.30 - 0.60           0.44
          Canceled .................    (1,277,804)   0.81 - 15.00          3.88
                                        ----------                       -------
          Balance, December 31, 1999     5,075,196                       $  3.40
          Granted ..................     1,083,420    1.63 - 7.00           4.57
          Exercised ................      (375,871)   0.60 - 5.13           1.34
          Canceled .................      (550,326)   0.60 - 9.50           1.12
                                        ----------                       -------
          Balance, December 31, 2000     5,232,419                       $  4.03
                                        ==========                       =======




                                       39
   40
                                   ALTEON INC
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


          The following table summarizes information regarding stock options
outstanding at December 31, 2000:



                                             Options Outstanding at                  Options Exercisable at
                                               December 31, 2000                        December 31, 2000
                                 ---------------------------------------------      -------------------------
                                                    Weighted          Weighted                       Weighted
             Range of                               Average           Average        Number of       Average
             Exercise            Number of         Remaining          Exercise        Shares         Exercise
              Prices              Shares        Contractual Life       Price        Exercisable       Price
         ------------------      ---------      ----------------      --------      -----------      --------
                                                                                      
         $0.7810 - $ 1.0630      1,880,218            6.56            $ 0.9590       1,277,322       $ 0.9554
         $1.1250 - $ 3.8750      1,424,125            8.78            $ 2.5223         847,890       $ 2.0675
         $4.3600 - $ 9.2500      1,457,387            5.51            $ 7.2395       1,041,595       $ 7.4239
         $9.5000 - $15.0000        470,689            2.99            $10.8932         470,689       $10.8932
                                 ---------            ----            --------       ---------       --------
                                 5,232,419            6.55            $ 4.0274       3,637,496       $ 4.3528


          The weighted average fair value of the options granted was $2.54,
$0.53 and $1.71 during 2000, 1999 and 1998, respectively. Included in options at
December 31, 2000, are 835,000 options granted to certain executives with option
prices ranging from $.875 per share to $3.56 per share. Such options vest upon
the earlier of five years after grant or upon achievement of certain Company
milestones.

          The Company accounts for its stock option plans under APB Opinion No.
25, under which no compensation cost (excluding those options granted below fair
market value) has been recognized. Had compensation costs for these plans been
determined consistent with FASB Statement No. 123, the Company's pro forma net
loss and loss per share applicable to common stockholders for 2000, 1999 and
1998 would have been $13.7 million, $13.9 million and $30.5 million and, $0.69,
$0.73 and $1.67, respectively. The 2000 pro forma net loss and loss per share
applicable to common stockholders reflects a benefit for the reversal of
previously recognized pro forma compensation costs on options forfeited in 2000.
Consistent with FASB Statement No. 123, the Company elected not to estimate
these forfeitures in the prior period pro forma compensation cost calculation.
Because FASB Statement No. 123 has not been applied to options granted prior to
January 1, 1995, the resulting pro forma compensation cost may not be
representative of that to be expected in future years.

          Under FASB Statement No. 123, the fair value of each stock option
grant is estimated on the date of grant using the Black-Scholes option pricing
model with the following assumptions used for grants in 2000, 1999 and 1998,
respectively: risk free interest rates ranging 5.24% to 6.64%, 4.73% to 6.07%
and 4.32% to 5.63%, respectively; expected life of 2.02 years over the vesting
periods; expected dividend yield of 0%; and expected volatility of 70%.

          In February 1999, the Board of Directors approved the repricing of
1,063,000 stock options outstanding as of February 2, 1999 (See Note 1).

NOTE 8 -- SAVINGS AND RETIREMENT PLAN

          The Company maintains a savings and retirement plan under Section
401(k) of the Internal Revenue Code which allows eligible employees to annually
contribute a portion of their annual salary to the plan. In 1998, the Company
began making discretionary contributions at a rate of 25% of an employee's
contribution up to a maximum of 5% of the employee's base salary. The Company
made contributions of $30,530 and $49,000 for the years ended December 31, 2000
and 1999, respectively.



                                       40
   41
                                   ALTEON INC.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)


NOTE 9 -- RELATED PARTY TRANSACTIONS

          Since the Company's inception, the Company has entered into certain
collaborative agreements with organizations with which Dr. Anthony Cerami, a
former member of the Company's Board of Directors, was affiliated. These
organizations included The Picower Institute for Medical Research ("The Picower
Institute"), The Rockefeller University, Cerami Consulting Corporation and the
Kenneth S. Warren Laboratories, Inc. The Company paid to the organizations $0,
$243,000 and $731,000 in 2000, 1999, and 1998, respectively. In addition, the
Company paid patent maintenance fees for technology related to the organizations
of $120,000, $73,000 and $207,000 in 2000, 1999 and 1998, respectively. Although
the Company has terminated its collaborative relationship with The Picower
Institute, the Company has a royalty obligation on all net sales and other
revenues associated with certain technologies developed. Effective May 17, 1999,
the Company terminated its consulting agreement with Cerami Consulting
Corporation and its research agreement with Kenneth S. Warren Laboratories, Inc.
In addition, Dr. Cerami resigned from the Company's Board of Directors on April
19, 1999.

          Prior to 2000, the Company had a Scientific Advisory Board. The
Chairman and two other Scientific Advisory Board members provided consulting
services to the Company. Consulting fees paid to these members totaled $55,000
and $89,000 in 1999 and 1998, respectively.

NOTE 10 -- INCOME TAXES

          At December 31, 2000, the Company had available Federal net operating
loss carryforwards, which expire in the years 2006 through 2020, of
approximately $125.9 million for income tax purposes and State net operating
loss carryforwards, which expire in the years 2000 through 2007, of
approximately $81.8 million. In addition, the Company has Federal research and
development tax credit carryforwards of approximately $4.9 million and State
research and development tax credit carryforwards of approximately $2.2 million.
The amount of Federal net operating loss and research and development tax credit
carryforwards which can be utilized in any one period may become limited by
Federal income tax regulations if a cumulative change in ownership of more than
50% occurs within a three-year period.

          The components of the deferred tax assets and the valuation allowance
are as follows:



                                                  December 31,
                                         -----------------------------
                                             2000             1999
                                         ------------     ------------
                                                    
     Net operating loss carryforwards    $ 47,700,000     $ 42,900,000
     Research and development credit        7,100,000        7,000,000
     Other temporary differences ....       2,400,000        4,700,000
                                         ------------     ------------
     Gross deferred tax assets ......      57,200,000       54,600,000
     Valuation allowance ............     (57,200,000)     (54,600,000)
                                         ------------     ------------
     Net deferred tax assets ........    $       --       $       --
                                         ============     ============


          A valuation allowance was established since the realization of the
deferred tax assets is uncertain. In 2000 and 1999, Alteon sold $14.1 million
and $27.6 million, respectively, of our gross State net operating loss
carryforwards and $590,000 and $645,000, respectively, of our State research and
development tax credit carryforwards under the State of New Jersey's Technology
Business Tax Certificate Transfer Program (the "Program"). The Program allowed
qualified technology and biotechnology business in New Jersey to sell unused
amounts of net operating loss carryforwards and defined research and development
tax credits for cash. The sales prices in 2000 and 1999 were $1,548,000 and
$2,588,000, respectively, and such amounts were recorded as a tax benefit in the
statements of operations. The proceeds from the sale of the net operating loss
carryforwards and the research and development tax credit carryforwards sold in
2000 were received on January 8, 2001. Accordingly, as of December 31, 2000,
$1,548,000 is included in other current assets.




                                       41
   42
                                  EXHIBIT INDEX



Exhibit
  No.            Description of Exhibit
- -------          ----------------------
              
  3.1            Restated Certificate of Incorporation, as amended.
                 (Incorporated by reference to Exhibit 3.1 to the Company's
                 Report on Form 10-Q filed on November 10, 1999).

  3.2            Certificate of the Voting Powers, Designations, Preference and
                 Relative Participating, Optional and Other Special Rights and
                 Qualifications, Limitations or Restrictions of Series F
                 Preferred Stock of the Company.

  3.3            Certificate of Retirement dated September 10, 2000, of Alteon
                 Inc. (Incorporated by reference to Exhibit 3.1 to the Company's
                 Report on Form 10-Q filed on November 10, 1999).

  3.4            Certificate of Designations of Series G Preferred Stock of
                 Alteon Inc. (Incorporated by reference to Exhibit 3.4 to the
                 Company's Annual Report on Form 10-K for the year ended
                 December 31, 1997).

  3.5            Certificate of Amendment of Certificate of Designations of
                 Series G Preferred Stock of Alteon Inc. (Incorporated by
                 reference to Exhibit 3.4 to the Company's Report on Form 10-Q
                 filed on August 14, 1998).

  3.6            Certificate of Designations of Series H Preferred Stock of
                 Alteon Inc. (Incorporated by reference to Exhibit 3.5 to the
                 Company's Annual Report on Form 10-K for the year ended
                 December 31, 1997).

  3.7            Amended Certificate of Designations of Series H Preferred Stock
                 of Alteon Inc. (Incorporated by reference to Exhibit 3.6 to the
                 Company's Report on Form 10-Q filed on August 14, 1998).

  3.8            Certificate of Retirement dated November 20, 2000, of Alteon
                 Inc.

  3.9            By-laws, as amended. (Incorporated by reference to Exhibit 3.7
                 to the Company's Report on Form 10-Q filed on May 12, 1999).

  4.1            Stockholders' Rights Agreement dated as of July 27, 1995,
                 between Alteon Inc. and Registrar and Transfer Company, as
                 Rights Agent.

  4.2            Amendment to Stockholders' Rights Agreement dated as of April
                 24, 1997, between Alteon Inc. and Registrar and Transfer
                 Company, as Rights Agent. (Incorporated by reference to Exhibit
                 4.4 to the Company's Current Report on Form 8-K filed on May 9,
                 1997).

  4.3            Registration Rights Agreement dated as of April 24, 1997,
                 between Alteon Inc. and the investors named on the signature
                 page thereof. (Incorporated by reference to Exhibit 4.1 to the
                 Company's Current Report on Form 8-K filed on May 9, 1997).

  4.4            Form of Common Stock Purchase Warrant. (Incorporated by
                 reference to Exhibit 4.2 to the Company's Current Report on
                 Form 8-K filed on May 9, 1997).

  4.5            Amendment to Stockholders' Rights Agreement dated as of
                 December 1, 1997, between Alteon Inc. and Registrar and
                 Transfer Company, as Rights Agent. (Incorporated by reference
                 to Exhibit 4.1 to the Company's Current Report on Form 8-K
                 filed on December 10, 1997).

  4.6            Registration Rights Agreement dated September 29, 2000.
                 (Incorporated by reference to Exhibit 4.1 to the Company's
                 Current Report on Form 8-K filed on October 5, 2000).

  4.7            Form of Series 1 Common Stock Purchase Warrant. (Incorporated
                 by reference to Exhibit 4.2 to the Company's Current Report on
                 Form 8-K filed on October 5, 2000).

   43
              
  4.8            Form of Series 2 Common Stock Purchase Warrant. (Incorporated
                 by reference to Exhibit 4.3 to the Company's Current Report on
                 Form 8-K filed on October 5, 2000).

 10.1+           Amended and Restated 1987 Stock Option Plan. (Incorporated by
                 reference to Exhibit 10.1 to the Company's Annual Report on
                 Form 10-K for the year ended December 31, 1997).

 10.2+           Amended 1995 Stock Option Plan. (Incorporated by reference to
                 Exhibit 10.2 to the Company's Report on Form 10-Q filed May 12,
                 1999).

 10.3            Form of Employee's or Consultant's Invention Assignment,
                 Confidential Information and Non-Competition Agreement executed
                 by all key employees and consultants as employed or retained
                 from time to time. (Incorporated by Reference to Exhibit 10.1
                 to the Company's Registration Statement on Form S-1 (File
                 Number 33-42574), which became effective on November 1, 1991).

 10.4            Amendment and Assignment of Research and Option Agreement dated
                 as of September 25, 1987, among Telos Development Corporation
                 ("Telos"), The Rockefeller University ("The Rockefeller"), the
                 Company and Anthony Cerami. (Incorporated by reference to
                 Exhibit 10.5 to the Company's Registration Statement on Form
                 S-1 (File Number 33-42574), which became effective on November
                 1, 1991).

 10.5            License Agreement dated as of September 25, 1987, among Telos,
                 Applied Immune Sciences, Inc., the Company and The Rockefeller,
                 as amended by letter agreement dated September 25, 1987, and
                 letter agreement dated August 15, 1991. (Incorporated by
                 reference to Exhibit 10.6 to the Company's Registration
                 Statement on Form S-1 (File Number 33-42574), which became
                 effective on November 1, 1991).

 10.6*           License Agreement dated as of June 16, 1989, between the
                 Company and Yamanouchi Pharmaceutical Co., Ltd. ("Yamanouchi").
                 (Incorporated by reference to Exhibit 10.17 to the Company's
                 Registration Statement on Form S-1 (File Number 33-42574),
                 which became effective on November 1, 1991).

 10.7*           Research and License Agreement dated as of September 5, 1991,
                 between the Company and The Picower Institute for Medical
                 Research. (Incorporated by reference to Exhibit 10.29 to the
                 Company's Registration Statement on Form S-1 (File Number
                 33-42574), which became effective on November 1, 1991).

 10.8            Lease Agreement dated January 11, 1993, between Ramsey
                 Associates and the Company.

 10.9*           License Agreement dated as of December 30, 1994, between the
                 Company and Corange International Limited.

 10.10*          Research Collaboration and License Agreement dated as of June
                 2, 1995, between Washington University and the Company.

 10.11           Distribution Agreement dated September 25, 1995, between the
                 Company and Eryphile BV.

 10.12+          Employment Agreement dated as of October 21, 2000, between the
                 Company and Elizabeth O'Dell.

 10.13+          Alteon Inc. Change in Control Severance Benefits Plan.

 10.14           Preferred Stock Investment Agreement dated as of April 24,
                 1997, between Alteon Inc. and the investors named on the
                 signature page thereof. (Incorporated by reference to Exhibit
                 10.1 to the Company's Current Report on Form 8-K filed on May
                 9, 1997).

 10.15*          License and Supply Agreement dated June 17, 1997, between IDEXX
                 Laboratories, Inc. and Alteon Inc. (Incorporated by reference
                 to Exhibit 10.1 to the Company's Report on Form 10-Q filed on
                 August 13, 1997).


   44
              
 10.16           Stock Purchase Agreement dated as of December 1, 1997, between
                 Alteon Inc. and Genentech, Inc. (Incorporated by reference to
                 Exhibit 10.1 to the Company's Current Report on Form 8-K filed
                 on December 10, 1997).

 10.17+          Amended and Restated Employment Agreement dated as of December
                 15, 1998, between the Company and Kenneth I. Moch.
                 (Incorporated by reference to Exhibit 10.28 to the Company's
                 Annual Report on Form 10-K for the year ended December 31,
                 1999).

 10.18           Letter Agreement dated February 11, 1999, between the Company
                 and Genentech, Inc. (Incorporated by reference to Exhibit 10.1
                 to the Company's Current Report on Form 8-K filed on February
                 19, 1999).

 10.19+          Consulting Agreement dated as of December 15, 1998, between the
                 Company and Mark Novitch, M.D., as amended by letter agreement
                 dated as of January 18, 2001.

 10.20+          Employment Agreement dated as of March 14, 2000, between the
                 Company and Robert deGroof, Ph.D. (Incorporated by reference to
                 Exhibit 10.1 to the Company's Report on Form 10-Q filed on May
                 12, 2000).

 10.21           Common Stock and Warrants Purchase Agreement dated as of
                 September 29, 2000, among Alteon Inc. and EGM Medical
                 Technology Fund, L.P., EGM Technology Offshore Fund,
                 Narragansett I, L.P., Narragansett Offshore, Ltd., S.A.C.
                 Capital Associates, LLC, SDS Merchant Fund, LP and Herriot
                 Tabuteau. (Incorporated by reference to Exhibit 10.1 to the
                 Company's Current Report on Form 8-K filed on October 5, 2000).

 10.22*          Development Services Agreement dated September 25, 2000.
                 (Incorporated by reference to Exhibit 10.2 to the Company's
                 Report on Form 10-Q filed on November 13, 2000).

 23.1            Consent of Independent Public Accountants.



- ----------
*  Confidentiality has been granted for a portion of this exhibit.

+  Denotes a management contract or compensatory plan or arrangement required to
   be filed as an exhibit pursuant to Item 14(c) to this Form 10-K.

EX-3.2

   1
                                                                     Exhibit 3.2




                        CERTIFICATE OF THE VOTING POWERS,
                     DESIGNATIONS, PREFERENCES AND RELATIVE
                    PARTICIPATING, OPTIONAL AND OTHER SPECIAL
                     RIGHTS AND QUALIFICATIONS, LIMITATIONS
                           OR RESTRICTIONS OF SERIES F
                               PREFERRED STOCK OF
                                   ALTEON INC.


                  Pursuant to Section 151 of the General Corporation Law of the
State of Delaware, Alteon Inc. (the "Corporation") organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:

                  That, pursuant to the authority conferred upon the Board of
Directors of the Corporation by Article Fifth of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"), the Board
of Directors of the Corporation on July 20, 1995, adopted the following
resolution creating a series of Preferred Stock designated as Series F Preferred
Stock:

                  RESOLVED, that, pursuant to the authority vested in the Board
         of Directors of the Corporation in accordance with the provisions of
         the Certificate of Incorporation of the Corporation, a series of
         Preferred Stock of the Corporation is hereby created and that the
         designation and number of shares thereof an the voting powers,
         preferences and relative, participating, optional and other special
         rights of the shares of such series, and the qualifications,
         limitations or restrictions thereof are as follows:

         SECTION 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series F Preferred Stock" (the "Series F Preferred
Stock"), par value $0.01 per share. The number of shares initially constituting
the Series F Preferred Stock shall be 400,000; provided, however, that, if more
than a total of 400,000 shares of Series F Preferred Stock shall be issuable
upon the exercise of Rights (the "Rights") issued pursuant to the Stockholders
Rights Agreement dated as of July 27, 1995, between the Corporation and
Registrar and Transfer Company, as Rights Agent (the "Rights Agreement"), the
Board of Directors of the Corporation, pursuant to Section 151(g) of the General
Corporation Law of the State of Delaware, shall direct by resolution or
resolutions that a certificate be properly executed, acknowledged, filed and
recorded, in accordance with the provisions of Section

                                       1
   2
                                                                     Exhibit 3.2




103 thereof, providing for the total number of shares of Series F Preferred
Stock authorized to be issued to be increased (to the extent that the
Certificate of Incorporation then permits) to the largest number of whole shares
(rounded up to the nearest whole number) issuable upon exercise of such Rights.

         SECTION 2. Dividends or Distributions. (a) Subject to the prior and
superior rights of the holders of shares of any other series of Preferred Stock
or other class of capital stock of the Corporation ranking prior and superior to
the shares of Series F Preferred Stock with respect to dividends, the holders of
shares of the Series F Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the Corporation
legally available therefore, (1) quarterly dividends payable in cash on the last
day of each fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or a
fraction of a share of Series F Preferred Stock, in the amount of $.01 per whole
share (rounded to the nearest cent) less the amount of all cash dividends
declared on the Series F Preferred Stock pursuant to the following clause (2)
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series F Preferred Stock (the total of which
shall not, in any event, be less than zero) and (2) dividends payable in cash on
the payment date for each cash dividend declared on the Common Stock in an
amount per whole share (rounded to the nearest cent) equal to the Formula Number
(as hereinafter defined) then in effect times the cash dividends then to be paid
on each share of Common Stock. In addition, if the Corporation shall pay any
dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or
distributions solely in shares of Common Stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding whole share of
Series F Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each share
of the Common Stock. As used herein, the "Formula Number" shall be 1,000;
provided, however, that, if at any time after July 20, 1995, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in share of Common
Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock, into
a smaller number of shares of Common Stock, then in each such

                                       2
   3
                                                                     Exhibit 3.2




event the Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction, the
numerator of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event (and
rounding the result to the nearest whole number); and provided further, that, if
an any time after July 20, 1995, the Corporation shall issue any shares of its
capital stock in a merger, reclassification, or change of the outstanding shares
of Common Stock, then in each such event the Formula Number shall be
appropriately adjusted to reflect such merger, reclassification or change so
that each share of Preferred Stock continues to be the economic equivalent of a
Formula Number of shares of Common Stock prior to such merger, reclassification
or change.

                  (b) The Corporation shall declare a dividend or distribution
on the Series F Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common Stock);
provided, however, that, in the event no dividend or distribution (other than a
dividend or distribution in shares of Common Stock) shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per
share on the Series F Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series F Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for corresponding dividend or
distribution on the Common Stock.

                  (c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series F Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series F Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series F Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of Series F
Preferred Stock which are originally issued prior to the record date for the
determination of holders of shares of Series F Preferred Stock entitled to
receive a quarterly dividend on the first Quarterly Dividend Payment Date shall
be calculated as if cumulative from and after the last day of

                                       3
   4
                                                                     Exhibit 3.2




the fiscal quarter next preceding the date of original issuance of such shares.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series F Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.

                  (d) So long as any shares of the Series F Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series F Preferred Stock shall have been declared.

                  (e) The holders of the shares of Series F Preferred Stock
shall not be entitled to receive any dividends or other distribution except as
provided herein.

         SECTION 3. Voting Rights. The holders of shares of Series F Preferred
Stock shall have the following voting rights:

                  (a) Each holder of Series F Preferred Stock shall be entitled
to a number of votes equal to the Formula Number then in effect, for each share
of Series F Preferred Stock held of record on each matter on which holders of
the Common Stock or stockholders generally are entitled to vote, multiplied by
the maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).

                  (b) Except as otherwise provided herein or by applicable law,
the holders of shares of Series F Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.

                  (c) If, at the time of any annual meeting of stockholders for
the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series F Preferred Stock are
in default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series F Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of stockholders (and at each subsequent annual meeting of stockholders),
unless all dividends in arrears have been paid or

                                       4
   5
                                                                     Exhibit 3.2




declared and set apart for payment prior thereto, to vote for the election of
two directors of the Corporation, the holders of any Series F Preferred Stock
being entitled to cast a number of votes per share of Series F Preferred Stock
equal to the Formula Number. Until the default in payments of all dividends
which permitted the election of said directors shall cease to exist, any
director who shall have been so elected pursuant to the next preceding sentence
may be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the shares of Series F Preferred Stock at the
time entitled to cast a majority of the votes entitled to be cast for the
election of any such director at a special meeting of such holders called for
that purpose, and any vacancy thereby created may be filled by the vote of such
holders. If and when such default shall cease to exist, the holders of the
Series F Preferred Stock shall be divested of the foregoing special voting
rights, subject to revesting in the event of each and every subsequent like
default in payments of dividends. Upon the termination of the foregoing special
voting rights, the terms of office of all persons who may have been elected
directors pursuant to said special voting rights shall forthwith terminate, and
the number of directors constituting the Board of Director shall be reduced by
two. The voting rights granted by this Section 3(c) shall be in addition to any
other voting rights granted to the holders of the Series F Preferred Stock in
this Section 3.

                  (d) Except as provided herein, in Section 11 or by applicable
law, holders of Series F Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for authorizing or taking
any corporate action.

         SECTION 4. Certain Restrictions.

                  (a) Whenever quarterly dividends or other dividends or
distributions payable on the Series F Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series F Preferred Stock
outstanding shall have been paid in full, the Corporation shall not

         (i) declare or pay dividends on, make any other distributions on, or
         redeem or purchase or otherwise acquire for consideration any shares of
         stock ranking junior (either as to dividends or upon liquidation,
         dissolution or winding up) to the Series F Preferred Stock;

         (ii) Declare or pay dividends on, or make any other distributions on
         any shares of stock ranking on a parity

                                       5
   6
                                                                     Exhibit 3.2




         (either as to dividends or upon liquidation, dissolution or winding up)
         with the Series F Preferred Stock, except dividends paid ratably on the
         Series F Preferred Stock and all such parity stock on which dividends
         are payable or in arrears in proportion to the total amounts to which
         the holders of all such shares are then entitled;

         (iii) redeem or purchase or otherwise acquire for consideration shares
         of any stock ranking on a parity (either as to dividends or upon
         liquidation, dissolution or winding up) with the Series F Preferred
         Stock; provided that the Corporation may at any time redeem, purchase
         or otherwise acquire shares of any such parity stock in exchange for
         shares of any stock of the Corporation ranking junior (either as to
         dividends or upon dissolution, liquidation or winding up) to the Series
         F Preferred Stock; or

         (iv) purchase or otherwise acquire for consideration any shares of
         Series F Preferred Stock, or any shares of stock ranking on a parity
         with the Series F Preferred Stock, except in accordance with a purchase
         offer made in writing or by publication (as determined by the Board of
         Directors) to all holders of such shares upon such terms as the Board
         of Directors, after consideration of the respective annual dividend
         rates and other relative rights and preferences of the respective
         series and classes, shall determine in good faith will result in fair
         and equitable treatment among the respective series or classes.

                  (b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

         SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series F
Preferred Stock unless, prior thereto, the holders of shares of Series F
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with

                                       6
   7
                                                                     Exhibit 3.2




the Series F Preferred Stock, except distributions made ratably on the Series F
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.

         SECTION 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the then
outstanding shares of Series F Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.

         SECTION 7. No Redemption; No Sinking Fund.

                  (a) The shares of Series F Preferred Stock shall not be
subject to redemption by the Corporation or at the option of any holder of
Series F Preferred Stock except as set forth in the Certificate of Incorporation
of the Corporation; provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of Series F Preferred Stock in the open
market or by offer to any holder or holders of shares of Series F Preferred
Stock.

                  (b) The shares of Series F Preferred Stock shall not be
subject to or entitled to the operation of a retirement or sinking fund.

         SECTION 8. Ranking. The Series F Preferred Stock shall rank junior to
all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions
thereof.

         SECTION 9. Fractional Shares. The Series F Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-thousandths
(1/1,000ths) of a share of any integral multiple of such fraction which shall
entitle the holder, in proportion to such holder's fractional shares, to receive
dividends, exercise voting rights, participate in distributions and

                                       7
   8
                                                                     Exhibit 3.2




to have the benefit of all other rights of holders of Series F Preferred Stock.
In lieu of fractional shares, the Corporation, prior to the first issuance of a
share or a fraction of a share of Series F Preferred Stock, may elect (1) to
make a cash payment as provided in the Rights Agreement for fractions of a share
other than one one-thousandths (1/1,000ths) of a share or any integral multiple
thereof or (2) to issue depository receipts evidencing such authorized fraction
of a share of Series F Preferred Stock pursuant to an appropriate agreement
between the Corporation and a depository selected by the Corporation; provided
that such agreement shall provide that the holders of such depository receipts
shall have all the rights, privileges and preferences to which they are entitled
as holders of the Series F Preferred Stock.

         SECTION 10. Reacquired Shares. Any shares of Series F Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancelation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the provisions of Article Fifth of the Certificate of Incorporation.

         SECTION 11. Amendment. None of the powers, preferences and relative,
participating, optional and other special rights of the Series F Preferred Stock
as provided herein or in the Certificate of Incorporation shall be amended in
any manner which would alter or change the powers, preferences, rights or
privileges of the holders of Series F Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series F Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at least
66-2/3% of the outstanding shares of Series F Preferred Stock shall be deemed to
apply to the powers, preferences, rights or privileges of any holder of shares
of Series F Preferred Stock originally issued upon exercise of the Rights after
the time of such approval without the approval of such holder.

                  IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be duly executed in its corporate name on this day of July 1995.

                                             Alteon Inc.



                                       8
   9
                                                                     Exhibit 3.2




                                             By:   /s/ James J. Mauzey
                                                   ------------------------

                                             Name:     James J. Mauzey
                                                   ------------------------

                                             Title:    Chairman and CEO
                                                   ------------------------



Attest:

   /s/ Elizabeth O'Dell
- -----------------------

Name:  Elizabeth O'Dell
       ----------------

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


                                       9

EX-3.8

   1
                                                                     Exhibit 3.8


                                   CERTIFICATE
                                       OF
                               RETIREMENT OF STOCK
                                       OF
                                   ALTEON INC.


         Pursuant to Section 243 of the Delaware General Corporation Law, Alteon
Inc., a corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY THAT:

         1. The Certificate of Designations of Series G Preferred Stock of the
Corporation provides that shares of the Corporation's Series G Preferred Stock
(the "Series G Preferred Stock") purchased or otherwise acquired by the
Corporation (including upon conversion thereof) shall be retired and canceled
after such acquisition and upon such cancellation shall become authorized but
unissued shares of the Corporation's Preferred Stock, without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors.

         2. 243 shares of the Series G Preferred Stock have been acquired by the
Corporation by reason of conversion and have been retired.

         3. Pursuant to the Certificate of Designation, the total number of
shares of Preferred Stock which the Corporation is authorized to issue is
unaffected by this Certificate of Retirement and remains 1,993,329 shares.

         IN WITNESS WHEREOF, this Certificate of Retirement of Stock is made
this 20 day of November 2000.

                                        ALTEON INC.


                                        By:  /s/ Kenneth I. Moch
                                             ---------------------------
                                                 Kenneth I. Moch
                                                 President and
                                                 Chief Executive Officer

EX-4.1

   1
                                                                     Exhibit 4.1











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




                          STOCKHOLDERS RIGHTS AGREEMENT


                            Dated as of July 27, 1995


                                     between


                                   ALTEON INC.


                                       and


                         Registrar and Transfer Company


                                 as Rights Agent



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



                                       1
   2
                                                                     Exhibit 4.1

                                TABLE OF CONTENTS

Certain Definitions............................................................1

Appointment of Rights Agent...................................................10

Issue of Rights and Right Certificates........................................10

Form of Right Certificates....................................................11

Execution, Countersignature and Registration..................................12

Transfer, Split-Up, Combination and Exchange of Right Certificates;
         Mutilated, Destroyed, Lost or Stolen Right Certificates;
         Uncertificated Rights................................................13

Exercise of Rights; Expiration Date of Rights.................................14

Cancellation and Destruction of Right Certificates............................16

Reservation and Availability of Preferred Shares..............................16

Preferred Shares Record Date..................................................18

Adjustments in Rights After there is an Acquiring Person; Exchange
         of Rights for Shares; Business Combinations..........................18

Certain Adjustments...........................................................22

Certificate of Adjustment.....................................................24

Additional Covenants..........................................................24

Fractional Rights and Fractional Shares.......................................24

Rights of Action..............................................................25

Transfer and Ownership of Rights and Right Certificates.......................26

Right Certificate Holder Not Deemed a Stockholder.............................26

Concerning the Rights Agent...................................................27

Merger or Consolidation or Change of Rights Agent.............................27

Duties of Rights Agent........................................................28

Change of Rights Agent........................................................31

Issuance of Additional Rights and Right Certificates..........................32

Redemption and Termination....................................................32

Notices.......................................................................33

Supplements and Amendments....................................................34

                                       2
   3
                                                                     Exhibit 4.1

Successors....................................................................34

Benefits of Rights Agreement; Determinations and Actions by the
     Board of Directors, etc..................................................35

Severability..................................................................35

Governing Law.................................................................36

Counterparts; Effectiveness...................................................36

Descriptive Headings..........................................................36





                                       3
   4
                                                                     Exhibit 4.1

         STOCKHOLDERS RIGHTS AGREEMENT (this "Rights Agreement") dated as of
July 27, 1995, between ALTEON INC., a Delaware corporation (the "Company"), and
Registrar and Transfer Company, as Rights Agent (the "Rights Agent").

         The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
par value $0.01 per share, of the Company (the "Common Stock") outstanding at
the Close of Business (as hereinafter defined) on the date fifteen (15) days
following the date of this Rights Agreement (the "Record Date"), and has
authorized the issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions of this Rights Agreement) with respect to each share
of Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Expiration Date
(as such terms are hereinafter defined); provided, however, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date or
the Expiration Date in accordance with the provisions of Section 23. Each Right
shall initially represent the right to purchase one one-thousandths (1/1,000ths)
of a share of Series F Preferred Stock, par value $0.01 per share, of the
Company (the "Preferred Shares"), having the powers, rights and preferences set
forth in the Certificate of Designation attached as Exhibit A.

         Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

         Section 1. Certain Definitions. For purposes of this Rights Agreement,
the following terms have the meanings indicated:

                  "Acquiring Person" shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 20% of the Common Shares then outstanding, other
than pursuant to a Qualifying Offer, but shall not include (a) the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any of
its Subsidiaries, or any Person holding Common Shares for or pursuant to the
terms of any such employee benefit plan or (b) any such Person who has become
such a Beneficial Owner solely because (i) of a change in the aggregate number
of Common Shares outstanding since the last date on which such Person acquired
Beneficial Ownership of any Common Shares or (ii) it acquired such Beneficial
Ownership in the good faith belief that such acquisition would not (x) cause
such Beneficial Ownership to exceed 20% of the Common Shares then outstanding
and such Person relied in good faith in computing the percentage of its
Beneficial Ownership on publicly filed reports or documents of the Company which
are inaccurate or out-of-date or (y) otherwise cause a Distribution Date or the
adjustment provided for in Section 11(a) to occur. Notwithstanding clause (b) of
the prior sentence, if any Person that is not an Acquiring Person due to such
clause (b) does not reduce its percentage of Beneficial Ownership of Common
Shares to 20% or less by the Close of Business on the fifth Business Day after
notice from the Company (the date of notice being the first day) that such
Person's Beneficial Ownership of Common Shares so exceeds 20%, such Person
shall, at the end of such five Business Day period, become an Acquiring Person
(and such clause (b) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company, acting by a
vote of those directors of the Company whose approval would be required to
redeem the Rights under Section 24.

                                       1
   5
                                                                     Exhibit 4.1

                  "Affiliate" and "Associate", when used with reference to any
Person, shall have the respective meanings ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Rights Agreement.

                  A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own", and shall be deemed to have "Beneficial
Ownership" of, any securities:

                  (i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule 13d-3 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Rights Agreement;

                  (ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (written or oral), or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, or to have Beneficial Ownership of,
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange thereunder, or (B) the
right to vote pursuant to any agreement, arrangement or understanding (written
or oral); provided, however, that a Person shall not be deemed the Beneficial
owner of, or to beneficially own, any security if (1) the agreement, arrangement
or understanding (written or oral) to vote such security arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) the beneficial ownership of
such security is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or

                  (iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (written or oral) for
the purpose of acquiring, holding, voting (except pursuant to a revocable proxy
as described in clause (ii)(B) of this definition) or disposing of any
securities of the Company.

         Notwithstanding the foregoing, nothing contained in this definition
shall cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own", any
securities acquired in a bona fide firm commitment underwriting pursuant to an
underwriting agreement with the Company.

                  "Book Value", when used with reference to Common Shares issued
by any Person, shall mean the amount of equity of such Person applicable to each
Common Share, determined (i) in accordance with generally accepted accounting
principles in effect on the date as to which such Book Value is to be
determined, (ii) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after giving
effect to (A) the exercise of all rights, options and warrants to purchase such
Common Shares (other than the Rights), and the conversion of all securities
convertible into such Common


                                       2
   6
                                                                     Exhibit 4.1

Shares, at an exercise or conversion price, per Common Share, which is less than
such Book Value before giving effect to such exercise or conversion (whether or
not exercisability or convertibility is conditioned upon occurrence of a future
event), (B) all dividends and other distributions on the capital stock of such
Person declared prior to the date as of which such Book Value is to be
determined and to be paid or made after such date, and (C) any other agreement,
arrangement or understanding (written or oral), or transaction or other action
prior to the date as of which such Book Value is to be determined which would
have the effect of thereafter reducing such Book Value.

                  "Business Combination" shall have the meaning set forth in
Section 11(c)(I).

                  "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
Borough of Manhattan, the City of New York, are authorized or obligated by law
or executive order to close.

                  "Certificate of Designation" shall mean the Certification of
Designation of Series F Preferred Stock setting forth the powers, preferences,
rights, qualifications, limitations and restrictions of such series of Preferred
Stock of the Company, a copy of which is attached as Exhibit A.

                  "Close of Business" on any given date shall mean 5:00 p.m.,
New York City time, on such date; provided, however, that, if such date is not a
Business Day, "Close of Business" shall mean 5:00 p.m., New York City time, on
the next succeeding Business Day.

                  "Common Shares", when used with reference to the Company prior
to a Business Combination, shall mean the shares of Common Stock of the Company
or any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that, if any time
there shall be more than one such class or series of capital stock or equity
interests of such Person, "Common Shares" of such Person shall include all such
classes and series substantially in the proportion of the total number of shares
or other units of each such class or series outstanding at such time.

                  "Common Stock" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.

                  "Company" shall have the meaning set forth in the heading of
this Rights Agreement; provided, however, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section 11(c)(III).

                  The term "control" with respect to any Person shall mean the
power to direct the management and policies of such Person, directly or
indirectly, by or


                                       3
   7
                                                                     Exhibit 4.1

through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.

                  "Distribution Date" shall have the meaning set forth in
Section 3(b).

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as in effect on the date in question, unless otherwise specifically provided.

                  "Exchange Consideration" shall have the meaning set forth in
Section 11(b)(I).

                  "Expiration Date" shall have the meaning set forth in Section
7(a).

                  "Major Part," when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (i) having a fair
market value aggregating 50% or more of the total fair market value of all the
assets of the Company and its Subsidiaries (taken as a whole) as of the date in
question, (ii) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and its
Subsidiaries (taken as a whole) as would be shown on a consolidated or combined
balance sheet of the Company and its Subsidiaries as of the date in question,
prepared in accordance with generally accepted accounting principles then in
effect, or (iii) accounting for 50% or more of the total amount of earnings
before interest, taxes, depreciation and amortization or revenues of the Company
and its Subsidiaries (taken as a whole) as would be shown on, or derived from, a
consolidated or combined statement of income of the Company and its Subsidiaries
for the period of 12 months ending on the last day of the Company's monthly
accounting period next preceding the date in question, prepared in accordance
with generally accepted accounting principles then in effect.

                  "Market Value," when used with reference to Common Shares on
any date, shall be deemed to be the average of the daily closing prices, per
share, of such Common Shares for the period which is the shorter of (1) 30
consecutive Trading Days immediately prior to the date in question or (2) the
number of consecutive Trading Days beginning on the Trading Day immediately
after the date of the first public announcement of the event requiring a
determination of the Market Value and ending on the Trading Day immediately
prior to the record date of such event; provided, however, that, in the event
that the Market Value of such Common Shares is to be determined in whole or in
part during a period following the announcement by the issuer of such Common
Shares of any action of the type described in Section 12(a) that would require
an adjustment thereunder, then, and in each such case, the Market Value of such
Common Shares shall be appropriately adjusted to reflect the effect of such
action on the market price of such Common Shares. The closing price for each
Trading Day shall be the closing price quoted on the composite tape for
securities listed on the New York Stock Exchange, or, if such securities are not
quoted on such composite tape or if such securities are not listed on such
exchange, on the principal United States securities exchange registered under
the Exchange Act (or any recognized foreign stock exchange) on which such
securities are listed, or, if such securities are not listed on any such
exchange, the average of the closing bid and asked quotations with respect to a
share of such securities on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use, or if
no such quotations are available, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such
securities selected by the Board of Directors of


                                       4
   8
                                                                     Exhibit 4.1

the Company. If on any such Trading Day no market maker is making a market in
such securities, the closing price of such securities on such Trading Day shall
be deemed to be the fair value of such securities as determined in good faith by
the Board of Directors of the Company (whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent, the holders of Rights and all other Persons); provided, however, that for
the purpose of determining the closing price of the Preferred Shares for any
Trading Day on which there is no such market maker for the Preferred Shares the
closing price on such Trading Day shall be deemed to be the Formula Number (as
defined in the Certificate of Designation) times the closing price of the Common
Shares of the Company on such Trading Day.

                  "Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity.

                  "Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.

                  "Principal Party" shall mean the Surviving Person in a
Business Combination; provided, however, that, if such Surviving Person is a
direct or indirect Subsidiary of any other Person, "Principal Party" shall mean
the Person which is the ultimate parent of such Surviving Person and which is
not itself a Subsidiary of another Person. In the event ultimate control of such
Surviving Person is shared by two or more Persons, "Principal Party" shall mean
that Person that is immediately controlled by such two or more Persons.

                  "Purchase Price" with respect to each Right shall mean $80.00,
as such amount may from time to time be adjusted as provided herein, and shall
be payable in lawful money of the United States of America. All references
herein to the Purchase Price shall mean the Purchase Price as in effect at the
time in question.

                  "Qualifying Offer" shall mean an all-cash tender offer made by
any Person for all outstanding Common Shares which meets all of the following
requirements:

         (1) on or prior to the date such offer is commenced within the meaning
         of Rule 14d-2(a) of the General Rules and Regulations under the
         Exchange Act, such Person has, and has provided to the Company, firm
         written commitments from responsible financial institutions, which have
         been accepted by such Person (or one of its Affiliates), to provide,
         subject only to customary terms and conditions, funds for such offer
         which, when added to the amount of cash and cash equivalents which such
         Person then has available and has irrevocably committed in writing to
         the Company to utilize for purposes of such offer, will be sufficient
         to pay for all Common Shares outstanding on a fully diluted basis
         pursuant to the offer and the second-step transaction required by
         clause (6) below and all related expenses, together with copies of all
         written materials prepared by such person for such financial
         institutions in connection with obtaining such financing commitments;

         (2) after the consummation of such offer, such Person, alone or
         together with any of its Affiliates and Associates, owns Common Shares
         representing a majority of the then outstanding Common Shares;

                                       5
   9
                                                                     Exhibit 4.1

         (3) such offer remains open for at least 45 Business Days; provided,
         however, that (x) if there is any increase in the price of such offer,
         such offer must remain open for at least an additional 20 Business Days
         after the last such increase, (y) such offer must remain open for at
         least 20 Business Days after the date that any bona fide alternative
         offer is made which, in the opinion of one or more investment banking
         firms designated by the Company, provides for consideration per share
         in excess of that provided for in such offer, and (z) such offer must
         remain open for at least 20 Business Days after the date on which such
         Person reduces the per share price offered in accordance with clause
         (6)(y) below; provided further, however, that such offer need not
         remain open, as a result of this clause (3), beyond (i) the time which
         any other offer satisfying the criteria for a Qualifying Offer is then
         required to be kept open under this clause (3), or (ii) the scheduled
         expiration date, as such date may be extended by public announcement on
         or prior to the then scheduled expiration date, of any other tender or
         exchange offer for Common Shares with respect to which the Board of
         Directors has agreed to redeem the Rights immediately prior to
         acceptance for payment of Common Shares thereunder (unless such other
         offer is terminated prior to its expiration without any Common Shares
         having been purchased thereunder);

         (4) such offer is accompanied by a written opinion, in customary form,
         of a nationally recognized investment banking firm which is addressed
         to the holders of Common Shares other than such Person and states that
         the price to be paid to holders pursuant to the offer is fair from a
         financial point of view to such holders and includes any written
         presentation of such firm showing the analysis and range of values
         underlying such conclusions;

         (5) such offer is approved by a majority of the Board of Directors of
         the Company who are not officers of the Company and who are not
         nominees, Affiliates or Associates of such Person, after determining
         that the price to be paid to stockholders pursuant to the offer is the
         best value reasonably available to stockholders after taking into
         account the potential long-term value of the Company and all other
         factors that it considers relevant or otherwise in the best interest of
         the stockholders; and

         (6) prior to or on the date that such offer is commenced within the
         meaning of Rule 14d-2(a) of the General Rules and Regulations under the
         Exchange Act, such Person makes an irrevocable written commitment to
         the Company (x) to consummate a transaction or transactions promptly
         upon the completion of such offer, whereby all Common Shares not
         purchased in such offer will be acquired at the same price per share
         paid in such offer, subject only to the condition that the Board of
         Directors shall have granted any approvals required to enable such
         Person to consummate such transaction or transactions following
         consummation of such offer without obtaining the vote of any other
         stockholder, (y) that such Person will not make any amendment to the
         original offer which reduces the per share price offered (other than a
         reduction to reflect any dividend declared by the Company after the
         commencement of such offer, whether by way of recapitalization,
         reorganization, repurchase or otherwise), changes the form of
         consideration offered, or reduces the number of shares being sought or
         which is in any other respect materially adverse to the Company's
         stockholders, and (z) that neither such Person nor of any its
         Affiliates or Associates will make any offer for any equity securities
         of the Company for a period of six months after the commencement of the
         original offer if such original offer does not result in the tender of
         the


                                       6
   10
                                                                     Exhibit 4.1

         number of Common Shares required to be purchased pursuant to clause (2)
         above, unless another tender offer by another party for all outstanding
         Common Shares is commenced that (a) constitutes a Qualifying Offer or
         (b) is approved by the Board of Directors of the Company (in which
         event, any new offer by such Person or of any of its Affiliates or
         Associates must be at a price no less than that provided for in such
         approved offer).

                  "Record Date" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.

                  "Redemption Date" shall have the meaning set forth in Section
24(a).

                  "Redemption Price" with respect to each Right shall mean $.01,
as such amount may from time to time be adjusted in accordance with Section 12.
All references herein to the Redemption Price shall mean the Redemption Price as
in effect at the time in question.

                  "Registered Common Shares" shall mean Common Shares which are,
as of the date of consummation of a Business Combination, and have continuously
been for the 12 months immediately preceding such date, registered under Section
12 of the Exchange Act.

                  "Right Certificate" shall mean a certificate evidencing a
Right in substantially the form attached as Exhibit B.

                  "Rights" shall mean the rights to purchase Preferred Shares
(or other securities) as provided in this Rights Agreement.

                  "Securities Act" shall mean the Securities Act of 1933, as in
effect on the date in question, unless otherwise specifically provided.

                  "Subsidiary" shall mean a Person, at least a majority of the
total outstanding voting power (being the power under ordinary circumstances
(and not merely upon the happening of a contingency) to vote in the election of
directors of such Person (if such Person is a corporation) or to participate in
the management and control of such Person (if such Person is not a corporation))
of which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.

                  "Surviving Person" shall mean (1) the Person which is the
continuing or surviving Person in a consolidation or merger specified in Section
11(c)(I)(i) or 11(c)(I)(ii) or (2) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction specified in Section
11(c)(I)(iii); provided, however, that if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in one or more related transactions specified in Section
11(c)(I)(iii) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.

                  "Trading Day" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be) on which any securities or Rights, as the case may be, are listed or
admitted to trading is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national


                                       7
   11
                                                                     Exhibit 4.1

securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.

         SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.

         SECTION 3. Issue of Rights and Right Certificates. (a) One Right shall
be associated with each Common Share outstanding on the Record Date, each
additional Common Share that shall become outstanding between the Record Date
and the earliest of the Distribution Date, the Redemption Date or the Expiration
Date and each additional Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or the
Expiration Date as provided in Section 23; provided, however, that, if the
number of outstanding Rights are combined into a smaller number of outstanding
Rights pursuant to Section 12(a), the appropriate fractional Right determined
pursuant to such Section shall thereafter be associated with each such Common
Share.

                  (b) Until the earlier of (i) such time as the Company learns
that a Person has become an Acquiring Person or (ii) the Close of Business on
such date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any of
its Subsidiaries, or any Person holding Common Shares for or pursuant to the
terms of any such employee benefit plan and other than a Qualifying Offer) for
outstanding Common Shares, if upon consummation of such tender or exchange offer
such Person could be the Beneficial Owner of more than 20% of the outstanding
Common Shares (the Close of Business on the earlier of such dates being the
"Distribution Date"), (x) the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof and not by separate
Right Certificates and (y) the Rights, including the right to receive Right
Certificates, will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after the Distribution Date, the Rights
Agent will send, by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate evidencing one whole Right
for each Common Share (or for the number of Common Shares with which one whole
Right is then associated if the number of Rights per Common Share held by such
record holder has been adjusted in accordance with the proviso in Section 3(a)).
If the number of Rights associated with each Common Share has been adjusted in
accordance with the proviso in Section 3(a), at the time of distribution of the
Right Certificates the Company may make any necessary and appropriate rounding
adjustments so that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Right in accordance
with Section 15(a). As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.

                  (c) With respect to any certificate for Common Shares, until
the earliest of the Distribution Date, the Redemption Date or the Expiration
Date, the Rights associated with the Common Shares represented by any such
certificate


                                       8
   12
                                                                     Exhibit 4.1

shall be evidenced by such certificate alone, the registered holders of the
Common Shares shall also be the registered holders of the associated Rights and
the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.

                  (d) Certificates issued for Common Shares after the Record
Date (including, without limitation, upon transfer or exchange of outstanding
Common Shares), but prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, may have printed on, written on or
otherwise affixed to them the following legend:

         This certificate also evidences and entitles the holder hereof to
         certain Rights as set forth in a Stockholders Rights Agreement dated as
         of July 27, 1995, as it may be amended from time to time (the "Rights
         Agreement"), between Alteon Inc. (the "Company") and Registrar and
         Transfer Company, as Rights Agent (the "Rights Agent"), the terms of
         which are hereby incorporated herein by reference and a copy of which
         is on file at the principal executive offices of the Company. Under
         certain circumstances, as set forth in the Rights Agreement, such
         Rights will be evidenced by separate certificates and will no longer be
         evidenced by this certificate. The Rights Agent will mail to the holder
         of this certificate a copy of the Rights Agreement without charge after
         receipt of a written request therefor. Rights beneficially owned by
         Acquiring Persons or their Affiliates or Associates (as such terms are
         defined in the Rights Agreement) and by any subsequent holder of such
         Rights are null and void and nontransferable.

         Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the rights of
any holder of Rights.

         SECTION 4. Form of Right Certificates. The Right Certificates (and the
form of election to purchase and form of assignment to be printed on the reverse
side thereof) shall be in substantially the form set forth as Exhibit B and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 7, 11 and 23, the Right Certificates, whenever issued,
shall be dated as of the Distribution Date, and on their face shall entitle the
holders thereof to purchase such number of Preferred Shares as shall be set
forth therein for the Purchase Price set forth therein, subject to adjustment
from time to time as herein provided.

         SECTION 5.  Execution, Countersignature and Registration.

                  (a) The Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Treasurer or a Vice President
(whether preceded by any additional title) of the Company, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary, an Assistant Secretary or a
Vice President (whether preceded by any additional title, provided that such
Vice President shall not have also executed the Right Certificates) of the
Company,


                                       9
   13
                                                                     Exhibit 4.1

 either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid or
obligatory for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such an officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may nevertheless
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such an officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of execution of such Right Certificate, shall be a proper officer of
the Company to sign such Right Certificate, although at the date of execution of
this Rights Agreement any such person was not such an officer of the Company.

                  (b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office in Cranford, New Jersey, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced by each of the Right Certificates,
the certificate number of each of the Right Certificates and the date of each of
the Right Certificates.

         SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights.

                  (a) Subject to the provisions of Sections 7(e) and 15, at any
time after the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, any Right Certificate
or Right Certificates may be transferred, split-up, combined or exchanged for
another Right Certificate or Right Certificates representing, in the aggregate,
the same number of Rights as the Right Certificate or Right Certificates
surrendered then represented. Any registered holder desiring to transfer,
split-up, combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent and shall surrender the Right Certificate
or Right Certificates to be transferred, split-up, combined or exchanged at the
principal office of the Rights Agent; provided, however, that neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any Right Certificate surrendered for transfer until
the registered holder shall have completed and signed the certification
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Sections 7(e) and 15, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange or Right Certificates.

                  (b) Upon receipt by the Company and the Rights Agent of
evidence reasonable satisfactory to them of the loss, theft, destruction or
mutilation of a valid Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and, at
the Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make a
new


                                       10
   14
                                                                     Exhibit 4.1

Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

                  (c) Notwithstanding any other provision hereof, the Company
and the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced by Right
Certificates.


                                       11
   15
                                                                     Exhibit 4.1

         SECTION 7.  Exercise of Rights; Expiration Date of Rights.

                  (a) Subject to Section 7(e) and except as otherwise provided
herein (including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided herein, to purchase for the Purchase
Price, at any time after the Distribution Date and at or prior to the earlier of
(i) the Close of Business on the 10th anniversary of the date of this Rights
Agreement (the Close of Business on such date being the "Expiration Date"), or
(ii) the Redemption Date, one one-thousandths (1/1,000ths) of a Preferred Share,
subject to adjustment from time to time as provided in Sections 11 and 12.

                  (b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date, upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the Rights
Agent in New York, New York, together with payment of the Purchase price for
each one one-thousandths (1/1,000ths) of a Preferred Share as to which the
Rights are exercised, at or prior to the earlier of (i) the Expiration Date or
(ii) the Redemption Date.

                  (c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the Preferred Shares to be
purchased together with an amount equal to any applicable transfer tax, in
lawful money of the United States of America, in cash or by certified check or
money order payable to the order of the Company, the Rights Agent shall
thereupon (i) either (A) promptly requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests or (B) if the Company shall have elected to deposit the Preferred
Shares with a depositary agent under the depositary arrangement, promptly
requisition from the depositary agent depositary receipts representing the
number of one one-thousandths (1/1,000ths) of a Preferred Share to be purchased
(in which case certificates for the Preferred Shares to be represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary agent to comply with all such requests,
(ii) when appropriate, promptly requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
15, (iii) promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt promptly deliver such cash
to or upon the order of the registered holder of such Right Certificate.

                  (d) In case the registered holder of any right Certificate
shall exercise fewer than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 15.

                  (e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by an Acquiring
Person or any Affiliate or Associate of an Acquiring Person shall be null and
void and nontransferable, and any holder of any such Right (including any

                                       12
   16
                                                                     Exhibit 4.1

purported transferee or subsequent holder) shall not have any right to exercise
or transfer any such Right.

                  (f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificates upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial owner) or Affiliates or Associates thereof as the Company
shall reasonably request.

                  (g) The Company may temporarily suspend, for a period of time
not to exceed 90 calendar days after the Distribution Date, the exercisability
of the Rights in order to prepare and file a registration statement under the
Securities Act, on appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the effectiveness of
such registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect. Notwithstanding any provision herein
to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of such
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted under applicable law.

         SECTION 8.  Cancellation and Destruction of Right Certificates.

         All Right Certificates surrendered or presented for the purpose of
exercise, transfer, split-up, combination or exchange shall, and any Right
Certificate representing Rights that have become null and void and
nontransferable pursuant to Section 7(e) surrendered or presented for any
purpose shall, if surrendered or presented to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered or presented to the Rights Agent, for cancellation and
retirement, and the Rights Agent for cancellation and retirement, and the Rights
Agent shall be canceled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by this Rights Agreement. The Company
shall deliver to the Rights Agent shall so cancel and retire, any Right
Certificate purchased or acquired by the Company. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

         SECTION 9.  Reservation and Availability of Preferred Shares.

                  (a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred shares
or any authorized and issued Preferred Shares held in its treasury, free from
preemptive rights or any right of first refusal, a number of Preferred Shares
sufficient to permit the exercise in full of all outstanding Rights.

                                       13
   17
                                                                     Exhibit 4.1

                  (b) In the event that there shall not be sufficient Preferred
Shares issued but not outstanding or authorized but unissued to permit the
exercise or exchange or Rights in accordance with Section 11, the Company
covenants and agrees that it will take all such action as may be necessary to
authorize additional Preferred Shares for issuance upon the exercise or exchange
of Rights pursuant to Section 11; provided, however, that if the Company is
unable to cause the authorization of additional Preferred Shares, then the
Company shall, or in lieu of seeking any such authorization, the Company may, to
the extent necessary and permitted by applicable law and any agreements or
instruments in effect prior to the Distribution Date to which it is a party, (A)
upon surrender of a Right, pay cash equal to the Purchase Price in lieu of
issuing Preferred Shares and requiring payment therefor, (B) upon due exercise
of a Right and payment of the Purchase Price for each Preferred Share as to
which such Right is exercised, issue equity securities having a value equal to
the value of the Preferred Shares which otherwise would have been issuable
pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board or (C) upon due
exercise of a Right and payment of the Purchase Price for each Preferred Share
as to which such Right is exercised, distribute a combination of Preferred
Shares, case and/or other equity and/or debt securities having an aggregate
value equal to the value of the Preferred Shares which otherwise would have been
issuable pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board. To the extent that any
legal or contractual restrictions (pursuant to agreements or instruments in
effect prior to the Distribution Date to which it is a party) prevent the
Company from paying the full amount payable in accordance with the forgoing
sentence, the Company shall pay to holders of the Rights as to which such
payments are being made all amounts which are not then restricted on a pro rata
basis as such payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.

                  (c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise or exchange of Rights shall, at the time of delivery of the
certificates for such preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.

                  (d) So long as the Preferred Shares issuable upon the exercise
or exchange of Rights are to be listed on any national securities exchange, the
Company covenants and agrees to use its best efforts to cause, from and after
such time as the Rights become exercisable or exchangeable, all Preferred Shares
reserved for such issuance to be listed on such securities exchange upon
official notice of issuance upon such exercise or exchange.

                  (e) The Company further covenants and agrees that it will pay
when due and payable any and all Federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of Right
Certificates or of any Preferred Shares or Common Shares or other securities
upon the exercise or exchange of the Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates for the Preferred Shares or Common Shares
or other securities, as the case may be, in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or exchange or to issue or deliver any certificates for Preferred
Shares or Common Shares or other securities, as the case may be, upon the
exercise or exchange of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of

                                       14
   18
                                                                     Exhibit 4.1

such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.

         SECTION 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares or Common Shares or other securities is issued
upon the exercise or exchange of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares or Common Shares or other
securities, as the case may be, represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of any Purchase Price (and any applicable
transfer taxes) was made; provided, however, that, if the date of such surrender
and payment is a date upon which the transfer books of the Company for the
Preferred Shares or Common Shares or other securities, as the case may be, are
closed, such Person shall be deemed to have become the record holder of such
Preferred Shares or Common Shares or other securities, as the case may be, on,
and such certificate shall be dated, the next succeeding Business Day on which
the transfer books of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are open.

         SECTION 11.  Adjustments in Rights After there is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations.

                  (a) Upon a Person becoming an Acquiring Person, proper
provision shall be made so that each holder of a Right, except as provided in
Section 7(e), shall thereafter have a right to receive, upon exercise thereof
for the Purchase Price in accordance with the terms of this Rights Agreement,
such number of one one-thousandths (1/1,000ths) of a Preferred Share as shall
equal the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of one one-thousandths (1/1,000ths) of a
Preferred Share for which a Right is then exercisable and the denominator of
which is 50% of the market Value of the Common Shares on the date on which a
Person becomes an Acquiring Person. As soon as practicable after a Person
becomes an Acquiring Person (provided the Company shall not have elected to make
the exchange permitted by Section 11(b)(I) for all outstanding Rights), the
Company covenants and agrees to use its best efforts to:

                  (I) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights;

                  (II) cause such registration statement to become effective as
soon as practicable after such filing;

                  (III) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and

                  (IV) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.

                  (b) (I) The Board of Directors of the Company may, at its
option, at any time after a Person becomes an Acquiring Person, mandatorily
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) for consideration per Right
consisting of one-half of the securities that would be issuable at such time
upon the exercise of one Right


                                       15
   19
                                                                     Exhibit 4.1

in accordance with Section 11(a) or, if applicable, Section 9(b) (the
consideration issuable per Right pursuant to this Section 11(b)(I) being the
"Exchange Consideration"). The Board of Directors of the Company may, at its
option, issue, in substitution for Preferred Shares, Common Shares in an amount
per Preferred Share equal to the Formula Number (as defined in the Certificate
of Designation) if there are sufficient Common Shares issued but not outstanding
or authorized but unissued. If the Board of Directors of the Company elects to
exchange all the Rights for Exchange Consideration pursuant to this Section
11(b)(I) prior to the physical distribution of the Rights Certificates, the
Corporation may distribute the Exchange Consideration in lieu of distributing
Right Certificates, in which case for purposes of this Rights Agreement holders
of Rights shall be deemed to have simultaneously received and surrendered for
exchange Right Certificates on the date of such distribution.

                           (II)  Any action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 11(b)(I) shall
be irrevocable and, immediately upon the taking of such action and without any
further action and without any notice, the right to exercise any such Right
pursuant to Section 11(a) shall terminate and the only right thereafter of a
holder of such Right shall be to receive the Exchange Consideration in exchange
for each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or issued, to exercise any such Right pursuant to Section 11
(c)(I). The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Rights for the Exchange Consideration will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which shall have become null and void
and nontransferable pursuant to the provisions of Section 7(e)) held by each
holder of Rights.

                  (c) (I) In the event that, following a Distribution Date,
directly or indirectly, any transactions specified in the following clause (i),
(ii) or (iii) of this Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:

                  (i)  the Company shall consolidate with, or merge with and
into, any Acquiring Person or any Affiliate or Associate of an Acquiring Person;

                  (ii) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall merge with and into the Company and, in connection with
such merger, all or part of the Common Shares shall be changed into or exchanged
for capital stock or other securities of the Company or of any Acquiring Person
or Affiliate or Associate of an Acquiring Person or cash or any other property;
or
                  (iii) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell, lease,
exchange or otherwise transfer or dispose of), in one or more transactions, the
Major Part of the assets of the Company and its Subsidiaries (taken as a whole)
to any Acquiring Person or any Affiliate or Associate of an Acquiring Person,
then, in each case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the


                                       16
   20
                                                                     Exhibit 4.1

exercise thereof for the Purchase Price in accordance with the terms of this
Rights Agreement, the securities specified below (or, at such holder's option,
the securities specified in Section 11(a)):

                  (A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter represent the
right to receive, upon the exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, such number of Registered Common Shares
of such Principal Party, free and clear of all liens, encumbrances or other
adverse claims, as shall have an aggregate Market Value equal to the result
obtained by multiplying the Purchase Price by two;

                  (B) If the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding, each Right shall
thereafter represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement, at the
election of the holder of such Right at the time of the exercise thereof, any
of:

                  (1) such number of Common Shares of the Surviving Person in
such Business Combination as shall have an aggregate Book Value immediately
after giving effect to such Business Combination equal to the result obtained by
multiplying the Purchase Price by two;

                  (2) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also the Surviving
Person in such Business Combination) as shall have an aggregate Book Value
immediately after giving effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by two; or

                  (3) if the Principal Party in such Business Combination is an
Affiliate of one or more Persons which has Registered Common Shares outstanding,
such number of Registered Common Shares of whichever of such Affiliates of the
Principal Party has Registered Common Shares with the greatest aggregate Market
Value on the date of consummation of such Business Combination as shall have an
aggregate Market Value on the date of such Business Combination equal to the
result obtained by multiplying the Purchase Price by two.

                  (II) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares that
have not been issued or reserved for issuance (and which shall, when issued upon
exercise thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer or ownership
thereof) to permit the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:

                  (i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights, shall be effective under the
Securities Act; and

                  (ii) the Company and each such issuer shall have:

                  (A) executed and delivered to the Rights Agent a supplemental
agreement providing for the assumption by such issuer of the obligations set
forth in this Section 11(c) (including the obligation of such issuer to issue


                                       17
   21
                                                                     Exhibit 4.1

Common Shares upon the exercise of Rights in accordance with the terms set forth
in Sections 11(c)(I) and 11(c)(III)) and further providing that such issuer, at
its own expense, will use its best efforts to:

                  (1) cause a registration statement under the Securities Act on
an appropriate form, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights, to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date;

                  (2) qualify or register the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights under the blue sky or
securities laws of such jurisdictions as may be necessary or appropriate; and

                  (3) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national securities exchange on
which the Common Shares were listed prior to the consummation of the Business
Combination or, if the Common Shares were not listed on a national securities
exchange prior to the consummation of the Business Combination, on a national
securities exchange;

                  (B) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a valid, binding
and enforceable agreement of such issuer; and

                  (C) filed with the Rights Agent a certificate of a nationally
recognized firm of independent accountants setting forth the number of Common
Shares of such issuer which may be purchased upon the exercise of each Right
after the consummation of such Business Combination.

                  (III) After consummation of any Business Combination and
subject to the provisions of Section 11(c)(II), (i) each issuer of Common Shares
for which Rights may be exercised as set forth in this Section 11(c) shall be
liable for, and shall assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights Agreement, (ii)
The term "Company" shall thereafter be deemed to refer to such issuer, (iii)
each such issuer shall take such steps in connection with such consummation as
may be necessary to assure that the provisions hereof (including the provisions
of Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (iv) the number of Common Shares of each such
issuer thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12 and the provisions of
Section 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such Common Shares.

         SECTION 12.  Certain Adjustments.

                  (a) To preserve the actual or potential economic value of the
Rights, if at any time after the date of this Rights Agreement there shall be
any change in the Common Shares or the Preferred Shares, whether by reason of
stock dividends, stock splits, recapitalization, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares, as the case
may be (other than distribution


                                       18
   22
                                                                     Exhibit 4.1

of the Rights or regular quarterly cash dividends) or otherwise, then, in each
such event the Board of Directors of the Company shall make such appropriate
adjustments in the number of Preferred Shares (or the number and kind of other
securities) issuable upon exercise of each Right, the Purchase Price and
Redemption Price in effect at such time and the number of Rights outstanding at
such time (including the number of Rights or fractional Rights associated with
each Common Share) such that following each adjustment such event shall not have
had the effect of reducing or limiting the benefits the holders of the Rights
would have had absent such event.

                  (b) If, as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter the number of
such securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such other securities.

                  (c) All Rights originally issued by the Company subsequent to
any adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of securities purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.

                  (d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number of kind of other securities
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms which were expressed in the
initial Right Certificates issued hereunder.

                  (e) In any case in which action taken pursuant to Section
12(a) requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional securities upon the
occurrence of the event requiring such adjustment.

         SECTION 13. Certificate of Adjustment. Whenever an adjustment is made
as provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment (b) promptly file with the Rights Agent and with
each transfer agent for the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) in accordance with Section 25. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained.

         SECTION 14.  Additional Covenants.

                  (a) Notwithstanding any other provision of this Rights
Agreement, no adjustment to the number of Preferred Shares (or fractions of a
share) or other


                                       19
   23
                                                                     Exhibit 4.1

securities or which a Right is exercisable or the number of Rights outstanding
or associated with each Common Share or any similar or other adjustment shall be
made or be effective if such adjustment would have the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such
adjustment, including, without limitation, the benefits under Sections 11 and
12, unless the terms of this Rights Agreement are amended so as to preserve such
benefits.

                  (b) The Company covenants and agrees that, after the
Distribution Date, except as permitted by Section 26, it will not take (or
permit any Subsidiary of the Company to take) any action if at the time such
action is taken it is intended or reasonably foreseeable that such action will
reduce or otherwise limit the benefits the holders of the Rights would have had
absent such action, including, without limitations, the benefits under Sections
11 and 12. Any action taken by the Company during any period after any Person
becomes an Acquiring Person but prior to the Distribution Date shall be null and
void unless such action could be taken under this Section 14(b) from and after
the Distribution Date. The Company shall not consummate any Business Combination
if any issuer of Common Shares for which Rights may be exercised after such
Business Combination in accordance with Section 11(c) shall have taken any
action that reduces or otherwise limits the benefits the holders of the Rights
would have had absent such action, including, without limitation, the benefits
under Sections 11 and 12.

         SECTION 15.  Fractional Rights and Fractional Shares.

                  (a) The Company may, but shall not be required to, issue
fractions of Rights or distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, the Company may pay to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 15(a), the
current market value of a whole Right shall be the closing price of the Rights
(as determined pursuant to the second and third sentences of the definition of
Market Value contained in Section 1) for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise issuable.

                  (b) The Company may, but shall not be required to, issue
fractions of Preferred Shares upon exercise of the Rights or distribute
certificates which evidence fractional Preferred Shares. In lieu of fractional
Preferred Shares, the Company may elect to (i) utilize a depository arrangement
as provided by the terms of the Preferred Shares or (ii) in the case of a
fraction of a Preferred Share (other than one one-thousandths (1/1,000ths) of a
Preferred Share or any integral multiple thereof), pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one
Preferred Share, if any are outstanding and publicly traded (or the Formula
Number times the current market value of one Common Share if the Preferred
Shares are not outstanding and publicly traded). For purposes of this Section
15(b), the current market value of a Preferred Share (or Common Share) shall be
the closing price of a Preferred Share (or Common Share) (as determined pursuant
to the second and third sentences of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date of such exercise.
If, as a result of an adjustment made pursuant to Section 12(a), the holder of
any Right thereafter exercised shall become entitled to receive any securities
other than Preferred Shares, the provisions of this Section 15(b) shall apply,
as nearly as reasonably may be, on like terms to such other securities.


                                       20
   24
                                                                     Exhibit 4.1

                  (c) The Company may, but shall not be required to, issue
fractions of Common Shares upon exchange of Rights pursuant to Section 11(b), or
to distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company may pay to the registered holders of
the Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current Market Value of one Common Share as of the date on which a Person became
an Acquiring Person.

                  (d) The holder of Rights by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as provided in this Section 15.

         SECTION 16.  Rights of Action.

                  (a) All rights of action in respect of this Rights Agreement
are vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares) may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders or Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and shall be entitled to specific
performance of the obligations of any Person under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Rights Agreement.

                  (b) Any holder of Rights who prevails in an action to enforce
the provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.

         SECTION 17.  Transfer and Ownership of Rights and Right Certificates.

                  (a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares.

                  (b) After the Distribution Date, the Right Certificates will
be transferable, subject to Section 7(e), only on the registry books of the
Rights Agent, if surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer.

                  (c) The Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.

                                       21
   25
                                                                     Exhibit 4.1

         SECTION 18.  Right Certificate Holder Not Deemed a Stockholder.

         No holder, as such, of any Right Certificate shall be entitled to vote
or receive dividends or be deemed, for any purpose, the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company, including, without limitation, any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders, or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.

         SECTION 19.  Concerning the Rights Agent.

                  (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder.

                  (b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate or certificate for the Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.

         SECTION 20.  Merger or Consolidation or Change of Rights Agent.

                  (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22. In case, at the time such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent shall succeed to
the agency created by this Rights Agreement, of any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
countersign such Right Certificate either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.

                                       22
   26
                                                                     Exhibit 4.1

                  (b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and, in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificate either in its prior name or
in its changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Rights Agreement.

         SECTION 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates (or, prior to the Distribution Date, of the Common Shares), by
their acceptance thereof, shall be bound:

                  (a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
opinion.

                  (b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person) be proved or established by the Company prior to taking, refraining from
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, a Vice President (whether
preceded by any additional title), the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.

                  (c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or wilful misconduct.

                  (d) The Rights Agent shall not be liable for or by reason of
any of statements of fact or recitals contained in this Rights Agreement or in
the Right Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.

                  (e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights

                                       23
   27
                                                                     Exhibit 4.1

evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.

                  (f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Rights Agreement.

                  (g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, a Vice President (whether preceded by
any additional title), the Secretary or the Treasurer of the Company, in
connection with its duties and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.

                  (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Rights Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other legal entity.

                  (i) The Rights Agent may execute an exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents of for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.

                  (j) The Company agrees to indemnify and to hold the Rights
Agent harmless against any loss, liability, damage or expense (including
reasonable fees and expenses of (legal counsel) which the Rights Agent may incur
resulting from its actions as Rights Agent pursuant to this Rights Agreement;
provided, however, that the Rights Agent shall not be indemnified or held
harmless with respect to any such loss, liability, damage or expense incurred by
the Rights Agent as a result of, or arising out of, its own negligence, bad
faith or wilful misconduct. In no case shall the Company be liable with respect
to any action, proceeding, suit or claim against the Rights Agent unless the
Rights Agent shall have notified the Company, by letter or by facsimile
confirmed by letter, of the assertion of any action, proceeding, suit or claim
against the Rights Agent, promptly after the Rights Agent shall have notice of
any such assertion of an action, proceeding, suit or claim or have been served
with the summons or other first legal process giving information as to the
nature and basis of the action, proceeding, suit or claim. The Company shall be
entitled to participate at its own expense in the defense of any such action,
proceeding, suit or claim, and, if the Company so elects, the Company shall
assume the defense of any such action, proceeding, suit or claim. In the event
that the Company assumes such defense, the Company shall not thereafter be
liable for the fees and expenses of any additional counsel retained by the
Rights Agent, so long as the Company shall


                                       24
   28
                                                                     Exhibit 4.1

retain counsel satisfactory to the Rights Agent, in the exercise of its
reasonable judgment, to defend such action, proceeding, suit or claim. The
Rights Agent agrees not to settle any litigation in connection with any action,
proceeding, suit or claim with respect to which it may seek indemnification from
the Company without the prior written consent of the Company.

         SECTION 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates (or, prior to the
Distribution Date, of the Common Shares) by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates (or,
prior to the Distribution Date, of the Common Shares) by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (or, prior to the Distribution Date, of the
Common Shares) (who shall, with such notice, submit his Right Certificate or,
prior to the Distribution Date, the certificate representing his Common Shares,
for inspection by the Company), then the registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares) may apply
to any court of competent jurisdiction for the appointment of a new Rights
agent. Any successor Rights Agent, whether appointed by the Company or by such
court, shall be a corporation organized and doing business under the laws of the
United States or of the State of New Jersey or New York (or of any other state
of the United States so long as such corporation is authorized to conduct a
stock transfer or corporate trust business in the State of New Jersey or New
York), in good standing, having a principal office in the State of New Jersey or
New York, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by Federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $20,000,000; provided that the
principal transfer agent for the Common Shares shall in any event be qualified
to be the Rights Agent. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares and the Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates (or, prior to the
Distribution Date, of the Common Shares). Failure to give any notice provided
for in this Section 22, however, or any defect therein shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

         SECTION 23. Issuance of Additional Rights and Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right


                                       25
   29
                                                                     Exhibit 4.1

Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change made in accordance with the
provisions of this Rights Agreement. In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Expiration Date, the Company (a)
shall, with respect to Common Shares so issued or sold pursuant to the exercise
of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Right Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Right Certificate wold be issued, and
(ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

         SECTION 24.  Redemption and Termination.

                  (a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) such time as a Person becomes an
Acquiring Person and (ii) the Expiration Date, order the redemption of all, but
not fewer than all, the then outstanding Rights at the Redemption Price (the
date of such redemption being the "Redemption Date"), and the Company, at its
option, may pay the Redemption Price either in cash or Common Shares or other
securities of the Company deemed by the Board of Directors of the Company, in
the exercise of its sole discretion, to be at least equivalent in value to the
Redemption Price; provided, however, that, in addition to any other limitations
contained herein on the right to redeem outstanding Rights (including the
occurrence of any event or the expiration of any period after which the Rights
may no longer be redeemed), for the 120-day period after any date of a change
(resulting from a proxy or consent solicitation) in a majority of the Board of
Directors of the Company in office at the commencement of such solicitation, the
Rights may only be redeemed if (A) there are directors then in office who were
in office at the commencement of such solicitation and (B) the Board of
Directors of the Company, with the concurrence of a majority of such directors
then in office, determines that such redemption is, in their judgment, in the
best interests of the Company and its stockholders.

                  (b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 Business Days after the action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Each such notice of redemption will state the method by which payment of
the Redemption Price will be made. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder of Rights receives such notice. In any case, failure to give such
notice by mail, or any defect in the notice, to any particular holder of Rights
shall not affect the sufficiency of the notice to other holders of Rights.


                                       26
   30
                                                                     Exhibit 4.1

         SECTION 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:

                  Alteon, Inc.
                  170 Williams Drive
                  Ramsey, New Jersey  07446
                  Attn: Chief Executive Officer

Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:

                  Registrar and Transfer Company
                  10 Commerce Drive
                  Cranford, New Jersey 07061
                  Attn:  Corporate Relations Department

         Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to any holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares.

         SECTION 26. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement (including, without limitation, the
date on which the Distribution Date shall occur, the time during which the
Rights may be redeemed pursuant to Section 24 or any provision of the
Certificate of Designation) without the approval of any holder of the Rights.
From and after the Distribution Date and subject to applicable law, the Company
may, and the Rights Agent shall if the Company so directs, amend this Rights
Agreement without the approval of any holders of Right Certificates (i) to cure
an ambiguity or to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision of this Rights
Agreement or (ii) to make any other provisions in regard to matters or questions
arising hereunder which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Any supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date shall be null
and void unless such supplement or amendment could have been adopted under the
prior sentence from and after the Distribution Date. Any supplement or amendment
to this Rights Agreement duly approved by the Company that does not amend
Sections 19, 20, 21 or 22 in a manner adverse to the Rights Agent shall become
effective immediately upon execution by the Company, whether or not also
executed by the Rights Agent. Notwithstanding anything contained in this Rights
Agreement to the contrary, during the 120-day period after any date of a change
(resulting from a proxy or


                                       27
   31
                                                                     Exhibit 4.1

consent solicitation) in a majority of the Board of Directors of the Company in
office at the commencement of such solicitation, this Rights Agreement may be
supplemented or amended only if (A) there are directors then in office who were
in office at the commencement of such solicitation and (B) the Board of
Directors of the Company, with the concurrence of a majority of such directors
then in office, determines that such supplement or amendment is, in their
judgment, in the best interests of the Company and its stockholders and, after
the Distribution Date, the holders of the Right Certificates. In addition,
notwithstanding anything to the contrary contained in this Rights Agreement, no
supplement or amendment to this Rights Agreement shall be made which (a) reduces
the Redemption Price (except as required by Section 12(a)) or (b) provides for
an earlier Expiration Date.

         SECTION 27. Successors. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         SECTION 28.  Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc.

                  (a) Nothing in this Rights Agreement shall be construed to
give to any Person other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, of the
Common Shares) any legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, of the Common Shares).

                  (b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the exclusive power
and authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or to amend this Rights Agreement and a determination of
whether an offer constitutes a Qualifying Offer and whether there is an
Acquiring Person).

                  (c) Nothing contained in this Rights Agreement shall be deemed
to be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any Qualifying Offer or any other
tender offer, or to recommend that holders of Common Shares reject any
Qualifying Offer or any other tender offer, or to take any other action
(including, without limitation, the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or alternative
offers or other proposals) with respect to any Qualifying Offer or any other
tender offer that the Board of Directors believes is necessary or appropriate in
the exercise of such fiduciary duty.

         SECTION 29. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.

                                       28
   32
                                                                     Exhibit 4.1

         SECTION 30. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the law
of the State of Delaware and for all purposes shall be governed by and construed
in accordance with the law of such State applicable to contracts to be made and
performed entirely within such State.

         SECTION 31. Counterparts; Effectiveness. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. This Rights Agreement shall
be effective as of the Close of Business on the date hereof.

         SECTION 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Rights Agreement.





                  IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.

                                       ALTEON INC.



                                       by: /s/ James J. Mauzey
                                           ---------------------------------
                                                Name: James J. Mauzey
                                                Title: Chairman & Chief
                                                       Executive Officer


                                       REGISTRAR AND TRANSFER COMPANY, as Rights
                                       Agent



                                       by: /s/ William P. Tatler
                                           ---------------------------------
                                            Name: William P. Tatler
                                            Title: Vice President



                                       29
   33
                                                                     Exhibit 4.1

Exhibits to Rights Agreement.



                                       30
   34
                                                                     Exhibit 4.1
                                                                       EXHIBIT A


                        CERTIFICATE OF THE VOTING POWERS,
                     DESIGNATIONS, PREFERENCES AND RELATIVE
                    PARTICIPATING, OPTIONAL AND OTHER SPECIAL
                     RIGHTS AND QUALIFICATIONS, LIMITATIONS
                           OR RESTRICTIONS OR SERIES F
                               PREFERRED STOCK OF
                                   ALTEON INC.


                  Pursuant to Section 151 of the General Corporation Law of the
State of Delaware, Alteon Inc. (the "Corporation") organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:

                  That, pursuant to the authority conferred upon the Board of
Directors of the Corporation by Article Fifth of the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"), the Board
of Directors of the Corporation on __________, 1995, adopted the following
resolution creating a series of Preferred Stock designated as Series F Preferred
Stock:

                  RESOLVED, that, pursuant to the authority vested in the Board
         of Directors of the Corporation in accordance with the provisions of
         the Certificate of Incorporation of the Corporation, a series of
         Preferred Stock of the Corporation is hereby created and that the
         designation and number of shares thereof an the voting powers,
         preferences and relative, participating, optional and other special
         rights of the shares of such series, and the qualifications,
         limitations or restrictions thereof are as follows:

         SECTION 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series F Preferred Stock" (the "Series F Preferred
Stock"), par value $0.01 per share. The number of shares initially constituting
the Series F Preferred Stock shall be 400,000; provided, however, that, if more
than a total of 400,000 shares of Series F Preferred Stock shall be issuable
upon the exercise of Rights (the "Rights") issued pursuant to the Stockholders
Rights Agreement dated as of ________________, 1995, between the Corporation and
Registrar and Transfer Company, as Rights Agent (the "Rights Agreement"), the
Board of Directors of the Corporation, pursuant to Section 151(g) of the General
Corporation Law of the State of Delaware, shall direct by resolution or
resolutions that a certificate be properly executed, acknowledged, filed and
recorded, in accordance with the provisions of Section 103 thereof, providing
for the total number of shares of Series F Preferred Stock authorized to be
issued to be increased (to the extent that the Certificate of Incorporation then
permits) to the largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of such Rights.

         SECTION 2. Dividends or Distributions. (a) Subject to the prior and
superior rights of the holders of shares of any other series of Preferred Stock
or other class of capital stock of the Corporation ranking prior and superior to
the shares of Series F Preferred Stock with respect to dividends, the holders of
shares of the Series F Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the Corporation
legally available therefore, (1) quarterly dividends payable in cash on the last
day of each fiscal quarter in each year, or such other dates as the Board of

                                       31
   35
                                                                     Exhibit 4.1

Directors of the Corporation shall approve (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or a
fraction of a share of Series F Preferred Stock, in the amount of $.01 per whole
share (rounded to the nearest cent) less the amount of all cash dividends
declared on the Series F Preferred Stock pursuant to the following clause (2)
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series F Preferred Stock (the total of which
shall not, in any event, be less than zero) and (2) dividends payable in cash on
the payment date for each cash dividend declared on the Common Stock in an
amount per whole share (rounded to the nearest cent) equal to the Formula Number
(as hereinafter defined) then in effect times the cash dividends then to be paid
on each share of Common Stock. In addition, if the Corporation shall pay any
dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or
distributions solely in shares of Common Stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding whole share of
Series F Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each share
of the Common Stock. As used herein, the "Formula Number" shall be 1,000;
provided, however, that, if at any time after July 20, 1995, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in share of Common
Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock, into
a smaller number of shares of Common Stock, then in each such event the Formula
Number shall be adjusted to a number determined by multiplying the Formula
Number in effect immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event (and rounding the
result to the nearest whole number); and provided further, that, if an any time
after July 20, 1995, the Corporation shall issue any shares of its capital stock
in a merger, reclassification, or change of the outstanding shares of Common
Stock, then in each such event the Formula Number shall be appropriately
adjusted to reflect such merger, reclassification or change so that each share
of Preferred Stock continues to be the economic equivalent of a Formula Number
of shares of Common Stock prior to such merger, reclassification or change.

                  (b) The Corporation shall declare a dividend or distribution
on the Series F Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common Stock);
provided, however, that, in the event no dividend or distribution (other than a
dividend or distribution in shares of Common Stock) shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per
share on the Series F Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series F Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for corresponding dividend or
distribution on the Common Stock.


                                       32
   36
                                                                     Exhibit 4.1

                  (c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series F Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series F Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series F Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of Series F
Preferred Stock which are originally issued prior to the record date for the
determination of holders of shares of Series F Preferred Stock entitled to
receive a quarterly dividend on the first Quarterly Dividend Payment Date shall
be calculated as if cumulative from and after the last day of the fiscal quarter
next preceding the date of original issuance of such shares. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series F
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.

                  (d) So long as any shares of the Series F Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series F Preferred Stock shall have been declared.

                  (e) The holders of the shares of Series F Preferred Stock
shall not be entitled to receive any dividends or other distribution except as
provided herein.

         SECTION 3.  Voting Rights. The holders of shares of Series F Preferred
Stock shall have the following voting rights:

                  (a) Each holder of Series F Preferred Stock shall be entitled
to a number of votes equal to the Formula Number then in effect, for each share
of Series F Preferred Stock held of record on each matter on which holders of
the Common Stock or stockholders generally are entitled to vote, multiplied by
the maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).

                  (b) Except as otherwise provided herein or by applicable law,
the holders of shares of Series F Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.

                  (c) If, at the time of any annual meeting of stockholders for
the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series F Preferred Stock are
in default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series F Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of stockholders (and at each subsequent annual meeting of stockholders),
unless all dividends in arrears have been paid or declared and set apart for

                                       33
   37
                                                                     Exhibit 4.1

payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series F Preferred Stock being entitled to cast
a number of votes per share of Series F Preferred Stock equal to the Formula
Number. Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the shares of Series F Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series F Preferred Stock shall
be divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Director shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series F Preferred Stock in this Section 3.

                  (d) Except as provided herein, in Section 11 or by applicable
law, holders of Series F Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for authorizing or taking
any corporate action.

         SECTION 4.  Certain Restrictions.

                  (a) Whenever quarterly dividends or other dividends or
distributions payable on the Series F Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series F Preferred Stock
outstanding shall have been paid in full, the Corporation shall not

         (i) declare or pay dividends on, make any other distributions on, or
         redeem or purchase or otherwise acquire for consideration any shares of
         stock ranking junior (either as to dividends or upon liquidation,
         dissolution or winding up) to the Series F Preferred Stock;

         (ii) Declare or pay dividends on, or make any other distributions on
         any shares of stock ranking on a parity (either as to dividends or upon
         liquidation, dissolution or winding up) with the Series F Preferred
         Stock, except dividends paid ratably on the Series F Preferred Stock
         and all such parity stock on which dividends are payable or in arrears
         in proportion to the total amounts to which the holders of all such
         shares are then entitled;

         (iii) redeem or purchase or otherwise acquire for consideration shares
         of any stock ranking on a parity (either as to dividends or upon
         liquidation, dissolution or winding up) with the Series F Preferred
         Stock; provided that the Corporation may at any time redeem, purchase
         or otherwise acquire shares of any such parity stock in exchange for
         shares of any stock of the Corporation ranking junior (either as to
         dividends or upon dissolution, liquidation or winding up) to the Series
         F Preferred Stock; or

                                       34
   38
                                                                     Exhibit 4.1

         (iv) purchase or otherwise acquire for consideration any shares of
         Series F Preferred Stock, or any shares of stock ranking on a parity
         with the Series F Preferred Stock, except in accordance with a purchase
         offer made in writing or by publication (as determined by the Board of
         Directors) to all holders of such shares upon such terms as the Board
         of Directors, after consideration of the respective annual dividend
         rates and other relative rights and preferences of the respective
         series and classes, shall determine in good faith will result in fair
         and equitable treatment among the respective series or classes.

                  (b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

         SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series F
Preferred Stock unless, prior thereto, the holders of shares of Series F
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series F Preferred
Stock, except distributions made ratably on the Series F Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up.

         SECTION 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the then
outstanding shares of Series F Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.

         SECTION 7.  No Redemption; No Sinking Fund.

                  (a) The shares of Series F Preferred Stock shall not be
subject to redemption by the Corporation or at the option of any holder of
Series F Preferred Stock except as set forth in the Certificate of Incorporation
of the Corporation; provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of Series F Preferred Stock in the open
market or by offer to any holder or holders of shares of Series F Preferred
Stock.

                  (b) The shares of Series F Preferred Stock shall not be
subject to or entitled to the operation of a retirement or sinking fund.

                                       35
   39
                                                                     Exhibit 4.1

         SECTION 8. Ranking. The Series F Preferred Stock shall rank junior to
all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions
thereof.

         SECTION 9. Fractional Shares. The Series F Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-thousandths
(1/1,000ths) of a share of any integral multiple of such fraction which shall
entitle the holder, in proportion to such holder's fractional shares, to receive
dividends, exercise voting rights, participate in distributions and to have the
benefit of all other rights of holders of Series F Preferred Stock. In lieu of
fractional shares, the Corporation, prior to the first issuance of a share or a
fraction of a share of Series F Preferred Stock, may elect (1) to make a cash
payment as provided in the Rights Agreement for fractions of a share other than
one one-thousandths (1/1,000ths) of a share or any integral multiple thereof or
(2) to issue depository receipts evidencing such authorized fraction of a share
of Series F Preferred Stock pursuant to an appropriate agreement between the
Corporation and a depository selected by the Corporation; provided that such
agreement shall provide that the holders of such depository receipts shall have
all the rights, privileges and preferences to which they are entitled as holders
of the Series F Preferred Stock.

         SECTION 10. Reacquired Shares. Any shares of Series F Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the provisions of Article Fifth of the Certificate of Incorporation.

         SECTION 11. Amendment. None of the powers, preferences and relative,
participating, optional and other special rights of the Series F Preferred Stock
as provided herein or in the Certificate of Incorporation shall be amended in
any manner which would alter or change the powers, preferences, rights or
privileges of the holders of Series F Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series F Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at least
66-2/3% of the outstanding shares of Series F Preferred Stock shall be deemed to
apply to the powers, preferences, rights or privileges of any holder of shares
of Series F Preferred Stock originally issued upon exercise of the Rights after
the time of such approval without the approval of such holder.

                  IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be duly executed in its corporate name on this  day of
_____________ 1995.


                                       Alteon Inc.



                                        By:
                                           Name:
                                           Title:


                                       36
   40
                                                                     Exhibit 4.1

Attest:

Name:
Title:





                                       37
   41
                                                                     Exhibit 4.1
                                                                       EXHIBIT B

                           [Form of Right Certificate]


Certificate No. [R]-
                                  Rights
                  ---------------


                  NOT EXERCISABLE AFTER __________, 2005, OR EARLIER IF REDEEMED
                  BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
                  OPTION OF THE COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET
                  FORTH IN THE STOCKHOLDERS RIGHTS AGREEMENT. RIGHTS
                  BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
                  ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
                  THE STOCKHOLDERS RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT
                  HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.


                                Right Certificate

                                   ALTEON INC.

                  This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Stockholders
Rights Agreement dated as of ____________, 1995 (the "Rights Agreement"),
between Alteon Inc., a Delaware corporation (the "Company"), and Registrar and
Transfer Company, as Rights Agent (the "Rights Agent"), unless the Rights
evidenced hereby shall have been previously redeemed by the Company, to purchase
from the Company at any time after the Distribution Date (as defined in the
Rights Agreement) and prior to 5:00 p.m., New York City time, on the 10th
anniversary of the date of the Rights Agreement (the "Expiration Date"), at the
principal office of the Rights Agent, or its successors as Rights Agent, one
one-thousandths (1/1,000ths) of a fully paid, nonassessable share of Series F
Preferred Stock, par value $0.01 per share, of the Company (the "Preferred
Shares"), at a purchase price per one one-thousandths (1/1,000ths) of a share
equal to $80.00 (the "Purchase Price") payable in cash, upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.

                  The Purchase Price and the number and kind of shares which may
be purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of [ ]. As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares which may be purchased upon the exercise
of each Right evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.

                  If the Rights evidenced by this Right Certificate are at any
time beneficially owned by an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.



                                       38
   42
                                                                     Exhibit 4.1

                  This Right Certificate is subject to all the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.

                  This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or corporate trust
office of the Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number and kind of shares as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors to be at least equivalent in value)
of $.01 per Right (which amount shall be subject to adjustment as provided in
the Rights Agreement) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date; provided,
however, that, for the 120-day period after any date of a change (resulting from
a proxy or consent solicitation) in a majority of the Board of Directors of the
Company in office at the commencement of such solicitation, the Rights may only
be redeemed if (A) there are directors then in office who were in office at the
commencement of such solicitation and (B) the Board of Directors of the Company,
with the concurrence of a majority of such directors then in office, determines
that such redemption is, in their judgment, in the best interests of the Company
and its stockholders.

                  The Company may, but shall not be required to, issue fractions
of Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one
one-thousandths (1/1,000ths) of a share or any integral multiple thereof or to
issue certificates or utilize a depository arrangement as provided in the terms
of the Rights Agreement and the Preferred Shares.

                  No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder thereof, as such, any
of the rights of a stockholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in accordance with the provisions of the Rights Agreement.

                                       39
   43
                                                                     Exhibit 4.1

                  This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.

                  WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.

Dated as of:

                                       ALTEON INC.,


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


Attest:


Name:
Title:



Countersigned:

Registrar and Transfer Company
as Rights Agent,


By:
   ------------------------------
         Authorized Officer



                                       40
   44
                                                                     Exhibit 4.1

                     [On Reverse Side of Right Certificate]

                          FORM OF ELECTION TO PURCHASE

                   (To be executed by the registered holder if
                   such holder desires to exercise the Rights
                     represented by this Right Certificate.)


To the Rights Agent:

                  The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
shares) issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:

Please insert social security
or other identifying number



                         (Please print name and address)


                  If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:

Please insert social security
or other identifying number



                         (Please print name and address)


Dated:                     , 19
         ------------------    ---




                                       Signature

Signature Guaranteed:


                                     NOTICE


                                       41
   45
                                                                     Exhibit 4.1

                  The signature on the foregoing Form of Election to Purchase
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.




                                       42

EX-10.8

   1
                                                                    Exhibit 10.8

                                TABLE OF CONTENTS

                       170 WILLIAMS ASSOCIATES ALTEON INC.



                      CLAUSE                                                PAGE
                                                                         
    Preamble                                                                  1
1.  Premises                                                                  3
2.  Term                                                                      3
3.  Construction                                                              4
4.  Landlord's Financing                                                      6
5.  Rental                                                                    6
6.  Use                                                                       7
7.  Insurance                                                                 8
8.  Increase of Insurance Rates                                               9
9.  Fire and Other Casualty                                                   9
10. Repairs and Maintenance                                                   10
11. Covenants Against Liens                                                   11
12. Alterations                                                               12
13. Condemnation                                                              12
14. Access and Right to Exhibit                                               13
15. Assignment and Subletting                                                 14
16. Rules and Regulations, Compliance with Laws                               15
17. Utilities                                                                 16
18. Signs                                                                     16
19. Taxes                                                                     17
20. Additional Charges                                                        18
21. Non-Liability of Landlord                                                 19
22. Intentionally Omitted                                                     20
23. Right to Cure Default                                                     20
24. Remedies Upon Default                                                     20
25. Waiver of Redemption                                                      22
26. Mortgage Priority                                                         22
27. Surrender of Premises                                                     23
28. Unavoidable Delays                                                        23
29. Landlord Consent                                                          24
30. Escrow for Fit-Up                                                         24
31. Certification                                                             25
32. Waiver of Trail by Jury                                                   25
33. Quiet Enjoyment                                                           25
34. Landlord                                                                  26
35. Notices                                                                   26
36. Covenants, Effect of Waiver                                               26
37. Holding Over                                                              27
38. Reference                                                                 27
39. Entire Agreement                                                          27
40. Attornment                                                                27
41. Real Estate Broker                                                        28
42. Validity of Lease                                                         28
43. Common Areas                                                              28
44. Representations                                                           28
45. ECRA and Environmental Laws                                               28
46. Option to Renew                                                           30
47. Cancellation Option                                                       31
48. Expansion                                                                 31
49. Environmental Survey                                                      32
50. Non-Binding Nature of Submittal                                           32





                                       1
   2
                                                                    Exhibit 10.8

                               AGREEMENT OF LEASE

                                    PREAMBLE

The Landlord and Tenant agree to the leasing of the premises indicated on the
terms and conditions specified and agree that the following terms whenever used
in this Lease shall have the meanings indicated unless the terms are otherwise
expressly modified, limited or expanded herein.

(1) LANDLORD: 170 Williams Associates, a New Jersey General Partnership

    ADDRESS: 500 Route 17 South, Hasbrouck Heights, NJ 07604

(2) TENANT: Alteon Inc.

    ADDRESS: 165 Ludlow Avenue, Northvale, NJ 07647

(3) DATE OF LEASE: January 3, 1993

(4) LEASED PREMISES: Land and Building as shown on Exhibits A&B

    ADDRESS:170 Williams Drive, Ramsey, NJ

    DESCRIPTION: As Shown on Exhibits A & B

    TERM: Ten (10) Years

    COMMENCEMENT DATE OF TERM: November 1, 1993

    TERMINATION DATE: October 31, 2003

(6) APPROXIMATE SIZE OF BUILDING: 37,000 Sq. Ft.

(7) BASE RENT:

    COMMENCEMENT DATE BASE RENT: November 1, 1993

    TOTAL LEASE BASE RENTAL: $4,815,874.68

                                   
    ANNUAL BASE RENTAL:     Year 1    :  $296,833.32
                            Year 2    :  $321,854.16
                            Year 3    :  $441,687.48
                            Years 4-10:  $536,499.96



                                      
    MONTHLY BASE RENTAL:    Months 1- 18 :  $24,736.11 per Month
                            Months 19- 30:  $28,906.25 per Month
                            Months 31-120:  $44,708.33 per Month



    RENT DUE DATE: First of Month

(8) ESCROW FOR FIT-UP: $1,034,000.00

(9) TENANT'S ALLOCABLE PERCENTAGE: 100 %

(10) ESTIMATED ADDITIONAL MONTHLY RENTAL CHARGE: $3,533.00(Taxes & Ins.)

(11) PERMITTED USE: General offices, warehouse and pharmaceutical
                    development laboratories includinq animal testing.

(12) INSURANCE REQUIREMENTS:
     LANDLORD: Per Paragraph 20
     TENANT: Per Paragraph 7

(13) BROKER: Edward S. Gordon company of New Jersey Inc.

(14) TAX IDENTIFICATION NO.


                                      -1-
   3
                                                                    Exhibit 10.8


     LANDLORD: 22-2340277

     TENANT: 13-3304550

(15) TENANT SIC NO: 8731

(16) EXHIBITS:      A. Site Plan
                    B. Existing Floor Plan
                    C. Letter of Intent
                    D. Form of Non-Disturbance Agreement





                                      -2-
   4
                                                                    Exhibit 10.8

                              W I T N E S S E T H:


PREMISES.

         1. The Landlord hereby leases to Tenant and Tenant hereby takes from
Landlord, those certain premises, consisting of a building on land owned by
Landlord (which building and land are collectively hereinafter referred to as
the "Leased Premises") , located in the Borough of Ramsey, County of Bergen and
State of New Jersey,and more particularly described on Exhibit "A" (the Land)
and Exhibit B (the Building) attached hereto and made a part hereof, subject
however, to all of the terms, covenants, provisions and conditions herein set
forth and to all liens, encumbrances, conditions, rights, easements,
restrictions, rights-of-way, covenants and zoning and building laws, ordinances,
regulations and codes affecting or governing the Building or which may hereafter
affect or govern the Building, and such matters as may be disclosed by
inspection,provided the same do not impair or interfere with the use and
enjoyment of the Leased Premises by Tenant for the purpose hereinafter stated in
Paragraph 6. Landlord represents and warrants that all liens encumbrances,
conditions, rights, easements, restrictions, rights-of-way and covenants and
agreements do not interfere with the use and enjoyment of the Leased Premises.

                  TO HAVE AND TO HOLD the Premises for the term and at the rents
herein set forth together with the right to use the driveway on Lot 13 which is
adjacent to the Leased Premises for ingress and egress.


TERM.

         2.       (a) The Term of this lease (hereinafter referred to as "Term")
shall be for the period stated following the Commencement Date, as hereinafter
defined, unless sooner terminated as herein expressly provided. In the event
however, that the Commencement Date is not the first day of a month, then the
Term shall end on the last day of the month in which the anniversary of the
Commencement Date shall fall.

                  (b) The term, and the Tenant's obligation to pay Rental and
Additional Rental, as hereinafter defined, shall commence on the earlier of the
following dates (which date is hereinafter referred to as the "Commencement
Date"): (1) On November 1, 1993 or (2) the date on which Tenant shall first
conduct any business activities on the Premises provided Landlord has completed
all of the work it is required to do by Paragraph 3 (a) by November 1, 1993 and
tendered possession of the Premises to Tenant for Tenant to begin its Tenants
Work (as hereinafter defined) on or prior to February 1, 1993 (February 1, 1993
is hereinafter referred to as "Possession Date"). If Tenant utilizes any of the
space in the Building prior to November 1, 1993 for its regular business
activities, it shall pay the Landlord on a monthly basis a pro rata portion of
the Total Lease Base Rental and estimated Additional Rent which shall be
determined by dividing the space so occupied by 37,000 and multiplying the
result by $45,373.96. In the event of such pre-Term occupancy for such regular
business activities, all of the other terms and conditions of this Lease shall
apply to Tenant's use and occupancy of the Leased Premises.

                  (c) For purposes of this lease, a "Lease Year" shall be deemed
to be each consecutive period of twelve (12) full calendar months during the
Term hereof, except that the first Lease Year shall also include the fractional
portion of the month, if any, immediately following the Commencement Date, and
that the last Lease Year shall run only from the day following the termination
of the previous Lease Year to the termination 67 date of the lease.




                                      -3-
   5
                                                                    Exhibit 10.8


CONSTRUCTION.

         3.       (a) The premises are being leased by Tenant on an as-is basis
except as otherwise indicated herein. Landlord shall, at its sole cost and
expense, complete the following building improvements prior to Tenant's
occupancy:

                           (i) Furnish and install, at the election of Tenant,
one (1) of the following elevators: (a) one (1) twin jack, holeless, hydraulic
freight elevator approximately 6'4" x 8'2", 4000 lb. capacity, speed 75 fpm, two
(2) stops in-line, with 6'x 7' bi-parting manual gates as manufactured by Casper
Elevator Company or equal; or (b) one (1) single jack, holeless, hydraulic
passenger elevator approximately 7'X 6', 3000 lb. capacity (20 people), 100 with
a 3' 0" wide door as manufactured by Dover Elevator Company or equal; or (c)
4500 lb. hydraulic with interior dimensions of 5'8" x 7'11" manufactured by Otis
Elevator or Dover Elevator or equal subject to the approval of Tenant's
Architect;

                           (ii) Furnish and install windows into the portion of
the lower floor which is above grade and four (4) windows in the rear wall of
the second floor. Such windows to be of equal quality to those presently
installed on the upper floor. Landlord shall submit shop drawings for such
windows to the Tenant's architect for the architect's reasonable approval which
shall not be unreasonably withheld or delayed;

                           (iii) Furnish and install screening on the roof to
screen the HVAC equipment from view at the front approach to the building.
Screening to be aesthetically and structurally consistent with the quality and
style of the building;

                           (iv) Landlord shall investigate the possibility of
water leakage into the first floor and, if required, perform any necessary
corrective measures in a manner subject to the reasonable approval of Tenant
and/or its architect/engineer;

                  (b) The Tenant shall complete all other improvements within
the Building required for its occupancy (hereinafter referred to as "Tenant's
Work"), in accordance with plans to be prepared by the Grad Partnership,
Tenant's architect (hereinafter referred to as "Tenant's Plans"). Tenant's Plans
shall be subject to the prior written approval of Landlord, which approval shall
not be unreasonably withheld or unduly delayed. The Landlord shall provide an
allowance of $1.50 per rentable square foot towards the costs of Tenants Plans.
This drawing allowance shall be paid to Tenant twenty (20) days following the
later of : (1) the date of drawing completion or (2) the start of construction
of Tenant improvements. All costs involved in Tenant's work (including, but not
limited to permits, professional fees, cost of utilities, interest costs to
Landlord for all sums paid by Landlord to Tenant as hereinafter provided and all
improvements costs) (herein referred to as "Tenant Construction Costs") are the
responsibility of the Tenant. Landlord will reimburse Tenant, for a portion of
all Tenant Construction Costs, the amount of Nine Hundred Seventy Eight Thousand
Five Hundred ($978,500.00) Dollars (hereinafter referred to as the "Landlord's
Allowance") as hereinafter provided in Sub-paragraph 3 (c) and 3 (d). Tenant has
the right to seek competitive bids for the performance of Tenants Work as well
as future alterations during the Lease Term so long as the contractor and
subcontractors selected are acceptable to Landlord, which acceptance shall not
be unreasonably withheld or delayed. In the event a contractor other than an
affiliate of Landlord is selected, Tenant shall pay to Landlord a supervisory
fee which shall be limited to actual and reasonable costs for personnel and
materials.

                  (c) A portion of Landlord's Allowance, in an amount not to
exceed Eight Hundred Seventy Eight Thousand Five Hundred ($878,500.00) Dollars,
shall be paid in progress payments to Tenant during the progress of Tenant's
performance of Tenant's Work upon the written request of Tenant, which request
shall be accompanied by the following:


                                      -4-
   6
                                                                    Exhibit 10.8



                           (i) A Certificate signed by the architect or engineer
in charge of Tenant's Work, reasonably satisfactory to Landlord and any
construction lender supplying the funds, dated not more than five (5) days prior
to such request, setting forth the following:

                                    (A) That the sum then requested has been or
is to be paid by Tenant to contractors, subcontractors, materialmen, engineers,
architects or other persons who have rendered services or furnished materials in
connection with Tenant's Work therein specified, and giving a brief description
of such services and materials and the several amounts so paid to each of said
persons in respect thereof, and stating that no part of such expenditures has
been or is being made the basis in any previous or then pending request for the
withdrawal or has been previously made, and that the sum then requested does not
exceed the value of the services and materials described in the certificate.

                                    (B) That, except for the amount, if any,
stated pursuant to the foregoing subparagraph (A) in such certificate to be due
for services or materials, there is no outstanding indebtedness which is then
due for labor, wages, materials, supplies or services in connection with
Tenant's Work and which, if unpaid, might become the basis of a vendor's
mechanic's, laborer's or materialmen's statutory or similar lien upon the
Premises, or any part thereof, or upon Tenant's leasehold interest therein
(unless such lien is adequately bonded or insured against by a surety company
bond or title policy free and clear of liens, by a company and in form,
substance and amount reasonably satisfactory to Landlord).

                           (ii) Progress payments shall be made to Tenant in
accordance with the reasonable requirements of First Fidelity, not later than
thirty (30) days after Landlord's receipt of Tenant's written request for the
Landlord's Allowance funds.

                           (iii) A copy of Tenant's general contract with its
general contractor and copies of any Change orders (as hereinafter defined)
since the prior progress payment. The term "Change Orders" shall mean any
written and signed amendments or modifications to Tenant's plans or general
contract with its contractor.

                           (iv) Such other documentation, affidavits and
certificates as are required by Landlord's construction or permanent lender; it
being specifically understood that Landlord is receiving funds from its
construction or permanent lender in order to reimburse Tenant.

                  (d) The remaining One Hundred Thousand ($100,000.00) Dollars
of the Landlord's Allowance shall be paid to Tenant subsequent to the
Commencement Date and upon Landlord's receipt from Tenant of (a) a copy of the
final certificate of occupancy for the Premises, and (b) a written certificate
from Tenant's architect certifying that Tenant's Work has been completed in
accordance with Tenant's Plans. Tenant shall give Landlord written notification
of completion and Landlord shall have a reasonable time within which to inspect
the Tenant's Work and either approve or disapprove same. Landlord's approval
shall not be unreasonably withheld if Tenant's Work shall be performed in
accordance with Tenant's Plans, as approved by Landlord. If Landlord disapproves
the Tenant's Work or any portion thereof, Tenant shall promptly cause any
defects noted by Landlord in Tenants Work to be corrected. Promptly upon
completion of the


                                      -5-
   7
                                                                    Exhibit 10.8


Tenant's Work, Tenant shall furnish Landlord with an affidavit, in form
reasonably satisfactory to Landlord's counsel, from Tenant's general contractor
stating that all subcontractors, laborers and material suppliers who have
supplied labor and/or materials in connection with the Tenant's Work have been
paid in full and that the general contractor releases any and all liens with
respect to labor and materials supplied to the Premises for the Tenant's Work.
Landlord agrees to pay to Tenant the remaining one Hundred Thousand
($100,000.00) Dollars of the Landlord's Allowance within fifteen (15) days after
Tenant shall have provided Landlord with all of the items required by this
sub-paragraph (b). Any and all of Tenant's costs to construct the Tenant's Work
exceeding the allowance stated in sub-paragraph (b) shall be borne by Tenant.

                  (e) All Construction shall be in a good and workmanlike manner
and shall be in compliance with all applicable laws, ordinances, rules and
regulations of any duly constituted governmental authority having jurisdiction
thereof.

                  (f) If the Tenant Work is not substantially completed by
November 11, 1993 due to (1) the non-performance by the Landlord of its
obligations under 3.(a)(i)-(iv) above; (2) Landlord's failure to tender
possession of the Premises to Tenant on or before February 1, 1993; (3) any
other delay attributable to or caused by Landlord's acts or omission or those of
any of its employees, agents, contractors or invitees; or (4) Tenant's inability
to obtain a Certificate of Occupancy because of a pre existing condition, then
the Commencement Date shall be postponed one (1) day for each day the completion
of Tenant improvements is delayed beyond November 1, 1993 due to the foregoing
items (1) through (4).

                  (g) In addition to "Landlords Allowance" Landlord shall
provide an Additional Tenant Improvements Allowance in the amount of $26,750.00
per month for each month (which shall be prorated for any partial month)
subsequent to the commencement of the Lease and up to and ending the month of
June 1994 (hereafter referred to as "Additional Tenant Improvements Allowance").
Landlord shall pay to the Tenant the Additional Tenant Improvements Allowance no
later than the tenth (10th) day of each month following the Commencement Date
through and including June 1, 1994.


LANDLORDS' FINANCING.

         4. Landlord has received a Letter of Intent from First Fidelity Bank,
N.A. ("First Fidelity") which is attached hereto as Exhibit "C". This Lease is
contingent upon Landlords receipt and its acceptance of a formal written
mortgage commitment to the Landlord embodying the terms of the Letter except
with respect to the use of the Security to be posted by the Tenant, which
commitment shall embody in substance the provisions of Paragraph 30. If Landlord
has not received the commitment on or before January 22, 1993 and so advised the
Tenant in writing or if the Landlord has not accepted the commitment on or
before January 29, 1993 and so advised the Tenant in writing, then this Lease
shall be terminated and neither party shall have any claim against the other
except that the Landlord shall return to the Tenant the first months rent paid
by the Tenant to the Landlord pursuant to Paragraphs 5.(a)(i).


RENTAL.

         5. (a) Tenant covenants and agrees to pay to the Landlord the following
Rental:

                           (i) a base rent during the Term of this lease or any
extension as may be provided for herein (hereinafter called the "Base Rent") in
the sum stated in the Preamble payable by Tenant in equal monthly installments
as stated on or before the first day of each month, in advance, to Landlord at
the office of Landlord above designated or to such other place as shall be


                                      -6-
   8
                                                                    Exhibit 10.8


designated by Landlord, without any prior notice or demand therefor And without
any deduction, abatement or set off for any reason Whatsoever, except that the
first month's rent, shall be paid upon the execution of the Lease by Tenant;

                           (ii) All charges payable pursuant to this lease As
additional rental (hereinafter referred to as "Additional Rental");

                           (iii) In the event that the Commencement Date Shall
be other than the first day of a month, then the Tenant shall be given a credit
by the Landlord for the fractional portion of the first month of the Lease Term
prior to the Commencement Date on a per diem basis (calculated on the basis of a
thirty-day month) for Base Rent and Additional Rent paid by Tenant for such
period. Such credit shall be calculated by Landlord and issued to Tenant to be
used as a credit against a portion of the next months rent due.

                  Such Base Rent and Additional Rental are herein Referred to
collectively as "Rental"

                  (b) It is intended that the Rental provided for in this lease
shall be a net return to Landlord throughout the Term Hereof, free of any
expense, charge or other deduction whatsoever, with respect to the Premises, the
Building and/or the operation, management, maintenance, repair, use or
occupation thereof, or any Portion thereof, with respect to any interest of
Landlord therein, except only as otherwise expressly provided in this lease. Any
attempt by Tenant "to escrow: any rent due or similar self-help Shall constitute
a default.

                  (c) In the event that any payment of Rental due Hereunder is
not made on the date it is due, a late charge in the amount of five percent (5%)
for each dollar so overdue may be charged by the Landlord for each month or part
thereof that the same remains overdue. This charge shall be in addition to and
not in lieu of any other remedy the Landlord may have under the circumstances
and is in addition to any reasonable fees and charges of any agents or attorneys
Landlord may employ as a result of any default in the payment of Rental
hereunder, whether authorized herein or by law. Any such "late charges" if not
previously paid shall, at the option of the Landlord, be added to and become
part of the succeeding rental payment to be made hereunder and shall be deemed
to constitute additional Rental.


USE

         6. the Premises are to be used by Tenant for any permitted use, subject
to and in accordance with all rules, regulations, laws, ordinances and
requirements of all governmental authorities, the Fire Insurance Rating
Organizations and Boards of Fire Insurance Underwriters, and any similar bodies
having jurisdiction thereof, and for no other purpose. Landlord represents that
Tenants proposed use set forth in Paragraph II of the Preamble is a permitted
use in the Leased Premises under the applicable zoning, health, fire, building,
environmental and all other governmental regulations. Landlord represents and
warrants to Tenant that, at the commencement Date, the Premises shall be in
compliance with all applicable governmental laws, orders, regulations and codes
(collectively the "laws") applicable to the Premises including without
limitation building, zoning, environmental and health laws and the Americans
with Disabilities Act; that the Premises do not violate and Landlord has
received no notice of any violations, of any such laws and that all taxes have
been paid to date; and that Landlord knows of no pending


                                      -7-
   9
                                                                    Exhibit 10.8


assessments or liens on the Premises.


INSURANCE.

         7.       (a) Tenant shall provide, on or before the earlier of Tenant's
entry in the Premises or the Commencement Date, and keep in force, at all times
during the Term, at its sole cost and expense, a comprehensive public liability
insurance policy, in the names of and for the mutual benefit of Landlord and any
of its designees (without any obligation to pay premium) and Tenant, insuring
the Landlord and Tenant against any claim or liability for personal injury to or
death of any persons, and/or damage to property occurring in, on or about the
Premises, or any appurtenances thereto. Such policy shall contain a "Landlord
Protective Liability" endorsement and shall provide for limits of liability
thereunder of not less than One Million ($1,000,000.00) Dollars in respect to
personal injury or death to any one person, One Million ($1,000,000.00) Dollars
in respect to personal injury or death to any number of persons and Five Hundred
Thousand ($500,000.00) Dollars in respect to property damage. The limit of any
such insurance shall not limit the liability of the Tenant hereunder.

                  (b) Landlord agrees to obtain and keep in full force and
effect, at all times during the Term, at Tenant's sole cost and expense,
policies of insurance covering the Building and improvements made by the
Landlord to the Premises against all risks to physical damage with extended
coverage, in amounts equal to the full replacement value of such improvements,
without any co insurance; rental insurance sufficient to include both Base and
Additional Rental; and such other insurance coverages as Landlord may deem
necessary or proper, all of which insurance coverages shall be in such amounts
and with such companies as Landlord may deem reasonable and proper. The cost of
any such insurance shall be paid as Additional Rental pursuant to Paragraph 20
hereof.

                  (c) Landlord shall not provide any insurance covering the
Tenant's possessions or business operations. Tenant agrees to obtain, at its
sole cost and expense, an insurance policy covering its contents and a liability
policy covering its business operations which shall include contractual
liability.

                  (d) Landlord and Tenant agree that the insurance policies to
be obtained hereunder shall provide that the insurance carriers shall waive all
rights of subrogation against Landlord and Tenant and that such policies shall
not be invalidated should the insurance waive in writing prior to a loss any or
all right of recovery against any party for losses covered by such policies.
Landlord and Tenant hereby waive and release any and all right of recovery which
it might otherwise have against the other, their agents and employees, for all
injury and for loss or damage to its business, contents, furniture, furnishings,
fixtures and other property of the Landlord or Tenant, notwithstanding that such
injury, loss or damage may result from the negligence or fault of Landlord or
Tenant, their agents, or employees, provided that no such waiver or release
shall operate to invalidate any insurance coverage.

                  (e) Tenant agrees to deliver to Landlord, at least fifteen
(15) days prior to the time such insurance is first required to be carried by
Tenant, and thereafter at least fifteen (15) days prior to the expiration of any
such policy, either a duplicate original or a certificate of insurance and a
true copy of all policies procured by Tenant in compliance with its obligations
hereunder, together with evidence of payment therefor. All such policies shall
provide for notice of cancellation to be provided thirty (30) days prior to any
cancellation.


INCREASE OF INSURANCE RATES.

         8. Tenant agrees, at its sole cost and expense, to


                                      -8-
   10
                                                                    Exhibit 10.8


promptly comply with all of the rules and regulations of the Insurance Service
Organization of New Jersey having jurisdiction, or any similar body. If, at any
time, as a result of or in connection with any failure by Tenant to comply with
the foregoing provision, or as a result of any act or omission or commission by
Tenant, its employees, agents, contractors, invitees, licensees or subtenants,
or as a result of or in connection with the use to which the Premises are put,
notwithstanding that such use may be for the purpose herein permitted or that
such use may have been consented to by Landlord, any insurance rate applicable
to the Building and/or to the contents thereof, shall be higher than that which
would be applicable for the least hazardous types of occupancy legally permitted
therein, then and in any of such events, Landlord shall have the right to treat
as additional rent, the added premium if Tenant fails to cease the conduct
causing such increase within thirty (30) days of notice from Landlord. Tenant
shall not use nor install any electrical equipment that overloads the lines in
the Building and Tenant, at its sole cost and expense, shall promptly make
whatever changes are necessary to prevent or remedy such condition and to comply
with all requirements of Landlord, the Board of Fire Insurance Underwriters or
any similar body and any governmental authority having jurisdiction thereof. For
the purposes of this Paragraph, any finding or schedule of the Fire Insurance
Rating organization or any similar organization having jurisdiction shall be
deemed to be conclusively binding on the parties hereto.


FIRE AND OTHER CASUALTY.

         9.       (a) In case of fire or other casualty, Tenant shall give
immediate notice to Landlord. In the event the Premises shall be partially
damaged by fire, the elements or other casualty, but shall not be so destroyed
or damaged as to substantially impaired the ongoing conduct of Tenant's
business, then the Landlord shall repair the same within ninety (90) days of
such casualty to the extent of the scope of Landlord's work in the original
construction of the Premises, and if any portion of the Premises shall be
rendered untenantable, then the Tenant's obligation to pay Rental hereunder
shall abate in the same proportion which the square footage of the portion
rendered untenantable bears to the total square footage of the Premises until
such time as the Landlord shall have substantially repaired the Premises. In the
event that through no fault of the Tenant, its agents, servants, employees,
contractors or invitees, the Tenant's use of the Premises is substantially
impaired and, the Landlord does not give notice to the Tenant within thirty (30)
days of the fire or other casualty that the Premises will be restored and the
Tenant's use will not be substantially impaired except as to the replacement of
Tenant's fixtures, laboratory and/or other personal property within one hundred
twenty (120) days of the date of the notice, or if the Premises are not
substantially restored and the Tenant's use will not be substantially impaired
except as to the replacement of Tenant's fixtures, laboratory and/or other
personal property during such one hundred twenty (120) day period, the Tenant
shall have the right to terminate this Lease on thirty (30) days written notice
delivered to Landlord. In the event the Landlord elects to restore the Premises
as stated, then the lease shall remain in full force and effect, the Rental
payments shall be reduced as aforesaid, and the Landlord shall proceed
diligently to rebuild the Building and/or to restore the Premises.

                  (b) However, there shall not be any abatement, reduction or
moratorium of rent if the fire or other casualty or damage shall be the result
of gross negligence or improper conduct of of Tenant or its agents, employees,
guests, licensees, invitees, subtenants, assignees or successors. In any such
case, Tenant's liability for the payment of the Rental and the performance of
all the covenants, conditions and terms hereof on its part to be performed shall
continue and Tenant shall be liable to Landlord for the damage or loss suffered
by Landlord. If Tenant shall have been insured against any of the risks herein
covered, then the proceeds of such insurance shall be paid over to Landlord to
the extent of Landlord's costs and expenses and for any other damage or loss


                                      -9-
   11
                                                                    Exhibit 10.8


suffered by Landlord as a result of such casualty.

                  (c) For purposes of determining substantial imparement,the
Landlord and Tenant agree that a casualty shall include a material violation of
any Environmental Law (as hereinafter defined) and as the obligations are
assumed pursuant to Paragraph 45.


REPAIRS AND MAINTENANCE.

         10. (a) Except as provided in Paragraph 10(c) hereof, Tenant, at its
sole cost and expense, shall (1) maintain and repair the structural portions (as
hereinafter defined) of the Premises, (2) maintain, repair, and replace each and
every other part of the Leased Premises including, without limitation, painting
and decorating and the heating, ventilating, plumbing, electrical, sprinkler,
elevator and air conditioning units or systems in the Building, and (3) shall
not cause nor permit any dirt, debris or rubbish to be put, placed or maintained
on the sidewalks, driveways, parking lots, yards, entrances and curbs, in, on or
adjacent to the Building. Tenant further agrees not to use the Premises or
permit the Premises to be used in any manner as to cause excessive depreciation
of or to the Building and improvements,and agrees not to cause nor permit waste
of or damage or nuisance to, in, or about the Premises or the Building.

                  (b) Tenant shall not make any alterations, improvements,
and/or additions to the Premises or any part thereof exceeding $25,000.00 (non
structural), nor install or attach any heavy equipment or apparatus, without
Landlord's prior consent which consent shall not be unreasonably withheld or
delayed in accordance with the provisions of this lease.

                  (c) Landlord, upon reasonable notice from Tenant and provided
further that Landlord cannot repair same, shall make, at Landlords cost and
expense, necessary replacements to the structural portion of the Premises,
excluding, however, all windows, doors, plate glass, signs which shall be
maintained, repaired and replaced by the Tenant and all repairs required by any
casualty except as otherwise provided in Paragraph 9 and 13 hereof. For the
purpose of this lease, "structural" shall be defined as the steel, footings,
foundations, masonry walls, elevators, roof and floors of the Leased Premises.
Landlord shall also repair or replace any condition in the Leased Premises
required to be repaired or replaced by any agency of the Borough of Ramsey which
is discovered during the completion of Tenant's work which relates to a
condition in the Leased Premises which should have been repaired or replaced
prior to the commencement of Tenant's Work as a part of the Landlord obtaining
the Certificate of Continued Occupancy which the Landlord has delivered to the
Tenant. Any repairs, whether structural or otherwise, resulting from damage
caused by any act, omission or negligence of Tenant, any subtenant or
concessionaire, or their respective employees, agents, invitees, licensees or
contractors shall be performed by the Landlord at the sole cost and expense of
the Tenant and shall be deemed to constitute Additional Rental.

                  (d) Tenant further agrees to maintain, repair, secure, and
keep in good order and condition, reasonably clean and free from snow, dirt and
rubbish, all public or common areas surrounding the Building which are the
property of the Landlord, except as otherwise herein provided, and agrees to
furnish all necessary utilities to such public or common areas. The costs and
expenses incurred by Tenant for maintenance, repairs, utilities, janitorial
service, refuse and snow removal and security of the public or common areas
shall be determined in the sole discretion of Tenant, to ensure the proper
quality and the preservation of the reputation of the Building. Tenant may elect
to have the Landlord undertake Tenants responsibilities under this sub-paragraph
10 (d) by so advising the Landlord sixty (60) days in advance of the date that
Tenant wishes the Landlord to do so. In that event, the Tenant shall pay all
reasonable costs and expenses so incurred by


                                      -10-
   12
                                                                    Exhibit 10.8


Landlord, as Additional Rental, in accordance with the provisions of Paragraph
20 hereof.

                  (e) Tenant shall have the right of access to the roof of the
Building and to install, repair, place or replace any aerial, fan, air
conditioner or other device on the roof of the Building without the prior
written consent of Landlord. Tenant shall repair at Tenant's expense, any damage
to the Building or roof resulting from the installation, repair, use, or
replacement of any such air conditioner or other device.


COVENANTS AGAINST LIENS.

         11. (a) Tenant shall not do any act, nor make any contract which may
create any lien or other encumbrance upon the Building or Premises, nor permit
nor suffer same to remain, as a result of any labor, work, services or materials
performed, supplied or furnished for or to the Tenant or the Premises. If,
because of any act or omission (or alleged act or omission) of Tenant, any
mechanic's or other lien or encumbrance shall be filed against the Building or
Premises, whether or not such lien or encumbrance is valid or enforceable as
such, Tenant, at its sole cost and expense, shall cause same to be discharged of
record or bonded, within thirty (30) days after notice to Tenant of the filing
thereof; and Tenant shall indemnify and save harmless Landlord against and from
all damages, costs, liabilities, suits, penalties, claims and demands, including
reasonable counsel fees, resulting from the creation of such lien or
encumbrance. In the event Tenant fails to so comply, Landlord shall have the
option of discharging or bonding any such lien or encumbrance, and Tenant agrees
to reimburse Landlord for all costs, legal and other expenses incurred in
connection therewith, together with interest at an annual rate equal to two (2%)
percent above the annual interest rate extended by Citicorp to its most favored
borrowers, promptly upon demand, which sums shall be deemed to constitute
Additional Rental. All materialmen, contractors, artisans, mechanics, laborers
and any other persons now or hereafter contracted by Tenant for the furnishing
of any labor, services, materials, supplies or equipment, at any time from the
date hereof until the end of the Term, are hereby charged with notice that they
must look exclusively to Tenant to obtain payment for same.

                  (b) Nothing in this lease shall be deemed to be, or construed
in any way as constituting, the consent or request of Landlord, expressed or
implied, by inference or otherwise, to any person, firm or corporation for the
performance of any labor or the furnishing of any materials for any
construction, rebuilding, alteration, addition or repair of or to the Premises
or any part thereof, nor as giving Tenant any right, power or authority to
contract for or permit the rendering of any services or the furnishing of any
materials which might in any way give rise to the right to file any lien against
Landlord's interest in the Building. Landlord shall have the right to post and
keep posted at all reasonable times on the Premises any notice which Landlord
shall deem necessary so to post for the protection of Landlord and the Building
from any such lien.


ALTERATIONS.

         12. (a) Tenant shall not make, or cause, or permit the making of any
repairs, alterations, additions, or improvements in or to the Premises without
obtaining Landlord's prior written consent thereto in each instance. In the
event any such work shall cost in excess of Twenty Five Thousand ($25,000.00)
Dollars, such work shall not be commenced until Tenant shall submit to the
Landlord plans and specifications relating to any such repairs, alterations,
additions or improvements, and all such work shall be


                                      -11-
   13
                                                                    Exhibit 10.8


performed in accordance with the provisions of this Lease. Landlord shall not
unreasonably withhold its consent to any such alteration, addition or
improvement, but shall have the right to determine if such work would reduce the
value, size or general utility of the Building or any portion thereof, or
whether such work maintains the architectural harmony of the Building. Any
approval by Landlord as aforesaid may be upon condition that Tenant furnish the
Landlord such evidence of Tenant's financial ability to assure completion
thereof and payment therefore as Landlord may reasonably require, including the
furnishing of adequate security. All such repairs, alterations, additions or
improvements, not removed by Tenant at end of Term, shall belong to and become
the property of the Landlord. Tenant shall have the right to remove all fixtures
equipment, furnishings and Tenant Improvements not permanently affixed to the
Building and all above standard and laboratory improvements (whether or not
permanently affixed) approved by Landlord prior to the expiration or other
termination of this Lease but shall repair all damage caused by such removal and
restore the Premises to a condition suitable for painting (not necessarily
"paint ready" as that term is commonly used) and carpeting (i.e. walls repaired
and spackled, floors cleaned and holes repaired). Nothing herein contained
shall be construed in any way to restrict Tenant's right to make any
alterations, additions or improvements in Tenant's own movable trade fixtures.

                  (b) Any work performed by Tenant, irrespective of cost, shall
be subject to the Landlord's inspection and approval after completion to
determine whether it complies with the requirements of this lease. The approval
or consent of the Landlord shall not relieve Tenant of its obligation that all
such repairs, alterations, improvements and/or additions be constructed and
performed in a first-class good and workmanlike manner and in accordance with
all applicable governmental and fire underwriting requirements, nor constitute a
waiver of any rights of Landlord if Tenant fails to perform its obligations.
Tenant, at its sole cost and expense, shall procure all necessary governmental
approvals, permits or certificates in connection with all work performed by
Tenant in, on or at the Premises and shall deliver the original of all such
approvals, permits or certificates to the Landlord, to be retained by Landlord.

                  (c) During the course of any and all repairs, alterations,
additions or improvements which the Tenant shall either be required to perform
or which the Tenant shall elect to perform Tenant, at its sole cost and expense,
shall at all times obtain and maintain or cause to be obtained and maintained,
workmen's compensation insurance and any other insurance which shall then be
required by law, together with public liability insurance as set forth in
Paragraph 7 hereof, to insure against any additional hazards created in
connection with the performance of any of the aforesaid work. Prior to the
commencement of any such work, Tenant shall deliver to Landlord copies of all
policies or certificates of insurance with respect to all policies required
pursuant to this Paragraph 12(c).


CONDEMNATION.

         13. (a) In the event that the whole of the Premises


                                      -12-
   14
                                                                    Exhibit 10.8


shall be taken for any public or quasi-public use under any statute or by right
of eminent domain, or by private purchase in lieu thereof, then this lease shall
automatically terminate as of the Date that title shall be taken. In the event
that a part of the Premises shall be so taken as to render the remainder thereof
unusable for the purpose for which the Premises are leased, then Landlord and
Tenant shall each have the right to terminate this lease on thirty (30) days'
written notice to the other, given within sixty (60) days following the date of
such taking. In the event that this lease shall terminate or be terminated, the
Rental hereunder shall be equitably adjusted as of the date of termination.

                  (b) In the event that a part of the Premises shall be so taken
and this lease shall not terminate or be terminated pursuant to the provisions
of subparagraph (a) above, then the Rental shall be equitably apportioned
according to the square footage of the Premises so taken and this lease, in all
other respects, shall remain in full force and effect, and Landlord, at its own
cost and expense, shall restore the remaining portion of the Premises in a
manner substantially similar to the Building as it pre-existed the taking. If
the Landlord does not complete the restoration within one hundred twenty
(120)days of the physical taking, then and in that event, either the Landlord or
the Tenant may terminate this Lease on thirty (30) days written notice to the
extent necessary to render it reasonably suitable for the purpose for which the
Premises were leased, provided that such work shall not exceed the scope of the
work required to be done by Landlord in originally constructing the Premises and
provided the cost thereof shall not exceed the proceeds of its condemnation
award for consequential damages.

                  (c) All compensation awarded or paid upon such a total or
partial taking of the Building or the Premises shall belong to and be the
property of Landlord, and without any sharing by Tenant, whether such
compensation result from diminution in value of the leasehold or to the fee
interest in the Premises. Tenant however, shall have the right to seek and
prosecute any claim directly against the condemning authority in such
condemnation proceedings for moving expenses, inventory and/or movable trade
fixtures, Tenant's improvements beyond those paid for by the Landlord's
Allowance, furniture and other personal property belonging to Tenant, so long as
such claim shall not diminish or otherwise adversely affect Landlord's award or
the award of any mortgagee.

                  (d) Tenant agrees to execute and deliver such instruments as
may be deemed necessary or required to expedite any condemnation proceedings or
to effectuate a proper transfer of title to such governmental or other public
authority, agency, body or public utility seeking to take or acquire the
Premises or any portion thereof. Tenant covenants and agrees to vacate the
Premises, remove all of its personal property therefrom and deliver up peaceable
possession thereof to Landlord or to such other party designated by Landlord in
the event of condemnation of the entire Premises. Failure by Tenant to comply
with any provision hereof shall subject Tenant to such costs, expenses, damages
and losses as Landlord may incur by reason of Tenant's breach hereof.


ACCESS AND RIGHT TO EXHIBIT.

         14. (a) Landlord and its designees shall have the right to enter upon
the Premises at all reasonable hours upon twenty four (24) hours prior notice to
Tenant (and in emergencies at all times):

                           (i) to inspect the same;

                           (ii) to make repairs, additions or alterations


                                      -13-
   15
                                                                    Exhibit 10.8


to and/or to complete initial construction of, the Premises and/or to the
Building or to prevent waste or depreciation thereof;

                           (iii) to post "For Sale" signs on the Premises at a
location in the front of the building to be reasonably approved by Tenant and to
exhibit the Premises to any prospective purchaser or mortgagee upon twenty four
(24) hours prior notice to Tenant.

                  This Paragraph shall not be deemed to be a covenant by
Landlord nor be construed to create an obligation or duty on the part of
Landlord to make such inspection, repairs, additions or alterations except as
otherwise herein provided. Any performance by Landlord hereunder shall not be
deemed a waiver of Tenant's default in failing to perform same, nor shall
Landlord be liable for any reasonable and limited inconvenience, disturbance,
loss of business, loss of use of the Premises, and the obligations of Tenant
pursuant to this lease shall not thereby be affected in any manner whatsoever.
Landlord agrees to exercise due care to cause the least reasonably possible
interference with Tenant's business, but Landlord shall not be required to
employ labor on weekends or on an overtime basis to avoid or reduce any such
interference.

                  (b) For a period commencing one hundred eighty (180) days
prior to the end of the Term, Landlord and its designees shall have reasonable
access to the Premises for the purpose of exhibiting the same to prospective
tenants and to post any "To Let," or "To Lease" signs upon the Premises at a
location in the front of the building approved by Tenant, which approval shall
not be unreasonably delayed or withheld.

                  (c) Landlord shall have the right to carry material in and on
the Premises and to perform work in or on the Premises pursuant to the
provisions of this lease, without the same constituting an actual or
constructive eviction to Tenant, in whole or in part. Rent shall be abated to
the extent that the Premises are rendered unusable for Tenant's business.


ASSIGNMENT AND SUBLETTING.

         15. Except to a parent, subsidiary or affiliate of Tenant, Tenant shall
not either voluntarily, or by operation of law, assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease or any interest therein, and shall
not sublet the Premises or any part thereof, or any right or privilege
appurtenant thereto, or allow any other person (the employees, agents, servants
and invitees of Tenant excepted) to occupy or use their Premises, or any portion
thereof, without first obtaining the written consent of Landlord, which consent
shall not be unreasonably withheld or delayed. When Landlord's consent is not
required, Tenant shall remain primarily obligated under the Lease, or provide
any necessary guarantees requested by Landlord or its mortgagee. When Tenant
requests Landlord's consent to such assignment or subletting, it shall notify
Landlord in writing of the name and address of the proposed assignee or
subtenant and the nature and character of the business of the proposed assignee
or subtenant and shall provide financial statements for the proposed assignee or
subtenant. If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, fifty percent (50%) of the
difference, after deduction for the leasing expenses incurred by Tenant
including without limitation costs of fit-up, construction, brokerage and legal
expenses advertising, if any, between the Rent plus Additional Rent allocable to
that part of the Premises affected by such assignment or sublease pursuant to
the provisions of this Lease, and the Rent and Additional Rent payable by the
assignee or sublessee to Tenant. A consent to one assignment, subletting,
occupation or use shall not be deemed to be a consent to any other or subsequent
assignment, subletting, occupation or use and consent to any assignment or
subletting shall in no way relieve Tenant of any liability under this Lease.
Except as provided herein, any assignment or subletting without Landlord's
consent shall be void, and shall, at the option of the Landlord, constitute a
default


                                      -14-
   16
                                                                    Exhibit 10.8


under this Lease. In the event that Landlord shall consent to a sublease or
assignment hereunder, Tenant shall pay any brokerage fees related to the
subletting or assignment of the Premises.


RULES AND REGULATIONS, COMPLIANCE WITH LAWS.

         16. (a) Tenant agrees, at all times during the Term hereof, and at its
sole cost and expense:

                           (i) not to continue after thirty (30) days notice
from Landlord, any action which would violate Landlord's union contracts, if
any, affecting the Building or the Premises, or which would create any work
stoppage, picketing, labor disruption or dispute, or which would damage, delay
or interfere with any work performed or to be performed by Landlord or by any
other persons in or about the Building, or which hinder the activities or
operations of the Landlord in bringing about the cessation of any work stoppage,
picketing or other labor disruption or dispute affecting the Building or any
work being performed or to be performed in or about the Building;

                           (ii) to pay promptly and when due, all taxes,
licenses, fees, assessments or other charges levied or imposed upon the business
of Tenant or upon any fixtures, furnishings or equipment in, on or at the
Premises;

                           (iii) not to commit any waste or nuisance, nor use
the plumbing facilities for any purpose injurious to same or dispose of any
garbage or any other foreign substance therein, nor place a load on any floor in
the Premises exceeding the floor load per square foot which such floor was
designed to carry, nor install, operate and/or maintain in the Premises any
heavy equipment except in a location approved by Landlord, nor install, operate
and/or maintain in the Premises any electrical equipment which will overload the
electrical system therein, or any part thereof, beyond its capacity for proper
and safe operation as determined by Landlord or which does not have
Underwriter's approval.

                           (iv) to keep the Premises in a neat, clean, orderly
and sanitary condition,

                           (v) to comply with all requirements of all suppliers
of public utility services to the Building and not to suffer or permit any act
or omission the consequence of which could be to cause the interruption,
curtailment, limitation or cessation of any utility service to the Building;

                           (vi) to retain trash, rubbish and garbage created by
the Tenant, its representatives, guests, licensees,or invitees within the
demised Premises until removed from the site at Tenant's expense.

                  (b) Tenant further agrees, at its sole cost and expense, to
promptly comply, or cause compliance, with all laws, ordinances, orders, rules,
regulations and requirements collectively "Laws")of all federal, state, county
and municipal governments, and appropriate departments, commissions, boards and
offices thereof, foreseen or unforseen, ordinary as well as extraordinary, and
whether or not the same shall presently be within the contemplation of the
parties hereto or shall involve any change of governmental policy in so far as
said laws relate and are triggered by Tenant's particular use and do not
otherwise apply to buildings used for office, warehouse and research. Landlord
shall cure any violations arising from Landlord's original failure to comply
with laws, ordinances, orders, rules, regulations and requirements presently
applicable to the construction of the Building and shall comply with all Laws
applicable to office, warehouse, research (as in existence at Commencement Date
and in general and not due to Tenant's particular use.

                  (c) No abatement, diminution or reduction of the


                                      -15-
   17
                                                                    Exhibit 10.8


Rental or other charges required to be paid by Tenant pursuant to the terms of
this lease, shall be claimed by or allowed to, the Tenant for any inconvenience,
interruption, cessation or loss of business or otherwise caused directly or
indirectly by any present or future laws, rules, requirements, orders,
directions, ordinances or regulations of the federal, state, county or municipal
government, or of any other governmental or lawful authority whatsoever, caused
by legally required changes in the construction, equipment, operation or use of
the Premises.

                  (d) Tenant, following notice to Landlord, shall have the right
to contest by appropriate legal proceedings, at its sole cost and expense, the
validity of any law, ordinance, order, rule regulation or requirement of the
nature herein referred to, provided, however, that:

                           (i) any noncompliance shall not constitute a crime on
the part of the Landlord or otherwise adversely affect, jeopardize or threaten
the interest of Landlord;

                           (ii) Tenant shall diligently prosecute any such
contest to a final determination by a court, department or governmental
authority having final jurisdiction and to keep Landlord advised in writing as
to all changes in status and determinations in connection with any such
proceedings; and

                           (iii) Tenant shall indemnify and save harmless
Landlord against any and all losses, costs, expenses, claims, penalties,
actions, demands, liabilities, judgments or other damages which Landlord may
sustain by reason of such contest or as a result of Tenant's failure or delay in
compliance. Landlord shall have the right, but not the obligation to contest by
appropriate legal proceedings, at Landlord's expense, any such law ordinance,
rule, regulation or requirement.


UTILITIES.

         17. Tenant agrees to pay as and when the same become due and payable,
all water rents, rates and charges, all sewer rents and all similar charges
assessed or charged to the Premises during the Term, if any, all charges for
electricity, gas, heat, steam, hot water, and other utilities supplied to the
Premises during the Term, together with cost of repair, maintenance, replacement
and reading of all meters measuring Tenant's use or consumption thereof, whether
supplied by Landlord or by a public or private utility company. Tenant's
electric charges will be paid directly to the utility company by Tenant,
however, in the event that Landlord shall supply any or all the aforesaid
services, the charges therefor shall be deemed Additional Rental and be
collectible as such on the first day of the following month. In no event shall
Landlord be responsible or liable for the failure to supply Tenant or for the
failure of the Tenant to receive, any utility service if such failure is due to
reasons beyond Landlord's control, nor shall Tenant be entitled to any
cessation, abatement, reduction or other offset of Rental in the event of any
failure to receive any utility service.


SIGNS

         18. Tenant may provide, install or maintain any exterior signs on the
roof or in the window; or provide, install or maintain any exterior signs on the
facade or walls of the Building or on any grounds adjacent thereto, provided all
such signs must at all times conform to all applicable rules, regulations, codes
and ordinances of any governmental agencies having jurisdiction thereover. All
such signs shall be provided, installed, maintained and removed at the
termination of the lease, at Tenant's sole cost and expense. Tenant further
agrees that it will not place any advertisements or other type of structure or
obstruction on the


                                      -16-
   18
                                                                    Exhibit 10.8


roof facade or walls of the Building and that it shall not operate any
loudspeaker or other device which can be heard outside of the Premises. In the
event that Landlord or its agents deem it necessary to remove any such signs in
order to paint or make any repairs, alterations or improvements in or upon the
Building or any part thereof, they may be so removed, but shall be replaced at
Landlord's expense when the said repairs, alterations or improvements shall have
been completed. Nothing contained in this Paragraph shall create any obligation
on the part of the Landlord to make any repairs, alterations or improvements.


TAXES.

         19. (a) Tenant covenants and agrees that it shall pay to Landlord, as
Additional Rental, its proportionate share of all real estate taxes,
assessments, added assessments and other governmental charges or substitutes
therefor, foreseen or unforeseen, levied, imposed, assessed or fixed on or
against the Building and land constituting the entire tax lot on which the
Building is constructed or arising from the use, occupancy or possession
thereof, during the Term hereof (hereinafter collectively referred to as the
"Taxes"). The proportionate share of Taxes to be paid by Tenant is set forth in
Paragraph 20 of this lease.

                  (b) Landlord shall have the right to contest in good faith any
such tax, assessment or added assessment and all costs and expenses, including,
but not limited to, all legal fees, shall be deemed to constitute additional
charges for which Tenant shall pay its proportionate share, as set forth in
Paragraph 20 hereof. Tenant shall pay its share of all such costs and expenses,
as Additional Rental, on the first day of the month following demand therefor.
Provided that the Tenant shall have paid its proportionate share of all costs
and expenses in accordance with the provisions of this Paragraph 19(b), Tenant
shall be entitled to the same proportionate share of the net proceeds of any
refund received by the Landlord as a result of such contest. Landlord agrees to
notify Tenant of the filing of any tax appeal or contest, not later than 15 days
prior to the filing deadline for which an such appeal is to be taken.

                  (c) In the event that Landlord shall fail to so notify Tenant,
then and in such event, Tenant shall have the right to contest in good faith any
such tax, assessment or added assessment, at its own cost and expense, provided,
however, that notwithstanding such contest, Tenant at all times: shall when due,
pay its proportionate share thereof; shall comply with all applicable laws,
rules and regulations regarding the payment of taxes; shall not take any action
which would adversely affect, threaten or jeopardize the interest of the
Landlord in the Building or land; shall promptly pay, indemnify and save
Landlord harmless from, all penalties and interest which may be charged or
imposed as a result of or during the pendency of, any such contest. In the event
of any such contest by the Tenant, Landlord agrees to reasonably cooperate and
to execute any necessary papers, provided however, that the same shall be
without any cost or expense to the Landlord. However, nothing herein shall
require the Landlord to withhold the payment of any tax, interest or penalty
otherwise due and owing to, or charged by, the taxing authority.

                  (d) It is further agreed that for the first and last Lease
Years of the Term hereof, the portion of all Taxes, other than such as result
from added assessments, to be paid by the Tenant shall be pro rated, depending
on the proportion which each such Lease Year shall bear to the tax year in which
it falls. The portion of Taxes resulting from added assessments to be paid by
Tenant during the first and last Lease Years of the Term shall be pro rated
depending on the proportion which such Lease Year shall bear to the portion of
the tax year for which the added assessment is charged.

                  (e) If at any time during the Term hereof, pursuant to the
laws of the Municipality, the County of Bergen, the State


                                      -17-
   19
                                                                    Exhibit 10.8


of New Jersey or the United States of America, a tax or excise on rents or other
tax, however described, is levied or assessed by any Municipality, County, State
or Country or any political subdivision thereof, against the Landlord or the
Rental reserved hereunder, or any part thereof, as a substitute, in whole or in
part, for any revenues derived from any tax assessed or imposed by any such
political entity on land and buildings, the Tenant covenants to pay to Landlord,
such sum as shall be necessary to pay and discharge such tax or excise on rents
or other tax, which sum shall be paid to Landlord in the manner herein set forth
for Taxes, provided, however, that the parties shall have the right to contest
said levy in the same manner as provided herein for Taxes.

                  (f) Except as otherwise provided herein, Tenant shall not be
obligated or required hereunder to pay any franchise, excise, corporate, estate,
inheritance, succession, capital levy or transfer tax of Landlord, or any
income, profit or revenue tax upon the income or receipts of Landlord.

                  (g) Tenant shall be responsible for and shall pay prior to the
time when such payment shall be deemed delinquent, all taxes assessed during the
Term against any leasehold interest, or any improvements, alterations,
additions, fixtures or personal property of any nature placed in, on or about
the Premises by the Tenant, whether such tax shall have been levied or assessed
against the Landlord or the Tenant after the Commencement Date or attributable
to Tenant's Work prior to the Commencement Date.


ADDITIONAL CHARGES.

         20. (a) In addition to all other rental charges provided for in this
lease, the Tenant agrees to pay as "Additional Rental," its proportionate share
of:

                           (i) all insurance premium costs incurred by Landlord,
if any, in connection with its obtaining and maintaining of fire, extended
coverage and all risk insurance; rental insurance sufficient to include both
Base Rent and Additional Rental; sprinkler damage insurance; and public
liability insurance, all of which insurance coverages, if maintained, shall be
in such amounts as are maintained by Landlord's comparable buildings and with
such companies as Landlord may deem reasonable or proper;

                           (ii) all costs and expenses incurred by Landlord in
connection with the Landlord's satisfying Tenants obligations for maintenance,
repair and replacements in and to the Leased Premises, in accordance with the
provisions of this Lease, including, all costs occasioned by Landlord in the
event the Tenant elects, pursuant to Sub-Paragraph 10(d), to have Landlord
undertake Tenant's responsibilities

                           (iii) in the event of Tenant electing to have
Landlord undertake its responsibilities pursuant to Sub-Paragraph 10 (d),
management fees for the operation of the Building, at an annual sum equal to
three (3%) percent of the total annual Base Rent for the building; and

                           (iv) Landlord represents that the 1993 estimated
cumulative Additional Rental, if Landlord undertakes Tenants responsibilities as
aforesaid, would be $1.70 per square foot. The items/services included in this
estimate are: real estate taxes, landscape maintenance, snow removal, site
lighting, irrigation, insurance, fire sprinkler alarm, management fees and
miscellaneous exterior repairs and maintenance. If Tenant elects that the
Landlord undertakes its responsibilities under Sub-Paragraph 10 (d), Landlord
agrees to limit increases in the total yearly Additional Rental to a maximum of
five (5%) percent per annum for the above listed items/services provided on a
recurring annual basis. Notwithstanding the foregoing, the aforesaid limitation
shall not apply to (1) increases in the cost of any of the above listed
items/services due to increases in the frequency of the performance of the above
listed items/services (e.g.,


                                      -18-
   20
                                                                    Exhibit 10.8


variation in snow removal costs in any calendar year as a result of excessive
snow falls) , and (2) additional items/services not listed above which may be
reasonably supplied by Landlord during the Term and (3) any items with costs
which are beyond the control of the Landlord (e.g., real estate taxes and
utility rates)

                  (b) It is acknowledged that the total annual Additional Rental
to be paid by the Tenant, pursuant to the provisions of Paragraph 19 and 20 of
this lease, cannot be determined except on an annual basis. It is therefore
agreed that, in addition to the payments of Additional Rental as may be provided
for elsewhere in this lease, the Tenant shall pay the estimated monthly sum set
forth in (10) of the Preamble on account of its Additional Rental obligations
pursuant to the provisions of Paragraphs 19 and 20 of this lease. Said estimated
payments shall be paid in advance, on the first day of each month, and shall be
based on an annual period from January 1 through December 31 during each year of
the Term hereof, and shall be adjusted annually within ninety (90) days
following the conclusion of each such annual period by written notice delivered
by Landlord to Tenant. Said notice shall set forth the total amount of the costs
and expenses incurred by the Landlord for such annual period, the sum which
represents the proportion to be paid by the Tenant, the sum actually paid by
Tenant for such period, and the amount of any required adjustment. Said notice
shall also set forth the estimated monthly payment to be paid by Tenant for the
following annual period.

                  (c) For the first and last Lease Years of the Term hereof, the
portion of Additional Rental to be paid by the Tenant other than for real estate
taxes, shall be pro rated depending on the proportion which each such Lease year
shall bear to the aforesaid annual period in which it falls.


NON-LIABILITY OF LANDLORD

         21. (a) Unless caused by Landlords gross neglect or Willful misconduct,
or the gross neglect or willful misconduct of Landlord's agents, employees,
guests, contractors, licensees, invitees, assignees or successors, Landlord
shall not be liable for any damage or injury which may be sustained by Tenant or
by any other person, as a consequence of the failure, breakage, leakage or
obstruction of the street or sub-surface; or of the water, plumbing, steam,
sewer, waste or soil pipes; or of the roof, walls, drains, leaders, gutters,
valleys, downspouts, or the like; or of the electrical, gas, power, conveyor,
refrigeration, sprinkler, air conditioning or heating systems; or of the
elevators or hoisting equipment; or of any other structural failure; or by
reason of the elements; or resulting from theft or pilferage; or resulting from
fire, explosion or other casualty; or resulting from the carelessness,
negligence or improper conduct on the part of the Tenant, any other tenant, or
of Landlord, their agents, employees, guests, licensees, invitees, subtenants,
assignees or successors; or attributable to any interference with interruption
of or failure, beyond the control of Landlord, of any services to be


                                      -19-
   21
                                                                    Exhibit 10.8


furnished or supplied by Landlord. All property kept, maintained or stored in,
on or at the Premises shall be so kept, maintained Or stored at the sole risk of
the Tenant. Notwithstanding anything Contained herein to the contrary, Landlord
shall remain liable for all latent defects and injury or damage that arise
therefrom.

         22. Intentionally Omitted


RIGHT TO CURE DEFAULT.

         23. In the event Tenant shall fail to comply fully with any of its
obligations hereunder, then Landlord shall have the right, at its option to cure
such breach, at Tenant's expense, upon twenty (20) days' prior written notice to
Tenant, except in cases of emergency (in which event no notice need be given),
and if Tenant shall fail to cure said default within such period, provided
however, that if said default cannot be cured with said period, then Tenant
shall have commenced in good faith to cure such default within said twenty (20)
day period and shall continue to curing thereof diligently thereafter. Tenant
agrees to reimburse Landlord promptly (as Additional Rental) for all costs and
expenses incurred as a result thereof or in connection therewith, together with
interest at an annual rate equal to two (2%) percent above the annual interest
rate extended by Citicorp to its most favored borrowers as of the date on which
the Landlord made such payment and which interest shall commence to run from the
date on which Landlord made any such payment. Any action so taken by Landlord
pursuant to this lease shall not serve to waive or release Tenant from its
performance of any obligation hereunder.


REMEDIES UPON DEFAULT.

         24. (a) In the event Tenant shall:

                           (i) default in the payment of the Rental reserved
herein or in making any other payment herein provided, said default continuing
for a period of ten (10) days after notice of said default; or

                           (ii) default in the observance of any of the other
material terms, covenants and conditions of this lease, which default continues
for thirty (30) days following the delivery of written notice thereof, ; except
that if such default is incapable of cure with thirty (30) days, if the Tenant
has not commenced a cure of the default and is not proceeding diligently to cure
same; or

                           (iii) assign, sublet or permit the Premises to be
occupied by someone other than Tenant, except as herein provided; or

                           (iv) make any assignment for the benefit of
creditors, file a voluntary petition in bankruptcy, be by any court adjudicated
a bankrupt, take the benefit of any insolvency act or be dissolved or
liquidated, voluntarily or involuntarily, or if a receiver or trustee of Tenant
and/or its property shall be appointed in any proceedings or if any Guarantor
hereunder shall cause or suffer any of such events to occur with respect to
itself or;

                           (v) suffer or permit any execution, attachment or
other similar process to issue against Tenant or a substantial portion of its
property or assets, or suffer or permit the Premises to be taken and/or occupied
or attempted to be taken and/or occupied by one other than the Tenant;

         then, upon the happening of any of the events set forth in this
Paragraph, Landlord shall have the right to terminate this lease and the Term
hereof upon not less than ten (10) days' written notice to Tenant, with the same
force and effect as though the date so specified were the date hereinabove first
set forth as the date


                                      -20-
   22
                                                                    Exhibit 10.8


of the expiration of the Term (but Tenant shall remain liable to Landlord as
hereinafter provided), and at the expiration of the period provided in said
notice, the Term hereof and all of the Tenant's right, title and interest
hereunder shall cease and terminate, and Landlord without further notice, may
reenter the Premises, remove the Tenant and its property therefrom, and have
possession and enjoyment of the same, and/or may recover possession thereof as
prescribed by law relating to summary proceedings or otherwise, without any
liability for damages or prosecution therefrom, it being understood that no
demand for the Rental, no reentry for condition broken and no notice to quit or
other notice prescribed by law shall be necessary to enable Landlord to recover
such possession, but that all rights to any such demand, reentry, notice or
other prerequisites are hereby expressly waived by Tenant.

                  (b) In the event of any such default, reentry, expiration
and/or dispossess:

                           (i)the Rental shall become due and be paid up to the
time of such reentry, dispossess and/or expiration, together with such costs and
expenses as Landlord may incur in reacquiring possession of the Premises, for
reasonable legal expenses, attorneys' and brokerage fees, putting or restoring
the Premises in or to good order and altering or preparing the same for
re-rental;

                           (ii) Landlord shall make reasonable efforts, to relet
the Premises or any part or parts thereof, either in the name of Landlord or
otherwise, for a term or terms which may, at Landlord's option be less than or
exceed the period which would otherwise have constituted the balance of the
Term, for such rental and on such terms as Landlord shall deem reasonable;

                           (iii) Tenant, or the legal representatives of Tenant,
shall pay Landlord any deficiency between the Rental hereby covenanted to be
paid and the net amount, if any, of the rents collected on account of any
reletting of the Premises for each month of the period which would otherwise
have constituted the balance of the Term. In computing such sum, there shall be
added to the Rental hereby covenanted to be paid, such expenses of Landlord as
are referred to in subparagraph (b) (i) of this Paragraph. Any such deficiency
shall be paid in monthly installments by Tenant on the first day of each
month, in advance, and any suit brought to collect the amount of the deficiency
for any month shall not prejudice in any way the rights of Landlord to collect
the deficiency for any subsequent month by a similar proceeding or by joining,
consolidating or otherwise including in one action, any and all claims for
subsequent periods;

                           (v) Landlord is hereby granted a lien, in addition to
any statutory lien or right to distrain which may exist, on all personal
property of Tenant in or on the Premises, to secure payment of the Rental and
performance of the terms, provisions, covenants and conditions of this lease.
Landlord shall have the right, as agent of Tenant, to take possession of any
furniture, fixtures or other personal property of Tenant found in or about the
Premises and sell the same at public or private sale and to apply the proceeds
thereof to the payment of any monies becoming due under this lease, Tenant
hereby waiving the benefit of all laws exempting property from execution, levy
and sale on distress or judgment. Tenant agrees to pay all legal expenses,
attorneys' and brokerage fees and all other costs and expenses incurred by
Landlord in exercising its rights hereunder or in Enforcing any of the
obligations of Tenant under this lease.

                  (c) Landlord may make such alterations, repairs replacements
and/or decorations in or on the Premises as it, in its sole judgment, considers
advisable or necessary for the purpose of reletting the Premises; and the making
of such alterations, repairs, replacements and/or decorations shall not operate
or be construed to relieve Tenant from its liability hereunder. Landlord shall
in no event be liable in any way whatever for any failure to


                                      -21-
   23
                                                                    Exhibit 10.8


relet the Premises, or in the event that the Premises are relet, for the
reasonableness of the rental or for the failure to collect any rent under such
reletting.

                  (d) In the event of a breach or threatened breach or violation
by Tenant of any of the covenants, conditions, terms or provisions of this
lease, Landlord shall have the right to obtain an injunction or to invoke any
remedy allowed at law or in equity, without limitation and in addition to, all
rights and remedies herein provided for.

                  (e) No receipt and acceptance of Rental by Landlord from
Tenant after the termination in any manner of this lease, or the performance by
Tenant of any obligation hereunder after the period stated in any notice given
pursuant to this lease, shall reinstate, continue or extend the lease or the
Term thereof, affect any such notice or cure any default theretofore arising
hereunder. No receipt of Rental after the commencement of suit, or after final
judgment for possession of the Premises, shall reinstate, cure, continue or
extend the lease or the Term thereof or affect said suit or said judgment.

                  (f) The rights and remedies of Landlord specified in this
lease, as well as the rights and remedies to which the Landlord is entitled by
law or in equity, are cumulative and are not intended to be exclusive of or
preclude the exercise of any other rights or remedies which may be available to
the Landlord in the event of a breach by Tenant of any provision of this lease.

                  (g) In no event shall the Tenant be entitled to receive all or
any portion of any net surplus monies obtained or received by Landlord either in
connection with any reletting or as a result of the exercise of any other right
or remedy to which Landlord may be entitled.



WAIVER OF REDEMPTION.

         25. Not used in this Lease.


MORTGAGE PRIORITY.

         26. This lease shall be and hereby is made subject and subordinate at
all times to the lien of all ground and underlying leases and to all mortgages
and all advances made thereon which may now or hereafter affect the Building,
and to all increases renewals, modifications, consolidations, participations,
replacements and extensions thereof, irrespective of the time of recording such
lien, without the necessity of any further instrument of subordination. In the
event, however, that Landlord or any lessor or mortgagee desires confirmation of
such subordination, Tenant shall promptly execute and deliver any certificate or
instrument that may be reasonably requested. Tenant's failure to deliver within
a reasonable time any such certificate or instrument shall be deemed a default
hereunder. Tenant shall not have the right to place any lien or encumbrance of
any kind against the Premises, or any of its fixtures, furniture, equipment or
improvements, other than a chattel mortgage on its movable trade fixtures.
Landlord agrees to cause any present mortgagee or holder of any interest in the
Leased Premises to deliver a non-disturbance agreement to Tenant, in their
customary form prior to the date of Delivery of Possession. Further, Landlord
agrees to cause any future ground lessor or mortgagee to deliver a
non-disturbance agreement by each ground lessor and/or mortgagee to Tenant in a
form substantially similar to Exhibit D attached hereto including the asterisk
addition to the foot thereof at or before the closing of the mortgage.




                                      -22-
   24
                                                                    Exhibit 10.8


SURRENDER OF PREMISES.

         27. On the expiration date or sooner termination of the Term, Tenant
shall quit and surrender the Premises to Landlord, in broom-clean good condition
and repair, reasonable wear and tear excepted, as well as all keys to the
Premises, together with all alterations, additions and improvements which may
have been made in, on or to the Premises, except for movable furniture and
equipment, or unattached movable trade fixtures put in at the sole expense of
Tenant. Tenant will not be required to remove any improvements made to the
Premises which have been approved by Landlord, unless Landlord had advised
Tenant of its obligation to do so at the time that Landlord granted its consent.
In the event Landlord had so advised, then Tenant, prior to the end of the Term,
at its sole cost and expense, shall so restore the Premises, remove therefrom
all of its property together with such alterations, additions and improvements
as may have been requested by Landlord, and fix and repair any and all damage or
defacement to the Building and/or lands caused by the installation and/or
removal of alterations, additions, improvements, furniture, equipment, trade
fixtures or any other property. Any or all of such property, alterations,
additions or improvements not so removed, at Landlord's option, shall become the
exclusive property of Landlord or be disposed of by Landlord at Tenant's cost
and expense, without further notice or demand. Tenant shall have the right to
remove its equipment, fixtures, furnishings and improvements affixed to the
Building, all laboratory fixtures and all above standard improvements (whether
or not permanently affixed) at the end of the Lease Term, but shall be obligated
to fix and repair any and all damage or defacement to the Building and/or lands
caused by their installation and/or removal and restore the Premises to a
condition suitable for painting (not meaning "paint ready" as that term is
commonly used) and carpeting (i.e. walls repaired and spackled, floors cleaned
and holes repaired). Tenant's obligation under this Paragraph shall survive the
expiration or sooner termination of the Term.


UNAVOIDABLE DELAYS.

         28. (a) If, as a result of strikes, lockouts, labor disputes, inability
to obtain labor, materials or reasonable substitutes therefor, acts of God,
governmental restrictions, regulations or controls, enemy or hostile
governmental action, civil commotion, insurrection, revolution, sabotage, fire
or other casualty, acts or failure to act by Tenant or any other tenant or other
conditions beyond the control of Landlord, whether prior to or during the Term,
Landlord shall fail punctually to perform any lease obligation, then and in any
of such events, such obligation shall be punctually performed as soon as
practicable after such condition shall abate. In the event that Landlord, as a
result of any such condition, shall be unable to exercise any right or option
within any time limit provided in this lease, such time limit shall be deemed
extended for a period equal to the duration of such condition. The failure of
Landlord to perform any lease obligation for the reasons set forth herein shall
not affect, curtail, impair or excuse this lease or the obligations of Tenant
hereunder.

                  (b) No diminution or abatement of rent, or other compensation,
shall be claimed or allowed for inconvenience or discomfort arising from the
making or repairs or improvements to the Building or to its appliances, or
arising from the construction of or repairs or improvements to, other buildings,
structures, lands or appliances, whether or not the same shall be owned by
Landlord. In respect to the various "services", if any, to be furnished by the
Landlord to the Tenant, it is agreed that there shall be no diminution or
abatement of the rent, or any other compensation, for interruption or
curtailment of such "service", when such interruption or curtailment shall be
due to accident, alterations or repairs necessary to be made or to inability or
difficulty in securing supplies or labor for the maintenance of such "service"
or to some other cause, not gross negligence on the part of the Landlord. No
such interruption or curtailment of any such "service" nor any non-performance
by Landlord pursuant to subparagraph (a) of this Paragraph, shall be deemed a
constructive eviction, nor shall there be any abatement or diminution of rent


                                      -23-
   25
                                                                    Exhibit 10.8


because of making of repairs, improvements or decorations to the Premises after
the date above fixed for the commencement of the Term.


LANDLORD CONSENT.

         29. With respect to any provision hereof which provides for the consent
or approval of Landlord, said consent or approval shall be in writing and shall
not be unreasonably withheld or delayed. Tenant in no event, shall be entitled
to make any claim. All expenses reasonably incurred by Landlord in reviewing and
acting upon any request for consent hereunder, including but not limited to,
reasonable attorneys' and architects' fees, shall be reimbursed by Tenant to
Landlord, shall be deemed to constitute Additional Rental and shall be paid over
to Landlord on the first day of the month following demand therefor.


ESCROW FOR FIT-UP.

         30. (a) Tenant, shall deposit with First Fidelity the sum set forth in
(8) of the Preamble, either in the form of a Letter of Credit, cash, escrow
account or other form of security in a manner reasonably acceptable to First
Fidelity at the closing of the Mortgage (or such later date as First Fidelity
may agree to) in trust for Tenant to be held by First Fidelity for the following
limited purposes: (1) to reimburse First Fidelity for any sums it has paid over
to the Landlord on account of "Landlords Allowance" which have been paid over to
Tenant in the event that (a) the Tenant fails to complete the Tenant's Work in
accordance with the terms of this Lease or (b) the Tenant defaults during the
Lease Term; (2) as security for the Tenant's compliance with Paragraph 47 of
this Lease but only to the extent of any sum paid over to the Landlord by First
Fidelity on account of "Landlord's Allowance" which have been paid over to
Tenant.

                  (b) In the event that Tenant is not in material default of the
terms, provisions, covenants and conditions of this lease, then Tenant shall
have the right to reduce the amount of the escrow deposit by ten (10%) percent
of the original escrow amount per year and any remaining escrow shall be
returned to the Tenant on the expiration of the Term hereof.

                  (c) Tenant shall be entitled to any interest on the aforesaid
escrow deposit held by First Fidelity in a segregated account. Tenant further
covenants that it will not assign or encumber or attempt to assign or encumber
the escrow deposited herein except as permitted under the provisions of
Paragraph 15 hereof, and that neither Landlord nor its successors or assigns
shall be bound by any such assignment, encumbrance, attempted assignment or
attempted encumbrance.

                  (d) It is expressly understood and agreed that the exercise of
any remedy by Landlord for any default on the part of Tenant shall no be deemed
such a termination of this lease as to entitle Tenant to the recovery of said
escrow and said escrow shall be retained and remain in the possession of First
Fidelity as hereinbefore stated.

CERTIFICATION.

         31. Tenant and Landlord each agree, without charge and at any time,
within ten (10) days after written request of the other, to certify by written
instrument duly executed, acknowledged and delivered to the other or any other
person, firm or corporation specified in such request:

                  (a) as to whether this lease has been modified or amended, and
if so the substance and manner of such modification or amendment;



                                      -24-
   26
                                                                    Exhibit 10.8


                  (b) as to the validity and force and effect of this lease;

                  (c) as to the existence of any default thereunder by Landlord
and Tenant;

                  (d) as to the existence of any offsets, counter claims or
defenses thereto on the part of Tenant;

                  (e) as to the commencement and expiration dates of the Term;

                  (f) as to the dates to which Rental payments have been made;

                  (g) as to any other matters as may reasonably be so requested.

         Any such certificate may be relied upon by Landlord and any other
person, firm or corporation to whom the same may be exhibited or delivered, and
the Tenant shall be bound by the contents of such certificate. The Tenant hereby
constitutes and irrevocably appoints the other as its attorney-in-fact to
execute any such instrument or other writing for and on behalf of the Tenant if
Tenant shall fail or refuse to execute the instrument within the aforesaid ten
(10) day period.

         Tenant further agrees to furnish to Landlord at any time, but not more
frequently than once per year, within ten (10) days after written request of
Landlord, a copy of its financial statement for its last full fiscal year,
certified by a corporate officer and prepared by independent Certified Public
Accountants, including, but not limited to, a profit and loss statement.


WAIVER OF TRIAL BY JURY.

         32. It is further agreed by and between the parties hereto that they
shall and do hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on any
matters whatsoever arising out of or in any way connected with this lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
and/or any claim or injury or damage.


QUIET ENJOYMENT.

         33. Landlord covenants and agrees with Tenant that upon Tenant's paying
the Rental and observing and performing all of the terms, provisions, covenants
and conditions on its part to be observed and performed, Tenant may peaceably
and quietly enjoy the Premises during the Term hereof, subject however, to all
of the terms, conditions, covenants and provisions of this lease. In the event
of any breach by Landlord of this covenant, Tenant may, by not less than thirty
(30) days' written notice given to Landlord, cancel this lease, unless within
such thirty (30) day period, Landlord shall have commenced appropriate action to
cure such breach and shall thereafter proceed diligently to cure such breach.
Upon such cancellation, all rights of either party against the other shall cease
and the term shall expire with the same force and effect as if the date of such
cancellation were the date originally fixed herein for the expiration of the
Term.


LANDLORD.

         34. (a) The term "Landlord" as used in this lease means only the owner,
the holder of a lease or the mortgage in possession for the time being of the
Premises, so that in the event of any sale of the land and Building of an
assignment of this lease or any underlying lease, Landlord herein shall be and
hereby is entirely


                                      -25-
   27
                                                                    Exhibit 10.8


freed and relieved of all obligations of Landlord hereunder Provided such
purchaser, assignee or lessee has assumed and agreed in writing to observe and
perform all obligations of Landlord hereunder.

                  (b) Notwithstanding anything herein contained to the contrary,
it is specifically understood and agreed that there shall be no personal
liability on the part of the Landlord, its successors or assigns, with respect
to any of the terms, provisions, covenants and conditions of this lease, and
that Tenant shall look solely to the estate, property and equity of Landlord or
such successor in interest in the Building and subject to the prior rights of
any mortgagee or ground lessee, for the satisfaction of each and every remedy of
Tenant in the event of any breach by Landlord or by such successor in interest
of any of the terms, provisions, covenants and conditions of this lease to be
performed by Landlord, which exculpation of personal liability shall be absolute
and without exception.


NOTICES.

         35. All notices, demands or requests required under the terms of this
lease shall be given in writing by either party to the other and shall be
complete by personal delivery or by mailing such notices by certified or
registered mail, return receipt requested, to the Landlord at the address set
forth hereinabove, and to the Tenant at the Premises, or to such other address
as either party may designate in writing, which notice of change of address
shall be given in the same manner. Copies of any Notice of Default shall be
forwarded to Counsel: Smith, Stratton, Wise, Heher & Brennan, 600 College Road
East, Princeton, NJ 08540, Attn: Richard J. Pinto, Esq.


COVENANTS, EFFECT OF WAIVER.

         36. (a) Every term, condition, agreement or provision set forth in this
lease shall be deemed to also constitute a covenant.

                  (b) The waiver of any term, provisions, covenant or condition
by Landlord shall not be construed as a waiver of a subsequent breach of the
same or any other term, provision, covenant or condition, and the consent or
approval by Landlord to or of any act by Tenant requiring Landlord's consent or
approval shall not be construed to waive or render unnecessary Landlord's
consent or approval to or of any subsequent similar act by Tenant. The failure
of Landlord to insist in any one or more instances upon the strict performance
of any term, condition, provision, covenant or agreement or to exercise any
option or any right hereunder, shall not be construed as a waiver or
relinquishment of the same for the future. The receipt by Landlord of any Rental
payment or the acceptance by Landlord of the performance of anything required to
be performed by this lease, with knowledge of a breach of any term, condition,
provision or covenant of this lease shall not be deemed a waiver of such breach.
No term, condition, provision or covenant of this lease shall be deemed to have
been waived unless such waiver is in writing and signed by Landlord. No payment
by Tenant or receipt and/or acceptance by Landlord of a lesser sum than the
agreed upon Rental shall operate or be deemed or construed to be other than on
account of the earliest Rental then unpaid, nor shall any endorsement or
statement on any check or any letter or writing accompanying any check nor the
acceptance of any check or payment be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to its right to
recover the balance of any Rental or to pursue any other remedy to which it may
be entitled.


HOLDING OVER.

         37. Any holding over or continued occupancy by Tenant


                                      -26-
   28
                                                                    Exhibit 10.8


after the expiration of the Term of this lease shall not operate to extend or
renew this lease or to imply or create a new lease. In such event, Landlord
shall have the right to immediately terminate the Tenant's occupancy, or to
treat the Tenant's occupancy as a month-to-month tenancy, in which event Tenant
shall continue to pay the Rental charges and shall perform all obligations as
shall be in effect immediately prior to the termination of the Term hereof. In
no event however, shall Tenant be relieved of any liability to Landlord for
damages resulting from such holding over.


REFERENCE.

         38. Wherever herein the singular number is used, the same shall include
the plural, and the masculine gender shall include the feminine and neuter
genders, if applicable. The paragraph headings and captions used herein are for
reference and convenience only. The words "reenter" and "reentry" as used herein
are not restricted to their technical legal meaning.


ENTIRE AGREEMENT.

         39. This lease contains the entire agreement between the parties. No
oral statement or prior written matter shall have any force or effect nor shall
the waiver of any provision of this agreement be effective unless in writing,
signed by the waiving party. Tenant agrees that it is not relying on any
representations or agreements other than those contained in this lease. This
agreement shall not be modified except by a writing executed by both parties,
nor may this lease be cancelled by Tenant except with the written consent of
Landlord, unless otherwise specifically provided herein. The covenants,
provisions, terms conditions and agreements contained in this lease shall bind
the Landlord and Tenant and their respective successors and assigns and shall
inure to the benefit of the Landlord, the Tenant, their respective successors,
the assigns of Landlord and the assigns of Tenant who shall have obtained an
assignment of lease in accordance with the provisions of this lease.


ATTORNMENT.

         40. At the option of the Landlord, a purchaser of the Building, or the
holder of any mortgage or ground lease affecting


                                      -27-
   29
                                                                    Exhibit 10.8

the Premises, Tenant agrees that neither the cancellation nor the termination of
any ground or underlying lease to which this lease is now or may become subject
or subordinate, nor the sale of the Building, nor the foreclosure of any
mortgage affecting the Premises, nor the institution of any suit, action,
summary or other proceeding by Landlord or any mortgagee shall, by operation of
law or otherwise, result in the cancellation or termination of this lease or the
obligations of Tenant hereunder, and Tenant covenants and agrees in such event
to attorn to Landlord or to the holder of such mortgage or ground or underlying
lease or to the purchaser of the Building, whether by foreclosure or otherwise.


REAL ESTATE BROKER.

         41. Landlord and Tenant each represent to the other that it has dealt
with no real estate broker in connection with this lease unless so stated in the
Preamble. Each of Tenant and Landlord agree that if any claims should be made
for commissions by any other broker by reason of any acts of Tenant or Landlord
or its respective representatives, Tenant or Landlord, as the case may be, will
indemnify and save harmless the other from any and all claims, demands! losses,
liabilities, judgments, costs, expenses, attorneys' fees or other damages
resulting from, arising out of, or in connection with that parties acts.
Landlord agrees to pay brokerage commission due in connection with this lease,
if any, to the broker named in the Preamble in accordance with the terms and
conditions of a separate agreement entered into or to be entered into between
the Landlord and said broker.


VALIDITY OF LEASE.

         42. The terms, conditions, covenants and provisions of this lease shall
be deemed to be severable. If any clause or provision herein contained shall be
adjudged to be invalid or unenforceable by a court of competent jurisdiction or
by operation of any applicable law, the same shall be deemed to be severable and
shall not affect the validity of any other clause or provision herein, but such
other clauses or provisions shall remain in full force and effect, unless such
provisions shall relate to any payment of Rental hereunder. In such event,
Landlord, on not less than thirty (30) days written notice to Tenant, shall have
the right to terminate this lease on the date specified in such notice,
whereupon all Rental charges shall be apportioned as of the date of termination
and with the same force and effect as if the lease terminated on the maturity
date set forth herein.


COMMON AREAS.

         43. Not used in this Lease.


REPRESENTATIONS.

         44. Tenant represents that it is a corporation in good standing of the
State of New Jersey, that there are no judgments or suits pending against it,
and that it does not owe any taxes, that         and         are its President
and Secretary respectively, and that they are empowered and authorized to enter
into this lease for and on behalf of the corporation. Tenant agrees to deliver
to Landlord simultaneously with the execution hereof, a certified copy of a
resolution of its Board of Directors authorizing the execution of this lease.


ECRA AND ENVIRONMENTAL LAWS.

         45. (a) the parties hereto recognize that the occupancy and use of the
Premises by the Tenant may be governed by the provisions of the New Jersey
Environmental Cleanup Responsibility Act, N.J.S.A 13:1K-6 et seq. and the
regulations promulgated thereunder (ECRA). As such, subject to Landlord's
obligations


                                      -28-
   30
                                                                    Exhibit 10.8


hereunder, the Tenant hereby covenants that prior to any "closing, terminating
or transferring of Tenant's operations" (as said terms are defined by ECRA) at
the demised Premises, the Tenant shall, at Tenant's own expense, receive from
the Bureau of Industrial Site Evaluation (the "Bureau")of the New Jersey
Department of Environmental Protection and Energy (N.J.D.E.P.E) either:

                         (i) a non-applicability letter;

                        (ii) approval of a negative declaration; or

                       (iii) a non-qualified approval of Tenant's cleanup plan.

         The Tenant shall promptly apply for ECRA approval at least six (6)
months prior to the occurrence of any event that would trigger ECRA
responsibility on the part of the Tenant as herein provided. Landlord shall
cooperate with Tenant in furnishing such information as may be required by
NJDEPE or which is otherwise reasonably required by Tenant in connection with
said approvals.

                  (b) Tenant shall promptly furnish to Landlord true and
complete copies of all documents, submissions and correspondence provided by
Tenant to the Bureau and all documents, reports, directives and correspondence
provided by the Bureau to Tenant. Tenant shall also promptly furnish to Landlord
true and complete copies of all sampling and test results obtained from samples
and tests taken at and around the Premises if any.

                  (c) Tenant shall, at Tenant's own expense, comply with ECRA
and all orders and directives of the Bureau and shall implement and complete all
required cleanups to the satisfaction of the bureau resulting from Tenant's use
and occupancy of the Premises during the term of this Lease.

                  (d) Should the submission of a cleanup plan be required
pursuant to ECRA by reason of a violation of either ECRA or any other
Environmental Law (as hereinafter defined) by the Tenant, its agents, servants,
employees, contractors or invitees, Tenant shall satisfy the minimum financial
security requirements under ECRA, furnish to NJDEPE security satisfactory to
NJDEPE, in the form of a bond or letter of credit issued by a financial surety
authorized to do business in the State of New Jersey, guaranteeing the
performance and completion of Tenant's obligations pursuant to ECRA. The
security furnished by Tenant shall be renewed and kept in force by Tenant, at
Tenant's own expense, until such time as Tenant shall have received final
approval of the cleanup and a release of the financial sureties from NJDEPE.

                  (e) In the event Tenant is unable to obtain either (a) a
non-applicability letter, (b) an approval of a negative declaration or (c) an
approval of a cleanup plan, then Tenant shall, at Tenant's own expense, do
everything necessary in order to obtain an administrative consent order from the
New Jersey Department of Environmental Protection and Energy ("NJDEPE"),
obligating Tenant to comply, at Tenant's own expense, with all requirements of
ECRA, the Bureau and any other division of NDEPE.

                  (f) If ECRA compliance becomes necessary at the Premises due
to any action on the part of Landlord, including, but not limited to, Landlord's
execution of a sale agreement for the Premises, any change in ownership of the
Premises, initiation of bankruptcy proceedings, Landlord's financial
reorganization or sale of the controlling share of the Landlord's assets, the
Landlord shall comply with ECRA t Landlord's own expense, provided however, that
Tenant shall cooperate with Landlord by preparing and filing all documents and
furnishing such information as may be required by NJDEPE or which is otherwise
reasonably required by Landlord in connection with such sale, financing or
transfer of interest.

                  (g)Landlord represents and warrants to Tenant that, to the
best of its knowledge and belief, the Leased Premises are in full compliance
with all Environmental Laws and that there


                                      -29-
   31
                                                                    Exhibit 10.8


is no hazardous substance or waste at the Leased Premises Landlord has received
no notice of any violation of Environmental Laws.

                  (h) The Tenant agrees that it shall not do or omit to do nor
suffer the commission or omission of any act, the commission or omission of
which is prohibited by or may result in liability under any Environmental Law,
including, without limitation, the discharge of petroleum products or other
Hazardous Substances or Wastes (as hereinafter defined). If Tenant or its
agents, servants, employees, contractors or invitees, violates, during Tenants
occupancy, any Environmental Law, Tenant shall, at its sole cost and expense,
undertake any and all remedial measures required and otherwise comply with all
Environmental Laws.

                  (i) If there is any violation of Environmental Laws which
exists on the Possession Date or any violation of Environmental Laws which
occurs thereafter by anyone or any entity other than the Tenant, its agents,
servants, employees, contractors, or invitees, Landlord, at its sole cost and
expense, shall undertake any and all remedial measures required and otherwise
comply with all Environmental Laws.

                  (j) The term "Environmental Laws" as used herein means all
present and future federal, state or local laws, ordinances, rules, regulations,
opinions, orders, directives and policies as the same, from time to time, may be
amended, which relate to the environment, health or worker safety, including,
but not limited to ECRA;the Resource Conservation Recovery Act, 42 U.S.C.
Section 6901 et seq.; the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq; the Clean Water Act, 33 U.S. C.
Section 1241 et seq. ; the Spill Act; the New Jersey Water Pollution Control
Act, N.J.S.A. 58:10A-1 et seq.; the Water and Community Right to Know Act,
N.J.S.A. 34:5A-1 et seq.; The Spill Compensation and Control Act, N.J.S.A.
58:10-23.11 et seq., and the Occupational Safety and Health Act of 1979, 29
U.S.C. Section 651 et seq. The term "Hazardous Substances or Waste s" as used
herein means any material, waste or other substance, whether solid, liquid or
gaseous, which is defined as a hazardous substance, hazardous waste, toxic
substance or toxic waste in any Environmental Laws.

                  (k) The Tenant shall indemnify, defend and hold the Landlord
harmless from any and all losses of whatever nature including but not limited
to, lost rentals, claims, fines, filing fees, costs, and reasonable counsel,
engineering and other professional or expert fees, that Landlord may sustain as
a result of the Tenant's failure to comply in a timely fashion with the
provisions of this Paragraph 45.

                  (1) The Landlord shall indemnify, defend and hold the Tenant
harmless from any and all losses of whatever nature including, but not limited
to, lost rentals, claims, costs, and reasonable counsel, engineering and other
professional or expert fees, that Tenant may sustain as a result of the
Landlord's failure to comply in a timely fashion with the provisions of this
Paragraph 45.

                  (m) This paragraph shall survive the expiration or earlier
termination of this lease.


OPTION TO RENEW.

         46. The Tenant shall have two (2) five (5) year options to renew this
Lease, by giving the Landlord written notice of its intent to exercise its
option to renew this Lease for the five (5) year term no later than six (6)
months prior to the expiration of the previous term. However, this option shall
be available to Tenant if and only if the Tenant is not in breach of any
material condition or term of this Lease after notice and expiration of the


                                      -30-
   32
                                                                    Exhibit 10.8


applicable period to cure such breach. The terms and conditions of the Lease
shall remain the same except for the payment of Base Rent which shall change
according to the following formula for the renewal period:

                  (a) Ninety (90) days prior to the expiration of the original
term, Landlord and Tenant shall commence negotiations to determine the fair
market value of the leased premises for the renewal term of the lease (the
"FMV"). The FMV shall incorporate any rent concessions which may prevail in the
market at that time. If the parties have not agreed upon the FMV within thirty
(30) days, Landlord and Tenant shall each appoint a real estate appraiser within
thirty (30) days of the end of the first 30-day period to determine the FMV.
Each appraiser shall be a designated MAI appraiser. If either party fails to
timely appoint its appraiser, the appraisal of the more timely appointed
appraiser shall determine the FMV.

                  (b) As soon as practical after appointment, but within thirty
(30) days, each appraiser shall submit an appraisal of the FMV to Landlord and
Tenant. Each shall deliver a copy of the appraisal to the other within three (3)
days of receipt, with a copy to the other appraiser. If the appraisals submitted
are within ten (10%) percent of each other, the average of the two appraisals
shall be the FMV. If the appraisals submitted are not within ten (10%) percent
of each other, within ten (10) days after the submission of the original
appraisals, both appraisers shall jointly select a third appraiser qualified as
stated above, whose appraisal shall be restricted to a determination of the FMV
in an amount neither greater than the higher of the two other appraisals, nor
less than the lower of the two other appraisals. If the two appraisers do not
timely select the third appraiser, Tenant and/or Landlord may seek an order of
the court of competent jurisdiction for the appointment of a third appraiser.
The third appraiser's appraisal shall be averaged with the results of the other
two appraisals and such average shall be the FMV. The FMV so determined shall be
converted to an Annual Base Rent by multiplying the FMV by 95%. The new Annual
Base Rent shall be paid in twelve (12) installments on the first day of each
month commencing on the first day of the first month of the renewal term. If the
foregoing appraisal procedure shall not result in a determination of the FMV
within 90 days after the end of the first 30-day period referred to above,
either party may seek a determination by a court of jurisdiction as to the FMV.

(c) Landlord, at its sole cost and expense, will repaint and recarpet the
Premises (color to be selected by Tenant and quality to be comparable to the
original installation) upon the commencement of the first renewal term.


CANCELLATION OPTION.

         47. Tenant shall have the option to cancel this Lease at the end of the
sixtieth (60th) month by giving written notice to Landlord prior to the fifty
fifth (55th) month of the Lease and by payment of a cancellation penalty to the
Landlord in the amount of One Million One Hundred Forty One Thousand
($1,141,000) Dollars prior to the sixtieth (60th) month of the Lease.


EXPANSION.

         48. If during the term of this Lease Tenant requires additional space
and notifies Landlord in writing of its requirements, Landlord shall respond to
Tenant's request within twenty (20) days with a proposal for leasing such space
which includes a build-out allowance and terms and conditions. If Tenant and
Landlord enter into an expansion agreement which would provide for additional
space to be constructed for Tenant, it shall be conditioned upon Landlord's
ability to expand the building. Landlord shall proceed diligently to obtain the
necessary approvals for the expansion in accordance with the terms of the
aforesaid


                                      -31-
   33
                                                                    Exhibit 10.8


expansion agreement. If Landlord is unable to obtain the necessary approvals for
the expansion within six (6) months of the expansion agreement, then either
party may elect to terminate the expansion agreement.


ENVIRONMENTAL SURVEY.

         49. Tenant shall arrange for an environmental investigation of the
Leased Premises. Upon Tenant's receipt of the results of said investigation,
Tenant shall send Landlord a copy of the report. Notwithstanding anything
contained herein to the contrary, Tenant, at its option, may terminate this
Lease upon written notice to Landlord sent on or before January 27, 1993, in the
event that Tenant, in its sole discretion, is not satisfied with the results of
the environmental report. Termination shall be deemed effective as of the date
of said notice as if said date were the original termination date set forth in
this Lease. Landlord shall immediately return any monies paid to, or deposited
with Landlord, to Tenant. If Tenant has commenced work at the premises, Tenant
shall have the same rights to remove its improvements, fixtures and equipment
and the same obligations to restore the premises as it would otherwise have upon
the termination or expiration of the Lease.


NON-BINDING NATURE OF SUBMITTAL.

         50. It is understood by the Tenant that the submission of this Lease to
the Tenant for execution in no way binds the Landlord to any of the terms or
contents therein unless or until this Lease has been executed by a duly
authorized Partner of the Landlord.


         IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals or caused these presents to be signed and sealed by their proper
corporate officers the day and year first above written.


         ATTEST:                    DATE:      RAMSEY ASSOCIATES


                                    1/11/93    By: /s/ Michael E. Laino
         ----------------------     -------       --------------------------
                                                   Michael E. Laino
                                                   A General Partner


         ATTEST:                    DATE:      ALTEON, INC.



         /s/ Elizabeth O'Dell       1/8/93     By: /s/ Kenneth Ludlum
         -----------------------    ------        ------------------------
                                                   V.P. Finance


                                      -32-
   34
                                                                    Exhibit 10.8



                                   ALTEON INC.
                   165 LUDLOW AVE./NORTHVALE, NEW JERSEY 07647
                          201/784-1010 Fax:201/784-1344

                                    EXHIBIT C


November 5, 1992

Mr. Michael Laino
RAMSEY ASSOCIATES
500 Route 17 South
Hasbrouck Heights, New Jersey 07604


RE:      170 WILLIAMS DRIVE
         RAMSEY, NEW JERSEY

Dear Mike:

This letter will serve to confirm the intent of Alteon Inc. to enter into a
lease at 170 Williams Drive, under the following terms and conditions.

BUILDING:                  170 Williams Drive
                           Ramsey, New Jersey

OCCUPANCY:                 November 1, 1993

SPACE REQUIREMENT:         37,000 square feet, subject to the confirmation of
                           measurement by Alteon's architect. Measurement shall
                           be to the outside wall.

INITIAL TERM:              Ten (10) years.



RENTAL RATE:               Months       Base Rent
                           ------       ---------
                                  
                           1-18         $24,736.11 per month
                                        ($8.02 p.s.f./annum)
                           19-30        $28,906.25 per month
                                        ($9.38 p.s.f./ annum)
                           31-120       $44,708.33 per month
                                        (14.50 p.s.f./annum)


SECURITY DEPOSIT:          Alteon will post either a letter of credit, Security
                           deposit, escrow account or other form of security in
                           a form acceptable to the lending institution
                           financing the improvements in this transaction, in
                           the amount of $1,034,000.

                           Alteon shall have the right, at its option, to reduce
                           the amount of the security by $103,400 at the end of
                           each year of the lease term.


                                      -33-
   35
                                                                    Exhibit 10.8

                                   ALTEON INC.
                   165 LUDLOW AVE./NORTHVALE, NEW JERSEY 07647
                          201/784-1010 Fax:201/784-1344

Mr. Michael Laino
November 5, 1992
Page Two


OPERATING EXPENSES:        Alteon will have the right to operate the building At
                           its own expense, or to have the landlord operate the
                           building. In the event the landlord operates the
                           building, landlord will cap the annual increase on
                           all operating expenses (excluding non-controllable
                           items such as real estate taxes and utilities ) at
                           5%. If the Landlord operates the building, Alteon
                           will pay a management fee of 3% of the annual net
                           rent to the Landlord.

TENANT CONSTRUCTION:       The landlord will contribute $978,500 to Alteon as a
                           cash allowance toward the construction of its tenant
                           space. Any unused portion of this allowance can be
                           converted to cash by Alteon.

                           Alteon shall have the right to competitively bid this
                           project to general contractors and subcontractors for
                           completion of the initial improvements and future
                           alterations over the Initial term of the lease, as
                           long as said contractors and subcontractors are
                           acceptable to the landlord, such acceptance not to be
                           unreasonably withheld. Landlord is encouraged to bid
                           the project. In the event an outside contractor is
                           selected, Landlord's supervisory fee shall be limited
                           to actual and reasonable cost for personnel time and
                           materials.

STRUCTURAL REPAIRS/
IMPROVEMENTS:              Landlord shall be responsible for water tightness and
                           structural repairs to the building not occasioned by
                           the tenant's misuse or failure to properly maintain
                           the premises during the term.

SPACE PLANNING/DESIGN:     Alteon is to receive from the Landlord $1.50 per
                           rentable square foot for space planning and working
                           drawings for the Initial Tanant Improvements.

RENEWAL OPTIONS:           a.       Alteon will receive two (2) five (5) year
                                    renewal options.

                           b.       Option Rental Rate after year ten and year
                                    15 shall be at 95% of the then Fair Market
                                    Value including rent concessions.


                                      -34-
   36
                                                                    Exhibit 10.8


                                   ALTEON INC.
                   165 LUDLOW AVE./NORTHVALE, NEW JERSEY 07647
                          201/784-1010 Fax:201/784-1344

Mr. Michael Laino
November 5, 1992
Page Three


                           c.       Landlord shall provide Alteon an allowance
                                    to repaint and carpet the premises upon the
                                    expiration of the ten (10) year occupancy.

                           d.       Notice for said renewal option is to be
                                    provided by Alteon six (6) months prior to
                                    the expiration of the existing lease. All
                                    other terms and conditions shall remain as
                                    negotiated in the primary lease document.

SIGNAGE:                   Alteon shall have all signage rights which are
                           permitted by existing zoning.

NON-PERFORMANCE BY
LANDLORD:                  If Alteon is unable to occupy the leased premises on
                           the planned occupancy date due to non-performance by
                           Landlord, lease commencement shall be postponed by
                           one day for each day of delay caused by Landlord's
                           non-performance. Any real estate costs Incurred by
                           Alteon due to landlord's non-performance shall be
                           paid by landlord.

SUBLEASE AND ASSIGNMENT:   Alteon will have the right to sublease all or a
                           portion of its space with owner's prior written
                           consent which shall not be unreasonably withheld or
                           delayed. Alteon will have the right to sublease to
                           affiliates or subsidiaries without Landlord's
                           consent. The rights provided to Alteon shall be
                           assignable to any assignee or subtenant. Tenant and
                           Landlord shall divide Equally all profits which may
                           arise out of an assignment or sublet after first
                           deducting all expenses incurred by tenant. The
                           Landlord will not have the right of recapture.

HOLD OVER RENT:            The holdover provision in the lease will state that
                           the hold over rent will be paid at 100% of the then
                           current base rental rate. All other standard
                           provisions shall remain intact.

NON-DISTURBANCE AGREEMENT: A non-disturbance agreement will be provided by the
                           mortgage holder(s) who will be re-financing the
                           building. Alteon will execute a tenant estoppel
                           agreement if requested. The mortgage holder(s) will
                           recognize the tenant and will assume the obligations
                           of the landlord.


                                      -35-
   37
                                                                    Exhibit 10.8


                                   ALTEON INC.
                   165 LUDLOW AVE./NORTHVALE, NEW JERSEY 07647
                          201/784-1010 Fax:201/784-1344

Mr. Michael Laino
November 5, 1992
Page Four

TENANT ELECTRIC:           Electric charges will be paid directly by Alteon to
                           the utility.

CANCELLATION OPTION:       Alteon shall have the option to cancel this lease at
                           the end of the fifth year by giving six (6) months
                           notice to the landlord and paying a cancellation
                           penalty of $1,141,000.

BUILDING FINANCING:        Landlord shall have 30 days from the conclusion of a
                           signed letter of intent to secure a commitment for
                           financing, after which time Alteon, at its option,
                           may elect not to proceed with the transaction.

BASE BUILDING WORK:        Landlord at its own expense, will complete the
                           Following base building work prior to Alteon's
                           Occupancy:

                           a)       install one hydraulic passenger / freight
                                    Elevator

                           b)       install mutually agreeable windows onto the
                                    portion of the lower level which is above
                                    grade

                           c)       screen the items on the roof from view at
                                    The front approach to the building, in a
                                    manner aesthetically consistent with the
                                    Building exterior.

                           d)       Prior to the start of tenant construction,
                                    landlord warrants water leakage problem in
                                    1st floor has been fixed or that landlord
                                    will take steps, to be approved by tenant,
                                    to assure building will be free from water
                                    infiltration in the future.

RESTORATION:               Alteon will not be required to restore the premises
                           to building standard construction or to remove any
                           above-standard improvements that were approved by the
                           Landlord and were completed during initial
                           construction or during the lease term. However,
                           Alteon retains right to remove laboratory fixtures
                           and any other above standard improvements, in which
                           case Alteon will repair any damage created by the
                           removal of fixtures and will leave the space in a
                           condition suitable for painting and carpeting.



                                      -36-
   38
                                                                    Exhibit 10.8


                                   ALTEON INC.
                   165 LUDLOW AVE./NORTHVALE, NEW JERSEY 07647
                          201/784-1010 Fax:201/784-1344

Mr. Michael Laino
November 5, 1992
Page Five

EXPANSION:                 If expansion space is required, Alteon shall have the
                           right to request Landlord to seek site plan approval
                           for expansion of the building. Landlord shall have
                           six (6) months to achieve approvals within the
                           parameters previously established between landlord
                           and tenant.

USE:                       Tenant is a pharmaceutical development company, with
                           certain special needs pursuant to the laboratory
                           space it plans to build out:

                           [ ]    Seven day a week access
                           [ ]    100% fresh air/ducted exhaust for labs
                           [ ]    Acid neutralization tanks at lab drains
                           [ ]    Chemical waste pick-up by contractor
                           [ ]    Radioisotope usage - licensed by NRC
                           [ ]    Radioisotope disposal and pick-up by licensed
                                  contractor
                           [ ]    A standard pharmaceutical animal testing
                                  facility.

BROKERAGE:                 Landlord shall be responsible for any payment due the
                           Edward S. Gordon Company of New Jersey Inc.,
                           ("Broker") as the broker in the transaction, subject
                           to a separate agreement between Landlord and Broker.

This letter of intent is subject to the execution of a mutually satisfactory
lease document, and is subject to the approval of Alteon's Board of Directors.


Sincerely,

/s/ Kenneth Ludlum                            Agreed and Accepted:
- ------------------                            By: Ramsey Associates
Kenneth Ludlum                                /s/ Michael Laino
Vice President - Finance                      -----------------
                                              Michael Laino - General Partner


cc: David Sherman
    Andrew Kaplan



                                      -37-
   39
                                                                    Exhibit 10.8


EXHIBIT D                                Prepared by:___________________________

                                         Name:_______________________________

Date:________________________________

MORTGAGEE:        FIRST FIDELITY BANK, NATIONAL ASSOCIATION, NEW JERSEY
                  570 Broad Street, Newark, New Jersey 07102
                  Commercial Real Estate Department
                  Attention:____________________________________________________

                  ______________________________________________________________

MORTGAGOR:        Name:_________________________________________________________

LESSEE:           Name:_________________________________________________________

                  Mailing Address:______________________________________________

                  ______________________________________________________________

                  ______________________________________________________________

MORTGAGED         Street Address:_______________________________________________

PREMISES:         Municipality of:______________________________________________

                  County of ______________________________, State of  New Jersey

                  Tax Map Designation: Lot No. ____________ Block No. __________

                  Deed Reference: Date of Deed _________________________________

                  Recorded - Deed Book No. _______________ Page No. ____________
DATE OF
LEASE:            ______________________________________________________________

The Mortgagee and Lessee hereby agree as follows:

1.       STATEMENT OF FACTS.

         1.1      The Lessee has entered into the Lease covering all or a
portion of the Mortgaged Premises.

         1.2      As security for a loan made by the Mortgagee to the Mortgagor,
the Mortgagor has given to the Mortgagee a mortgage dated
__________________________ on the Mortgaged Premises (the "Mortgage").

         1.3      As a condition of making the loan, the Mortgagee has required
that the Lease be subordinated to the loan and terms of the Mortgage and in
exchange for such, the Lessee has requested and the Mortgagee has agreed not to
disturb Lessee's possessory rights in the Mortgaged Premises provided that the
Lessee is not in default under the Lease and that the Lessee attorns to the
Mortgagee or purchaser at the foreclosure sale.

2.       SUBORDINATION OF LEASE.

         The Lease is and shall be subject and subordinate to the Mortgage and
to all renewals, modifications, consolidations, replacements and extensions
thereof, to the full extent of the principal amount and other sums secured
thereby and interest thereon, as though the Mortgage had been executed,
acknowledged, delivered, recorded and properly indexed prior to the execution
and delivery of the Lease.


3.       ATTORNMENT

         3.1      The Lessee agrees that it will attorn to and recognize (i) any
purchaser at a foreclosure sale under the Mortgage; (ii) any transferee who
acquires possession or title to the Mortgaged Premises by deed in lieu of
foreclosure or other means; and (iii) the successors and assignee of such
purchase and/or transferees, as its landlord for the unexpired balance (and any
extensions, if exercised) of the term of the Lease upon the same terms and
conditions set forth in the Lease. Such attornment shall automatically become
effective, without the need for execution of any further instrument by any of
the parties hereto; provided, however, that Lessee will upon request by the
Mortgagee, or any subsequent owner, execute a written agreement whereunder the
Lessee will attorn to the Mortgagee or any subsequent owner, affirm Lessee's
obligations under the Lease and agree to pay all rentals and charges that are or
to become due as they become due to the Mortgagee or such subsequent owner.

         3.2      In the event that the Mortgagee shall succeed to the interest
of the Mortgagor under the Lease, and/or to title to the Mortgaged Premises, the
Mortgagee and the Lessee hereby agree to be bound to one another under all of
the terms, covenants and conditions of the Lease; provided, however, that the
Mortgagee (or any other party acquiring the Mortgaged Premises upon a
foreclosure sale or from the Mortgagee) shall not be (i) liable for any act or
omission at any prior landlord (including the Mortgagor); (ii) liable for the
return of any security deposit to the extent not paid over to the Mortgagee;
(iii) subject to any offsets or defenses which the Lessee might have against any
prior Landlord (including the Mortgagee) (iv) bound by any rent or additional
rent which the Lessee might have paid for more that the current month to any
prior landlord (including the Mortgagor) to the extent not paid over to the
Mortgagee; or (v) bound by any amendment or modification of the Lease made
without its prior express written consent.

         3.3      The Lessee agrees, until any such attornment, not to pay rent
or additional rent under the Lease for more than one month in advance without
the prior express written consent of the Mortgagee.

         3.4      The Lessee shall have no right to appear in any foreclosure
action under the Mortgage.


4.       ACCEPTANCE OF COLLATERAL ASSIGNMENT OF LEASES.

         The Lessee acknowledges notice of and consents to that certain
Assignment of Leases from the Mortgagor to the Mortgagee, dated ______________,
19______. (the "Assignment"). The Lessee agrees with the Mortgagee and the
Mortgagor that, in the event the Mortgagee becomes a mortgagee-in-possession of
the Mortgaged Premises, or otherwise takes title to the Mortgaged Premises, upon
demand or notice as provided in the Assignment, the Lessee shall make payment of
all monies due under the Lease directly to the Mortgagee. Any such payment shall
be made notwithstanding any



                                      -38-
   40
                                                                    Exhibit 10.8

5.       NONDISTURBANCE.

         5.1      Provided the Lessee complies with the Agreement and is not in
default under the Lease in or otherwise commence foreclosure proceedings, the
Mortgagee will not disturb Lessee's possession under the Lease and the Lease
will not be affected or cut off by such proceedings*

         5.2      The Lessee agrees that this Agreement satisfies any condition
or requirement in the Lease relating to the granting of a nondisturbance
agreement.


6.       RIGHT TO CURE DEFAULTS.

         6.1      The Lessee shall promptly notify the Mortgagee by registered
or certified mail, return requested, of the occurrence of any default or

         6.2      If the Mortgagor shall have failed to cure the event of
default within the time provided in the lease, then the Mortgagee shall have an
additional thirty (30) days within which to cure the event of default or if it
cannot be cured with the time such additional time as may be necessary to effect
the cure if within the thirty (30) days the Mortgagee has commenced and it is
diligently pursuing the remedies necessary to cure the event of default
(including, without limitation, the commencement of foreclosure proceedings, if
necessary to affect the cure), in which event the Lease shall not be terminated.


7.       ESTOPPEL CERTIFICATES AND NOTICES.

         7.1      The Lessee shall deliver to the Mortgagee within ten (10) days
of its request, from time to time, certificates as to the continuance of the
Lease in effect, payment of rents thereunder and related matters.

         7.2      The Lessee shall from the date hereof send to the Mortgagee a
copy of any notice or statement required to be sent under the Lease to the
Mortgagor, at the same time such notice is sent to the Mortgagor.


8.       MISCELLANEOUS.

         8.1      Primary Liability. The Lessee represents and warrants that it
is now the sole owner of the leasehold estate created by the Lease and that it
shall not hereafter assign the Lease, except as permitted by the terms thereof,
and that notwithstanding any such assignment or any sublease of the Mortgaged
Promise, the Lessee shall remain primarily liable for the observance and
performance of all of its obligations and agreement under the lease.

         8.2      Modifications. Neither the Lease nor this Agreement may be
amended without the prior express written consent of the Mortgagee.

         8.3      Binding Affect. This Agreement shall inure to the benefit of
the parties hereto, their successors and assigns; provided, however, that (i) in
the event of the assignment or transfer of the interest of the Mortgagee, all
obligations and liabilities of the Mortgagee under this Agreement shall
terminate, and thereupon all such obligations and liabilities shall be the
responsibility of the party to whom Mortgagee's interest is assigned or
transferred; and (ii) the interest of Lessee under this Agreement may not be
assigned or transferred. Nothing contained in this Agreement shall in any way
impair or affect the lien created by the Mortgage, except as specifically set
forth herein.

         8.4      Counterparts. This Agreement may be signed in any number of
counterparts with the same affect as if the signature thereto and hereto were on
the same instrument.

         8.5      Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.

         IN WITNESS WHEREOF, this Assignment has been duly executed and
delivered by the parties on the day and year first above written:

                                   
WITNESS:                              LESSEE:

- -----------------------------         ------------------------------------------
                                      Name:           (Individual)

WITNESS:

- -----------------------------         ------------------------------------------
                                      Name            (Individual)


                                      ------------------------------------------
                                              (Corporation or Partnership)
ATTEST:

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

ATTEST:

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


(CORPORATE SEAL)

                                      MORTGAGEE:

                                      FIRST FIDELITY BANK, NATIONAL ASSOCIATION
                                      NEW JERSEY

ATTEST:                               By:
                                         ---------------------------------------
                                         Name:
- -----------------------------            Title:
(CORPORATE SEAL)



Mortgagee agrees to immediately recognize and honor all of lessees rights under
the Lease and satisfy Landlord's obligations under the Lease, including use of
insurance proceeds, condemnation proceeds, and delivery of Tenant's Construction
Improvement Allowance.



                                      -39-

EX-10.9

   1
                                                                    Exhibit 10.9


[Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidentiality has been requested for this confidential information.] [The
confidential portions have been omitted and filed separately with the Securities
and Exchange Commission.]











                               LICENSE AGREEMENT

                                    BETWEEN

                         CORANGE INTERNATIONAL LIMITED

                                      AND

                                  ALTEON INC.

                                  DATED AS OF

                               DECEMBER 30, 1994
   2
                                                                    Exhibit 10.9
                               TABLE OF CONTENTS




                                                                              Page
                                                                              ----
                                                                           
ARTICLE 1 - DEFINITIONS....................................................     1

      1.1      "Affiliate".................................................     1
      1.2      "AGE(s)"....................................................     1
      1.3      "Combination Product".......................................     2
      1.4      "Commercial Product"........................................     2
      1.5      "Commercial Sale"...........................................     2
      1.6      "Commodity Product".........................................     2
      1.7      "Effective Date of this Agreement"..........................     2
      1.8      "Far East Countries"........................................     2
      1.9      "FDA".......................................................     2
      1.10     "Field".....................................................     2
      1.11     "510(k)"....................................................     2
      1.12     "Licensed Patents"..........................................     2
      1.13     "Licensed Technology".......................................     3
      1.14     "NDA".......................................................     3
      1.15     "Net Sales".................................................     3
      1.16     "Party".....................................................     4
      1.17     "Picower"...................................................     4
      1.18     "PMA".......................................................     4
      1.19     "Product"...................................................     4
      1.20     "Reagents"..................................................     4
      1.21     "Research Product"..........................................     4
      1.22     "Territory".................................................     4
      1.23     "Valid Claim"...............................................     4
      1.24     "Yamanouchi"................................................     5

ARTICLE 2 - LICENSE GRANT..................................................     5

      2.1      Grant of License............................................     5
      2.2      Reservation of Rights.......................................     5

ARTICLE 3 - MILESTONE, ROYALTY AND OTHER PAYMENTS..........................     5

      3.1      Initial Payment.............................................     5
      3.2      Running Royalties...........................................     5
      3.3      Obligation to Pay Royalties.................................     6

ARTICLE 4 - PAYMENTS AND REPORTS...........................................     6

      4.1      Payment.....................................................     6
      4.2      Mode of Payment.............................................     6
      4.3      Records Retention...........................................     6
      4.4      Audit Request...............................................     7



                                       i
   3
                                                                    Exhibit 10.9


                                                                           
      4.5      Cost of Audit...............................................     7
      4.6      Taxes.......................................................     7
      4.7      No Non-Monetary Consideration for Sales.....................     7
      4.8      Affiliate's Right to Pay....................................     7
      4.9      Sublicense of Affiliates....................................     8

ARTICLE 5 - DEVELOPMENT OBLIGATIONS AND COMMERCIAL COOPERATION.............     8

      5.1      Product Development - Research Assays.......................     8
      5.2      Product Development and Registration Milestones -
               Commercial Assays...........................................     9
      5.3      Development of Additional Assays............................     9
      5.4      Conduct of Development Programs by CIL......................    11
      5.5      Collaboration in the Development Process....................    11
      5.6      Joint Inventions............................................    12
      5.7      Collaborative Marketing of AGE Mechanism....................    13

ARTICLE 6 - RIGHT OF FIRST REFUSAL.........................................    13

      6.1      Grant of Right..............................................    13
      6.2      Exercise of Right...........................................    14
      6.3      Effect of Exercise..........................................    14
      6.4      Effect of Failure to Exercise...............................    14

ARTICLE 7 - PATENT PROSECUTION, ENFORCEMENT AND INFRINGEMENT...............    14

      7.1      Patent Prosecution and Maintenance..........................    14
      7.2      Notification of Infringement................................    14
      7.3      Patent Enforcement..........................................    14
      7.4      Third Party Licenses........................................    15
      7.5      Infringement Action by Third Parties........................    15

ARTICLE 8 - CONFIDENTIALITY................................................    16

      8.1      Confidential Information....................................    16
      8.2      Confidentiality; Exceptions.................................    17
      8.3      Third Party Information.....................................    17

ARTICLE 9 - INDEMNIFICATION................................................    18

      9.1      Indemnification by CIL......................................    18
      9.2      Indemnification by ALTEON...................................    18
      9.3      Notice......................................................    18

ARTICLE 10 - TERM; TERMINATION.............................................    18

      10.1     Term........................................................    18
      10.2     Effect of Expiration of Term................................    19
      10.3     Breach......................................................    19




                                       ii
   4
                                                                    Exhibit 10.9


                                                                           
      10.4     Termination by CIL..........................................    19
      10.5     Discontinuance of Sales.....................................    19
      10.6     Election Not to Develop Product.............................    19
      10.7     Right to Sell Stock on Hand.................................    20
      10.8     Termination of Sublicenses..................................    20
      10.9     Effect of Termination.......................................    20
      10.10    Surviving Rights............................................    20
      10.11    Accrued Rights, Surviving Obligations.......................    20

ARTICLE 11 - MISCELLANEOUS PROVISIONS......................................    20

      11.1     Relationship of Parties.....................................    20
      11.2     Interest on Late Payments...................................    21
      11.3     Assignment..................................................    21
      11.4     Disclaimer of Warranties....................................    21
      11.5     Representations and Warranties..............................    21
      11.6     Further Actions.............................................    21
      11.7     Patent Marking..............................................    21
      11.8     Sharing of Information......................................    21
      11.9     Force Majeure...............................................    22
      11.10    No Trademark Rights.........................................    22
      11.11    Public Announcements........................................    22
      11.12    Notices.....................................................    22
      11.13    Amendment...................................................    23
      11.14    Waiver......................................................    23
      11.15    Counterparts................................................    23
      11.16    Descriptive Headings........................................    23
      11.17    Governing Law...............................................    23
      11.18    Alternative Dispute Resolution..............................    23
      11.19    Severability................................................    24
      11.20    Compliance with Law.........................................    24
      11.21    Entire Agreement of the Parties.............................    24




                                      iii
   5
                                                                    Exhibit 10.9


      EXHIBIT A:     U.S. and Foreign Patents and Patent Applications
                     Relating to the Licensed Technology

      EXHIBIT B:     List of Countries Where Patents Will Be Filed
                     and Maintained

      EXHIBIT C:     Rockefeller Agreements

      EXHIBIT D:     Picower Agreements


                                      (iv)
   6
                                                                    Exhibit 10.9


                               LICENSE AGREEMENT


      LICENSE AGREEMENT, dated as of December 30, 1994 (this "Agreement"),
between ALTEON INC., a Delaware corporation, ("ALTEON") and CORANGE
INTERNATIONAL LIMITED, a Bermuda corporation ("CIL").

                            PRELIMINARY STATEMENTS

      A. ALTEON has acquired, and possesses the right to license, worldwide
proprietary rights to a range of health care related technologies discovered at
The Rockefeller University, The Picower Institute of Medical Research or at
ALTEON, relating to the inhibition or reversal of damage to cells, tissues and
organs caused by the formation and cross-linking of advanced glycosylation
endproducts, including certain diagnostic technology to measure such endproducts
as a marker of disease and dysfunction associated with diabetic complications,
aging and related conditions.

      B.   CIL is a common parent company to each of Boehringer
Mannheim Corporation and Boehringer Mannheim GmbH.

      B. CIL and/or its Affiliates have expertise in developing and marketing
diagnostic products and wishes to develop and market diagnostic products which
utilize such proprietary technology in conjunction with CIL's and/or its
Affiliates' proprietary immunodiagnostic kits and instrumentation.

      C.   CIL desires to obtain, and ALTEON is willing to grant, a
license to ALTEON's diagnostic technology.

      NOW, THEREFORE, in consideration of the various promises and undertakings
set forth herein, the Parties agree as follows:


ARTICLE 1 - DEFINITIONS

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

      1.1 "Affiliate", with respect to any Party, shall mean any person or
entity controlling, controlled by, or under common control with, such Party. For
these purposes, "control" shall refer to (i) the possession, directly or
indirectly, of the power to direct the management or policies of a person or
entity, whether through the ownership of voting securities, by contract or
otherwise or (ii) the ownership, directly or indirectly, of at


                                      -1-
   7
                                                                    Exhibit 10.9


least 50% of the voting securities or other ownership interest of a person or
entity (or such lesser percentage which is the maximum allowed to be owned by a
foreign corporation in a particular jurisdiction).

      1.2 "AGE(s)" shall mean advanced glycosylation endproducts and any similar
biologic or physiologic reference including, but not limited to, Millard
reaction products, non-enzymatic glycation products, and like terminology
functioning in a substantially similar mechanistic way to such advanced
glycosylation endproducts.

      1.3 "Combination Product" shall mean a Product that is formulated in
combination with one or more active components not in the Field.

      1.4 "Commercial Product" shall mean any Product which is not a Research
Product.

      1.5 "Commercial Sale" shall mean any sale which transfers to a purchaser
physical possession and title to any Products in any country in the Territory by
CIL or an Affiliate or sublicensee of CIL.

      1.6 "Commodity Product" shall mean a diagnostic product sold by a
non-Affiliate or sublicensee of CIL which utilizes technology similar to the
Licensed Technology, the sale of which does not infringe a Valid Claim, and
which is interchangeable in the marketplace with a Commercial Product.

      1.7 "Effective Date of this Agreement" shall mean the date first written
above.

      1.8 "Far East Countries" shall mean Japan, Korea, Taiwan and The People's
Republic of China.

      1.9 "FDA" shall mean the United States Food and Drug Administration, or
any successor thereto.

      1.10 "Field" shall mean the use of in-vitro medical diagnostic and
analytical chemistry for the detection, monitoring and measurement of the
presence of AGEs.

      1.11 "510(k)" shall mean an application filed with the FDA prior to the
introduction or delivery for introduction of a medical device pursuant to the
provisions of Section 510(k) of the Federal Food, Drug and Cosmetic Act (21
U.S.C. Section 321, et seq.) and the regulations promulgated thereunder.


                                      -2-
   8
                                                                    Exhibit 10.9


      1.12 "Licensed Patents" shall mean any current and future patent or patent
application owned by or licensed to ALTEON during the term of this Agreement
relating to the Licensed Technology in the Field throughout the Territory,
including any substitutions, extensions, renewals, continuations,
continuations-in-part, divisions, patents of additions, and/or reexaminations or
reissues thereof, and any current and future patent or patent application which
is a foreign counterpart in any country in the Territory to any of the
foregoing, including any substitutions, extensions, renewals, continuations,
continuations-in-part, divisions, patents- of-additions, and/or reexaminations
or reissues thereof. ALTEON's current U.S. and foreign patents and patent
applications which exist on the Effective Date of this Agreement are set forth
on Exhibit A.

      1.13 "Licensed Technology" shall mean any and all proprietary information,
and all patentable and non-patentable inventions, improvements, discoveries,
claims, formulae, processes, methods, trade secrets, technologies, data and
know-how owned or exclusively licensed to ALTEON or to which ALTEON has the
right to grant licenses or sublicenses before or during the term of this
Agreement which identifies or measures the presence or quantity of AGE's as a
biological marker for disease and dysfunction associated with diabetic
complications, aging and other related conditions. Licensed Technology must not
be publicly available, unless it is made publicly available by, on behalf of, or
with the consent of CIL.

      1.14 "NDA" shall mean a New Drug Application filed with the FDA for
marketing approval for a drug pursuant to the Federal Food, Drug and Cosmetic
Act (21 U.S.C. Section 321, et seq.) and the regulations promulgated thereunder.

      1.15 "Net Sales" shall mean the gross amount invoiced for all Products
sold by CIL and its Affiliates and sublicensees in arm's length sales to
unrelated third parties, less deductions for:

                (a) trade, quantity and cash discounts or rebates, credits,
allowances or refunds given or made for rejected, outdated or returned Products
and the like;

                (b) any tax or government charge (other than an income tax)
levied on the sale, transportation or delivery of a Product and borne by the
seller thereof;

                (c)  any charges for freight, postage, shipping, import
or export taxes, insurance or charges for returnable containers;
and


                                      -3-


   9
                                                                    Exhibit 10.9


                (d) the actual full cost of financing or servicing of an
analyzer or device, in the event that the Product is sold as part of a lease or
rental agreement with the customer, whereby an analyzer or other device is
placed with the customer and the financing or servicing of such analyzer or
device is included in the price of the Product.

      With respect to the deductions set forth in Sections 1.15(a), (b) or (c),
CIL may elect, for any calendar year during the term of this Agreement, to
deduct a lump sum of five percent (5%) of Net Sales to cover such items in lieu
of taking the deductions set forth in such Sections.

      In the case of sales of a Combination Product, Net Sales shall be
determined by multiplying the Net Sales, as defined above, of such Combination
Product by a fraction, the numerator of which shall be the per unit current
stand-alone selling price of the component of such Combination Product that
would be a Product if sold separately (determined in accordance with generally
accepted accounting principles), and the denominator of which shall be the total
per unit current stand-alone selling price of all diagnostic technologies and
ingredients in such Combination Product, including the price of the component of
such Combination Product that would be a Product if sold separately. If there is
no established current stand-alone selling price for any component of a
Combination Product, the Parties shall negotiate in good faith a formula for
determining Net Sales of such Combination Product, taking into account (i) the
sales volume of such Combination Product; (ii) the profitability of such
Combination Product; and (iii) the proprietary nature and importance of each
component of such Combination Product.

      1.16 "Party" shall mean ALTEON or CIL and, when used in the plural, shall
mean ALTEON and CIL.

      1.17 "Picower" shall mean The Picower Institute for Medical Research.

      1.18 "PMA" shall mean an application for premarket approval of a medical
device filed with the FDA pursuant to Section 515(b) of the Federal Food, Drug
and Cosmetic Act (21 U.S.C. Section 321, et seq.) and the regulations
promulgated thereunder.

      1.19 "Product" shall mean any product in the Field, the manufacture, use
or sale of which: (i) uses Licensed Technology; and/or (ii) is covered by one or
more Licensed Patents which, but for the license granted hereunder, would
infringe a Valid Claim.


                                      -4-
   10
                                                                    Exhibit 10.9


The term "Product" includes all Commercial Products, all Research Products, and
all Reagents.

      1.20 "Reagents" shall mean chemical and biological materials which (i) use
Licensed Technology or are covered by one or more Licensed Patents and, but for
the license granted hereunder, would infringe a Valid Claim, and (ii) are
required for sample preparation or the performance of an AGE specific assay,
including but not limited to polyclonal or monoclonal antibodies, clones,
antigens, sera, diluents, solution, binding materials and the like.

      1.21 "Research Product" shall mean any Product which is sold as an assay
for use by research investigators interested in AGE technology for which
premarket regulatory approval has not been granted and for which no diagnostic
efficacy claims have been made.

      1.22 "Territory" shall mean all countries of the world, except the Far
East Countries.

      1.23 "Valid Claim" shall mean a claim of any issued and unexpired Licensed
Patent which has not been held invalid or unenforceable by final decision of a
court or other governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, and which is not admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise.

      1.24 "Yamanouchi" shall mean Yamanouchi Pharmaceutical Co., Ltd.


ARTICLE 2 - LICENSE GRANT

      2.1 Grant of License. Subject to the terms and conditions of this
Agreement, ALTEON grants to CIL an exclusive license throughout the Territory,
with the right to grant sublicenses, to make, have made, use, sell and have sold
Products in the Field, under the Licensed Technology and Licensed Patents.

      2.2 Reservation of Rights. The license granted in Section 2.1 is exclusive
to CIL, except that:

                (a) ALTEON reserves the rights granted by ALTEON to The
Rockefeller University ("Rockefeller") or Picower, or reserved by Rockefeller or
Picower, pursuant to the agreements attached as Exhibit C and Exhibit D,
respectively; and

                (b) ALTEON reserves the right, on behalf of itself, Rockefeller
and Picower, to use the Licensed Technology and the


                                      -5-
   11
                                                                    Exhibit 10.9


Licensed Patents without cost to CIL and subject to the confidentiality
provisions of this Agreement, solely for internal research and development
purposes on a non-commercial basis.


ARTICLE 3 - MILESTONE, ROYALTY AND OTHER PAYMENTS

      3.1 Initial Payment. As partial consideration to ALTEON for the licenses
and other rights granted to CIL under this Agreement, CIL shall pay to ALTEON
the sum of [C.I.] upon the execution of this Agreement. Such sum shall be
non-refundable.

      3.2 Running Royalties. As further consideration of the license and other
rights granted to CIL under this Agreement, CIL shall pay to ALTEON a royalty,
commencing on the first Commercial Sale of a Research Product or a Commercial
Product, as the case may be, by CIL, its Affiliates or its sublicensees, as
follows:

                (a) A royalty in the amount of [C.I.] of Net Sales of Research
Products sold in any country in the Territory if the sale would, but for the
license granted hereunder, infringe a Valid Claim.

                (b) A royalty in the amount of [C.I.] of Net Sales of Commercial
Products sold in any country in the Territory if the sale would, but for the
license granted hereunder, infringe a Valid Claim and where Commodity Products
are not sold in such country.

                (c) A royalty in the amount of [C.I.] of Net Sales of Commercial
Products sold in any country in the Territory if the sale would, but for the
license granted hereunder, infringe a Valid Claim in the event a Commodity
Product is sold in such country that does not infringe a Valid Claim.

                (d) A royalty in the amount of [C.I.] of Net Sales of all
Products will be paid on the sale in any country of the Territory if such sale
is not covered by subparagraphs (a), (b) or (c) above.

                (e) If any country restricts the royalty rate or amount payable
on account of sales of Products in such country, the royalties payable under
this Agreement with respect to such country shall be automatically adjusted so
as not to exceed the maximum amount payable under applicable laws, regulations
or administrative rulings of such country.


                                      -6-
   12
                                                                    Exhibit 10.9


      3.3 Obligation to Pay Royalties. The obligation to pay royalties to ALTEON
under this ARTICLE 3 is imposed only once with respect to the same unit of
Product regardless of the number of Licensed Patents or Licensed Technology
pertaining thereto. There shall be no obligation to pay royalties to ALTEON
under this ARTICLE 3 on sales of Products among CIL, its Affiliates and its
sublicensees, but in such instances the obligation to pay royalties shall arise
upon the sale of Products by CIL, its Affiliates or its sublicensees to
unrelated third parties. Payments of running royalties due under this ARTICLE 3
based on Net Sales shall be deemed to accrue when Products are shipped or
billed, whichever event shall first occur.


ARTICLE 4 - PAYMENTS AND REPORTS

      4.1 Payment. All running royalty payments due hereunder shall be paid
annually. Royalties accruing on Net Sales in the United States shall be paid by
January 31st following the end of each calendar year. All other royalties
accruing on Net Sales in other countries in the Territory shall be paid by March
31st following the end of each calendar year. Each such payment shall be
accompanied by a statement of the amount of Net Sales during such year, on a
quarter-by-quarter, Product-by-Product and country- by-country basis, the amount
of royalties due on such Net Sales, and the amount of any credits being applied
to such royalties.

      4.2 Mode of Payment. CIL shall make all payments required under this
Agreement in the United States in United States Dollars. The royalty payments
due on the sale of Products outside the United States shall be translated at the
rate of exchange at which United States Dollars are listed in The Wall Street
Journal for the currency of the country in which the royalty is accrued for the
last business day of the calendar quarter in which such sales were made.

      4.3 Records Retention. CIL and its Affiliates and sublicensees shall keep
complete and accurate records pertaining to the sale of Products in the
Territory and covering all transactions from which Net Sales are derived for a
period of three calendar years after the year in which such sales occurred, and
in sufficient detail to permit ALTEON to confirm the accuracy of royalty
calculations hereunder.

      4.4 Audit Request. At the request and expense of ALTEON, CIL and its
Affiliates and sublicensees shall permit an independent, certified public
accountant appointed by ALTEON and acceptable to CIL or its Affiliate or
sublicensee, at reasonable


                                      -7-
   13
                                                                    Exhibit 10.9


times and upon reasonable notice, to examine those records and all other
material documents relating to or relevant to Net Sales in the possession or
control of CIL or its Affiliates or sublicensees, for a period of two years
after such royalties have accrued, as may be necessary to: (i) determine the
correctness of any report or payment made under this Agreement; or (ii) obtain
information as to the royalties payable for any calendar year in the case of
CIL's failure to report or pay pursuant to this Agreement. Said accountant shall
not disclose to ALTEON any information other than information relating to said
reports, royalties, and payments. Results of any such examination shall be made
available to both Parties.

      4.5 Cost of Audit. ALTEON shall bear the full cost of the performance of
any such audit, unless such audit discloses a variance resulting in underpayment
by CIL of more than 10% of the actual amount due. In such case, CIL shall bear
the full reasonable cost of the performance of such audit.

      4.6 Taxes. In the event that CIL or its Affiliates are required to
withhold any tax to the revenue authorities in any country in the Territory
regarding any payment to ALTEON due to the laws of such country, such amount
shall be deducted by CIL or its Affiliates, and it shall notify ALTEON and
promptly furnish ALTEON with copies of any tax certificate or other
documentation evidencing such withholding. All taxes levied on ALTEON's income
arising from this Agreement shall be borne by ALTEON. The Parties shall take
steps, consistent with current commercial practices, to: (i) avoid or minimize
any such withholding; and (b) take advantage of such double taxation avoidance
agreements as may be available.

      4.7 No Non-Monetary Consideration for Sales. Without the prior written
consent of ALTEON, CIL and its Affiliates and sublicensees shall not accept or
solicit any non-monetary consideration in the sale of any Product other than as
would be reflected in Net Sales. The use by CIL of a commercially reasonable
amount of Product for promotional sampling shall not violate this prohibition.

      4.8 Affiliate's Right to Pay. ALTEON agrees that any Affiliate of CIL may
pay, on behalf of CIL, any obligation of CIL under this Agreement and that such
payment shall be received in lieu of payment by CIL in satisfaction of such
obligation under this Agreement. Said Affiliate shall make payment to ALTEON in
U.S. Dollars pursuant to Section 4.2. Said Affiliate shall use its best efforts
to convert the royalties payable on sales in any country to U.S. Dollars;
provided, however, that if conversion to and transfer of U.S. Dollars cannot be
made in any country for any


                                      -8-
   14
                                                                    Exhibit 10.9


reason, payment of royalties may be made in the currency of the country in which
such sales are made, deposited in ALTEON's name in a bank designated by ALTEON
in any such country.

      4.9 Sublicense of Affiliates. Upon written request of CIL, ALTEON will
contract directly with any Affiliate of CIL and provide to said Affiliate the
right and license granted hereunder in any country in the Territory on
substantially the same terms and conditions as those contained herein, provided
that CIL shall guarantee to ALTEON performance of such Affiliates' duties and
obligations under such contract.


ARTICLE 5 - DEVELOPMENT OBLIGATIONS AND COMMERCIAL COOPERATION

      5.1       Product Development - Research Assays.

                (a) During the first calendar quarter of 1995, CIL will initiate
the development of a Hemoglobin-AGE assay for research kits using a microtiter
plate format. Assuming continued demonstration of the utility of the AGE
mechanism and ALTEON's positive clinical experience (e.g., from short-term
trials such as a cholesterol and Lipid-AGE placebo control study and an
Hb-AGE/A1c comparison study), CIL will also develop two additional research
assays for research kits using a microtiter plate format. The order of priority
for development of the assays will be:

                     (1) AGE-LDL - first; and

                     (2) AGE-serum protein/peptide - second.

The parties contemplate that CIL will initiate development of the AGE-LDL assay
in the third calendar quarter of 1995, subsequent to ALTEON's planned
commencement of a short term cholesterol and Lipid-AGE placebo control study in
humans. Continued development of such AGE-LDL assay will be based upon such
clinical data as ALTEON may learn and communicate to CIL. CIL will initiate
development of the AGE-serum protein/peptide assay in calendar year 1996 as
ALTEON develops or communicates information supporting such development.

                (b) In addition, in the event that (i) Yamanouchi elects not to
accept for development a license of the Licensed Technology and the Licensed
Patents in the Field in the Far East Countries and CIL acquires such rights
pursuant to the exercise of its Rights under Article 6, and (ii) the Parties
agree that a format other than the one developed or being developed pursuant to
Section 5.1(a) (e.g. a radioimmune assay) is required in the Far


                                      -9-
   15
                                                                    Exhibit 10.9


East Countries taking into consideration input the Parties receive from
Yamanouchi or any other ALTEON licensee of AGEs for therapeutic use in Japan,
then, if commercially reasonable, CIL shall also develop (or cause a sublicensee
to develop) the three (3) research assays listed in Section 5.1(a) for research
kits using such different format.

      5.2       Product Development and Registration Milestones -
Commercial Assays.

                (a) On execution of this Agreement, CIL will prepare a
development plan and schedule for the development of commercial (automated)
assays, on a platform to be determined by CIL, taking into account such factors
as potential market size, frequency of testing and location of testing (i.e.
reference laboratories, etc.) for the assays listed in Section 5.1 (the "Plan").
The Plan will detail assay development milestones and timing which have been
mutually agreed upon by the Parties. The Parties agree that the Plan shall be
consistent with CIL's internal "New Product Commercialization Process
Guideline," as in effect from time to time, a copy of the current version of
which has been provided to ALTEON. The development milestones to be agreed upon
shall include, without limitation, (i) the timing for the initiation of each
assay development, (ii) the timing for the filing of a PMA or 510(k), and (iii)
the timing of commercial launch following regulatory approval. Such Plan shall
include development milestones that are consistent with the intent of the
Parties as set forth in Sections 5.2(b) and 5.2(c). Proposals for such Plan
shall be submitted to ALTEON for its review and comment. Such Plan shall be
subject to the approval of ALTEON, which will not be unreasonably withheld.

                (b) It is the intention of the Parties that CIL will commence
the development of a commercial automated Hemoglobin-AGE assay prior to or at
the time that ALTEON generates data from its Phase III nephropathy clinical
trials for pimagedine, or such other clinical trials for pimagedine that ALTEON
is conducting, that indicate therapeutic efficiency for pimagedine. In order to
allow CIL to budget and plan for such assay development, ALTEON currently
anticipates filing for NDA approval of pimagedine between the second quarter of
1997 and the second quarter of 1998. ALTEON will advise CIL from time to time as
to delays or other changes in this expectation.

                (c) Further, it is the intention of the Parties that, at a
minimum, CIL shall develop a commercial automated Hemoglobin-AGE assay in a
time frame which would permit PMA or 510(k) approval of a commercial assay at
the same time as ALTEON obtains NDA


                                      -10-
   16
                                                                    Exhibit 10.9


approval for pimagedine, thereby making the Hemoglobin-AGE assay commercially
available contemporaneous with the commercial launch of pimagedine as an AGE
inhibitor for the treatment/prevention of one or more complications of diabetes.
In order to allow CIL to budget and plan for such assay development, ALTEON
currently anticipates receiving NDA approval of pimagedine during 1999. ALTEON
will advise CIL from time to time as to delays or other changes in this
expectation.

      5.3 Development of Additional Assays. CIL will have a right of first
refusal to develop additional AGE-analytes. These assays will include (but are
not limited to) assays to detect: (i) AGE-urine, (ii) AGE-tissue, (iii)
AGE-amyloid protein, (iv) AGE-immunoglobulin, (v) pimagedine and similar drug
compounds in patient samples, and (vi) triazine and other pimagedine-blocked
products in patient samples. With respect to each assay, the following terms
will apply:

                (a) When ALTEON has sufficient information necessary to permit
CIL or a third party to determine the business and technical feasibility of
developing an assay, ALTEON will notify CIL in writing of the availability of
such information. If CIL desires to conduct due diligence with respect to such
assay, CIL shall notify ALTEON of its interest in same within thirty (30) days
after receipt of notice from ALTEON regarding such assay. CIL will then have six
months from the date of ALTEON's initial notice (or until ALTEON receives NDA
approval of pimagedine, whichever is longer) to conduct due diligence to
determine whether to proceed with the development of such assay.

                (b) No later than the end of the due diligence period with
respect to any assay, CIL may elect to proceed with the development of such
assay by sending written notice of such election to ALTEON together with payment
to ALTEON, for each additional assay it elects to develop, of the sum of [C.I.]
[C.I.]. Such sums shall be non-refundable. Products using such assays shall
thereafter be subject to all of the terms of this Agreement applicable to
Products, including the royalty rates set forth in Section 3.2. CIL will then
prepare a development plan and schedule for the development of such assays, on a
platform to be determined by CIL, taking into account such factors as potential
market size, frequency of testing and location of testing (i.e. reference
laboratories, etc.) for the elected assay(s). The Parties agree that any such
plan shall be consistent with CIL's internal "New Product Commercialization
Process Guideline," as in effect from time to time. Proposals for such plan
shall be submitted to ALTEON for its review and comment. Such


                                      -11-
   17
                                                                    Exhibit 10.9


plan shall be subject to the approval of ALTEON, which will not be unreasonably
withheld.

                (c) In the event that CIL declines to conduct such due diligence
with respect to an assay pursuant to Section 5.3(a) or does not reply to
ALTEON's notice within the thirty (30) day period, and if ALTEON identifies a
third party willing to develop such assay, CIL will grant an exclusive
sublicense of proprietary rights granted hereunder to enable such third party to
develop and commercialize such assay on terms consistent with this Agreement;
provided, however, that nothing in this Agreement shall be construed to obligate
CIL to assist with or collaborate in the development of such assay. In lieu of
the royalty rates set forth in Section 3.2, CIL shall pay fifty percent (50%) of
the royalties and other payments received by CIL from such third party
sublicensee to ALTEON within thirty (30) days after receipt of such payments.

      5.4       Conduct of Development Programs by CIL.  CIL shall:

                (a) Use its reasonable best commercial efforts and proceed
diligently to perform the work set out in the plan for each assay being
developed;

                (b) Conduct the development programs in good scientific manner,
and in compliance in all material respects with all requirements of applicable
laws, rules and regulations, and all other requirements of any applicable good
laboratory practices to attempt to achieve its objectives efficiently and
expeditiously;
                (c) During the term of the development programs and promptly
following the expiration or termination of each development program, cause
appropriate representatives of CIL to meet with representatives of ALTEON, at
mutually agreeable times and places or by telephone conference, but at least
quarterly, to discuss the progress and developments of any development programs
relating to AGE diagnostics. Such meetings shall include, without limitation,
the following:

                     (1)   Providing ALTEON access to data and progress
notes concerning CIL's diagnostic development programs and the opportunity to
discuss such data and progress notes with appropriate CIL personnel, in order to
assist ALTEON in determining the progress being made and in evaluating the
viability, utility and acceptability of future AGE-diagnostics pursuits;

                     (2)   Providing ALTEON with reports summarizing all
activities under the development programs during the period since


                                      -12-
   18
                                                                    Exhibit 10.9


the last meeting, which reports shall be in writing if requested by ALTEON; and

                     (3) At least twice per calendar year, re-evaluating each
development plan and, if necessary, proposing modifications to such plan to
ALTEON for its review and approval; and

                (d) Allow representatives of ALTEON, upon reasonable notice and
during normal business hours, to (1) visit the facilities where the development
programs are being conducted, and (2) consult informally, during such visits and
by telephone, with CIL personnel performing work on the development programs.

      5.5       Collaboration in the Development Process.

                (a) ALTEON will provide CIL with access to ALTEON's assay
development personnel who will provide a reasonable amount of time, as
determined by ALTEON, to assist CIL throughout the development process.

                (b) ALTEON will use its best efforts to cause Picower to provide
CIL with access to appropriate scientists on AGE-related diagnostic and medical
knowledge throughout the development process in accordance with the terms of its
agreement with Picower, as well as access to individuals at Picower who consult
for ALTEON.

                (c) Subject to the terms of the existing collaborative agreement
between ALTEON and Marion Merrell Dow Inc., ALTEON will provide CIL, at the
quarterly meetings to be held pursuant to Section 5.4(c), access to data and
progress notes concerning ALTEON's AGE therapeutic clinical trials and the
opportunity to discuss such data and progress notes with appropriate ALTEON
personnel, in order to assist CIL in determining the progress being made and in
evaluating the viability, utility and acceptability of future AGE-diagnostics
pursuits.

                (d) ALTEON will provide CIL with a reasonable amount of clinical
samples for CIL to use for test development purposes only, as such samples are
available.

                (e) CIL hereby grants ALTEON the right to continue to perform
AGE assays on clinical trial samples using its in-house reagents until such time
as CIL can supply research grade diagnostic tests to ALTEON which have been
appropriately validated pursuant to a criterion mutually agreed upon by the
Parties. Thereafter, ALTEON will purchase its requirements of the assay(s) for
clinical trial purposes from CIL at CIL's list price for the


                                      -13-
   19
                                                                    Exhibit 10.9


assay(s), provided that the use of the CIL assay would not invalidate ALTEON's
findings or prior diagnostic results. CIL, however, will provide ALTEON at no
cost a reasonable quantity of research assays for ALTEON to use for its
preclinical testing and validation purposes. Such test kits will not be included
in Net Sales and CIL's provision of test kits to ALTEON at no cost shall not be
deemed to violate Section 4.7 of this Agreement.

      5.6       Joint Inventions.

                (a) Any inventions made jointly by CIL and ALTEON that are
within the Field shall be jointly owned, but shall be subject to the exclusive
license granted hereunder to CIL and subject to all of the terms of CIL's
license hereunder.

                (b) ALTEON will have the right of first refusal to acquire an
exclusive license for any inventions made jointly by the Parties relating to
therapeutic aspects of the Licensed Technology in accordance with the following
terms:

                     (1) CIL shall give written notice to ALTEON of its interest
in entering into a licensing arrangement for any such joint invention, together
with sufficient information regarding such joint invention which is reasonably
necessary for ALTEON to make an informed decision regarding such arrangement,
including, without limitation, the commercial terms upon which CIL is interested
in offering an exclusive license for such joint invention. ALTEON shall have
ninety (90) days after receipt of such notice and information to decide whether
or not it wishes to accept such offer.

                     (2) In the event that ALTEON declines to accept such offer
with respect to such joint invention or does not reply to CIL's notice within
the ninety (90) day period, and if CIL identifies a third party willing to enter
into a licensing arrangement for such joint invention on terms no less
advantageous to CIL than those offered to ALTEON for such joint invention,
ALTEON will, together with CIL, grant an exclusive license of such joint
invention to such third party. ALTEON shall collect all royalties from such
third party and shall pay fifty percent (50%) of such royalties and other
payments received by ALTEON from such third party to CIL within thirty (30) days
after receipt of such payments.

                     (3) In no event may CIL conclude any transaction with any
third party on terms less advantageous to CIL than those offered to ALTEON
without first offering said less advantageous terms to ALTEON in compliance with
this Section 5.6(b).


                                      -14-
   20
                                                                    Exhibit 10.9


                (c) Any other joint inventions outside the Field which do not
relate to therapeutic aspects of the Licensed Technology will be jointly owned,
and CIL and ALTEON will negotiate in good faith to determine how best to
recognize the value of each party's contribution to the joint invention, taking
into account (i) the relative efforts by CIL and ALTEON in developing such joint
invention; (ii) whether products developed from such joint invention are covered
by a valid claim of a patent; (iii) the potential sales volume and profitability
of such products; and (iv) the projected expenses of marketing such products.

      5.7 Collaborative Marketing of AGE Mechanism. ALTEON and CIL will develop
and carry forward an AGE mechanism marketing plan intended to educate medical
and clinical laboratory practitioners regarding the utility of the AGE marker
and to establish demand for Products and understanding of the clinical and
therapeutic utility of the AGE mechanism in general. Following regulatory
approval of Products, CIL will actively promote and sell Products in the
Territory. On approval of ALTEON's AGE inhibitor agent or other AGE therapeutic
products, provided the commercial availability and regulatory claims approved
for the use of Products, ALTEON will promote their use in AGE diagnostics and as
a diagnostic tool to be used as part of an overall therapy program.


ARTICLE 6 - RIGHT OF FIRST REFUSAL

      6.1 Grant of Right. Subject to the terms and conditions of this Agreement,
ALTEON grants to CIL a right of first refusal to expand the Territory to include
the Far East Countries (the "Right") in the event that Yamanouchi elects not to
accept for development a license of the Licensed Technology and the Licensed
Patents in the Field pursuant to an agreement by and between Alteon and
Yamanouchi, such that Yamanouchi retains or receives no financial benefit,
either directly or indirectly, from such license (other than the indirect
benefit to Yamanouchi sales of therapeutic products by virtue of having
commercial assays available).

      6.2 Exercise of Right. The Right may be exercised, during the term of this
Agreement, for a period of thirty (30) days following ALTEON's notice to CIL of
Yamanouchi's election not to accept such license (the "Exercise Period"). CIL
may exercise the Right at any time during the Exercise Period by sending to
Alteon written notice of the exercise of the Right. CIL will then prepare a
development plan and schedule for the development of all assays which CIL is
then developing pursuant to Section 5.1 or 5.3 for the Far East Countries, on a
platform to be determined by CIL, taking into account such factors as potential
market size, frequency of


                                      -15-
   21
                                                                    Exhibit 10.9


testing and location of testing (i.e. reference laboratories, etc.) for such
assay(s). Proposals for such plan shall be submitted to ALTEON for its review
and comment. Such plan shall be subject to the approval of ALTEON, which will
not be unreasonably withheld.

      6.3 Effect of Exercise. Upon exercise of the Right and agreement on
appropriate development milestones for Products in the Far East Countries, the
Territory shall be expanded to include the Far East Countries and shall be
subject to all of the terms and conditions contained in this Agreement
applicable thereto.

      6.4 Effect of Failure to Exercise. In the event that CIL declines to
exercise its Right or does not reply to ALTEON's notice within the Exercise
Period, ALTEON shall be free to negotiate a license for the Products in the
Field in the Far East Countries with a third party.


ARTICLE 7 - PATENT PROSECUTION, ENFORCEMENT AND INFRINGEMENT

      7.1 Patent Prosecution and Maintenance. ALTEON agrees to take all actions
reasonably necessary to diligently prosecute and maintain any patents or patent
applications relating to the Licensed Technology and ALTEON's AGE technology for
therapeutic applications in the countries listed on Exhibit B, which may be
modified by mutual agreement of the parties. ALTEON and CIL shall mutually
determine the additional countries, if any, where patent applications will be
filed and prosecuted, and where the patents will be maintained. The Parties
acknowledge and agree that they intend for ALTEON to be required to file and
prosecute patent applications and maintain patents in all major commercial
markets where viable patent protection is available. If the laws affecting
patent protection or maintenance costs change in any such country, the Parties
shall reassess the need to continue to file and prosecute patent applications
and maintain patents in such country.

      7.2 Notification of Infringement. If either Party learns of an
infringement or threatened infringement by a third party of any Licensed Patent
granted hereunder within the Territory, such Party shall promptly notify the
other Party and shall provide such other Party with available evidence of such
infringement.

      7.3 Patent Enforcement. ALTEON shall have the first right, but not the
duty, to institute patent infringement actions against third parties based on
any Licensed Patent under this Agreement. If ALTEON does not institute an
infringement proceeding against an offending third party within one-hundred
twenty (120) days after receipt of notice from CIL, CIL shall have the right,
but not the duty, to institute such an action. The costs and


                                      -16-
   22
                                                                    Exhibit 10.9


expenses of any such action (including fees of attorneys and other
professionals) shall be borne by the Party instituting the action, or, if the
Parties elect to cooperate in instituting and maintaining such action, such
costs and expenses shall be borne by the Parties in such proportions as they may
agree in writing. Each Party shall execute all necessary and proper documents
and take such actions as shall be appropriate to allow the other Party to
institute and prosecute such infringement actions. Any award paid by third
parties as a result of such an infringement action (whether by way of settlement
or otherwise) shall be paid to the Party who instituted and maintained such
action, or, if both Parties instituted and maintained such action, such award
shall be allocated among the Parties in proportion to their respective
contributions to the costs and expenses incurred in such action.

      7.4       Third Party Licenses.

                (a) If either Party identifies an infringement or potential
infringement of a third party's patent(s) based upon the use of any Licensed
Technology to make, use or sell any Product in any country in the Territory,
such Party shall promptly notify the other Party and shall provide such other
Party with available evidence of such potential infringement.

                (b) In such event, and during the period prior to the
institution of a suit by such third party, ALTEON shall have the first right to
obtain, at ALTEON's expense, a license from such third party in such country
with respect to such infringing Product.

                (c) If ALTEON does not obtain a license from such third party in
such country with respect to such infringing Product within 120 days after
ALTEON receives notice of such potential infringement pursuant to Section
7.4(a), CIL may seek to do so prior to the institution of a suit by such third
party. If CIL obtains a license from such third party, CIL shall be entitled to
a credit against the payments due hereunder for such Product in such country of
an amount equal to the royalty paid to such third party, but in no event shall
such credit exceed fifty percent (50%) of such payments due hereunder in any
calendar year for such Product in such country which is the subject of such
potential infringement.

      7.5       Infringement Action by Third Parties.

                (a) In the event of the institution of any suit by a third party
against CIL or its Affiliates, sublicensees, distributors or customers for
patent infringement involving the


                                      -17-
   23
                                                                    Exhibit 10.9


manufacture, use, distribution, marketing or sale of any Product in the
Territory, CIL shall promptly notify ALTEON in writing of such suit. CIL shall
have the right to defend such suit at its own expense, and ALTEON hereby agrees
to assist and cooperate with CIL, at its own expense, to the extent necessary in
the defense of such suit. During the pendency of such action, CIL shall either,
at its option: (i) continue to make all payments due under this Agreement to
ALTEON, or (ii) make one-half of all payments due under this Agreement resulting
from the Product(s) in the country or countries which are the subject of such
action into an escrow account at a bank mutually agreed to by the Parties, and
continue to make the balance of all payments due under this Agreement to ALTEON.
The costs of creating such escrow account shall be deemed to be costs incurred
in connection with such action, subject to credit or refund as set forth in
Section 7.5(b) or (c), if applicable.

                (b) If CIL finally prevails because it is held not to be
infringing any patents or trademarks belonging to such third party or because
such third party's patent is held invalid, CIL shall continue to pay the
royalties as set forth in Section 3.2, but shall be entitled to a credit against
such payments or a refund from the escrow account (or, if the escrow account is
not sufficient to cover the amount due, a credit against such payments), as the
case may be, of an amount equal to one-half of the reasonable costs actually
incurred in such action, but in no event shall such refund or credit be more
than 50% of such payments due hereunder in any calendar year for Products in
such country which is the subject of such action.

                (c) If CIL finally loses, whether by judgment, award, decree or
settlement, and is required to pay a royalty to such third party, CIL shall
continue to pay the royalties for such Products in the country which is the
subject of such action, but shall be entitled to a credit against such payments
or a refund from the escrow account (or, if the escrow account is not sufficient
to cover the amount due, a credit against such payments), as the case may be, of
an amount equal to the royalty paid to such third party, but in no event shall
such refund or credit be more than 50% of the payments due hereunder in any
calendar year for Products in such country which is the subject of such action.
In addition, if CIL incurs litigation expenses or is required to pay damages to
such third party, CIL shall be entitled to a refund from the escrow account (or,
if the escrow account is not sufficient to cover the amount due, a credit
against such payments) of an amount equal to one-half of the reasonable costs
actually incurred in such action plus one-half of the damages, but in no event
shall the total refund or credit provided herein be


                                      -18-
   24
                                                                    Exhibit 10.9


more than 50% of the payments due hereunder in any calendar year for Products in
such country which is the subject of such action.

ARTICLE 8 - CONFIDENTIALITY

      8.1 Confidential Information. It is contemplated that in the course of the
performance of this Agreement each Party will, from time to time, disclose
proprietary and confidential information to the other. "Information" shall
include all disclosures made pursuant to this Agreement in writing and
identified as being confidential or, if disclosed orally, is reduced to writing
within thirty (30) days of such oral disclosure and identified as being
confidential.

      8.2 Confidentiality; Exceptions. Except to the extent expressly authorized
by this Agreement or otherwise agreed in writing, the Parties agree that, for
the term of this Agreement and for five (5) years thereafter, the receiving
Party shall keep confidential, and shall take such reasonable measures to
maintain such Information as confidential as it takes to protect its own
proprietary information, and shall not publish or otherwise disclose and shall
not use for any purpose any Information furnished to it by the other Party
pursuant to this Agreement, except to the extent that it can be established by
the receiving Party by competent proof that such Information:

                (a) was already known to the receiving Party, other T 21 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 by a third party who
had no obligation to the disclosing Party not to disclose such Information to
others.

                (e) was independently developed by the receiving Party by
persons who did not have access to the Information.


                                      -19-
   25
                                                                    Exhibit 10.9


      Each Party may disclose the other's Information to the extent such
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental
regulations, undertaking basic research with outside collaborators, or
conducting preclinical or clinical trials, provided that if a Party is required
to make any such disclosure of the other Party's secret or confidential
Information it will, except where impracticable for necessary disclosures, for
example to physicians conducting studies or to health authorities, give
reasonable advance notice to the other Party of such disclosure requirement and,
except to the extent inappropriate in the case of patent applications, will use
its best efforts to secure confidential treatment of such Information required
to be disclosed.

      8.3 Third Party Information. The Parties recognize that ALTEON may have
development and marketing partners and/or licensees or sublicensees for the
research, development and marketing of AGE-related therapeutic products. CIL
hereby grants ALTEON the right to share data and information disclosed by CIL
relating to AGEs with such third parties, subject to appropriate confidentiality
agreements; provided, however, that ALTEON shall not share such data and
information with any other licensees of the Licensed Technology in the Field.


ARTICLE 9 - INDEMNIFICATION

      9.1 Indemnification by CIL. CIL shall defend, indemnify and hold ALTEON,
its directors, officers and employees, harmless from and against any and all
claims, suits or demands for liability, damages, losses, costs and expenses
(including the costs and expenses of attorneys and other professionals) arising
out of third party claims or suits resulting from the manufacture, use or sale
of Products by CIL, its Affiliates or its sublicensees pursuant to this
Agreement, including, without limitation, promotion and advertising of Products
and/or interactions and communications with governmental authorities, physicians
or other third parties.

      9.2 Indemnification by ALTEON. ALTEON shall defend, indemnify and hold
CIL, its directors, officers, employees, Affiliates and sublicensees harmless
from and against any and all claims, suits, or demands for liability, damages,
losses, costs and expenses (including the costs and expenses of attorneys and
other professionals) arising out of third party claims or suits resulting from
the (i) manufacture, use or sale of ALTEON's AGE inhibitor agent or other AGE
therapeutic products and (ii) the promotion of Products outside the scope of
regulatory claims approved for


                                      -20-
   26
                                                                    Exhibit 10.9


Products, by ALTEON, its Affiliates and its licensees or sublicensees,
including, without limitation, promotion and advertising of ALTEON's AGE
inhibitor agent or other AGE therapeutic products and/or interactions and
communications with governmental authorities, physicians or other third parties.

      9.3 Notice. In the event that a Party (an "Indemnitee") seeks
indemnification under this ARTICLE 9, the Indemnitee agrees to: (i) promptly
inform the other Party (the "Indemnitor") of any claim, suit or demand
threatened or filed, (ii) permit the Indemnitor to assume direction and control
of the defense or claims resulting therefrom (including the right to settle it
at the sole discretion of the Indemnitor), and (iii) cooperate as requested (at
the expense of the Indemnitor) in the defense of the claim.

ARTICLE 10 - TERM; TERMINATION

      10.1 Term. This Agreement shall commence as of the Effective Date of this
Agreement and, unless sooner terminated as provided hereunder, shall terminate
as follows:

                (a) As to each Product and as to each country in the Territory:
(i) if such Product is covered by Section 3.2(a), (b) or (c), this Agreement
shall terminate upon the expiration of the last to expire of the Valid Claims
necessary for the use and sale of such Product in such country; and (ii) as to
any Product which is covered by Section 3.2(d), this Agreement shall terminate
fifteen (15) years from the first Commercial Sale of such Product.

                (b) This Agreement shall terminate in its entirety upon its
termination as to all Products in all countries in the Territory.

      10.2 Effect of Expiration of Term. Following expiration of the term of
this Agreement, in whole or in part, pursuant to Section 10.1, CIL shall have
the royalty-free non-exclusive right and license, within the Field, to continue
to make, use and sell the Products as to which this Agreement is terminated,
including the right to grant sublicenses therefor, as previously licensed in
ARTICLE 2.

      10.3 Breach. Failure by CIL to comply with any of the material obligations
contained in this Agreement shall entitle ALTEON to give notice to CIL
specifying the nature of the default and requiring it to cure such default. If
such default is not cured within sixty (60) days after the receipt of such
notice (or, if such default cannot be cured within such sixty (60) day period,


                                      -21-
   27
                                                                    Exhibit 10.9


if CIL does not commence and diligently continue actions to cure such default),
ALTEON shall be entitled, without prejudice to any of its other rights conferred
on it by this Agreement, in addition to any other remedies available to it by
law or in equity, to terminate this Agreement by giving written notice to take
effect immediately. The right of ALTEON to terminate this Agreement, as
hereinabove provided, shall not be affected in any way by its waiver or failure
to take action with respect to any previous default.

      10.4 Termination by CIL. CIL shall have the right to terminate the
licenses granted herein, in whole or as to any Product in any country in the
Territory, at any time, and from time to time, by giving notice in writing to
ALTEON. Such termination shall be effective ninety (90) days from the date such
notice is given, and all CIL's rights and duties associated therewith shall
cease as of that date, subject to Section 10.7.

      10.5 Discontinuance of Sales. ALTEON may terminate the license granted
herein, in whole or as to any Product licensed under this Agreement to CIL in
any country in the Territory in which CIL voluntarily discontinues Commercial
Sales of such Products for any reason other than as set forth in Section 11.9 or
that CIL is legally barred from selling such Products and fails to start selling
such Products again in such country within one hundred eighty (180) days after
delivery of written notice from ALTEON to CIL of such discontinuance.

      10.6 Election Not to Develop Product. If CIL elects not to initiate a
development program, or has not commenced a program, that is designed to develop
and register Product(s) with regulatory agencies in the major markets included
in the Territory in accordance with the milestones agreed upon pursuant to
Section 5.1, ALTEON, at its sole option, shall have the right to terminate the
license granted herein, and this Agreement, by giving notice in writing to CIL
of its decision. Such termination shall be effective ninety (90) days from the
date such notice is given (unless CIL commences such program within such ninety
(90) day period) and, except as otherwise provided in this Agreement, all CIL's
rights and duties associated therewith shall cease as of that date.

      10.7 Right to Sell Stock on Hand. Upon the termination of any license
granted herein, in or whole or as to any Product in any country in the
Territory, for any reason other than a failure to cure a material breach of the
Agreement by CIL, CIL and its Affiliates and sublicensees shall have the right
for six (6) months or such longer period as the Parties may reasonably agree to


                                      -22-
   28
                                                                    Exhibit 10.9


dispose of all Product or substantially completed Product then on hand to which
such termination applies, and royalties shall be paid to ALTEON with respect to
such Product as though this Agreement had not terminated.

      10.8 Termination of Sublicenses. Upon any termination of this Agreement,
all sublicenses granted by CIL under this Agreement shall terminate
simultaneously, subject, nevertheless, to Section 10.7.

      10.9 Effect of Termination. Upon the termination of any license granted
herein as to any Product in any country in the Territory other than pursuant to
Section 10.1, CIL and its sublicensees shall promptly return to ALTEON all
relevant records, materials or confidential information concerning the Licensed
Patents and Licensed Technology relating to such Product in such country in the
possession or control of CIL or any of its sublicensees.

      10.10 Surviving Rights. Termination of this Agreement shall not terminate
CIL's obligation to pay all royalties which shall have accrued hereunder. The
Parties' obligations under ARTICLES 4, 7, 8, 9 and 10 and Sections 11.17 and
11.18 shall survive termination.

      10.11 Accrued Rights, Surviving Obligations. Termination, relinquishment
or expiration of this 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. Such termination, relinquishment or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of this Agreement.


ARTICLE 11 - MISCELLANEOUS PROVISIONS

      11.1 Relationship of Parties. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the Parties. No Party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.

      11.2 Interest on Late Payments. Any payments required under this Agreement
that are not made when due shall accrue interest at the rate of one percent (1%)
per month from the date such payment is due. The Party making such payment shall
make the payment together with any accrued interest thereon through the date
such payment is made.


                                      -23-
   29
                                                                    Exhibit 10.9


      11.3 Assignment. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder shall be assignable by any Party without
the prior written consent of the other; provided, however, that either Party may
assign this Agreement to any wholly-owned subsidiary, to any Affiliate (provided
that such Affiliate is, directly or indirectly, under 100% common ownership with
such Party), or to any successor by merger or sale of substantially all of its
assets to which this Agreement relates in a manner such that the assignor shall
remain liable and responsible for the performance and observance of all its
duties and obligations hereunder. This Agreement shall be binding upon the
successors and permitted assigns of the parties and the name of a Party
appearing herein shall be deemed to include the names of such Party's
successor's and permitted assigns to the extent necessary to carry out the
intent of this Agreement. Any assignment not in accordance with Section 11.3
shall be void.

      11.4 Disclaimer of Warranties. The parties expressly disclaim any
warranties as to validity or enforceability of Licensed Patents, or
non-infringement of third party patents.

      11.5 Representations and Warranties. Each Party represents and warrants
that, to the best of its knowledge: (i) it is free to enter into this Agreement;
and (ii) in so doing will not violate any other agreement to which it is a
party.

      11.6 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

      11.7 Patent Marking. At ALTEON's request, CIL shall mark in an appropriate
manner all containers or packages of Products sold by CIL with the appropriate
statutory patent notice for the jurisdiction in which the Product is to be sold
to indicate patent coverage has been obtained or patents are pending.

      11.8 Sharing of Information. ALTEON and CIL shall keep each other
currently informed of relevant progress, plans and information concerning the
development, manufacture, use and sale of Products and ALTEON's products to the
extent such are reasonably relevant to the work of the other Party.

      11.9 Force Majeure. Neither Party shall be liable to the other for loss or
damages or shall have any right to terminate this Agreement for any default or
delay attributable to any act of God, flood, fire, explosion, strike, lockout,
labor dispute, shortage of


                                      -24-
   30
                                                                    Exhibit 10.9


raw materials, casualty or accident, war, revolution, civil commotion, act of
public enemies, blockage or embargo, injunction, law, order, proclamation,
regulation, ordinance, demand or requirement of any government or subdivision,
authority or representative of any such government, or any other cause beyond
the reasonable control of such Party, if the Party affected shall give prompt
notice of any such cause to the other Party. The Party giving such notice shall
thereupon be excused from such of its obligations hereunder as it is thereby
disabled from performing for so long as it is so disabled and for thirty (30)
days thereafter. Notwithstanding the foregoing, nothing in this Section 11.9
shall excuse or suspend the obligation to make any payment due hereunder in the
manner and at the time provided.

      11.10 No Trademark Rights. Except as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the name
"CIL" or "ALTEON" or any other trade name or trademark of the other party in
connection with the performance of this Agreement.

      11.11 Public Announcements. Except as required by law, neither Party shall
make any public announcement concerning this Agreement or the subject matter
hereof without the prior written consent of the other. In the event of a
required public announcement, the Party making such announcement shall provide
the other with a copy of the proposed text prior to such announcement.

      11.12 Notices. All notices and other communications 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 or
address shall be effective only upon receipt thereof):

                (a)  If to ALTEON, addressed to:

                     Alteon Inc.
                     170 Williams Drive
                     Ramsey, New Jersey 07446-2907
                     Attention:  Chief Executive Officer
                     Telephone No.: (201) 934-5000
                     Facsimile No.: (201) 934-8880


                                      -25-
   31
                                                                    Exhibit 10.9


                (b)  If to CIL, addressed to:

                     Corange International Limited
                     c/o Boehringer Mannheim Corporation
                     9115 Hague Road
                     Indianapolis, Indiana  46250
                     Attention:  Legal Department
                     Telephone No.: (317) 845-2000
                     Facsimile No.: (317) 576-3082

      11.13 Amendment. No amendment, modification or supplement of any provision
of this Agreement shall be valid or effective unless made in writing and signed
by a duly authorized officer of each Party.

      11.14 Waiver. No provision of this Agreement shall be waived by any act,
omission or knowledge of a Party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by the waiving
Party.

      11.15 Counterparts. This Agreement may be executed simultaneously in two
counterparts, either one of which need not contain the signature of more than
one party but both such counterparts taken together shall constitute one and the
same agreement.

      11.16 Descriptive Headings. The descriptive headings of this Agreement are
for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.

      11.17 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New Jersey, applicable to contracts
executed and performed wholly within the State of New Jersey. The English
original of this Agreement shall prevail over any translation hereof.

      11.18     Alternative Dispute Resolution.

                (a) Except with respect to breaches for which a Party is seeking
injunctive relief, all disputes between the Parties relating to this Agreement
or the subject matter hereof which cannot be resolved by the Parties, shall,
upon written notice by one Party to the other, be submitted for settlement by
means of alternative dispute resolution, which can include moderated settlement,
minitrial, use of expert advisor mediation or non- binding arbitration, as
provided in the New Jersey Alternative Procedure for Dispute Resolution Act,
N.J.S.A. 2A:23A-1 et seq.


                                      -26-
   32
                                                                    Exhibit 10.9


(the "Act"). All proceedings for the alternative resolution of a dispute (an
"ADR Proceeding") shall be designed to conclude within four (4) months of the
original notice and shall be held at a mutually agreeable location or in New
York City. If the parties cannot agree on the form of ADR Proceeding to be used,
then mediation, with an independent mediator acceptable to both Parties, shall
be used. All fees and expenses associated with the ADR Proceeding shall be
divided equally between the parties; provided that each party shall be
responsible for such party's own attorneys' fees and disbursements. The Act
shall govern the procedures and methods for any ADR Proceeding demanded or
undertaken pursuant to this Agreement.

                (b) Each person selected for any ADR Proceeding shall be
knowledgeable as to the diagnostic industry and will be instructed to consider,
in making any determination or recommendation, the customary practices in the
diagnostic industry to the extent such practices exist. The Parties will
cooperate with each other in causing the ADR Proceeding to be held in as
efficient and expeditious a manner as practicable.

                (c) At the conclusion of the ADR Proceeding, either Party shall
have the right to a trial de novo by a court of competent jurisdiction.

      11.19 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.

      11.20 Compliance with Law. Nothing in this Agreement shall be deemed to
permit a Party to export, reexport or otherwise transfer any Licensed Technology
or Licensed Patents transferred hereunder or Products manufactured therefrom
without compliance with applicable laws.

      11.21 Entire Agreement of the Parties. This Agreement constitutes and
contains the entire understanding and agreement of the Parties and cancels and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the Parties respecting the subject
matter hereof.


                                      -27-
   33
                                                                    Exhibit 10.9


      IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its duly authorized officer as of the day and year first above
written.

                                 ALTEON INC.



                                 By: /s/ James J. Mauzey
                                     ------------------------------------------
                                 Name: James J. Mauzey
                                       ----------------------------------------
                                 Title: Chairman, Chief Executive Officer
                                       ----------------------------------------


                                 CORANGE INTERNATIONAL LIMITED



                                 By: /s/ William Petravic
                                     ------------------------------------------
                                 Name: William Petravic
                                       ----------------------------------------
                                 Title: Treasurer
                                       ----------------------------------------


                                      -28-
   34
                                   EXHIBIT A

               U.S. AND FOREIGN PATENTS AND PATENT APPLICATIONS
                      RELATING TO THE LICENSED TECHNOLOGY


1)    Immunochemical Detection of AGE's (Methods and Test Kits for
      Measuring AGE's by ELISA Assay)

      U.S. Application #07/956,849 - filed October 1, 1992

      P.C.T. Application US92/11158 - filed December 21, 1992
                National Phase filings proceeding via a European
                Patent Application and in Australia, Canada, Japan and
                Korea

      Additional filings made in People's Republic of China,
      Portugal and Taiwan


2)    AGE-Lipid Oxidation - Methods of Measuring

      U.S. Application #08/029,417 - filed March 11, 1993

      P.C.T. Application US93/10880 - filed November 12, 1993


3)    Improved Method of Detecting Hb-AGE & Diagnostic Methods

      U.S. Application #08/236,416 - filed April 29, 1994

      Decision on PCT filing is pending


4)    Monoclonal Antibody specific for AGE's in Biological Samples

      U.S. Application #08/   ,    - filed December   , 1994

      Decision on PCT filing is pending


5)    FFI - Diagnostic Divisional - Immunochemical Test for
      Detecting AGE's Using FFI as an Indicator

      U.S. Patent #4,761,368 - issued August 2, 1988

      European Patent #0322402 - filed February 11, 1989 (Issued in
      Germany, France and Great Britain)
   35
6)    Additional Patents and Patent Applications

      U.S. Patent Application #07/749,438 - filed August 23, 1991
      (no foreign counterpart) (Liver-Derived Receptors for AGEs and
      Uses Thereof)

      U.S. Patent #5,202,424 - issued April 13, 1993 (no foreign
      counterpart) (Meangial-Cell Derived Receptors for AGEs and
      Uses Thereof)

      U.S. Patent #5,316,754 - issued May 31, 1994 (no foreign
      counterpart) (Meangial-Cell Derived Receptors for AGEs and
      Uses Thereof)

      U.S. Patent #5,108,930 - issued April 28, 1992 (no foreign
      counterpart) (Aminoguanidine Assay and Applications Thereof)
   36
                                   EXHIBIT B

                               LIST OF COUNTRIES
                  WHERE PATENTS WILL BE FILED AND MAINTAINED


I.   BASE COUNTRIES*

                United States of America
                Canada
                Japan
                Germany
                France
                Great Britain
                Italy
                Spain


II.   ADDITIONAL COUNTRIES SUBJECT TO MUTUAL AGREEMENT OF ALTEON AND
      CIL*

                Mexico
                Australia
                Others to be determined
   37
* applicable to patents/applications covering broad AGE diagnostic technology,
novel antibodies and significant commercial improvements thereto.
   38
                                   EXHIBIT C

                            ROCKEFELLER AGREEMENTS


[Filed as Exhibits 10.4 and 10.5 to the Form 10-K.]
   39
                                   EXHIBIT D

                              PICOWER AGREEMENTS


[Filed as Exhibit 10.7 to the Form 10-K]

EX-10.10

   1
                                                                   Exhibit 10.10

[Note: Certain portions of this document have been marked "[C.I.]" to indicate
that confidentiality has been requested for this confidential information. The
confidential portions have been omitted and filed separately with the Securities
and Exchange Commission.]














                             RESEARCH COLLABORATION

                                       AND

                                LICENSE AGREEMENT

                                     BETWEEN

                              WASHINGTON UNIVERSITY

                                       AND

                                   ALTEON INC.

                                   DATED AS OF

                                  JUNE 2, 1995

















                                       1
   2
                                                                   Exhibit 10.10

                                TABLE OF CONTENTS



                                                                                          Page
                                                                                          ----
                                                                                       
ARTICLE 1 - DEFINITIONS................................................................      1
         1.1          "Affiliate"......................................................      1
         1.2          "ALTEON Research Program"........................................      2
         1.3          "Commercial Sale"................................................      2
         1.4          "Compound".......................................................      2
         1.5          "Dosage Forms"...................................................      2
         1.6          "Effective Date of this Agreement"...............................      2
         1.7          "Field"..........................................................      2
         1.8          "First Commercial Sale"..........................................      2
         1.9          "Goldman Patent".................................................      2
         1.10         "Heart Graft Project"............................................      2
         1.11         "Initial Product"................................................      3
         1.12         "Invention"......................................................      3
         1.14         "Investigator(s)"................................................      3
         1.15         "Joint Invention"................................................      3
         1.16         "Licensed Patents"...............................................      3
         1.17         "Licensed Technology"............................................      4
         1.18         "Monsanto".......................................................      4
         1.19         "Net Sales"......................................................      4
         1.20         "Other Patents"..................................................      5
         1.21         "Party"..........................................................      5
         1.22         "Post-Commercialization Income"..................................      5
         1.23         "Pre-Commercialization Income"...................................      5
         1.24         "Product"........................................................      5
         1.25         "Publication"....................................................      5
         1.26         "Sponsored Research Program".....................................      5
         1.27         "Territory"......................................................      5
         1.28         "University Personnel"...........................................      5
         1.29         "Valid Claim"....................................................      6

ARTICLE 2 - REPRESENTATIONS AND WARRANTIES.............................................      6
         2.1          Representations and Warranties of Both Parties...................      6
         2.2          Representations and Warranties of WASHINGTON.....................      6
         2.3          Representation and Covenant Regarding U.S. Government Funding....      7
         2.4          Disclaimer of Other Warranties...................................      7

ARTICLE 3 - RESEARCH COLLABORATION AND DEVELOPMENT EFFORTS.............................      7
         3.1          Sponsored Research Programs......................................      7
         3.2          ALTEON Research Programs.........................................      8
         3.3          Collaboration....................................................      8
         3.4          Exchange of Information..........................................      8

ARTICLE 4 - LICENSE GRANT..............................................................      9
         4.1          Grant of License.................................................      9
         4.2          ALTEON Option for New WASHINGTON Technology......................      9
         4.3          ALTEON Option for Other Patents..................................     10
         4.4          Reservation of Rights............................................     10
         4.5          Retained Rights of U.S. Government...............................     10
         4.6          ALTEON's Development Efforts.....................................     10

ARTICLE 5 - MILESTONE, ROYALTY AND OTHER PAYMENTS......................................     11
         5.1          Up-front Payments................................................     11
         5.2          Annual Pre-Commercial Payments...................................     11


                                       i
   3
                                                                   Exhibit 10.10
                                                                                         
         5.3          Milestone Payments...............................................     11
         5.4          Credit Against Royalties.........................................     12
         5.5          Pre-Commercialization Income from Sublicensees...................     12
         5.6          Running Royalties................................................     13
         5.7          Annual Minimum Royalties.........................................     14
         5.8          Obligation to Pay Royalties......................................     15

ARTICLE 6 - PAYMENTS AND REPORTS.......................................................     15
         6.1          Payment..........................................................     15
         6.2          Mode of Payment..................................................     15
         6.3          Late Payments....................................................     16
         6.4          Records Retention................................................     16
         6.5          Audit Request....................................................     16
         6.6          Taxes............................................................     16

ARTICLE 7 - OWNERSHIP; PATENT PROSECUTION..............................................     17
         7.1          WASHINGTON Ownership.............................................     17
         7.2          ALTEON Ownership.................................................     17
         7.3          Joint Ownership..................................................     17
         7.4          Patent Prosecution and Maintenance...............................     17

ARTICLE 8 - PATENT ENFORCEMENT; INFRINGEMENT...........................................     19
         8.1          Notification of Infringement.....................................     19
         8.2          Patent Enforcement...............................................     19
         8.3          Infringement Action by Third Parties.............................     20

ARTICLE 9 - PUBLICATION; CONFIDENTIALITY...............................................     21
         9.1          Notification.....................................................     21
         9.2          Review of Proposed Publications..................................     21
         9.3          Use of Name......................................................     21
         9.4          Confidentiality; Exceptions......................................     22

ARTICLE 10 - INDEMNIFICATION...........................................................     23
         10.1         Indemnification..................................................     23
         10.2         Notice...........................................................     23
         10.3         Insurance........................................................     23

ARTICLE 11 - TERM; TERMINATION.........................................................     25
         11.1         Term.............................................................     25
         11.2         Breach...........................................................     25
         11.3         Termination by ALTEON............................................     26
         11.4         Termination of U.S. Rights.......................................     26
         11.5         Right to Sell Stock on Hand......................................     26
         11.6         Termination of Sublicenses.......................................     26
         11.7         Effect of Termination............................................     26
         11.8         Surviving Rights.................................................     27
         11.9         Accrued Rights, Surviving Obligations............................     27

ARTICLE 12 - MISCELLANEOUS PROVISIONS..................................................     27
         12.1         Relationship of Parties..........................................     27
         12.2         Assignment.......................................................     27
         12.3         Further Actions..................................................     27
         12.4         Force Majeure....................................................     27
         12.5         No Trademark Rights..............................................     28
         12.6         Public Announcements.............................................     28
         12.7         Notices..........................................................     28
         12.8         Amendment........................................................     29
         12.9         Waiver...........................................................     29
         12.10        Counterparts.....................................................     29



                                       ii
   4
                                                                   Exhibit 10.10

                                                                                      
         12.11        Descriptive Headings.............................................     29
         12.12        Governing Law....................................................     29
         12.13        Arbitration......................................................     29
         12.14        Severability.....................................................     30
         12.15        Compliance with Law..............................................     30
         12.16        Entire Agreement of the Parties..................................     30



                                      iii
   5
                                                                   Exhibit 10.10

         EXHIBIT A:  U.S. and Foreign Patents and Patent Applications
                     Relating to the Licensed Technology

         EXHIBIT B:  Research Projects Involving Licensed Technology

         EXHIBIT C:  List of Countries Where Patents Will Be Filed and
                     Maintained

         EXHIBIT D:  Form of Confidentiality and Non-Disclosure Agreement

                                      (iv)
   6
                                                                   Exhibit 10.10
                  RESEARCH COLLABORATION AND LICENSE AGREEMENT


         RESEARCH COLLABORATION AND LICENSE AGREEMENT, dated as of June 2, 1995
(this "Agreement"), between WASHINGTON UNIVERSITY, a Missouri educational and
charitable corporation ("WASHINGTON") and ALTEON INC., a Delaware corporation,
for and on behalf of itself and its Affiliates ("ALTEON").

                             PRELIMINARY STATEMENTS

         A. WASHINGTON has certain rights to the Compound (as defined below) for
use in the Field (as defined below) pursuant to the Licensed Patents and
Licensed Technology (as such terms are defined below). WASHINGTON also has
certain rights to the Compound pursuant to the Other Patents (as defined below).

         B. ALTEON has certain rights to, subject to various licenses it has
granted, and has developed substantial information and scientific data relating
to, the Compound for a variety of other uses under a different mechanism of
action.

         C. ALTEON is interested in obtaining: (i) the right to commercialize
the Compound for use in the Field pursuant to the Licensed Patents and Licensed
Technology, and (ii) an option, subject to the rights of Monsanto, to obtain a
license to the Other Patents.

         D. WASHINGTON and ALTEON are entering into this Agreement to provide
for ALTEON to conduct further research and development of the Compound for use
in the Field, for ALTEON and WASHINGTON, acting through its Investigators (as
defined below), to jointly collaborate on such further research and development,
for WASHINGTON to license, and ALTEON to obtain a license for, the use and sale
of products developed from such research and development and for WASHINGTON to
grant, and ALTEON to obtain, an option, subject to the rights of Monsanto, to
obtain a license to use and sell products covered by the Other Patents.

         NOW, THEREFORE, in consideration of the various promises and
undertakings set forth herein, the Parties agree as follows:

ARTICLE 1 - DEFINITIONS

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

         1.1 "Affiliate", with respect to any Party, shall mean any person or
entity controlling, controlled by, or under common control with, such Party. For
these purposes, "control" shall refer to (i) the possession, directly or
indirectly, of the power to direct the management or policies of a person or
entity, whether through the ownership of voting securities, by contract or
otherwise or (ii) the ownership, directly or indirectly, of at least 50% of the
voting securities or other ownership interest of a person or entity.

         1.2 "ALTEON Research Program" shall mean any research and development
conducted by or on behalf of ALTEON pursuant to this Agreement which relates to
the Compound in the Field.

         1.3 "Commercial Sale" shall mean any sale which transfers to a
purchaser physical possession and title to any Products in any country in the
Territory by ALTEON or a sublicensee of ALTEON after all required marketing and
pricing approval has been granted by the governing health authority of such
country.

                                      -1-
   7
                                                                   Exhibit 10.10

         1.4 "Compound" shall mean the chemical entity known as pimagedine, also
known as aminoguanidine.

         1.5 "Dosage Forms" shall mean the three (3) dosage forms in which
Products may be developed, comprised of (i) topical (including any and all
external applications); (ii) oral (including any ingestible form); and (iii)
injectable (which shall include any dosage form other than topical or oral,
including, without limitation, suppository, patch, depot, implant or pessary).
When used in the singular, "Dosage Form" shall mean any of the three Dosage
Forms.

         1.6 "Effective Date of this Agreement" shall mean the date first
written above.

         1.7 "Field" shall mean all pharmaceutical and health care industry
applications of the Licensed Patents and the Licensed Technology relating to the
use of the Compound for therapeutic applications affected by iNOS/iCOX
inhibition.

         1.8 "First Commercial Sale" shall mean the first Commercial Sale of a
Product in any country in the Territory.

         1.9 "Goldman Patent" shall mean U.S. Patent No. 5,317,040 issues May
31, 1994 to William E. Goldman, entitled "Method for the Treatment of Pertussis
with Aminoguanidine", which has been assigned to WASHINGTON, including any
substitutions, extensions, renewals, continuations, continuations-in-part,
divisions, patents-of-additions, and/or reissues thereof.

         1.10 "Heart Graft Project" shall mean that certain research project
conducted as a collaboration between Dr. J.A. Williamson and Dr. Ferguson at
WASHINGTON, with funding from Monsanto, relating to the potential use of
aminoguanidine to control heart graft rejection, the results of which are the
subject of the following publications: Worrall et al., Abstract: "Nitric Oxide
Mediates Increased Graft and Systemic Endothelial Permeability During Early
Cardiac Transplant Rejection", Vol. 90, No. 4, Part 2, Oct 94. Circulation;
Worrall et al, "Modulation of In-Vivo Alloreactivity by Inhibition of Inducible
Nitric Oxide Synthase", J. Exp. Med. Vol 181, Jan 95; Worrall et al, Graft and
Systemic Endothelial Barrier Dysfunction During Early Allograft Rejection:
Prevention by Inhibition of Inducible Nitric Oxide Synthase, in press at J.
Clin. Med.

         1.11 "Initial Product" shall mean the first Product which reaches the
applicable stage of development for sale.

         1.12 "Invention" shall mean any new or useful process, manufacture,
compound or composition of matter, patentable or unpatentable, or any
improvement thereof, conceived or first reduced to practice, or demonstrated to
have utility during the conduct of any Sponsored Research Program or any ALTEON
Research Program.

         1.13 "Inventors" shall mean the inventors named on WASHINGTON's current
United States patents and patent applications as set forth in Exhibit A.

         1.14 "Investigator(s)" shall mean J.R. Williamson, J.A. Corbett, and
M.L. McDaniel, so long as they are associated with WASHINGTON, and any other
University Personnel who become involved in any Sponsored Research Programs or

                                      -2-
   8
                                                                   Exhibit 10.10

who otherwise agree to become involved in the collaboration between ALTEON and
WASHINGTON pursuant to this Agreement.

         1.15 "Joint Invention" shall mean any Invention for which it is
determined, in accordance with applicable law, that both: (i) employees or
agents of ALTEON or any other persons obligated to assign such Invention to
ALTEON, and (ii) employees or agents of WASHINGTON or any other persons obliged
to assign such Invention to WASHINGTON, are joint inventors of such Invention.

         1.16 "Licensed Patents" shall mean any current and future patent or
patent application, or portion thereof, owned or controlled by WASHINGTON by way
of transfer of rights from any Investigator or Inventor or jointly owned or
controlled by ALTEON and WASHINGTON by way of transfer of rights from any
Investigator claiming a therapeutic use for the Compound in the Field throughout
the Territory, including any substitutions, extensions, renewals, continuations,
continuations-in-part, divisions, patents-of-additions, and/or reissues thereof,
and any current and future patent or patent application, or portion thereof,
which is a foreign counterpart in any country in the Territory to any of the
foregoing, including any substitutions, extensions, renewals, continuations,
continuations-in-part, divisions, patents-of-additions, and/or reissues thereof;
provided that continuations-in-part and patents-of-additions filed after the
Effective Date of this Agreement shall only be included in Licensed Patents if
they claim a therapeutic use of the Compound in the Field. Only those claims of
any Licensed Patents which cover the Compound, either alone or in conjunction
with other compounds, shall be included in Licensed Patents, and for those
claims which cover the Compound in conjunction with other compounds, only that
portion of the claims which relates solely to the Compound, shall be included in
Licensed Patents. Any claim or any portion of any claim, in any Licensed Patent
which does not cover the Compound shall not be included in Licensed Patents and
shall not be licensed under this Agreement. WASHINGTON's current U.S. and
foreign patents and patent applications which claim a therapeutic use for the
Compound and are included in Licensed Patents, and which exist on the Effective
Date of this Agreement, are set forth on Exhibit A. The Other Patents are not
included in Licensed Patents.

         1.17 "Licensed Technology" shall mean any and all information, and all
patentable and non-patentable inventions (including, without limitation, all
Inventions and Joint Inventions), improvements, discoveries, claims, formulae,
processes, methods, trade secrets, technologies, data and know-how relating to a
therapeutic use of the Compound in the Field owned or controlled by WASHINGTON
by way of transfer of rights from any Investigator or Inventor or to which
WASHINGTON has the right to grant licenses or sublicenses by way of transfer of
rights from any Investigator or Inventor before or during the term of this
Agreement and: (i) relating to or resulting from research projects conducted at
WASHINGTON by any of the Inventors or any of WASHINGTON's Investigators
involving the Compound in the Field listed and described in Exhibit B, provided
that, with respect to research conducted after the Effective Date of this
Agreement, excluding any research conducted using commercial third party
funding, or (ii) claimed, covered or disclosed in any patent or patent
application listed in Exhibit A which relates to the research projects described
in Exhibit B, or (iii) relating to or derived from any Sponsored Research
Program or any ALTEON Research Program. Both Parties acknowledge and agree that
WASHINGTON has, and may hereinafter develop, certain non-public information
relating to iNOS inhibition with the Compound, including the results of studies,
which is valuable Licensed Technology and which is adequate and sufficient
consideration for the license granted in this Agreement. The Heart Graft Project
and the know-how related to the invention disclosed and claimed in the Goldman
Patent are not included in Licensed Technology.

                                      -3-
   9
                                                                   Exhibit 10.10

         1.18 "Monsanto" shall mean Monsanto Company, a Delaware corporation,
with a principal place of business at 800 North Lindbergh, St. Louis, Missouri,
or such other entity who holds rights pursuant to that certain Biomedical
Research Agreement with WASHINGTON dated July 1, 1982, as amended.

         1.19 "Net Sales" shall mean the gross amount invoiced for all Products
sold by ALTEON and/or its Affiliates in arm's length sales to unrelated third
parties (excluding sales to sublicensees for their resale), less deductions for:

                  (a) commissions, trade, quantity and cash discounts or rebates
actually allowed or given;

                  (b) credits, allowances or refunds given or made for rejected,
outdated or returned Products;

                  (c) any tax or government charge (other than an income tax)
levied on the sale, transportation or delivery of a Product and borne by the
seller thereof; and

                  (d) any prepaid and invoiced charges for freight, postage,
shipping, import or export taxes, insurance or charges for returnable
containers.

         1.20 "Other Patents" shall mean: (i) the Goldman Patent, and (ii) any
patent which may issue at any time during the term of this Agreement resulting
from the Heart Graft Project which is owned or controlled by WASHINGTON.

         1.21 "Party" shall mean WASHINGTON or ALTEON and, when used in the
plural, shall mean WASHINGTON and ALTEON.

         1.22 "Post-Commercialization Income" shall mean the gross revenues
received by ALTEON and/or its Affiliates from any sublicensee, after the First
Commercial Sale of a Product by such sublicensee, for all Products sold by such
sublicensee in arm's length sales to unrelated third parties, excluding,
however, any portion thereof that is attributable to ALTEON's full manufacturing
cost for the supply of bulk materials or finished Product, including direct
materials, direct labor and manufacturing overhead.

         1.23 "Pre-Commercialization Income" shall mean the gross revenues
received by ALTEON and/or its Affiliates from any sublicensee, prior to the
First Commercial Sale of a Product by such sublicensee, in connection with the
grant of a sublicense to such sublicensee of the Licensed Technology and/or
Licensed Patents, or any part thereof.

         1.24 "Product" shall mean any product comprising the Compound, the use
or sale of which is: (i) based upon, derived from, identified through or related
to any Licensed Technology; and/or (ii) covered by one or more Licensed Patents
and would infringe a Valid Claim thereof.

         1.25 "Publication" means any written or oral publication or disclosure
resulting from or involving the Licensed Technology or the subject matter of any
Sponsored Research Program or ALTEON Research Program, and includes but is not
limited to a publication or disclosure in books, journals, theses, trade
publications, scientific meetings, poster sessions, and symposia.

         1.26 "Sponsored Research Program" shall mean any research conducted by
WASHINGTON, acting through the laboratories of any Investigator(s), in
collaboration with ALTEON pursuant to Section 3.1 this Agreement.

                                      -4-
   10
                                                                   Exhibit 10.10

         1.27 "Territory" shall mean the entire world.

         1.28 "University Personnel" means any University employee, student or
consultant who participates in any Sponsored Research Program or any ALTEON
Research Program in any manner or who acquires knowledge of any test data,
clinical information or any other information resulting from any Sponsored
Research Program or any ALTEON Research Program which is deemed a trade secret
or confidential or proprietary to ALTEON or WASHINGTON, such as any professor,
technician, any associate or student (including a pre-or post-doctoral student),
any independent contractor (including any consultant under an obligation of
confidentiality), or any research collaborator.

         1.29 "Valid Claim" shall mean a claim of any issued or granted Licensed
Patent which has not been held invalid or unenforceable by final decision of a
court or other governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, and which is not admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise.


ARTICLE 2 - REPRESENTATIONS AND WARRANTIES

         2.1 Representations and Warranties of Both Parties. Each Party
represents and warrants to the other Party that: (i) it is free to enter into
this Agreement; (ii) in so doing, it will not violate any other agreement to
which it is a party; and (iii) it has taken all corporate action necessary to
authorize the execution and delivery of this Agreement and the performance of
its obligations under this Agreement.

         2.2 Representations and Warranties of WASHINGTON. WASHINGTON hereby
represents and warrants that, to the best of its knowledge, information and
belief, after due inquiry:

                  (a) It is the owner of all of the Licensed Patents listed on
Exhibit A, and has the exclusive right to grant licenses therefor;

                  (b) It is the owner of the Goldman Patent, and has the
exclusive right to grant licenses therefor, subject to the rights of Monsanto,
and the Goldman Patent has not been licensed to any third party as of the date
of this Agreement;

                  (c) It is the owner of the results of the Heart Graft Project,
and will own any patents resulting therefrom, subject to the rights of Monsanto,
no patent applications have been made and no patents have issued which have
resulted from the Heart Graft Project;

                  (d) It is the owner of, or is the licensee of, all of the
Licensed Technology in existence on the date of this Agreement, and has the
right to grant licenses or sublicenses therefor;

                  (e) It has not entered into any agreement with any third party
which is in conflict with the rights granted to ALTEON pursuant to this
Agreement.

WASHINGTON hereby represents and warrants that, to the best of its knowledge,
information and belief:

                                      -5-
   11
                                                                   Exhibit 10.10

                  (f) All the Licensed Patents listed on Exhibit A are in full
force and effect and have been maintained to date;

                  (g) There are no asserted or unasserted claim or demand which
can be enforced against the Licensed Patents listed on Exhibit A;

                  (h) None of the Licensed Patents listed on Exhibit A infringe
upon any patent or other proprietary rights of any other third party; and

         2.3 Representation and Covenant Regarding U.S. Government Funding. The
Parties acknowledge that WASHINGTON has received United States government
funding with respect to the Compound in the Field which requires certain rights
to be granted to the United States government pursuant to 35 U.S.C. Sections
200-212. In addition, WASHINGTON represents and warrants to ALTEON that
WASHINGTON has complied with all government rules and regulations relating to
reporting requirements thereunder, and WASHINGTON covenants and agrees to
continue to comply with all such reporting requirements during the term of this
Agreement.

         2.4 Disclaimer of Other Warranties. EXCEPT AS EXPRESSLY PROVIDED IN
SECTIONS 2.2 AND 2.3, NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION MADE, OR WARRANTY GIVEN, BY WASHINGTON THAT ANY PATENT WILL ISSUE
BASED UPON ANY PENDING PATENT APPLICATION, THAT ANY PATENT WHICH ISSUES WILL BE
VALID, OR THAT THE USE OF THE COMPOUND, THE RESULTS OF ANY SPONSORED RESEARCH
PROGRAM OR THE PRODUCTS WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF
ANY THIRD PARTY. FURTHERMORE, WASHINGTON MAKES NO OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED TECHNOLOGY, THE
LICENSED PATENTS, THE COMPOUND, THE RESULTS OF ANY SPONSORED RESEARCH PROGRAM OR
THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. WASHINGTON SHALL NOT BE LIABLE FOR ANY DIRECT,
CONSEQUENTIAL, PUNITIVE OR OTHER DAMAGES SUFFERED BY ALTEON OR ANY OTHER PERSON
RESULTING FROM THE USE OF THE COMPOUND OR ANY PRODUCT.


ARTICLE 3 - RESEARCH COLLABORATION AND DEVELOPMENT EFFORTS

         3.1 Sponsored Research Programs. During the term of this Agreement,
ALTEON may request WASHINGTON, acting through the laboratories of any
Investigator(s), to conduct research programs in the use of the Compound in the
Field. In such event, ALTEON and WASHINGTON shall negotiate in good faith
concerning the terms and conditions of such research program, including a
research plan and budget, term of the research program, funding to be provided
by ALTEON and the University Personnel to be assigned to the research program.
If the Parties reach an agreement for such research program, such research
program shall be deemed a Sponsored Research Program under this Agreement and
shall be subject to all of the terms and conditions applicable thereto contained
in this Agreement. Any such Sponsored Research Program shall be conducted only
at WASHINGTON by WASHINGTON's Investigator(s) and other University Personnel.

         3.2 ALTEON Research Programs. During the term of this Agreement, ALTEON
shall initiate development of the Compound in each Dosage Form and conduct such
ALTEON Research Programs which it deems appropriate, in its sole judgment, to
achieve the milestone targets provided in Section 5.3 and to develop and market
commercial applications of the Licensed Technology and the Licensed Patents.
ALTEON shall have the sole discretion to make all decisions relating to the
research, development, marketing and other commercialization efforts of the
Compound and Products in the Field, including without limitation, the sequence
of the Dosage Form(s) to be pursued. ALTEON shall not be obligated to pursue the

                                      -6-
   12
                                                                   Exhibit 10.10

development of more than one Dosage Form at any time prior to the filing of an
NDA for the previously developed Dosage Form(s). Notwithstanding the foregoing,
ALTEON shall not be obligated to develop any Dosage Form for which it determines
that there is not a sufficient scientific or commercial basis to warrant such
development.

         3.3 Collaboration.

                  (a) WASHINGTON's Investigators shall collaborate with ALTEON,
as reasonably requested by ALTEON, on any ALTEON Research Programs. WASHINGTON's
Investigators agree to meet with ALTEON's science personnel from time to time
and for telephone consultations regarding such ALTEON Research Programs. In
addition, WASHINGTON, acting through the laboratories of its Investigator(s),
shall collaborate with ALTEON on any Sponsored Research Programs and any other
studies or research projects being conducted by WASHINGTON's Investigators which
relate to the Compound in the Field.

                  (b) Prior to WASHINGTON or any of its Investigator(s)
accepting any commercial third party funding for further research involving the
Compound in the Field, WASHINGTON or such Investigator(s), as the case may be,
shall notify ALTEON of its or their interest in pursuing such further research
and give ALTEON the opportunity to provide the necessary funding for same.

         3.4 Exchange of Information.

                  (a) It is the intent of the Parties that there be a timely and
full exchange of all Licensed Technology, and thereafter continuing exchange of
all information arising from each Sponsored Research Program and ALTEON Research
Program, subject to the terms and conditions of this Agreement. Within thirty
(30) days after the Effective Date of this Agreement and after any request
therefor by a Party, the other Party and, with respect to WASHINGTON,
WASHINGTON's Investigators, shall provide to the requesting Party all data and
information relating to the Licensed Technology as such requesting Party may
request from time to time. Within thirty (30) days after the end of each
calendar quarter during the term of this Agreement: (i) WASHINGTON's
Investigators shall provide ALTEON with a written report setting forth the
progress of each study being conducted by such Investigator(s) under any
Sponsored Research Program then pending, and any other study or research project
being conducted by such Investigator(s) which relates to the Compound in the
Field. Upon completion or termination of a study or a Sponsored Research
Program, WASHINGTON's Investigators shall provide ALTEON with a copy of all
results thereof; and (ii) ALTEON shall provide WASHINGTON with a written report
setting forth the progress of all ALTEON Research Programs. In addition, ALTEON
and WASHINGTON's Investigators shall immediately disclose to the other any
critical data or development which would have a significant effect, whether
positive or negative, on the overall prospects of any research being conducted
on the Licensed Technology.

                  (b) The Parties recognize that ALTEON may have
development/marketing partners and/or licensees or sublicensees for the Licensed
Technology. WASHINGTON hereby grants ALTEON the right to share data and
information developed by WASHINGTON relating to the Licensed Technology with
such third parties, subject to appropriate confidentiality agreements, which
conform to the restrictions on confidentiality contained in this Agreement.

                                      -7-
   13
                                                                   Exhibit 10.10

ARTICLE 4 - LICENSE GRANT

         4.1 Grant of License.

                  (a) Subject to the terms and conditions of this Agreement,
WASHINGTON grants to ALTEON an exclusive license throughout the Territory, with
the right to grant sublicenses, to use and sell Products in the Field, under the
Licensed Technology and Licensed Patents, except that such license shall only
extend to any New WASHINGTON Technology, as defined in Section 4.2, if ALTEON
has exercised the option set forth in Section 4.2 with respect thereto.

                  (b) The Parties acknowledge and agree that the license granted
in this Section 4.1 does not include any rights under the Other Patents, and
this Agreement does not confer upon ALTEON any rights with respect to the Other
Patents other than as provided in Section 4.3.

         4.2 ALTEON Option for New WASHINGTON Technology. WASHINGTON grants to
ALTEON an exclusive option to acquire an exclusive license, pursuant to the
terms of this Agreement, to any Licensed Technology relating to or resulting
from research projects conducted at WASHINGTON by any of the Inventors or any of
WASHINGTON's Investigators after the Effective Date of this Agreement (excluding
any research conducted using commercial third party funding), involving the
Compound in the Field listed and described in Exhibit B ("New WASHINGTON
Technology"). WASHINGTON shall provide ALTEON with written notice of any New
WASHINGTON Technology, together with sufficient information to allow ALTEON to
evaluate such New WASHINGTON Technology. ALTEON may exercise such option with
respect to such New WASHINGTON Technology by sending written notice to
WASHINGTON of such exercise within 90 days after ALTEON receives such notice
from WASHINGTON with respect to such New WASHINGTON Technology. Upon the
exercise of this option with respect to any such New WASHINGTON Technology, such
New WASHINGTON Technology shall automatically be included in the license granted
in Section 4.1 and shall be subject to all of the terms and conditions of this
Agreement.

         4.3 ALTEON Option for Other Patents. Subject to the prior rights of
Monsanto pursuant to that certain Biomedical Research Agreement between Monsanto
and WASHINGTON dated July 1, 1982, as amended, WASHINGTON hereby grants to
ALTEON an exclusive option, on the terms hereinafter set forth, to acquire an
exclusive license to any Other Patents upon reasonable terms to be negotiated.
If during the term of this Agreement WASHINGTON becomes interested in licensing
any Other Patents to any third party for exploitation in the Territory,
WASHINGTON shall give written notice to ALTEON of its interest in negotiating
such license together with sufficient information regarding such Other Patents
which is reasonably necessary for ALTEON to make an informed decision regarding
such license. ALTEON shall have sixty (60) days after receipt of the notice
relating to such Other Patents to notify WASHINGTON of its election to exercise
its option with respect to such Other Patents. If ALTEON elects to exercise such
option, the Parties shall negotiate the terms of such license in good faith for
a period of at least 120 days after ALTEON's election of such option. If the
parties have not reached an agreement after such time, then WASHINGTON shall be
free to negotiate such license with a third party, provided, however, that any
such license shall not conflict with the license and other rights granted to
ALTEON under this Agreement. In addition, WASHINGTON shall advise ALTEON of the
terms of any such license to a third party.

         4.4 Reservation of Rights. The license granted in Section 4.1 is
exclusive to ALTEON, except that WASHINGTON reserves the right to use and permit
the use of the Licensed Technology and the Licensed Patents by non-profit
organizations, without cost to ALTEON and subject to the confidentiality

                                      -8-
   14
                                                                   Exhibit 10.10

provisions of this Agreement, solely for educational and research purposes on a
non-commercial basis.

         4.5 Retained Rights of U.S. Government. Any license granted to ALTEON
pursuant to this ARTICLE 4 shall be subject to the royalty free, non-exclusive
license granted to the United States government by WASHINGTON pursuant to 35
U.S.C. 200(c)(4) and for any Licensed Patents claiming any invention subject to
35 U.S.C. Section 201, and any federal laws and applicable regulations.

         4.6 ALTEON's Development Efforts. ALTEON shall use all reasonable
commercial efforts to develop and commercialize Products based on the rights and
license granted under this Agreement. ALTEON shall keep WASHINGTON informed
annually about its development plans and its progress on pursuing such
development plans, including submitting the reports required of ALTEON pursuant
to Section 3.4(a)(ii). Notwithstanding any of the foregoing, ALTEON shall not be
obligated to develop any Dosage Form or Product for which it determines that
there is not a sufficient scientific or commercial basis to warrant such
development. However, in the event that ALTEON decides not to pursue the
development of any Dosage Form, other than due to its good faith determination
that there is an insufficient scientific or commercial basis to warrant such
development, ALTEON shall immediately notify WASHINGTON of such decision and
ALTEON shall terminate the license granted under this Agreement with respect to
such Dosage Form pursuant to Section 11.3.


ARTICLE 5 - MILESTONE, ROYALTY AND OTHER PAYMENTS

         5.1 Up-front Payments. As partial consideration to WASHINGTON for the
licenses and other rights granted to ALTEON under this Agreement, ALTEON shall
pay to WASHINGTON: (a) the sum of [C.I] upon the execution of this Agreement,
and (b) the sum of [C.I.] no later than January 2, 1996. Such sums shall be
non-refundable and non-creditable against royalties.

         5.2 Annual Pre-Commercial Payments. As further consideration for the
licenses and other rights granted to ALTEON under this Agreement, each year
during the term of this Agreement and until commencement of the first full
calendar year after the First Commercial Sale of the Initial Product, ALTEON
shall pay to WASHINGTON the sum of [C.I.] no later than June 30th of each year,
commencing in 1996. Such sums shall be non-refundable and non-creditable against
royalties.

         5.3 Milestone Payments. As further consideration for the licenses and
other rights granted to ALTEON under this Agreement, ALTEON shall pay WASHINGTON
the following milestone payments within six (6) months following the first
occurrence of each event set forth below with respect to each Initial Product in
each Dosage Form:

                  (a) [C.I.] upon commencement of Phase I/II clinical trials in
the United States;

                  (b) [C.I.] upon commencement of Phase III clinical trials in
the United States; and

                  (c) [C.I.] upon filing an NDA in the United States; and

                  (d) [C.I.] upon receipt of NDA approval from the FDA,
including any required marketing and pricing approval.

                                      -9-
   15
                                                                   Exhibit 10.10

         With respect to the first Initial Product in the first Dosage Form,
such payments shall be made in any event no later than (i) June 30, 1997 with
respect to the payment due under Section 5.3(a), (ii) December 31, 1997 with
respect to the payment due under Section 5.3(b), and (iii) December 31, 1998
with respect to the payment due under Section 5.3(c).

         5.4 Credit Against Royalties. With respect to any milestone payments
made pursuant to Section 5.3, for each Initial Product in each Dosage Form
ALTEON shall be entitled to a credit against running royalties due under Section
5.6 of this Agreement for such Product in the Territory in each of the first ten
calendar semi-annual periods following the First Commercial Sale of such Product
in an amount equal to the lesser of: (i) [C.I.] of the aggregate amount of such
milestone payments, or (ii) the amount of the royalties due for such Product for
such period in excess of the minimum royalties due for such period. Such credit,
if any, shall be applied when the royalties for such semi-annual period are due
pursuant to Section 6.1. Such credit may only be taken against royalties
otherwise due for Products of the same Dosage Form as that for which the
milestone payments were made. Any credit not taken or eligible to be taken in
the applicable semi-annual period shall expire and shall not be carried into any
other periods.

         5.5 Pre-Commercialization Income from Sublicensees.

                  (a) In the event that ALTEON and/or its Affiliates receive
Pre-Commercialization Income from any sublicensee, ALTEON shall pay to
WASHINGTON: (i) a first amount equal to [C.I.] of the aggregate
Pre-Commercialization Income received by ALTEON and/or its Affiliates which such
sublicensee may credit against its running royalties, plus (ii) a second amount
equal to [C.I.] of the aggregate of all other Pre-Commercialization Income
received by ALTEON and/or its Affiliates, but such second amount shall then be
reduced by the amount of all payments made by ALTEON to WASHINGTON pursuant to
Sections 5.1, 5.2 and 5.3 through the last day of the calendar semi-annual
period in which such payment of such second amount of other
Pre-Commercialization Income was received (less any such payments previously
applied against previously received Pre-Commercialization Income). To the extent
that any Pre-Commercialization Income can be identified to relate specifically
to one or more Dosage Forms, the amount by which [C.I.] of the aggregate
Pre-Commercialization Income is reduced shall be limited only to the milestone
payments made with respect to such Dosage Form(s). Such payments shall be made
within thirty (30) days after the end of the calendar semi-annual period in
which it was received. In the event that any payments made by ALTEON pursuant to
this Section 5.5 are made before all payments due under Sections 5.1, 5.2 and
5.3 have been accrued, such payment(s) under this Section 5.5 shall be deemed to
be a prepayment of any payments subsequently due under Sections 5.1, 5.2 and
5.3.

                  (b) By way of illustration of the application of Section
5.5(a), if ALTEON has paid a total of [C.I.] to WASHINGTON pursuant to Sections
5.1, 5.2 and 5.3 at the time that it grants a sublicense to Company X, and the
sublicense provides for an up-front payment of [C.I.] which is not creditable
against running royalties, then ALTEON will pay WASHINGTON [([C.I.] of [C.I.]) -
[C.I.]], or [C.I.]. Such payment will be deemed to be a prepayment of subsequent
payments due under 5.1, 5.2 or 5.3. Thereafter, as payments become due under
Sections 5.1, 5.2 or 5.3, the [C.I.] payment will be applied against such
payments then due under 5.1, 5.2 or 5.3 until it is fully used. So, if a
milestone payment of [C.I.] becomes due in the following period, ALTEON shall
make no additional payment, but the amount of such prepayment shall be reduced
by the amount of such milestone payment, such that a prepayment of [C.I.] -
[C.I.], or [C.I.], remains.

                                      -10-
   16
                                                                   Exhibit 10.10

In addition, if ALTEON subsequently receives an additional up-front or milestone
payment of [C.I.] from Company X, and in the interim ALTEON has paid to
WASHINGTON an additional [C.I.] in payments pursuant to Section 5.1, 5.2 or 5.3,
ALTEON will pay WASHINGTON [([C.I.] of [C.I.]) - [C.I.]], or [C.I.], from which
ALTEON may deduct the remaining [C.I.] prepayment.

         5.6 Running Royalties. As further consideration of the license and
other rights granted to ALTEON under this Agreement, ALTEON shall pay to
WASHINGTON a royalty, commencing on the First Commercial Sale of a Product by
ALTEON, its Affiliates or its sublicensees, as follows:

                  (a) For Commercial Sales made by ALTEON and its Affiliates,
ALTEON shall pay to WASHINGTON a royalty equal to [C.I.] of the annual Net Sales
for the first [C.I.] in Net Sales for each calendar year, and [C.I.] of the
annual Net Sales for any Net Sales over [C.I.] for such calendar year.

                  (b) For Commercial Sales made by any sublicensee of ALTEON or
its Affiliates, ALTEON shall pay to WASHINGTON a royalty equal to [C.I.] of
ALTEON's Post-Commercialization Income for such period.

                  (c) For any Product relating solely to Joint Inventions, and
which does not utilize any Licensed Technology other than Joint Inventions, or
which is not covered by a Licensed Patent other than jointly owned Licensed
Patents, the royalty rates set forth in Sections 5.6(a) and 5.6(b) shall be
reduced by [C.I.] with respect to such Product in the Territory.

                  (d) The Parties intend and expect that they will be able to
secure patents covering the Products. However, during any period when (i) the
use or sale of a Product would not infringe a Valid Claim of any Licensed Patent
in the country in the Territory where it is used or sold such that a third party
would be permitted to sell competing products, and (ii) either (A) no patent
application has been filed which, if issued, would cover such Product in such
country, then the royalty rates set forth in Sections 5.6(a) and 5.6(b) shall be
reduced by [C.I.] with respect to such Product in such country during such
period, or (B) a patent application has been filed which, if issued, would cover
such Product in such country, then the royalty rates set forth in Sections
5.6(a) and 5.6(b) shall be reduced by [C.I.] with respect to such Product in
such country during the pendency of such patent application. In the event that a
patent application has been filed and is pending for a period of time such that,
the Parties agree, in good faith, that it is reasonable to believe that no
patent will be issued from such patent application, then thereafter, the royalty
rates shall be reduced as provided in clause (A) of this Section.

                  (e) During any period when either: (i) the Compound, or (ii)
any other compound licensed by WASHINGTON, is available for use or sale in any
country in the Territory by a third party (other than an Affiliate or
sublicensee of ALTEON) for use in the Field in such a manner that such use or
sale would not infringe a Valid Claim of any Licensed Patent in such country and
ALTEON experiences effective competition which has a substantial negative impact
on sales of Products by ALTEON or any of its Affiliates or sublicensees, the
royalty rates set forth in Sections 5.6(a) and 5.6(b) shall be reduced by [C.I.]
with respect to such Product in such country. ALTEON shall provide to WASHINGTON
a written notice of any event covered by this Section 5.6(e), which shall
include an explanation of the facts and information which give rise to such
event.

                  (f) Notwithstanding the foregoing, ALTEON shall only be
entitled to a [C.I.] reduction of the royalty rate once with respect to any
Product in any country in the Territory pursuant to any provision in this
Agreement.

                                      -11-
   17
                                                                   Exhibit 10.10

         5.7 Annual Minimum Royalties. During each full calendar year after the
First Commercial Sale of the Initial Product in the United States during the
term of this Agreement, ALTEON shall pay to WASHINGTON minimum royalties as
follows:

                  (a) For the first full calendar year after the First
Commercial Sale in the United States, the minimum royalty shall be [C.I.];

                  (b) For the second full calendar year after the First
Commercial Sale in the United States, the minimum royalty shall be [C.I.]; and

                  (c) For the each full calendar year thereafter, and until this
Agreement terminates with respect to all Products in the United States, the
minimum royalty shall be [C.I.].

         One-half of the applicable annual minimum royalty shall be paid within
thirty (30) days after the end of the first semi-annual period in such calendar
year, and the balance shall be paid within thirty (30) days after the end of the
second semi-annual period in such calendar year. ALTEON shall be entitled to a
full credit of the annual minimum royalty against running royalties due for the
applicable calendar year pursuant to Section 5.6.

         5.8 Obligation to Pay Royalties.

                  (a) The Parties acknowledge and agree that ALTEON owns or
controls separate intellectual property rights relating to the use of the
Compound using different mechanisms of action and making different claims in its
patents and patent applications relating to the Compound. The Parties agree that
ALTEON shall only be obligated to pay royalties to WASHINGTON on the sales of
products making use of the Compound if the allowed claims for the sale and
promotion of such products by the United States Food and Drug Administration or
the successor thereto, or its equivalent in any other country, is consistent
with the claims contained in the Licensed Patents with respect to the Compound,
and such sales and promotion are based upon such claims. ALTEON shall use all
reasonable commercial efforts to develop formulations of Products which differ
from any formulations of other products making use of the Compound which may be
marketed pursuant to claims of other patents so that there may be avoidance of
doubt as to which products shall be governed by the Licensed Patents under this
Agreement.

                  (b) The obligation to pay royalties to WASHINGTON under this
ARTICLE 5 is imposed only once with respect to the same unit of Product
regardless of the number of Licensed Patents or Licensed Technology pertaining
thereto. There shall be no obligation to pay royalties to WASHINGTON under this
ARTICLE 5 on sales of Products between ALTEON, its Affiliates and its
sublicensees, but in such instances the obligation to pay royalties shall arise
upon the sale by ALTEON, its Affiliates or its sublicensees to unrelated third
parties. Payments of running royalties due under this ARTICLE 5 based on Net
Sales shall be deemed to accrue when Products are shipped or billed, whichever
event shall first occur. Payments of running royalties due under this ARTICLE 5
based on Post-Commercialization Income shall be deemed to accrue when ALTEON
receives such Post-Commercialization Income.

                                      -12-
   18
ARTICLE 6 - PAYMENTS AND REPORTS

         6.1 Payment. All running royalty payments due pursuant to Section
5.6(a) shall be paid semi-annually within sixty (60) days after the end of each
June 30 and December 31 of each calendar year. All running royalty payments due
pursuant to Section 5.6(b) shall be paid semi-annually within thirty (30) days
after the end of each June 30 and December 31 of each calendar year. Each such
payment shall be accompanied by a statement for each Dosage Form of the amount
of Net Sales and Post-Commercialization Income during such semi-annual period,
the amount of royalties due on such Net Sales and Post-Commercialization Income
and the amount of any credits being applied to such royalties.

         6.2 Mode of Payment. ALTEON shall make all payments required under this
Agreement in the United States in United States Dollars. The royalty payments
due shall be translated at the rate of exchange at which United States Dollars
are listed in The Wall Street Journal for the currency of the country in which
the royalty is accrued for the last business day of the calendar semi-annual
period in which such sales were made.

         6.3 Late Payments. ALTEON shall pay interest to WASHINGTON on the
aggregate amount of any payments that are not paid on or before the date such
payments are due under this Agreement at a rate per annum equal to the lesser
of: (i) the prime rate of interest as published in the United States in The Wall
Street Journal under the caption "Money Rates" on the date such payment was due,
plus three percent (3%), or (ii) the highest rate permitted by applicable law;
calculated on the actual number of days such payment is late.

         6.4 Records Retention. ALTEON and its Affiliates shall keep complete
and accurate records pertaining to the sale of Products in the Territory and
covering all transactions from which Net Sales, Pre-Commercialization Income or
Post-Commercialization Income are derived for a period of three calendar years
after the year in which such sales occurred, and in sufficient detail to permit
WASHINGTON to confirm the accuracy of royalty calculations hereunder.

         6.5 Audit Request. At the request and expense of WASHINGTON, ALTEON and
its Affiliates shall permit an independent, certified public accountant
appointed by WASHINGTON and acceptable to ALTEON or its Affiliate, at reasonable
times and upon reasonable notice, to examine those records and all other
material documents relating to or relevant to Net Sales, Pre-Commercialization
Income and Post-Commercialization Income in the possession or control of ALTEON
or its Affiliates, for a period of three years after such royalties have
accrued, as may be necessary to: (i) determine the correctness of any report or
payment made under this Agreement; or (ii) obtain information as to the
royalties payable for any calendar semi-annual period in the case of ALTEON's
failure to report or pay pursuant to this Agreement. Said accountant shall not
disclose to WASHINGTON any information other than information relating to said
reports, royalties, and payments. Results of any such examination shall be made
available to ALTEON if a claim is made for royalties underpaid by ALTEON.
WASHINGTON shall bear the full cost of the performance of any such audit, unless
such audit demonstrates underpayment of royalties by ALTEON of more than ten
percent (10%) from the amount of the original royalty payment made by ALTEON. In
such event, ALTEON shall bear the full cost of the performance of such audit.

         6.6 Taxes. In the event that ALTEON or its Affiliates are required to
withhold any tax to the revenue authorities in any country in the Territory
regarding any payment to WASHINGTON due to the laws of such country, such amount
shall be deducted by ALTEON or its Affiliates, and it shall notify WASHINGTON
and

                                      -13-
   19
                                                                   Exhibit 10.10

promptly furnish WASHINGTON with copies of any tax certificate or other
documentation evidencing such withholding.


ARTICLE 7 - OWNERSHIP; PATENT PROSECUTION

         7.1 WASHINGTON Ownership. Except as otherwise provided in Section 7.2
or 7.3, WASHINGTON shall retain all right, title and interest in and to the
Licensed Technology and the Licensed Patents, regardless of which party prepares
and prosecutes the applications associated therewith, or maintains the patents,
copyrights or other intellectual property rights related to the Licensed
Technology or Licensed Patents, subject to the license granted to ALTEON under
Section 4.1. Rights to Inventions made solely by employees of WASHINGTON using
WASHINGTON's facilities shall belong to WASHINGTON. WASHINGTON agrees to
promptly disclose to ALTEON any such Inventions.

         7.2 ALTEON Ownership. Rights to Inventions made solely by employees of
ALTEON using ALTEON's facilities shall belong to ALTEON. ALTEON agrees to
promptly disclose to WASHINGTON any such Inventions.

         7.3 Joint Ownership. Rights to Inventions which were made jointly
during the performance of this Agreement by University Personnel or other
inventors owing a duty to assign to WASHINGTON and by employees of ALTEON shall
belong jointly to WASHINGTON and to ALTEON. Such Joint Inventions shall be
subject to the terms and conditions of this Agreement.

         7.4 Patent Prosecution and Maintenance.

                  (a) WASHINGTON shall continue to have full responsibility for
and shall control the preparation and prosecution of all patent applications and
the maintenance of all patents related to the Licensed Technology and included
in the Licensed Patents. WASHINGTON agrees to take all actions reasonably
necessary to diligently prosecute and maintain any patents or patent
applications in the countries listed on Exhibit C. ALTEON and WASHINGTON shall
mutually determine the additional countries, if any, where patent applications
will be filed and prosecuted, and where the patents will be maintained. The
Parties acknowledge and agree that they intend for WASHINGTON to file and
prosecute patent applications and maintain patents in all major commercial
markets where viable use patent protection is available (such countries,
including the countries listed on Exhibit C, shall be referred to as "Use Patent
Countries"). If the laws affecting patent protection or maintenance costs change
in any Use Patent Country, the Parties shall reassess the need to continue to
file and prosecute patent applications and maintain patents in such country. If
the Parties determine to discontinue such filing, prosecution and maintenance in
any such country, such country shall no longer be deemed a Use Patent Country.

                  (b) As of the Effective Date of this Agreement, ALTEON shall
reimburse WASHINGTON for all reasonable fees and expenses (including, without
limitation, legal fees, filing and maintenance fees or other governmental
charges) incurred on or after January 1, 1995 in connection with the filing and
prosecution of such patent applications and maintenance of such patents,
including patent applications and patents relating to Inventions and Joint
Inventions. In addition, ALTEON shall reimburse WASHINGTON for all such
reasonable fees and expenses incurred prior to the Effective Date in connection
with the filing of the continuation-in-part application to U.S. Patent #[C.I.],
which was filed on [C.I.]. WASHINGTON shall provide ALTEON with copies of all
detailed statements it receives from its counsel for legal fees and expenses for
ALTEON's review. If ALTEON does not notify WASHINGTON or the person or entity

                                      -14-
   20
                                                                   Exhibit 10.10

rendering the services of any issues, questions or discrepancies regarding such
statement within thirty (30) days after receipt of such statement by ALTEON, the
fees and expenses set forth in such statement shall be deemed reasonable.

                  (c) WASHINGTON shall select qualified independent patent
counsel (who shall be reasonably acceptable to ALTEON) to file and prosecute all
patent applications required pursuant to Section 7.4(a). ALTEON or its
representatives shall be entitled to meet and confer with such patent counsel at
reasonable times and places. WASHINGTON shall promptly provide copies to ALTEON
of any communications from any patent office relating to the Licensed
Technology, and allow ALTEON and its patent counsel the opportunity to attend
(either in person or by phone) any conferences (conducted in person or by phone)
to be made with or to any patent office regarding the Licensed Technology. In
addition, filing deadlines permitting, at least thirty (30) days prior to the
filing of any patent application, amendment thereto, or response to any patent
office action related to the Licensed Technology, WASHINGTON shall provide
ALTEON with a copy of each such patent application, amendment or response and
will provide ALTEON and its legal counsel with an opportunity to consult with
WASHINGTON and its patent counsel regarding the filing and contents of any such
application, amendment or response, and the advice and suggestions of ALTEON and
its legal counsel shall be taken into consideration by WASHINGTON and its legal
counsel in connection with such filing. However, WASHINGTON shall make every
reasonable effort to obtain the concurrence of ALTEON regarding the content of
any patent application, amendment thereto, or response to any patent office
action related to the Licensed Technology prior to filing or submitting same.
WASHINGTON shall also provide ALTEON with copies of any patentability search
reports made by patent counsel, including patents located, a copy of each patent
application, and each patent that issues thereon.

                  (d) WASHINGTON agrees to provide promptly to ALTEON complete
written disclosure of any Invention made by WASHINGTON. ALTEON and WASHINGTON
shall mutually determine whether such Invention is patentable. If the Parties
determine that such Invention is patentable, WASHINGTON shall proceed with the
preparation and prosection of a patent application covering such Invention.

                  (e) If ALTEON elects not to support any patent or patent
application in any Use Patent Country in the Territory, ALTEON shall notify
WASHINGTON in a timely manner and WASHINGTON may do so at its own expense. In
such event, such patent or application in such country shall be considered as
part of the Licensed Patents, and ALTEON shall be required to pay royalties for
Products which would infringe a Valid Claim of such patent in such Use Patent
Country pursuant to Section 5.6.

                  (f) In the event that the Parties elect to file one or more
patent applications comprising Joint Inventions, the Parties shall confer on how
the preparation and prosecution of such applications shall be accomplished. Once
the Parties agree on how to proceed with respect to the preparation and filing
of patent applications comprising Joint Inventions, all other provisions of this
Section 7.4 shall govern such preparation, filing, maintenance and prosecution.

                  (g) Both Parties, including all University Personnel who agree
to participate in a Sponsored Research Program or an ALTEON Research Program and
sign a copy of this Agreement, agree to cooperate with the other Party to
execute all lawful papers and instruments, to make all rightful oaths and
declarations and to provide consultation and assistance as may be necessary in
the preparation, prosecution, maintenance, and enforcement of all such patent
applications and patents.

                                      -15-
   21
                                                                   Exhibit 10.10

ARTICLE 8 - PATENT ENFORCEMENT; INFRINGEMENT

         8.1 Notification of Infringement. If either Party learns of an
infringement or other use, rights or ownership claim or threatened infringement
or other such claim by a third party with respect to any Licensed Patent or
other Licensed Technology granted hereunder within the Territory (an
"Infringement"), such Party shall promptly notify the other Party and shall
provide such other Party with available evidence of such infringement.

         8.2 Patent Enforcement. ALTEON shall have the first right, but not the
duty, to institute infringement actions against third parties based on any
Infringement. If ALTEON does not institute an infringement proceeding against an
offending third party within ninety (90) days after receipt of notice from
WASHINGTON, WASHINGTON shall have the right, but not the duty, to institute such
an action. The costs and expenses of any such action (including fees of
attorneys and other professionals) shall be borne by the Party instituting the
action, or, if the Parties elect to cooperate in instituting and maintaining
such action, such costs and expenses shall be borne by the Parties in such
proportions as they may agree in writing. Each Party shall execute all necessary
and proper documents and take such actions as shall be appropriate to allow the
other Party to institute and prosecute such infringement actions. Each Party
shall consult with and co-operate with the other Party in good faith in the
event that either Party is pursuing any such action. Any award paid by third
parties as a result of such an infringement action (whether by way of settlement
or otherwise) shall be paid to the Party who instituted and maintained such
action, or, if both Parties instituted and maintained such action, such award
shall be allocated among the Parties in proportion to their respective
contributions to the costs and expenses incurred in such action. Notwithstanding
the foregoing, either Party may participate in any such suit or action and use
its own counsel at its own expense for such purpose. Both Parties, and their
respective counsel, shall cooperate by sharing information concerning any such
suit or action.

         8.3 Infringement Action by Third Parties.

                  (a) In the event of the institution of any suit by a third
party against ALTEON for patent or other intellectual property rights
infringement or other use, rights or ownership claim involving the use or sale
of any Product in the Territory (an "Action"), ALTEON shall promptly notify
WASHINGTON in writing of such Action. In the event that such an Action is
instituted by a third party, neither Party shall take a position inconsistent
with, or cooperate with or assist any third party who contests, WASHINGTON's
ownership or the continued validity of any Licensed Patent or Licensed
Technology. Each Party shall use its best efforts to consult with, support and
cooperate with the other Party, in good faith, in the event that either Party is
pursuing any such Action, including specifically, without limiting the
generality of the foregoing, actively and vigorously contesting any third party
claim challenging WASHINGTON's right to grant the rights granted herein to
ALTEON. ALTEON shall have the right to defend such suit at its own expense, and
WASHINGTON hereby agrees to assist and cooperate with ALTEON, at its own
expense, to the extent necessary in the defense of such suit; provided, however,
that WASHINGTON shall not be obligated to engage in any testing at its own
expense. During the pendency of such action, ALTEON shall continue to make all
payments due under this Agreement. Notwithstanding the foregoing, either Party
may participate in any such suit or action and use its own counsel at its own
expense for such purpose. Both Parties, and their respective counsel, shall
cooperate by sharing information concerning any such suit or action.

                                      -16-
   22
                                                                   Exhibit 10.10

                  (b) If as a result of any judgment, award, decree or
settlement resulting from an Action instituted by a third party, ALTEON is
required to pay a royalty to such third party, ALTEON shall continue to pay
running royalties for such Products in the country which is the subject of such
Action, but shall be entitled to a credit against such payments in an amount
equal to one-half (1/2) of the royalty paid to such third party, but in no event
shall such credit be more than 50% of such royalties due hereunder for such
Products in such country which is the subject of such Action in any calendar
semi-annual period. In addition, if ALTEON is required to pay damages to such
third party, and such damages are not otherwise reimbursed by WASHINGTON, ALTEON
shall be entitled to a credit against such payments in an amount equal to
one-half (1/2) of such damages, to the extent effectively paid by ALTEON to such
third party, but in no event shall the total credit provided hereunder be more
than 50% of such royalties due hereunder for such Products in such country which
is the subject of such Action in any calendar semi-annual period.


ARTICLE 9 - PUBLICATION; CONFIDENTIALITY

         9.1 Notification. ALTEON acknowledges that the basic objective of
research activities at WASHINGTON is the generation of new knowledge and its
expeditious dissemination. However, both Parties also recognize the importance
of acquiring patent protection on inventions. Consequently, any proposed
Publication by University Personnel shall comply with this ARTICLE 9. At least
fifteen (15) days before a manuscript is to be submitted to a publisher,
University Personnel will provide ALTEON with a copy of the manuscript. If
University Personnel wish to make an oral presentation, they will provide ALTEON
with a copy of the abstract (if one is submitted) at least fifteen (15) days
before it is to be submitted. University Personnel will also provide to ALTEON a
copy of the text of the presentation, including all slides, posters, and any
other visual aids, at least fifteen (15) days before the presentation is made.

         9.2 Review of Proposed Publications. ALTEON will review the manuscript,
abstract, text or any other material provided under Section 9.1 to determine if
patentable subject matter is disclosed. ALTEON will notify University Personnel
within fifteen (15) days of receipt of the proposed Publication if ALTEON, in
its sole discretion, determines that patentable subject matter is or may be
disclosed, or if ALTEON, in its sole discretion, believes confidential or
proprietary information is or may be disclosed. If it is determined by ALTEON
that patent applications should be filed, the University Personnel shall delay
its publication or presentation for a period not to exceed ninety (90) days from
ALTEON's receipt of the proposed Publication to allow time for the filing of
patent applications covering patentable subject matter. In the event that the
delay needed to complete the filing of any necessary patent application will
exceed the ninety (90) day period, WASHINGTON and University Personnel will
discuss with ALTEON the need for obtaining an extension of the publication delay
beyond the ninety (90) day period. The publication delay shall not exceed 105
days from the date that the proposed Publication was first submitted to ALTEON
for review, except that, by mutual agreement, as provided in this Section, this
delay may be extended past the 105 day period for purposes of filing patent
applications. If it is determined by ALTEON and WASHINGTON that confidential or
proprietary information is being disclosed, ALTEON, WASHINGTON and University
Personnel will consult among themselves in good faith to arrive at an agreement
on mutually acceptable modifications to the proposed Publication to avoid such
disclosure.

         9.3 Use of Name. WASHINGTON agrees not to use directly or indirectly
ALTEON's name without ALTEON's prior written consent except that WASHINGTON may

                                      -17-
   23
                                                                   Exhibit 10.10


acknowledge ALTEON's funding of any Sponsored Research Programs in scientific
publications and in listings of Sponsored Research Programs. ALTEON agrees not
to use directly or indirectly WASHINGTON's name, the name of any Investigator or
University Personnel, or the name of any trustee, officer, faculty member,
student or employee thereof, without WASHINGTON's prior written consent, except
that ALTEON may refer to any University Personnel who is serving as a member of
ALTEON's Scientific Advisory Board or as a consultant to ALTEON and include a
statement of his experience and qualifications and his current and past
positions at WASHINGTON. Notwithstanding the foregoing, ALTEON and WASHINGTON
may include an accurate description of the terms of this Agreement to the extent
required under federal or state securities or other disclosure laws and internal
communications; and ALTEON may use WASHINGTON's name in various documents used
by ALTEON for capital raising and financing purposes, provided that WASHINGTON
grants prior written approval of such use, which approval shall not be
unreasonably withheld. WASHINGTON agrees that ALTEON's use of its name solely to
identify this Agreement will be deemed a reasonable use by WASHINGTON for which
it grants its approval.

         9.4 Confidentiality; Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that, for the term of this Agreement and for five years thereafter, the
receiving Party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose any information furnished
to it by the other Party pursuant to this Agreement, except to the extent that
it can be established by the receiving Party by competent proof that such
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 of confidentiality, by a third party who had no obligation to the
disclosing Party not to disclose such information to others; or

                  (e) was independently developed by or for the receiving Party
by persons not having access to such information.

         Each Party may disclose the other's information to the extent such
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental
regulations, undertaking basic research with outside collaborators, or
conducting preclinical or clinical trials, provided that if a Party is required
to make any such disclosure of the other Party's secret or confidential
information it will, except where impracticable for necessary disclosures, for
example to physicians conducting studies or to health authorities, give
reasonable advance notice to the other Party of such disclosure requirement and,
except to the extent inappropriate in the case of patent applications, will use
its best efforts to secure confidential treatment of such information required
to be disclosed.

         9.5 Confidentiality Agreements with University Personnel. Prior to any
University Personnel participating in any Sponsored Research Program or any
ALTEON Research Program in any manner or receiving any test data, clinical

                                      -18-
   24
                                                                   Exhibit 10.10

information or any other information relating to or resulting from any Sponsored
Research Program or any ALTEON Research Program which is deemed a trade secret
or confidential or proprietary to ALTEON or WASHINGTON, WASHINGTON shall cause
such University Personnel to execute a confidentiality and non-disclosure
agreement with ALTEON in the form attached as Exhibit D.


ARTICLE 10 - INDEMNIFICATION

         10.1 Indemnification. ALTEON shall defend, indemnify and hold
WASHINGTON, its directors, trustees, faculty members, officers and employees,
harmless from and against any and all third party claims, suits or demands,
threatened or filed, ("Claims") for liability, damages, losses, costs and
expenses (including the costs and expenses of attorneys and other
professionals), at both trial and appellate levels, relating to the
distribution, testing, manufacture, use, sale, consumption, applications, or
injection of Products by ALTEON, its Affiliates or its sublicensees pursuant to
this Agreement, including, without limitation, Claims for any loss, damage, or
injury to persons or property, or loss of life, or relating to the promotion and
advertising of Products and/or interactions and communications with governmental
authorities, physicians or other third parties. The foregoing indemnification
shall not apply to any Claims to the extent caused by either the acts or
omissions of WASHINGTON or any University Personnel.

         10.2 Notice. In the event that WASHINGTON seeks indemnification under
Section 10.1, WASHINGTON agrees to: (i) promptly inform ALTEON of any Claim,
(ii) permit ALTEON to assume direction and control of the defense or claims
resulting therefrom (including the right to settle it at the sole discretion of
ALTEON), and (iii) cooperate as reasonably requested (at the expense of ALTEON)
in the defense of the Claim. Notwithstanding the foregoing, WASHINGTON shall
have the right to participate in the defense or prosecution of any Claim,
including hiring its own counsel at its own expense, and ALTEON shall cooperate
with WASHINGTON if WASHINGTON does so participate.

         10.3 Insurance. ALTEON shall at all times comply with all statutory
worker's compensation and employer's liability requirements covering any and all
employees with respect to activities performed under this Agreement. In addition
to the foregoing, ALTEON shall obtain and maintain the following:

                  (a) Prior to the first human clinical trials of a Product
under this Agreement, broad form comprehensive general liability insurance with
a reputable and financially secure insurance carrier, to cover such activities
of ALTEON and ALTEON's contractual indemnity under this Agreement. Such
insurance shall provide minimum annual limits of liability of $2,000,000.00 per
occurrence and in the aggregate with respect to all occurrences arising out of
such human clinical trials of the Product. Such insurance policy shall apply to
all occurrences arising our of such human clinical trials and shall be purchased
and kept in force for the period of five (5) years after the cessation of sales
of all Products under this Agreement.

                  (b) In addition to the insurance provided in Section 10.3(a),
prior to the first sale of Products under this Agreement, products liability
insurance with a reputable and financially secure insurance carrier reasonably
acceptable to WASHINGTON, to cover such activities of ALTEON and ALTEON's
contractual indemnity under this Agreement. Such insurance shall provide minimum
annual limits of liability of $2,000,000.00 per occurrence and $50,000,000.00 in
the annual aggregate with respect to all occurrences being indemnified under
this Agreement. Such insurance policy shall be purchased and kept in force for
the

                                      -19-
   25
                                                                   Exhibit 10.10

period of five (5) years after the complete cessation of sales of all Products
under this Agreement.

                  (c) In the event that ALTEON chooses to rely on any strategic
partners of ALTEON to satisfy any of the requirements for insurance under this
Section 10.3, then ALTEON shall provide details of such coverage to WASHINGTON
for its information. Any such coverage must substantially comply with the form,
scope and amounts set forth in this Section 10.3 which are applicable to such
insurance. In the event that any such insurance is a self-insured plan, ALTEON
may choose to rely on same only if WASHINGTON reasonably determines in advance
in writing that such strategic partner's self-insured plan is adequate given the
financial condition of such strategic partner. WASHINGTON hereby agrees that any
self-insured plan of Alteon's current strategic partners (i.e., Yamanouchi
Pharmaceutical Co., Ltd., Marion Merrell Dow Inc. and Corange International
Limited) is acceptable to WASHINGTON. At WASHINGTON's request, which shall not
be more frequently than annually, ALTEON shall provide WASHINGTON with a
certificate of such insurance or written verification by such strategic partner
of such self-insurance.

                  (d) At WASHINGTON's request, which shall not be more
frequently than annually, ALTEON shall provide WASHINGTON evidence of insurance
obtained pursuant to Section 10.3(a) or 10.3(b). In addition, ALTEON shall cause
WASHINGTON to be added as an additional insured of any insurance obtained
pursuant to Section 10.3(a) or 10.3(b). ALTEON shall not and shall not permit
any strategic partner to, cancel or materially reduce the coverage of any policy
of insurance required under this Section 10.3 without giving WASHINGTON thirty
(30) days prior written notice thereof.

                  (e) In the event that any insurance required under this
Section 10.3 lapses, terminates or is cancelled, WASHINGTON may purchase on its
own behalf such insurance as is necessary to remedy any short fall in coverage
required to be provided under this Section 10.3. Any such insurance purchased by
WASHINGTON shall be paid for by ALTEON. In addition, all insurance amounts
provided for under this Section 10.3 shall be considered minimum amounts, and
such minimum amounts shall be subject to an increase every five (5) years from
the Effective Date of this Agreement, which increase shall be calculated in
accordance with the compounded rise in the Consumer Price Index for the
preceding five (5) years. In the event that any of the insurance required under
this Section 10.3 is not available at commercially reasonable rates, the Parties
agree to negotiate in good faith to modify such requirements and/or take such
other actions as may be deemed reasonable and prudent to affect the purposes of
this Agreement, including protection of WASHINGTON's interests hereunder.


ARTICLE 11 - TERM; TERMINATION

         11.1 Term. This Agreement shall commence as of the Effective Date of
this Agreement and, unless sooner terminated as provided hereunder, shall
terminate as follows:

                  (a) As to the Sponsored Research Programs and collaboration
between the parties as contemplated in ARTICLE 3, five (5) years from the
Effective Date of this Agreement, unless extended by the mutual consent of the
Parties.

                  (b) As to each Product and as to each country in the
Territory, this Agreement shall terminate upon the later of: (i) fifteen (15)
years from the Effective Date of this Agreement; (ii) the expiration of the last
to expire

                                      -20-
   26
                                                                   Exhibit 10.10

of the Licensed Patents necessary for the use and sale of such Product in such
country; or (iii) ten (10) years after the first Commercial Sale of such Product
in such country.

                  (c) This Agreement shall terminate in its entirety upon its
termination as to all Products.

         11.2 Breach. Failure by either Party to comply with any of the material
obligations contained in this Agreement shall entitle the other Party to give to
the Party in default notice specifying the nature of the default and requiring
it to cure such default. If such default is not cured within sixty (60) days
after the receipt of such notice (or, if such default cannot be cured within
such sixty (60) day period, if the Party in default does not commence and
diligently continue actions to cure such default), the notifying Party shall be
entitled, without prejudice to any of its other rights conferred on it by this
Agreement, in addition to any other remedies available to it by law or in
equity, to terminate this Agreement by giving written notice to take effect
within thirty (30) days after such notice unless the defaulting Party shall cure
such default within said thirty (30) days. The right of either Party to
terminate this Agreement, as hereinabove provided, shall not be affected in any
way by its waiver or failure to take action with respect to any previous
default.

         11.3 Termination by ALTEON. ALTEON shall have the right to terminate
the licenses granted herein, in whole or as to any Product in any country in the
Territory, at any time, and from time to time, by giving notice in writing to
WASHINGTON. Such termination shall be effective thirty (30) days from the date
such notice is given, and all ALTEON's rights associated therewith shall cease
as of that date, subject to Section 11.5.

         11.4 Termination of U.S. Rights. Termination of this Agreement by
ALTEON as to the United States with respect to any Dosage Form shall give
WASHINGTON the right to terminate this Agreement as to all countries for such
Dosage Form. Upon such termination by WASHINGTON, WASHINGTON shall be free to
grant rights, including sub-licenses, to third parties for the making, using and
selling of said Dosage Form throughout the world with no claim by ALTEON.

         11.5 Right to Sell Stock on Hand. Upon the termination of any license
granted herein, in or whole or as to any Product, for any reason other than a
failure to cure a material breach of the Agreement by ALTEON, ALTEON shall have
the right for one year or such longer period as the Parties may reasonably agree
to dispose of all Product or substantially completed Product then on hand to
which such termination applies, and royalties shall be paid to WASHINGTON with
respect to such Product as though this Agreement had not terminated.

         11.6 Termination of Sublicenses. Upon any termination of this
Agreement, all sublicenses granted by ALTEON under this Agreement shall
terminate simultaneously, subject, nevertheless, to Section 11.5.

         11.7 Effect of Termination.

                  (a) Upon the termination of any license granted herein as to
any Product in any country in the Territory other than pursuant to Section 11.1,
ALTEON and its sublicensees shall promptly: (i) return to WASHINGTON all
relevant records, materials or confidential information concerning the Licensed
Technology relating to such Product in such country in the possession or control
of ALTEON or any of its sublicensees; (ii) assign to WASHINGTON, or WASHINGTON's
designee, its registrations with governmental health authorities, licenses, and
approvals of such Product in such country; and (iii) assign to WASHINGTON, or
WASHINGTON's

                                      -21-
   27
                                                                   Exhibit 10.10

designee, its right to any trade name or trademark used by ALTEON or any
sublicensee for such Product in such country.

                  (b) Following expiration of the term of this Agreement, in
whole or in part, pursuant to Section 11.1, ALTEON shall have the royalty-free
non-exclusive right within the Field to continue to use and sell the Products,
including the right to grant sublicenses therefor, as heretofore licensed in
Section 4.1.

         11.8 Surviving Rights. Termination of this Agreement shall not
terminate ALTEON's obligation to pay all royalties which shall have accrued
hereunder. The Parties' obligations under ARTICLES 6, 8, 9 and 10 and Sections
11.7, 12.12 and 12.13 shall survive termination.

         11.9 Accrued Rights, Surviving Obligations. Termination, relinquishment
or expiration of this 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. Such termination, relinquishment or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of this Agreement.


ARTICLE 12 - MISCELLANEOUS PROVISIONS

         12.1 Relationship of Parties. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the Parties. No Party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.

         12.2 Assignment. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder shall be assignable by any Party without
the prior written consent of the other; provided, however, that either Party may
assign this Agreement to any wholly-owned subsidiary or to any successor by
merger or sale of substantially all of its assets to which this Agreement
relates in a manner such that the assignor shall remain liable and responsible
for the performance and observance of all its duties and obligations hereunder.
This Agreement shall be binding upon the successors and permitted assigns of the
parties and the name of a Party appearing herein shall be deemed to include the
names of such Party's successor's and permitted assigns to the extent necessary
to carry out the intent of this Agreement. Any assignment not in accordance with
this Section 12.2 shall be void.

         12.3 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

         12.4 Force Majeure. Neither Party shall be liable to the other for loss
or damages or shall have any right to terminate this Agreement for any default
or delay attributable to any act of God, flood, fire, explosion, strike,
lockout, labor dispute, shortage of raw materials, casualty or accident, war,
revolution, civil commotion, act of public enemies, blockage or embargo,
injunction, law, order, proclamation, regulation, ordinance, demand or
requirement of any government or subdivision, authority or representative of any
such government, or any other cause beyond the reasonable control of such Party,
if the Party affected shall give prompt notice of any such cause to the other

                                      -22-
   28
                                                                   Exhibit 10.10

Party. The Party giving such notice shall thereupon be excused from such of its
obligations hereunder as it is thereby disabled from performing for so long as
it is so disabled and for thirty (30) days thereafter. Notwithstanding the
foregoing, nothing in this Section 12.4 shall excuse or suspend the obligation
to make any payment due hereunder in the manner and at the time provided.

         12.5 No Trademark Rights. Except as otherwise provided herein, no
right, express or implied, is granted by this Agreement to use in any manner the
name "ALTEON" or "WASHINGTON UNIVERSITY" or any other trade name or trademark of
the other party in connection with the performance of this Agreement.

         12.6 Public Announcements. Except as required by law, neither Party
shall make any public announcement concerning this Agreement or the subject
matter hereof without the prior written consent of the other. In the event of a
required public announcement, the Party making such announcement shall provide
the other with a copy of the proposed text prior to such announcement.

         12.7 Notices. All notices and other communications 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 or
address shall be effective only upon receipt thereof):

                  (a) If to ALTEON, addressed to:

                              Alteon Inc.
                              170 Williams Drive
                              Ramsey, New Jersey  07446-2907
                              Attention: Chief Executive Officer
                              Telephone No.: (201) 934-5000
                              Facsimile No.: (201) 934-8880

                  (b) If to WASHINGTON, addressed to:

                              Washington University
                              Technology Management Office
                              School of Medicine Box 8013
                              724 South Euclid Avenue
                              St. Louis, MO 63110
                              Attention:  Director, Technology Management
                              Telephone No.: (314) 747-0922
                              Facsimile No.: (314) 362-5872

         12.8 Amendment. No amendment, modification or supplement of any
provision of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.

         12.9 Waiver. No provision of this Agreement shall be waived by any act,
omission or knowledge of a Party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by the waiving
Party.

         12.10 Counterparts. This Agreement may be executed simultaneously in
two counterparts, either one of which need not contain the signature of more
than one party but both such counterparts taken together shall constitute one
and the same agreement.


                                      -23-
   29
                                                                   Exhibit 10.10

         12.11 Descriptive Headings. The descriptive headings of this Agreement
are for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.

         12.12 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New Jersey, applicable
to contracts executed and performed wholly within the State of New Jersey.

         12.13 Arbitration.

                  (a) All disputes which cannot be resolved arising between
ALTEON and WASHINGTON under this Agreement shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Such arbitration shall be conducted by three (3) arbitrators
appointed according to said rules. The Parties will cooperate with each other in
causing the arbitration to be held in as efficient and expeditious a manner as
practicable.

                  (b) Any award rendered by the arbitrators shall be final and
binding upon the Parties. Judgment upon the award may be entered in any court of
record of competent jurisdiction. Each Party shall pay its own expenses of
arbitration and the expenses of the arbitrators shall be equally shared unless
the arbitrators assess as part of their award all or any part of the arbitration
expenses of one Party (including reasonable attorneys' fees) against the other
Party.

         12.14 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.

         12.15 Compliance with Law. Nothing in this Agreement shall be deemed to
permit a Party to export, reexport or otherwise transfer any Licensed Technology
or Licensed Patents transferred hereunder or Products manufactured therefrom
without compliance with applicable laws.

         12.16 Entire Agreement of the Parties. This Agreement constitutes and
contains the entire understanding and agreement of the Parties and cancels and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the Parties respecting the subject
matter hereof.

                                      -24-
   30
                                                                   Exhibit 10.10

         IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its duly authorized officer as of the day and year first above
written.

         THIS AGREEMENT IS SUBJECT TO BINDING ARBITRATION.


                                                       WASHINGTON UNIVERSITY



Date: June 2, 1995                              By: /s/ E.J. Brandt, Ph.D.
      ------------                                  -------------------------
                                                Name:   E.J. Brandt, Ph.D.
                                                        ---------------------
                                                Title:  Director, Technology
                                                        ---------------------
                                                        Management
                                                        ---------------------


                                                       ALTEON INC.



Date: June 2, 1995                              By: /s/ James J. Mauzey
      ------------                                  -------------------------
                                                Name:   James J. Mauzey
                                                        ---------------------
                                                Title:  Chairman and Chief
                                                        ---------------------
                                                        Executive Officer
                                                        ---------------------


                                      -25-
   31
                                                                   Exhibit 10.10

         The undersigned is an Investigator (as defined in this Agreement) and
is executing this Agreement to acknowledge his or her agreement to comply with
the provisions of Articles 3, 7 and 9 of this Agreement which are applicable to
Investigators and/or University Personnel (as defined in this Agreement).



                              Signature: /s/ J.R. Williamson
                                         -------------------

                              Print Name: J.R. Williamson
                                          -------------------
                              Date:       June 2, 1995
                                     ------------------------

                                      -26-
   32
                                                                   Exhibit 10.10

         The undersigned is an Investigator (as defined in this Agreement) and
is executing this Agreement to acknowledge his or her agreement to comply with
the provisions of Articles 3, 7 and 9 of this Agreement which are applicable to
Investigators and/or University Personnel (as defined in this Agreement).



                              Signature:  /s/ M.L. McDaniel
                                          -----------------
                              Print Name:  M.L. McDaniel
                                          -----------------
                              Date:        June 2, 1995
                                    -----------------------

                                      -27-
   33
                                                                   Exhibit 10.10

         The undersigned is an Investigator (as defined in this Agreement) and
is executing this Agreement to acknowledge his or her agreement to comply with
the provisions of Articles 3, 7 and 9 of this Agreement which are applicable to
Investigators and/or University Personnel (as defined in this Agreement).


                              Signature:  /s/ J.A. Corbett
                                          ----------------
                              Print Name:  J.A. Corbett
                                          ----------------
                              Date:        June 2, 1995
                                     ---------------------

                                      -28-
   34
                                                                   Exhibit 10.10

                                    EXHIBIT A

                U.S. AND FOREIGN PATENTS AND PATENT APPLICATIONS
                       RELATING TO THE LICENSED TECHNOLOGY



U.S. Patent #5,246,970, issued September 21, 1993 relating to a method of
treating immunologically-mediated, nitric oxide-mediated diseases by
aminoguanidine.


U.S. Patent #5,358,969, issued October 25, 1994, relating to the treatment of
acute inflammatory diseases, which is not immunologically-mediated, by use of
aminoguanidine.


Continuation-in-part application to U.S. Patent #[c.i.], filed [c.i.]

PCT Application #[c.i.]

                                      -29-
   35
                                                                   Exhibit 10.10

                                    EXHIBIT B

               RESEARCH PROJECTS INVOLVING THE LICENSED TECHNOLOGY


To be agreed upon by the parties.

                                      -30-
   36
                                                                   Exhibit 10.10

                                    EXHIBIT C

                                LIST OF COUNTRIES
                   WHERE PATENTS WILL BE FILED AND MAINTAINED



[C.I.]

                                      -31-
   37
                                                                   Exhibit 10.10

                                    EXHIBIT D

              FORM OF CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT


                                      -32-
   38
                                                                   Exhibit 10.10

                            CONFIDENTIALITY AGREEMENT





AGREEMENT ("Agreement") effective as of ______________ between the undersigned
(the "Recipient") and Alteon Inc. (the "Company"). The Recipient and the Company
are referred to collectively as the "Parties" hereinafter.

WHEREAS, the Parties possesses certain valuable and/or Confidential Information
relating to their business interests; and

WHEREAS, the Recipient will participate on behalf of Washington University in
certain collaborative research programs (the"Sponsored Research") with the
Company pursuant to a Sponsored Research Program as described in that certain
Research Collaboration and License Agreement between the Company and Washington
University dated as of June 2, 1995; and

WHEREAS, each party is willing to disclose to the other Party upon the terms and
conditions hereinafter set forth, Confidential Information in order that
meaningful collaborative research may take place;

NOW, THEREFORE, in consideration of the foregoing premises that are incorporated
as part of this Agreement and the mutual covenants hereinafter set forth, the
Parties agree as follows:

          1. Definition of Confidential Information. All information disclosed
by either Party to the other Party in oral, written, graphic, photograhic,
recorded, prototype, sample or in any other form shall be considered
"Confidential Information" if so marked; provided, however, that any oral
communication shall not be considered Confidential Information hereunder unless
it is reduced to writing within 60 days.

          2. Disclosure of Confidential Information. Each Party may disclose to
the other Party Confidential Information as part of the research collaboration
for the Sponsored Research to enable the Parties to engage in meaningful
research collaboration. The Parties agree to accept and hold such Confidential
Information in accordance with the provisions of this Agreement.

                                      -33-
   39
                                                                   Exhibit 10.10

         3. Disclosure to Third Parties. From and after the date of this
Agreement, each Party agrees neither to disclose to any third party nor permit
any third party to have access to any or all of the Confidential Information
disclosed to such Party, except for other participants in the Sponsored Research
who have agreed with the Company to keep such information in confidence, without
the prior written consent of the disclosing Party, nor to use any of the
Confidential Information for any purpose other than the conduct of the Sponsored
Research or as otherwise consented to in wiring by the Parties. However, the
aforesaid obligations shall not apply












CONFIDENTIALITY AGREEMENT                                                 Page 2

to information which the Party can clearly demonstrate falls within any one of
the following categories:

         (i)      Information that is now generally known to the public through
                  no fault of the Party.

         (ii)     Information that, as of the time of disclosure to the Party
                  was Already known to and in the possession of the Party, as
                  evidenced by written records; or

         (iii)    Information obtained after the date of this Agreement hereof
                  from a third party lawfully in possession of and with no
                  limitation upon disclosure of that information, and having the
                  right to disclose the same.

          4. Return of Confidential Information. At any time, either Party may
request the return of all confidential Information and all copies thereof,
received from or on behalf of the other Party, and each Party agrees to promptly
comply with such requests. Each Party agrees that, subsequent to a request for
return of Confidential Information or notification of termination of the
collaboration the provisions of this Agreement shall continue with respect to
all Confidential Information until any items 3 (i) - (iii) become applicable.

         5. Use of Confidential Information. The Parties shall not use the
Confidential Information for any purpose except for purposes of the Sponsored
Research.

                                      -34-
   40
                                                                   Exhibit 10.10

         6. Governing Laws. This Agreement shall be governed and construed in
accordance with all applicable laws of the State of New Jersey.

         7. Limitation of Agreement. This Agreement shall in no way be construed
as the granting of a license to either Party by the other directly or indirectly
under any patent or patent application owned by the disclosing Party.
Furthermore, nothing in this Agreement shall be interpreted so as to oblige
either Party to enter into a further agreement.

         8. Term. The obligations of the Parties under this agreement shall
continue for the duration of the Parties participation in the Sponsored Research
and for a period of five (5) years thereafter.

         9. Amendments. This Agreement cannot be altered or otherwise amended
except pursuant to an instrument in writing signed by each of the Parties
hereto.

         10. Disclosure of this Agreement. The Parties are hereby authorized to
notify others, including but not limited to customers of the Company and any of
Recipients's current and future employers,










CONFIDENTIALITY AGREEMENT                                                 Page 3

of the terms of this Agreement and the Parties' responsibilities hereunder.

         11. Injunctive Relief and Enforcement. The Parties understand that in
the event of a breach or threatened breach of this Agreement the Recipient or
the Company, as the case may be, may suffer irreparable harm and will therefore
be entitled to injunctive relief to enforce this Agreement. The Parties also
agree that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope then such provision shall
nonetheless be enforceable by any such court upon such modified term or scope as
may be determined by such court to be reasonable and enforceable.


Alteon Inc.                             Recipient


Signed : ______________________________ Signed : ______________________________

Name : ________________________________ Name : ________________________________

                                      -35-
   41
                                                                   Exhibit 10.10

Title : ________________________________ Title : ______________________________

Date : _________________________________ Date : _______________________________

                                      -36-

EX-10.11

   1
                                                                   Exhibit 10.11

ALTEON

                                                        Alteon Inc.
                                            170 William Drive - Ramsey, NJ 07446
                                             (201) 934-5000- Fax (201) 934-8880

                             DISTRIBUTION AGREEMENT

THIS AGREEMENT is made this 25th day of September, 1995 by and between ALTEON
INC. of 170 Williams Drive, Ramsey, New Jersey 07446, USA (hereinafter called
"Alteon") of the one part and ERYPHILE BV of Marten Meesweg 51, 3068 AV
Rotterdam, the Netherlands (hereinafter called "Eryphile") of the other part

WHEREAS :

(A)      Alteon has developed and is the owner of the proprietary rights to the
         Product (as hereinafter defined), and

(B)      Alteon and Eryphile desire to enter into an agreement pursuant to which
         Eryphile will have the sole and exclusive right to market, distribute
         and sell such Product in the Territory (as hereinafter defined)

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, THE PARTIES HERETO AGREE as follows :

Grant and Acceptance of Rights

  1.01   Alteon, subject to the terms and conditions of this Agreement, hereby
         grants to Eryphile the sole and exclusive right to purchase the Product
         for re-sale in the Territory (as such terms "Product" and "Territory"
         are defined in Section 2), and Eryphile accepts such appointment. Said
         appointment shall mean that Alteon shall not appoint any third party
         for the promotion, distribution or sale of the Product (whether under
         Alteon's own or any other trademarks) in the Territory, and shall not
         itself distribute or sell the same in or to the Territory. Alteon shall
         refer to Eryphile all contacts for the sale of and any enquiries
         relating to the Product in the Territory.

  1.02   Eryphile shall be an independent contractor under this Agreement.
         Except as otherwise provided in this Agreement or expressly agreed
         between the parties hereafter in writing, Eryphile is not authorised
         to: (i) enter into agreements for or on behalf of Alteon; (ii) create
         any obligation or liability, express or implied, for or on behalf of
         Alteon; (iii) accept settlement of any debt or other obligation due or
         owed to Alteon; (iv) accept service of process for Alteon; or (v) bind
         Alteon in any manner or thing whatsoever; and Eryphile shall not list,
         print or display Alteon's name in such manner as to indicate or imply
         that there is an employer-employee or principal-agent relationship
         between Alteon and Eryphile. Distribution Agreement Page 2
   2
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 2

  1.03   Subject to its material compliance with all applicable laws and
         regulations and except as otherwise provided in this Agreement,
         Eryphile shall have full control over the manner and means of
         performing its obligations hereunder. All expenses incurred by Eryphile
         in connection with the performance of such obligations, including the
         appointment and remuneration of employees, agents or representatives,
         shall be the sole responsibility of Eryphile.

2.       Product and Territory

  2.01   The Product is described in Exhibit A hereto, and includes any and all
         ancillary products relating thereto and any and all modifications,
         improvements, developments or replacements of or appertaining to such
         Product except that the Product shall in all events be therapeutic
         dosage forms only in finished product form only. The parties from time
         to time by mutual agreement in writing may add to such Exhibit any
         other existing or future product of Alteon.

  2.02   The "Territory" shall consist of the countries specified in Exhibit B
         hereto and such other countries (if any) as the parties from time to
         time to time may add to such Exhibit by mutual agreement in writing.

  2.03   Eryphile is not acquiring any rights to the Product outside the
         Territory. Accordingly, Eryphile shall not sell any Product to anyone
         outside the Territory, and shall not sell any Product to anyone in the
         Territory who either Eryphile or Alteon has reasonable grounds to
         believe might resell it outside the Territory or might permit any
         Product obtained by it to be transported outside the Territory.

  2.04   Alteon is and will at all times be the owner of all rights to the
         Product, including registrations with governmental authorities in the
         Territory, except for the distribution rights granted pursuant to this
         Agreement.

3.       Promotion and Sale of Product

  During the term of this Agreement:

  3.01   Eryphile shall use its best efforts in the registration and related
         clinical testing, promotion, distribution and sale of the Product in
         the Territory. Such efforts in Israel and South Africa shall not be
         less than the efforts which it devotes to new products of comparable
         commercial promise in countries with comparable market opportunities.

  3.02   Eryphile shall organize and maintain a competent promotional and
         selling organization for the Product in the Territory, and hold an
         inventory of the Product sufficient to meet market demand therefor in
         the Territory without undue delay.
   3
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 3

  3.03   Alteon shall provide Eryphile with reasonable quantities of such
         English-language promotional and advertising material as it from time
         to time shall have available on the Product. On the basis of such
         material, Eryphile shall be responsible for the preparation of such
         local-language promotional and advertising material as may be required,
         such material to be subject to the reasonable prior approval of Alteon.
         Alteon shall also provide Eryphile with such quantities of samples of
         the Products as from time to time shall be reasonably agreed between
         the parties.

  3.04   Eryphile shall refer to Alteon all enquiries for the Product from
         outside the Territory.

  3.05   Alteon undertakes to provide Eryphile as and when appropriate with
         scientific, technical and clinical advice and information in relation
         to the Product, and to respond promptly and constructively to enquiries
         or recommendations made from time to time by Eryphile, whether on its
         own initiative or at the request of opinion leaders or other interested
         parties in the Territory, concerning the use of the Product or possible
         improvements or modifications thereof.

  3.06   Eryphile shall comply with all health registration laws, regulations
         and orders of any government authority within the Territory and with
         all other governmental requirements applicable to its sales activities
         with respect to the Product. Alteon shall furnish Eryphile with such
         assistance and cooperation as may reasonably be requested in connection
         with compliance with such governmental requirements, including without
         limitation the file of clinical and other data and such samples of the
         Product or its active ingredients as may be required for registration
         purposes. Eryphile shall also use its best efforts to obtain, at its
         own expense, any import license, foreign exchange permit, or other
         permit or approval it may need for the performance of its duties under
         this Agreement. In particular and whenever appropriate, Eryphile will
         proceed expeditiously to take all such steps as shall be reasonably
         necessary to obtain regulatory approval for each and every new
         application or therapeutic dosage form of the Product, including the
         conduct, at Eryphile's expense, of further clinical trials or similar
         procedures within the Territory to the extent (if any) required in each
         case. All registrations, licences, permits and other government
         approvals and filings relating to the Product shall specify that Alteon
         is the owner of the Product and of the registrations and all other
         rights to the Product except for the distribution rights granted
         pursuant to this Agreement.

  3.07   The Product shall be packaged and labelled for distribution and sale in
         the Territory in accordance with local law in a manner to be mutually
         agreed between the parties. Eryphile shall be entitled to have included
         on such packaging and labelling an indication that it is the
         territorial source of the Product.
   4
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 4

  3.08   Eryphile undertakes not, without the prior written consent of Alteon,
         to promote and sell in the Territory any product which is used for the
         same therapeutic purpose as the Product.

4.       Planning & Minimum Standards

  4.01   Prior to 30th September of each year during the continuance of this
         Agreement, Eryphile will submit to Alteon a plan for the marketing,
         distribution and sale of the Product in the Territory during the next
         calendar year (hereinafter referred to as "the Plan"), the first such
         Plan to be annexed to this Agreement.

  4.02   The Plan will include, on a country by country basis, Eryphile's
         forecasted sales and marketing programme for the relevant year in
         respect of each therapeutic dosage form of the Product and will propose
         for such year in relation to Israel and South Africa respectively:

         4.2.1    a minimum purchase quota (hereinafter referred to as the
                  "Minimum Quota"), and

         4.2.2    a minimum program of marketing efforts (hereinafter referred
                  to as the "Minimum Program").

  4.03   The Minimum Quotas and Minimum Programs for the said countries for each
         calendar year will be finally established by mutual agreement between
         the parties prior to the first day of the relevant year, failing which
         an expert shall be appointed to resolve the open issues outstanding
         between the parties, such expert to be named by mutual agreement of the
         parties or, failing which and at the request of either party, by the
         Secretary-General of the International Chamber of Commerce.

  4.04   It is agreed with respect to Minimum Quotas that

         4.4.1    they shall not exceed seventy per cent (70%) of reasonable
                  full purchase forecasts for the countries respectively
                  concerned for each relevant year;

         4.4.2    in the fixing of Minimum Quotas in accordance herewith,
                  reasonable regard shall be taken of the sales of the Product
                  by Alteon or Alteon licensees in other comparable markets,
                  according to the guidelines included in Exhibit B hereto.

  4.05   In the event that, in any calendar year, Eryphile shall fail in either
         Israel or South Africa to meet both the applicable Minimum Quota and
         Minimum Program, Alteon shall be entitled within ninety (90) days of
         the end of such year to serve a written
   5
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 5

         notice upon Eryphile, removing the country in question from the
         Territory with effect 120 days from the date of such notice, provided
         however that if Eryphile places orders with Alteon for Product within
         such 120 days, for delivery within 90 days, in quantities equal to or
         greater than the shortfall from the Minimum Quota during the prior
         calendar year plus any shortfall from the pro rata portion of the
         Minimum Quota for the current calendar year, such notice shall not take
         effect and that country shall remain within the Territory.

  4.06   In the event that Eryphile is no longer distributing the Product in
         either Israel or South Africa, its distribution rights for Bulgaria,
         Cyprus and Jordan shall be terminated and this Agreement shall be
         terminated.

5.       Prices and Terms of Sale

  5.01   The price from Alteon to Eryphile for the Product will be established
         by Alteon, in reasonable consultation with Eryphile, once the Product
         is approved for sale in Israel. Alteon may change said price from time
         to time upon giving Eryphile written notice of the change at least
         ninety (90) days in advance of the effective date thereof. The new
         price will apply to all orders accepted by Alteon after said effective
         date, and also to orders accepted by Alteon prior to such date in the
         case of any quantities of the Product ordered for shipment more than
         ninety (90) days after that date. Alteon agrees, notwithstanding the
         foregoing, that the prices charged by it to Eryphile shall not exceed
         Alteon's lowest prices to other distributors for similar quantities.

  5.02   Alteon will use reasonable commercial efforts to meet each order for
         the Product placed by Eryphile on or before the requested shipment
         date, provided such date is at least sixty (60) days from the date on
         which Alteon receives the order. Orders from Eryphile shall be deemed
         accepted by Alteon unless rejected in writing within fourteen (14) days
         of receipt of order. Alteon reserves the right to specify a different
         reasonable shipment date by written notice to Eryphile given within
         such fourteen (14) days' period, failing which the shipment date
         requested by Eryphile shall be deemed accepted. Shipments shall be made
         pursuant to Eryphile's instructions; all deliveries shall be properly
         packed for overseas shipment. It is understood that Eryphile may use
         its normal purchase order form with respect to its purchases of the
         Product, which form may specify (inter alia) the quantity of the
         Product ordered, the method of shipment, the requested shipment
         date(s), and the destination to which shipment is to be made. Such form
         shall be used for convenience only, however, and any terms or
         conditions on such form which are inconsistent with the terms and
         conditions of this Agreement shall have no force or effect whatsoever
         as between the parties, regardless of whether Alteon might otherwise be
         deemed to have accepted such form by reason of its acknowledgement or
         execution thereof.
   6
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 6

  5.03   All payments due to Alteon from Eryphile for the Product hereunder
         shall be payable in US Dollars within ninety (90) days of date of
         invoice to such bank account as Alteon from time to time may designate.
         The terms of sale shall be FOB Alteon's warehouse. Eryphile agrees to
         pay and to hold Alteon harmless from all import duties, sales, use,
         excise or other taxes, and all costs of transportation, brokerage,
         handling and insurance, applicable to the delivery of the Product
         hereunder from point of shipment.

  5.04   During the term of this Agreement, if Eryphile so requests, Alteon will
         give reasonable consideration to modification of this Agreement to
         provide for the supply of Product in bulk form for repackaging in final
         dosage form by Eryphile, provided Alteon deems such arrangement to be
         in the best interests of both parties under terms and conditions
         acceptable to Alteon.

6.       Term of Agreement and Termination

  6.01   Subject to earlier termination as provided for in this Section 6, this
         Agreement shall be for an initial period commencing on the date hereof
         and ending on the last day of the tenth (10th) year following the date
         upon which regulatory approval is issued for the sale of the Product in
         Israel. Thereafter, this Agreement shall automatically continue for
         further consecutive periods of three (3) years each, unless and until
         it is terminated on the last day of said initial period or of any such
         further period by one party serving upon the other party not less than
         one hundred and twenty (120) days' prior written notice to such effect.

  6.02   In the event of a material default by either party in the performance
         of any of its obligations under this Agreement, the other party shall
         have the right to give written notice to the defaulting party advising
         such party of the default involved. If the defaulting party shall not
         have remedied such default within ninety (90) days (or, in the case of
         the breach of a financial obligation, 30 days) after receipt of such
         notice, the other party shall have the right, in addition to any other
         rights or remedies it may have, to terminate this Agreement immediately
         upon giving a further written notice to the defaulting party.

  6.03   Either party may immediately terminate this Agreement at any time by
         giving written notice of such termination in the event that the other
         party is adjudged insolvent or institutes or permits to be instituted
         against it (without a dismissal thereof within 90 days) any proceedings
         in consequence of debt under any applicable law.

  6.04   Upon the effective date of termination of this Agreement for whatever
         reason, the right of Eryphile to promote, distribute and sell the
         Product in the Territory shall cease. Thereupon, Alteon shall
         re-purchase Eryphile's outstanding stock of the
   7
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 7

         Product in saleable condition at a price equivalent to Eryphile's
         landed cost therefor, FOB Eryphile's warehouse, provided, that Alteon
         shall not be required to purchase more than 50% of the amount of
         Product sold by Eryphile in the previous 12 months, and further
         provided that Alteon shall have no obligation to re-purchase any
         Product if the termination of this Agreement is on account of a breach
         of contract by Eryphile.

  6.05   Alteon shall continue to meet Eryphile's orders for the Product placed
         prior to the effective date of termination hereof, but no termination
         of this Agreement shall in any manner whatsoever release, or be
         construed as releasing, either party from any liability to the other
         arising out of or in connection with such party's breach of or failure
         to perform any covenant, undertaking or obligation contained in this
         Agreement.

7.       Warranties

         Alteon warrants that the Product will be manufactured in accordance
         with generally accepted good manufacturing practices in the
         pharmaceutical industry, will meet its specifications and will be free
         from defects in materials or workmanship. Alteon shall promptly replace
         any Product found to be defective without charge or expense to
         Eryphile. Any such defective Product shall, at Alteon's election and
         cost, be either returned to Alteon or destroyed.

         Alteon makes no other warranty of any kind and excludes and disclaims,
         to the extent permitted by applicable law, any and all implied
         warranties, including (without limitation) those concerning the
         merchantability of the Product or its suitability for any particular
         purpose or use. Alteon excludes, in particular, any liability for
         indirect or consequential damages.

         Should Eryphile make any warranty or representation inconsistent with
         or in addition to the warranties of Alteon stated in this Section 7,
         Eryphile shall at its own expense defend and hold harmless Alteon from
         any claim to the extent it is based upon such inconsistent or
         additional warranty or representation.

8.       Trademarks and Trade Names

  8.01   Eryphile recognizes the validity of Alteon's trademarks and trade names
         as set forth in Exhibit C hereto and such other trademarks and trade
         names as Alteon may designate for the Product, acknowledges that the
         same are the property of Alteon, and agrees not to infringe upon, harm
         or contest the rights of Alteon to its trademarks and trade names.
   8
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 8

  8.02   Eryphile shall not use any of Alteon's trademarks or trade names,
         except in conformity with this Agreement or as otherwise approved in
         writing by Alteon. Eryphile shall not use Alteon's trademarks or trade
         names in connection with any products other than the Product, but shall
         have the right during the continuance hereof to use the same in
         connection with the Product.

  8.03   Eryphile agrees that upon termination of this Agreement for any reason
         it will destroy or, at Alteon's option, return to Alteon any
         advertising, promotional or other materials bearing any of Alteon's
         trademarks or trade names.

  8.04   Alteon shall take prompt action at its expense to stop all
         infringements in the Territory of its trademarks and trade names
         (including court actions, if necessary) whenever it determines such to
         be commercially reasonable. If Alteon decides that it would not be
         commercially reasonable to take such action, Eryphile may do so, at its
         expense, in the names of both Alteon and Eryphile.

9.       Intellectual Property Claims

         Alteon will defend, indemnify and hold harmless Eryphile against any
         and all third party claims of patent, trademark or other intellectual
         property infringement which may be asserted against Eryphile because of
         its marketing, advertising or sale of the Product in the Territory
         (except for claims of infringement of a trade name or trademark other
         than one covered by this Agreement). In such event, Alteon will bear
         all losses, damages, costs and expenses suffered or incurred by
         Eryphile in connection with any such claim and the defense thereof, or
         as a result of any settlement made or judgement rendered on the basis
         of such claim. Alteon shall have sole and exclusive control of the
         defense of any such claim and shall have the right to settle or
         compromise any claims on terms acceptable to Alteon. Notwithstanding
         the provisions of Section 6 of this Agreement, Alteon shall have right,
         upon notice to Eryphile, to withdraw the affected dosage form or forms
         of the Product from sale for any country for which such claim is made
         and to amend this Agreement accordingly.

10.      Product Liability Claims

         Alteon shall defend, indemnify and hold harmless Eryphile against any
         and all product liability claims arising out of the use of the Product,
         except to the extent that such claims arise out of or relate to
         mishandling (including improper storage), modification or misuse of the
         Product, product claims which were not expressly approved by Alteon, or
         other negligence or wrongful action or inaction by Eryphile, its
         employees or agents. Eryphile shall give Alteon prompt notice of every
         complaint, claim or suit known to Eryphile concerning the Product, keep
         Alteon fully informed of the status of each, and afford Alteon
         reasonable access to its
   9
                                                                   Exhibit 10.11

Distribution Agreement                                                    Page 9

         records pertaining to such complaint, claim or suit. Alteon shall have
         the right to defend and control the defense of, or to settle, any such
         claim. Eryphile shall have the right, at its own expense, to
         participate in any such defense action or settlement negotiations.

         Eryphile shall likewise defend, indemnify and hold harmless Alteon as
         to any product liability claims arising out of the use of the Product
         in the Territory to the extent that such claims arise out of or relate
         to mishandling (including improper storage), modification or misuse of
         the Product, product claims which were not expressly approved by
         Alteon, or other negligence or wrongful action or inaction by Eryphile,
         its employees or agents.

11.      Confidential Information

         Each party agrees that it will treat in the strictest confidence all
         oral and written communications from the other party which are
         designated, or which should reasonably be regarded in a normal
         commercial view, as constituting business secrets or proprietary
         information (hereinafter referred to as "Proprietary Information").
         Each party agrees to refrain from disclosing or making available to any
         third party and to refrain from using for any purpose other than the
         implementation of the Agreements between the parties any of the other
         party's Proprietary Information without such other party's prior
         written consent. Each party also agrees to reveal Proprietary
         Information only to those persons who have a need to know it in
         connection with the implementation of such Agreements and who are
         required to keep it confidential, and to impose upon its respective
         affiliates, employees and agents the same obligations with respect to
         said other party's Proprietary Information as it employs with respect
         to its own confidential information. The provisions of this Section
         shall survive the termination of this Agreement.

         Proprietary Information hereunder shall not, however, include
         information

         (i)      which is in or enters the public domain through no breach of
                  this Agreement, or

         (ii)     which is known to the party receiving the same at the time of
                  disclosure, as evidenced by such party's prior written
                  records, or

         (iii)    which such party may receive from a third party lawfully
                  entitled to disclose the same.
   10
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 10

12.      Miscellaneous Provisions

  12.01  Rights Cumulative

         Each and all of the respective rights and remedies of the parties
         hereunder shall be considered to be cumulative with and in addition to
         any other rights or remedies which such parties may have at law or in
         equity in the event of the breach of any of the terms of this
         Agreement. The exercise or partial exercise of any right, power or
         remedy shall neither constitute the exclusive election thereof, nor the
         waiver of any other right or remedy available to either party.

  12.02  Notices

         Any notice or other formal communication which either party may wish or
         be required to serve on the other party in connection with this
         Agreement shall be in writing and may be delivered by personal service
         or sent by registered or certified air mail, return receipt requested,
         with postage fully prepaid, provided that a copy of every such notice
         sent by mail shall be simultaneously transmitted by telefax.

         Notices shall be addressed as follows:

         If to Alteon:

         ALTEON Inc.
         170 Williams Drive
         Ramsey, NJ 07446 USA

         Telefax No: 1 - 201 - 934 0090

         If to Eryphile:

         ERYPHILE BV
         P.O.Box 2295
         3000 CG Rotterdam
         The Netherlands

         Telefax No: 31 - 20 - 661 0654

         Either party may from time to time, by notice in writing served upon
         the other as provided above, designate a change of address for the
         service of notices.

         Nothing contained in this Agreement shall excuse either party from
         giving oral notice to the other when prompt notification is
         appropriate, but such notice shall not satisfy the requirement of
         written notice as specified in this Section.
   11
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 11

  12.03  Severability

         If any provision of this Agreement is held to be void or unenforceable
         by or as a result of the decision of any court or other authority,
         which decision is binding upon the parties, the parties agree that such
         decision shall not result in the nullity or unenforceability of the
         remaining provisions of this Agreement. The parties further agree to
         use their mutual best efforts to replace such void or unenforceable
         provision in a manner which will achieve, to the extent possible, the
         economic, business and other purposes of said void or unenforceable
         provision.

  12.04  Force Majeure

         No failure to observe any of the terms or conditions of this Agreement
         shall be deemed to be a breach of this Agreement, if the same is caused
         by or arises out of one or more of the following conditions, namely:
         acts of God; acts, regulations or laws of any government or similar
         authority; war; civil commotion; destruction of facilities or materials
         by fire, earthquake or storm; labor disturbances; epidemics; failure of
         public utilities or of suppliers; or any other event, matter or thing
         wheresoever occurring and whether or not of the same class or kind as
         those set forth above, which is not reasonably within the control of
         the affected party. However, the parties shall endeavor to avoid or
         cure all such conditions, and any party temporarily excused from
         performance by such conditions shall resume performance promptly when
         such conditions are removed. Any party claiming any such conditions as
         an excuse for delay in performance shall give prompt notice in writing
         of such conditions to the other party. The parties, furthermore, while
         any such conditions shall prevail, will cooperate by reasonable mutual
         agreement to minimize the effects of such conditions by adopting any
         suitable temporary measures which may be available to them.

  12.05  Choice of Law

         The internal laws of the State of New Jersey, without reference to any
         principles concerning conflicts of law, shall govern the validity of
         this Agreement, the construction of its terms and the interpretation of
         the rights and duties of the parties hereunder.

  12.06  Arbitration

         Any dispute or claim in any way arising out of or relating to this
         Agreement shall be finally settled by arbitration under the Rules of
         Conciliation and Arbitration of the International Chamber of Commerce.
         In the event that the request for arbitration shall be submitted by
         Alteon, the arbitration shall be held in Tel-Aviv, Israel, and in the
         event that such request shall be made by Eryphile, the arbitration
         shall take
   12
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 12

         place in New Jersey, USA. The language to be used in the proceedings
         shall be English, and each party shall bear one half of the costs of
         the arbitration. The decision of the arbitrator(s) shall be definitive,
         binding and without appeal, and judgement upon the award rendered may
         be entered in any court of competent jurisdiction.

  12.07  Interpretation

         (i)      The headings used at the beginnings of the Sections and
                  certain sub-sections of this Agreement are for convenience
                  only and form no part hereof. They are not to serve as a basis
                  for interpretation or construction of this Agreement, nor as
                  evidence of the intention of the parties.

         (ii)     References in this Agreement to the plural shall where the
                  context so admits include the singular, and vice versa.

  12.08  Counterparts

         This Agreement may be executed in separate counterparts, each of which
         shall be deemed an original and, when executed separately or together,
         shall constitute a single original instrument, effective in the same
         manner as if the parties had executed one and the same instrument.

  12.09  Waiver

         No waiver of any term or condition of this Agreement, whether by
         conduct or otherwise, in any one or more instances shall be deemed to
         be, or construed as a further or continuing waiver of any such term or
         condition, or as a waiver of any other term or condition of this
         Agreement.

  12.10  Entire Agreement

         This Agreement and the Clinical Testing Agreement between the parties
         of even date herewith are intended by the parties to be the final
         expression of their agreement as to the subject matter herein and
         therein, and constitute the entire understanding between them with
         respect thereto. They are a complete and exclusive statement of the
         terms and conditions of such understanding, and shall supersede any and
         all prior correspondence, conversations, negotiations, understandings
         or agreements relating to the same subject matter.
   13
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 13

  12.11  Amendments

         No change in, modification of or addition to the terms conditions
         contained in this Agreement shall be valid unless set forth in a
         written document signed by both parties, which specifically states that
         it constitutes an amendment hereto.

  12.12  Assignment

         Neither party to this Agreement shall assign or otherwise transfer any
         of its rights or obligations hereunder to any third party without the
         prior written approval of the other party, except that

         (a)      Alteon may assign any or all of its rights and obligations
                  hereunder to an Affiliate (as hereinafter defined), and

         (b)      Eryphile may delegate or assign any or all of its rights and
                  obligations hereunder to an Affiliate (as hereinafter defined)
                  resident in the Territory, provided that

         (c)      The Affiliate agrees in writing with the parties that it will
                  be bound by all of the terms of the Agreement which impose
                  obligations upon its assignor, and

         (d)      The assigning party will remain fully responsible for the
                  performance of the Affiliate to which it assigns its rights.

         "Affiliate" for the purposes hereof means a company controlling,
         controlled by or under common control with the party concerned,
         "control" meaning the holding of more than fifty per cent (50%) of the
         common voting stock or voting equity share capital of the relevant
         company.

         Eryphile, moreover, shall be entitled to engage sub-distributors in
         connection with its performance hereunder, but only upon terms and
         conditions which are consistent in all respects with those of this
         Agreement.

         Furthermore, Alteon may assign all of its rights and obligations
         hereunder without approval to any party to whom Alteon sells its
         related business assets.

  12.13  Successors and Assigns

         This agreement and all of its terms and conditions are intended to be
         fully effective and binding, to the extent permitted by applicable law,
         upon the successors and permitted assigns of the parties (including, in
         the case of Alteon, any successor in title to assets of Alteon which
         include rights in relation to the Product).
   14
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 14

  12.14  Exhibits

         All exhibits referred to in and attached to this Agreement are intended
         to be a part of this Agreement as if set forth in full in the text
         hereof.


IN WITNESS WHEREOF, this Agreement has been signed by the duly authorized
signatories of the parties hereto the day and year first before written,


         ALTEON INC.                                 ERYPHILE BV



by: /s/ James J. Mauzey                           by:
    -------------------                              ---------------------------
      James J. Mauzey                                      Director

Title: Chairman and  Chief Executive Officer
                                                     ---------------------------
                                                           Director
   15
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 15



                                    EXHIBIT A

                                     Product



                                   PIMAGEDINE

                      all dosage forms for therapeutic uses

            (including all existing and future indications therefor)





                                    EXHIBIT B

                                    Territory


                           Israel   (including Israeli-administered territories
                                    and the areas of Palestinian autonomy and
                                    any future political denominations of such
                                    territories and areas)

                           Bulgaria
                           Cyprus
                           Jordan
                           South Africa




  NOTE:   Guidelines for the fixing of Minimum Quotas

                  (a)      in respect of Israel, the comparable market to be
                           taken into account is Italy, and

                  (b)      in respect of South Africa (to the extent of that
                           proportion of its population enjoying a standard of
                           living equivalent to that prevailing in Western
                           Europe), such comparable market is the United
                           Kingdom,

                  on a per capita basis in each case.
   16
                                                                   Exhibit 10.11

Distribution Agreement                                                   Page 16













                                    EXHIBIT C

                            Trademarks & Trade Names




                                     ALTEON

                                   PIMAGEDINE

                    trademark for Pimagedine to be determined

EX-10.12

   1

                                                                   Exhibit 10.12


                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 21,
2000, by and between Alteon Inc., a Delaware corporation (the "Company"), and
Elizabeth A. O'Dell (the "Employee").

         WHEREAS, the Company wishes to employ the Employee as Vice President,
Finance and Administration; and

         WHEREAS, the Employee wishes to enter into the employ of the Company as
its Vice President; Finance and Administration; Treasurer and Secretary;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereby agree as follows;

         1.   Term of Employment. Subject to the terms and conditions hereof,
              the Company will employ the Employee, and the Employee will serve
              the Company, as Vice President, Finance and Administration, for a
              period beginning on the date hereof and terminating December 31,
              2003, subject to extension by mutual agreement of the Company and
              the Employee (such term, as it may be extended, is hereinafter
              referred to as the "Term of Employment").

         2.   Duties. During the Term of Employment, the Employee will serve as
              Vice President, Finance and Administration, subject to the terms
              of this Agreement and the direction and control of the Board of
              Directors, and/or the Chief Executive Officer of the Company. The
              Employee will, during the Term of Employment, serve the Company
              faithfully, diligently and competently and to the best of
              Employee's ability, and will, consistent with the dignity of Vice
              President, Finance and Administration of the Company, hold, in
              addition to the offices of Vice President, Finance and
              Administration of the Company, such other offices in the Company
              to which Employee may be appointed or assigned from time to time
              by the Board of Directors and/or the Chief Executive Officer of
              the Company and will discharge such duties in connection
              therewith. The Employee shall devote all business time to the
              performance of the duties hereunder.

         3.   Compensation. During the Term of Employment, the Company will pay
              to the Employee as compensation for the performance of Employee's
              duties and obligations hereunder a base salary at the rate of
              $145,000 per annum until December 31, 2000 and at the rate of
              $150,800 per annum for the calendar year 2001 ("Salary"), payable
              in equal semi-monthly installments. For periods after calendar
              year 2001, such Salary shall be reviewed annually by the Board of
              Directors of the Company in accordance with the Company's
              compensation program. In each of the Company's fiscal years during
              the Term of Employment, the Employee shall be eligible to receive
              a cash bonus of up to $5,000, to be awarded at the sole discretion
              of the Board of Directors of the Company. The Board shall use as a
              basis for determining the extent of such bonus awards the
              attainment of stated goals and objectives for the Employee to be
              set by the Compensation Committee of the Board after consultation
              with the Chief Executive Officer.

         4.   Other Benefits. During the Term of Employment:

              A.  The Employee shall be entitled during the Term of Employment
                  to participate in employee benefit plans and programs of the
                  Company to the extent that Employee's position, tenure,
                  salary, age, health and other qualifications make Employee
                  eligible to participate.
   2
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 2


                  The Company does not guarantee the adoption or continuance of
                  any particular employee benefit plan or program during the
                  Term of Employment, and the Employee's participation in any
                  such plan or program shall be subject to the provisions,
                  rules, regulations and laws applicable thereto; provided,
                  however, that during the Term of Employment, the Employee
                  shall be entitled to health and hospital insurance benefits
                  consistent with the past practices of the Company in effect
                  with respect to Company personnel generally; and, further
                  provided, the Employee is eligible for protection under the
                  Alteon Inc. Change in Control Severance Benefits Plan, as in
                  effect from time to time.

              B.  The Employee shall be entitled to five weeks vacation per year
                  while employed hereunder. Such vacation may be taken by the
                  Employee at such times as do not unreasonably interfere with
                  the business of the Company. The accumulation of annual
                  vacation time earned, but not taken, will be in accordance
                  with the Company policy guidelines. Additional vacation will
                  be earned in accordance with Company policy.

         5.   Expenses. During the Term of Employment, the Company will
              reimburse the Employee for all travel and other reasonable
              business expenses incident to the rendering of services by the
              Employee under this Agreement, subject to the submission of
              appropriate vouchers and receipts in accordance with the Company's
              policy from time to time in effect.

         6.   Death or Disability.

              A.  This Agreement shall be terminated by the death of the
                  Employee. In addition, this Agreement may be terminated by the
                  Board of Directors of the Company if the Employee shall be
                  rendered incapable by illness or any other disability, from
                  complying with the terms, conditions and provisions on
                  Employee's part to be kept, observed and performed for a
                  period in excess of 180 days (whether or not consecutive) or
                  90 days consecutively, as the case may be, during a 12-month
                  period during the Term of Employment ("Disability"). If this
                  Agreement is terminated by reason of Disability of the
                  Employee, the Company shall give written notice to that effect
                  to the Employee in the manner provided herein. In the event
                  that the Employee receives disability insurance benefits paid
                  for by the Company during any period prior to termination of
                  this Agreement pursuant to this Section 6(a), the Employee's
                  Salary shall be reduced by an amount equal to such disability
                  insurance benefits during such period.

              B.  In addition to and not in substitution for any other benefits
                  which may be payable by the Company with respect to the death
                  or Disability of the Employee in the event of such death or
                  Disability, the Salary payable hereunder shall continue to be
                  paid at the then current rate for three months after the
                  termination of employment, and any bonus to which the Employee
                  would have been entitled for the year in which Employee's
                  death occurs shall be pro rated to the date of Employee's
                  death and paid not later than three months after the
                  termination of employment. In the event of the death of the
                  Employee during the Term of this Agreement, the sums payable
                  hereunder shall be paid to Employee's personal representative.

         7.   Disclosure of Information, Inventions and Discoveries. The
              Employee shall promptly disclose to the Company all processes,
              trademarks, inventions, improvements discoveries and other
              information related to the business of the Company (collectively,
              "Developments") conceived, developed or acquired by Employee alone
              or with others during the Term of Employment or during any earlier
              period of employment by the Company or any predecessor of the
              Company, whether or not during regular working hours or through
              the use of materials or facilities of the Company. All such
              Developments shall be the sole and exclusive property of
   3
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 3


              the Company, and, upon request, the Employee shall promptly
              deliver to the Company all drawings, sketches, models and other
              data and records relating to such Developments. In the event any
              such Development shall be deemed by the Company to be patentable,
              the Employee shall, at the expense of the Company, assist the
              Company in obtaining a patent or patents thereon and execute all
              documents and do all such other acts and things necessary or
              proper to obtain letters of patents and to invest in the Company
              full right, title and interest in and to such Developments.

         8.   Non-Disclosure. The Employee shall not, at any time during or
              after the Term of Employment, divulge, furnish or make accessible
              to anyone (otherwise than in the regular course of business of the
              Company), or use for Employee's own account or for the account of
              any person, any knowledge or information with respect to
              confidential or secret processes, inventions, discoveries,
              improvements, formulae, plans, materials, devices or ideas or
              other know-how, whether patentable or not, with respect to any
              confidential or secret development or research work or with
              respect to any other confidential or secret aspects of the
              Company's business (including, without limitation, customer lists,
              supplier lists and pricing arrangements with customers or
              suppliers).

         9.   Non-Competition. The Company and the Employee agree that the
              services rendered by the Employee hereunder are unique and
              irreplaceable. The Employee hereby agrees that, during the Term of
              Employment and for a period of one year thereafter, the Employee
              shall not (i) in any geographical area in the United States or in
              those foreign countries where the Company, during the Term of
              Employment, conducts or proposes to conduct business or initiates
              activities, engage or participate in, directly or indirectly
              (whether as an officer, director, employee, partner, consultant,
              holder of an equity or debt investment, lender or in any other
              manner or capacity), or lend Employee's name (or any part or
              variant thereof) to any business which is, or as a result of the
              Employee's engagement or participation would become, competitive
              with any aspect of the business of the Company, such business
              being the commercialization of the measurement, prevention therapy
              or reversal of glucose-mediated non-enzymatic crosslinking of
              macro-molecules, and such other specific technologies in which the
              Company has, during the Term of Employment, initiated significant
              plans to develop products, (ii) deal, directly or indirectly, in a
              competitive manner with any customers doing business with the
              Company during the Term of Employment (except in connection with
              the performance of the duties and obligations of the Employee
              during the Term of Employment), (iii) solicit any officer,
              director, employee, consultant or agent of the Company to become
              an officer, director, employee, consultant or agent of the
              Employee, Employee's respective affiliates or anyone else, and
              (iv) engage in or participate in, directly or indirectly, any
              business conducted under any name that shall be the same as or
              similar to the name of the Company or any trade name used by it.
              Ownership, in the aggregate, of less than one percent of the
              outstanding shares of capital stock of any corporation with one or
              more classes of its capital stock listed on a national securities
              exchange or publicly traded in the over-the-counter market shall
              not constitute a violation of the foregoing provision.

         10.  Remedies. The Employee acknowledges that irreparable damage would
              result to the Company if the provisions of Section 7, 8, 9 or 14
              were not specifically enforced, and agrees that the Company shall
              be entitled to any appropriate legal, equitable or other remedy,
              including injunctive relief, in respect to any failure to comply
              with the provisions of Section 7, 8, 9 or 14.


         11.  Termination for Cause. In addition to any other remedy available
              to the Company, either at law or in equity, the Employee's
              employment with the Company may be terminated by the
   4
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 4


              Board of Directors for cause, which shall include (i) the
              Employee's conviction for, or plea of nolo contendere, to a felony
              or a crime involving moral turpitude, (ii) the Employee's
              commission of an act of personal dishonesty or a breach of
              fiduciary duty involving personal profit in connection with the
              Employee's employment by the Company, (iii) the Employee's
              commission of an act which the Board of Directors shall reasonably
              have found to have involved willful misconduct or gross negligence
              on the part of the Employee in the conduct of Employee's duties
              under this Agreement, (iv) habitual absenteeism, (v) the
              Employee's material breach of any material provision of this
              Agreement, or (vii) the willful and continued failure by the
              Employee to perform substantially Employee's duties with the
              Company (other than any such failure resulting from Employee's
              incapacity due to physical or mental illness). In the event of
              termination under this Section 11, the Company's obligations under
              this Agreement shall cease and the Employee shall forfeit all
              rights to receive any future compensation under this Agreement.
              Notwithstanding any termination of this Agreement pursuant to this
              Section 11, the Employee, in consideration of Employee's
              employment hereunder to the date of such termination, shall remain
              bound by the provisions of Section 7, 8, 9 and 14 hereof.

         12.  Termination Without Cause. Each of the Company and Employee may
              terminate this Agreement at any time for any reasons whatsoever,
              without any further liability or obligation of the Company to the
              Employee or of the Employee to the Company from and after the date
              of such termination (other than liabilities or obligations accrued
              but unsatisfied on, or surviving, the date of such termination),
              by sending 30 days' prior written notice to the other party. In
              the event (a) the Company elects to terminate this Agreement prior
              to the end of the Term of Employment, or (b) the Company gives
              Employee notice of its election not to extend the Term of
              Employment beyond the expiration of the then current Term of
              Employment, or (c) by the date which is four months prior to the
              end of the then current Term of Employment, the Company has not
              offered to extend the then current Term of Employment, the Company
              shall continue to pay the Employee the full Salary (exclusive of
              bonuses, if any) as such Salary would have otherwise accrued for a
              period of six months if the effective date of such termination
              occurs prior to the first anniversary of this Agreement, and for a
              period of six months if the effective date of such termination
              occurs thereafter. In the event the Employee elects to terminate
              prior to the end of the Term of Employment, the Company's
              obligation to pay Salary shall cease as of the effective date of
              termination. Notwithstanding any termination of this Agreement
              pursuant to this Section 12, the Employee, in consideration of
              Employee's employment hereunder to the date of such termination,
              shall remain bound by the provisions of Section 7, 8, 9 and 14
              hereof. Any termination of this Agreement by the Company as
              provided in this Section 12 shall be in addition to, and not in
              substitution for, any rights with respect to termination of the
              Employee which the Company may have pursuant to Section 11.

         13.  Resignation. In the event that the Employee's services under this
              Agreement are terminated under any of the provisions of this
              Agreement (except by death), the Employee agrees to deliver
              written resignation from all positions held with the Company to
              the Board of Directors, such resignation to become effective
              immediately; provided, however, that nothing herein shall be
              deemed to affect the provisions of Section 7, 8, 9 and 14 hereof
              relating to the survival thereof following termination of the
              Employee's services hereunder, and provided, further, that except
              as expressly provided in this Agreement, the Employee shall be
              entitled to no further compensation hereunder.

         14.  Data. Upon termination of the Term of Employment or termination
              pursuant to Sections 6, 11 or 12 hereof, the Employee or
              Employee's personal representative shall promptly deliver to
   5
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 5

              the Company all books, memoranda, plans, records and written data
              of every kind relating to the business and affairs of the Company
              which are then in Employee's possession.

         15.  Insurance. The Company shall have the right, at its own cost and
              expense, to apply for and to secure in its own name or otherwise,
              life, health or accident insurance or any or all of them covering
              the Employee, and the Employee agrees to submit to usual and
              customary medical examinations and otherwise to cooperate with the
              Company in connection with the procurement of any such insurance,
              and any claims thereunder.

         16.  Waiver of Breach. Any waiver of any breach of this Agreement shall
              not be construed to be a continuing waiver or consent to any
              subsequent breach on the part either of the Employee or of the
              Company.

         17.  Assignment. This Agreement shall inure to the benefit of and be
              binding upon the successors and assigns of the Company upon any
              sale of all or substantially all of the Company's assets, or upon
              any merger or consolidation of the Company with or into any other
              entity, all as though such successors and assigns of the Company
              and their respective successors and assigns were the Company.
              Insofar as the Employee is concerned, this Agreement, being
              personal, may not be assigned.

         18.  Severability. To the extent any provision of this Agreement shall
              be invalid or unenforceable, it shall be considered deleted
              therefrom and the remainder of such provision and of this
              Agreement shall be unaffected and shall continue in full force and
              effect. In furtherance and not in limitation of the foregoing,
              should the duration or geographical extent of, or business
              activities covered by, any provision of this Agreement be in
              excess of that which is valid and enforceable under applicable
              law, then such provision shall be construed to cover only that
              duration, extent or activities which may be validly and
              enforceable covered.

         19.  Notices. All notices, requests and other communications pursuant
              to this Agreement shall be in writing and shall be deemed to have
              been duly given, if delivered in person or by courier,
              telegraphed, telexed or by facsimile transmission or five business
              days after being sent by registered or certified mail, return
              receipt requested, postage paid, addressed as follows:

              If to the Employee:

                           Elizabeth A. O'Dell
                           53 Avon Drive
                           Essex Fells, New Jersey 07021

              If to the Company:

                           Alteon Inc.
                           170 Williams Drive
                           Ramsey, New Jersey 07446

              with a copy to:

                           Richard J. Pinto, Esq.
                           Smith, Stratton, Wise, Heher & Brennan
                           600 College Road East
                           Princeton, New Jersey 08540
   6
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 6

              Any party may, by written notice to the other in accordance with
              this Section 19, change the address to which notices to such party
              are to be delivered or mailed.

         20.  General. Except as otherwise provided herein, the terms and
              provisions of this Agreement and any Stock Option Grant Agreements
              entered into between the Employee and the Company shall constitute
              the entire agreement by the Company and the Employee with respect
              to the subject matter hereof, and shall supersede any and all
              prior agreements or understandings between the Employee and the
              Company, whether written or oral. This Agreement may be amended or
              modified only by a written instrument executed by the Employee and
              the Company. This Agreement may be executed in any number of
              counterparts, all of which, when executed, shall be deemed to be
              an original, and all of which together shall constitute one and
              the same instrument.

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

                                   ALTEON INC.


                                   By:    /s/ Kenneth I. Moch
                                       --------------------------------------
                                       Kenneth I. Moch
                                       President and Chief Executive Officer


                                         /s/ Elizabeth A. O'Dell
                                       -------------------------------------
                                       Elizabeth A. O'Dell

EX-10.13

   1

                                                                   Exhibit 10.13











                                   ALTEON INC.
                                CHANGE IN CONTROL
                             SEVERANCE BENEFITS PLAN










                                                     Effective February 27, 1996
   2
                                                                   Exhibit 10.13

                                TABLE OF CONTENTS

                                                                          
INTRODUCTION................................................................  1

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

ARTICLE II
ENTITLEMENT TO BENEFITS.....................................................  5

         2.1      ELIGIBILITY REQUIREMENTS..................................  5
         2.2      LIMITATION ON ENTITLEMENT TO BENEFITS.....................  5

ARTICLE III
SEVERANCE BENEFITS UNDER THE PLAN...........................................  5

         3.1      AVAILABLE SEVERANCE BENEFITS..............................  5
         3.2      CONTINUATION OF BENEFITS UPON DEATH.......................  6
         3.3      LIMITATION OF SEVERANCE BENEFITS..........................  7

ARTICLE IV
AMENDMENT OR TERMINATION OF PLAN............................................  7

ARTICLE V
MISCELLANEOUS...............................................................  7

         5.1      PLAN INTERPRETATION.......................................  7
         5.2      GENDER AND NUMBER.........................................  7
         5.3      UNFUNDED OBLIGATIONS......................................  8
         5.4      TRANSFERABILITY OF BENEFITS...............................  8
         5.5      NO GUARANTEE OF TAX CONSEQUENCES..........................  8
         5.6      CONSTRUCTION, GOVERNING LAWS..............................  8
         5.7      SEPARABILITY..............................................  8
         5.8      EMPLOYEE'S RIGHTS.........................................  9
         5.9      ACTION BY THE COMPANY.....................................  9

ARTICLE VI
ERISA PROVISIONS............................................................  9

         6.1      CLAIM FOR BENEFITS........................................  9
         6.2      NAMED FIDUCIARY........................................... 10
         6.3      GENERAL FIDUCIARY RESPONSIBILITIES........................ 10



                                       i
   3
                                                                   Exhibit 10.13


                                   ALTEON INC.
                    CHANGE IN CONTROL SEVERANCE BENEFITS PLAN

                                  INTRODUCTION


         Alteon Inc. ("Company") has adopted the Alteon Inc. Change in Control
Severance Benefits Plan ("Plan") effective February 27, 1996 to reward its
Employees for loyal service to the Company by providing for Severance Benefits
to Employees upon certain terminations of employment after a Change in Control
of the Company. The Board of Directors of the Company ("Board"), has determined
that the establishment of the Plan is in the best interest of the Company and
its shareholders to protect and retain qualified Employees and to encourage
their full attention and dedication to the Company, free from distractions
caused by personal uncertainties and risks related to a pending or threatened
Change in Control of the Company.

                                    ARTICLE I
                                   DEFINITIONS


         1.1 "Acquiring Person" means any "Person" or group of "Affiliates" or
"Associates" (as those terms are defined in Rule 12b-2 of the general rules and
regulations under the Securities Exchange Act of 1934, as amended) who is or
becomes the beneficial owner, directly or indirectly, of 20% or more of the
outstanding Stock.

         1.2 "Administrator" means the Committee or the individual or
individuals appointed by the Committee to carry out the administration of the
Plan. In the event the Administrator has not been appointed or resigns from a
prior appointment, the Company shall be deemed to be the Administrator. Any
procedure, discretionary act, interpretation or construction taken by the
Administrator shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent and
terms of the Plan. All determinations by the Administrator shall be final and
binding upon Employees and all other parties having an interest in this Plan.

         1.3 "Base Amount" shall be an Employee's "base amount" as defined and
determined under Section 280G of the Code and applicable Regulations at the time
of an Employee's Qualifying Termination.

         1.4 "Base Compensation" means one-twelfth of an Employee's gross salary
(including any amounts deferred under any Company plan or program), for the
Compensation Period which includes his or her Qualifying Termination (or Change
in Control if an Employee's Base Amount is higher during such Compensation
Period).

         1.5 "Board" means the Board of Directors of the Company.

         1.6 "Change in Control" means:

                  (a) the Company is merged with or into or consolidated with
another corporation or other entity under circumstances where the shareholders
of the Company immediately prior to such merger or consolidation do not own,
after such merger or consolidation, shares representing at least fifty percent
(50%) of the

                                       1
   4
                                                                   Exhibit 10.13

voting power of the Company or the surviving or resulting corporation or other
entity, as the case may be; or

                  (b) the Company is liquidated or sells or otherwise disposes
of substantially all of its assets to another corporation or entity; or

                  (c) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) shall become the beneficial
owner (within the meaning of Rule 13d-3 under such Act) of forty percent (40%)
or more of the Common Stock of the Company other than pursuant to a plan or
arrangement entered into by such person and the Company or otherwise approved by
the Board; or

                  (d) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority of the Board
unless the election or nomination for election by the Company's shareholders of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.

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

         1.8 "Committee" means the Compensation Committee of the Board or any
successor to the Committee or any other committee appointed by the Board to
perform the functions of the Committee hereunder.

         1.9 "Company" means Alteon Inc. and any successor thereto.

         1.10 "Compensation Period" means the twelve month period for which an
Employee's annual compensation and benefits are determined by the Company.

         1.11 "Continuing Director" means any member of the Board who is not an
Acquiring Person and who was a member of the Board prior to the time when the
Acquiring Person became an Acquiring Person. "Continuing Director" includes any
successor of a Continuing Director, while the successor is a member of the
Board, who is not an Acquiring Person or a representative or nominee of an
Acquiring Person and who is recommended or elected to succeed the Continuing
Director by a majority of the Continuing Directors.

         1.12 "Employee" means any individual who is employed by and regularly
performs personal services for the Company.

         1.13 "Employment Group A" means the group of Employees that includes
(a) officers of the Company who serve in a position of authority equal to or
greater than that possessed by a vice president of the Company, and (b)
departmental directors.

         1.14 "Employment Group B" means the group of Employees that includes
associates of the Company.

         1.15 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

         1.16 "Plan" means the Alteon Inc. Change in Control Severance Benefits
Plan, as stated herein and as amended from time to time.

         1.17 "Qualifying Termination" means, within two years after a Change in
Control, termination of employment other than Termination for Cause, as defined

                                       2
   5
                                                                   Exhibit 10.13

in Section 1.21, or resignation by an Employee within 90 days after a
detrimental change in the nature or scope of his or her employment or duties.
Detrimental change shall include, without limitation, the assignment of the
Employee to any duties substantially inconsistent with his or her then current
position, duties, responsibilities or status with the Company or a substantial
reduction in such duties or responsibilities, the removal of the Employee from,
or any failure to re-elect him or her to his or her then current positions, a
reduction in base salary or other employee benefits, the failure by the Company
to continue to provide the Employee with substantially similar bonus
opportunities, the relocation of the Employee's primary office of employment to
a location more than thirty-five (35) miles from the location of such office
prior to the relocation, and substantially increased travel requirements.

         Notwithstanding anything herein to the contrary, if an Employee's
employment with the Company is terminated prior to the date on which a Change in
Control occurs, and if such Employee reasonably demonstrates that his or her
termination of employment (a) was at the request of a third party who had taken
steps reasonably calculated to effect such Change in Control or (b) otherwise
arose in connection with or anticipation of such Change in Control, then,
provided such Change in Control occurs, for all purposes of this Plan, such
Employee will have incurred a "Qualifying Termination" on the date immediately
prior to the date of such termination of employment. Notwithstanding the
foregoing, "Qualifying Termination" shall not include any termination prior to a
Change in Control which is undertaken by the Company in the ordinary course of
its business or in response to an adverse change in its business, financial
condition or results of operations.

         1.18 "Regulations" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his or her delegate, as amended from time to
time.

         1.19 "Severance Benefits" means benefits provided under the Plan
pursuant to Article III.

         1.20 "Stock" means the Company's Common Stock.

         1.21 "Termination for Cause" means:

                  (a) as to any Employee for whom there is then in effect an
employment agreement with the Company, the Employee's termination for cause or
as a result of death or disability, in each case as defined in and permitted by
such employment agreement; and

                  (b) as to any Employee for whom there is not then in effect an
employment agreement with the Company, the Employee's termination of employment
with the Company due to the Employee's:

                  (i) conviction for, or plea of nolo contendere to, a felony or
a crime involving moral turpitude;

                  (ii) commission of an act of personal dishonesty or breach of
fiduciary duty involving personal profit in connection with the Employee's
employment by the Company;

                  (iii) commission of an act which the Administrator shall
reasonably, in its sole discretion, have found to have involved willful
misconduct or gross negligence on the part of the Employee, in the conduct of
his or her duties;

                                       3

   6
                                                                   Exhibit 10.13

                  (iv) habitual absenteeism;

                  (v) material breach of any material provision of any agreement
between the Employee;

                  (vi) willful and continued failure to perform substantially
his or her duties with the Company (other than any such failure resulting from
his or her incapacity due to physical or mental illness); or

                  (vii) death or disability.

                                       4
   7
                                                                   Exhibit 10.13

                                   ARTICLE II
                             ENTITLEMENT TO BENEFITS

2.1      ELIGIBILITY REQUIREMENTS

         Each Employee is eligible for benefits upon a Qualifying Termination,
subject to Section 2.2 below. Benefits under this Plan shall be in addition to,
and not in substitution for, benefits, including, without limitation, severance
benefits and bonus payments, to which an Employee is entitled pursuant to any
agreement or understanding between the Company and the Employee.

2.2      LIMITATION ON ENTITLEMENT TO BENEFITS

         Notwithstanding any other provision of this Plan, no Employee shall be
entitled to receive benefits under this Plan upon a Qualifying Termination if,
prior to the Change in Control, a majority of the Continuing Directors who are
then members of the Board of Directors of the Company approve, and do not
rescind, a resolution providing that no benefits shall be paid to terminated
Employees upon the occurrence of the Change in Control.

                                   ARTICLE III
                        SEVERANCE BENEFITS UNDER THE PLAN

3.1      AVAILABLE SEVERANCE BENEFITS

         Each Employee who has incurred a Qualifying Termination shall be
entitled to the following Severance Benefits, based on his or her status as a
member of Employment Group A or Employment Group B:

         (a)      Employment Group A. If an Employee who has incurred a
Qualifying Termination is a member of Employment Group A, the Employee shall
receive:

                  (1) continuation of his or her Base Compensation payable each
month for the twenty-four months following his or her date of Qualifying
Termination (or the Change in Control, if later), or, at the election of the
Employee, a lump sum payment equal to the present value as of the date of
Qualifying Termination (or the Change in Control, if later) of such payments
discounted at the rate prescribed under Section 1.280G-1 Q & A-24(c)(2) of the
Regulations;

                  (2) continuation of participation in all benefit programs and
plans providing for health or life insurance in which the Employee participated
and upon the same terms available either immediately prior to the Change in
Control or the date of Qualifying Termination (whichever would provide the
Employee with greater benefits) until the earlier of (a) eighteen (18) months
after his or her date of Qualifying Termination (or the Change of Control, if
later) or (b) as to any benefit program or plan, the date on which he or she is
first eligible to receive from another source a benefit program or plan
substantially similar to and no less favorable than the benefit program or plan
provided by the Company. If the terms of any benefit plan do not permit
continued participation by the Employee, then the Company will pay to the
Employee each month during the period provided in the preceding sentence the
amounts set forth in the following sentences. With respect to health insurance
the Company will pay the Employee an amount equal to the full monthly premium
paid by it for the coverage in effect for the Employee and his or her dependents
on the Employee's date of Qualifying Termination or the Change in Control
(whichever would provide the Employee with greater benefits). With respect to
life insurance the Company will pay the Employee an amount equal to the monthly
premium on any life insurance policy

                                       5

   8
                                                                   Exhibit 10.13

obtained by the Employee which provides benefits substantially similar to the
life insurance provided to the Employee under the Company's benefit plans on his
or her date of Qualifying Termination or the Change in Control (whichever would
provide the Employee with greater benefits) up to a maximum of one and one-half
(1-1/2) times the monthly cost to the Company of providing life insurance to the
Employee on his or date of Qualifying Termination or Change in Control, as the
case may be.

         (b)      Employment Group B. If an Employee who has incurred a
Qualifying Termination is a member of Employment Group B, the Employee shall
receive continuation of his or her Base Compensation payable each month for two
months, plus one additional month for each year of service (up to a maximum
payment period of 24 months), following his or her date of Qualifying
Termination (or the Change in Control, if later), or, at the election of the
Employee, a lump sum payment equal to the present value as of the date of
Qualifying Termination (or the Change in Control, if later) of such payments
discounted at the rate prescribed under Section 1.280G-1 Q & A-24(c)(2) of the
Regulations.

3.2      CONTINUATION OF BENEFITS UPON DEATH

         Upon the death of an Employee who has incurred a Qualifying
Termination, the continuation of his or her Base Compensation determined in
accordance with Section 3.1(a)(1) or 3.1(b) of this Plan shall be paid to the
beneficiary designated by the Employee under this Plan. If no beneficiary is
designated, such payments shall be made to his or her surviving spouse, if any,
or to his or her estate. In addition, the survivors of a deceased Employee from
Employment Group A who had incurred a Qualifying Termination shall have such
rights to other benefits as would be available to the survivors of a deceased
Employee in Employment Group A who had not incurred a Qualifying Termination.

                                       6
   9
                                                                   Exhibit 10.13

3.3      LIMITATION OF SEVERANCE BENEFITS

         In the event that the present value of any Severance Benefits, as set
forth in this Plan, combined with any other benefits which constitute "parachute
payments" within the meaning of Section 280G of the Code would be subject to the
excise tax imposed by Section 4999 of the Code ("Excise Tax"), then the amount
of Severance Benefits may be reduced to the amount which the Employee, in his or
her sole discretion, determines would result in no portion of such benefits (or
only such portion thereof as is acceptable to the Employee) being subject to the
Excise Tax. The determination by the Employee of any reduction shall be
conclusive and binding upon the Company.

         The Company shall reduce such Severance Benefits only upon written
notice, received from the Employee not later than thirty days after the date on
which he or she becomes eligible for benefits, indicating the amount of such
reduction.

                                   ARTICLE IV
                        AMENDMENT OR TERMINATION OF PLAN

         The Committee or the Board may at any time amend or terminate this
Plan, provided that at the time of such amendment or termination Continuing
Directors comprise a majority of the Committee or the Board, as the case may be,
and a majority of the Continuing Directors then serving on the Committee or the
Board, as the case may be, approve such amendment or termination.
Notwithstanding anything to the contrary contained herein, the Plan may not be
amended in any respect or terminated after the occurrence of a Change in
Control.

                                    ARTICLE V
                                  MISCELLANEOUS

5.1      PLAN INTERPRETATION

         All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. This Plan shall be read in its entirety and
not severed except as provided in Section 5.6.

5.2      GENDER AND NUMBER

         Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.

                                       7
   10
                                                                   Exhibit 10.13

5.3      UNFUNDED OBLIGATIONS

         All benefits due an Employee or an Employee's beneficiary under this
Plan are unfunded and unsecured and are payable out of the general funds of the
Company. The Company, in its sole and absolute discretion, may establish a
"grantor trust" for the payment to one or more Employees of any or all benefits
and obligations under this Plan, the assets of which shall be at all times
subject to the claims of creditors of the Company as provided for in the trust,
provided that the trust does not alter the characterization of the Plan as an
"unfunded plan" for purposes of the ERISA. The trust shall make distributions in
accordance with the terms of the Plan.

         The Company may, in its discretion, set aside the necessary funds to
satisfy and discharge the Company's obligations under this Plan. Any funds
remaining after the satisfaction and discharge of all obligations under this
Plan shall be returned to the Company, its successors or assigns.

5.4      TRANSFERABILITY OF BENEFITS

         The right to receive payment of any benefits under this Plan shall not
be transferred, assigned or pledged except by beneficiary designation or by will
or under the laws of descent and distribution.

5.5      NO GUARANTEE OF TAX CONSEQUENCES

         Neither the Administrator nor the Company makes any commitment or
guarantee regarding tax consequences to an Employee under any federal, state, or
local income tax laws, resulting from the receipt of any Severance Benefits
provided under this Plan (or other benefits which are contingent upon a Change
in Control). Any Employee who may be subject to Excise Tax may reduce his or her
Severance Benefits as provided in Section 3.2. Each Employee acknowledges that
all amounts payable hereunder shall be reduced by any and all federal, state and
local taxes, including applicable Excise Taxes, imposed upon the Employee or his
or her beneficiary which are required to be paid or withheld by the Company.

5.6      CONSTRUCTION, GOVERNING LAWS

         Except to the extent that federal legislation or applicable regulation
shall govern, the validity and construction of the Plan and each of its
provisions shall be subject to and governed by the laws of the State of New
Jersey.

5.7      SEPARABILITY

         If any provision of this Plan is found, held or deemed to be void,
unlawful or unenforceable under any applicable statute or other controlling law,
the remainder of this Plan shall continue in full force and effect.

5.8      EMPLOYEE'S RIGHTS

         This Plan shall not be deemed to constitute a contract of employment
between the Company and any Employee or to be a consideration or an inducement
for the employment of any Employee. Nothing contained in this Plan shall be
deemed to give any Employee the right to be retained in the service of the
Company or to interfere with the right of the Company to discharge any Employee
at any time regardless of the effect which such discharge shall have upon his or
her entitlement to Severance Benefits under this Plan.

                                       8
   11
                                                                   Exhibit 10.13

5.9      ACTION BY THE COMPANY

         Whenever the Company under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.

                                   ARTICLE VI
                                ERISA PROVISIONS

6.1      CLAIM FOR BENEFITS

         (a) Any claim for Severance Benefits shall be made to the
Administrator. If the Administrator denies a claim, the Administrator may
provide notice to the Employee or beneficiary, in writing, within 90 days after
the claim is filed unless special circumstances require an extension of time for
processing the claim. If the Administrator does not notify the Employee of the
denial of the claim within the 90 day period specified above, then the claim
shall be deemed denied. The notice of a denial of a claim shall be written in a
manner calculated to be understood by the claimant and shall set forth:

                  (1)      specific references to the pertinent Plan provisions
on which the denial is based;

                  (2)      a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
as to why such information is necessary; and

                  (3)      an explanation of the Plan's claim procedure.

         (b)      Within 60 days after receipt of the above material, the
claimant shall have a reasonable opportunity to appeal the claim denial to the
Administrator for a full and fair review. The claimant or his or her duly
authorized representative may:

                  (1)      request a review upon written notice to the
Administrator;

                  (2)      review pertinent documents; and

                  (3)      submit issues and comments in writing.

         (c)      A decision on the review by the Administrator will be made not
later than 60 days after receipt of a request for review, unless special
circumstances require an extension of time for processing (such as the need to
hold a hearing), in which event a decision should be rendered as soon as
possible, but in no event later than 120 days after such receipt. The decision
of the Administrator shall be written and shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, with
specific references to the pertinent Plan provisions on which the decision is
based.

6.2      NAMED FIDUCIARY

         The Administrator shall be the named fiduciary pursuant to ERISA
Section 402 and shall be responsible for the management and control of the
operation and administration of the Plan.

                                       9
   12
                                                                   Exhibit 10.13

6.3      GENERAL FIDUCIARY RESPONSIBILITIES

         The Administrator and any other fiduciary under ERISA shall discharge
their duties with respect to this Plan solely in the interest of the Employees
and their beneficiaries and:

         (a)      for the exclusive purpose of providing Severance Benefits to
Employees and their beneficiaries and defraying reasonable expenses of
administering the Plan;

         (b)      with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims; and

         (c)      in accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with ERISA.


         IN WITNESS WHEREOF, the Company has caused this Plan to be adopted and
executed by its duly authorized officer, this day of   , 19  .

                                        ALTEON INC.




                                        By:




                                       10

EX-10.19

   1

                                                                   Exhibit 10.19

                              CONSULTING AGREEMENT


This Agreement is made and entered into as of December 15, 1998 by and between
Alteon Inc., a Delaware corporation whose principal address is 170 Williams
Drive, Ramsey, New Jersey 07446 (the "Company"), and Mark Novitch, M.D., an
individual whose address is 3558 Albermarle Street NW, Washington, D.C. 20008
("Chairman").


Whereas, the Company desires to retain Chairman as an independent contractor to
act as Chairman of Alteon's Board of Directors starting on December 15, 1998
until the annual meeting in 2000 and until a successor is elected and qualified
and Chairman is willing to perform such consulting services, all on the basis
set forth more fully herein;



NOW, THEREFORE, the parties agree as follows:


1.       SERVICES. Chairman agrees to serve as Chairman of the Company's Board
         of Directors and to carry out assignments for the Company as requested
         by the Board from time to time or as authorized by the Company's
         By-laws. In addition to chairing meetings of the Board, it is expected
         that the Chairman shall dedicate approximately one day per week (as and
         when appropriate) to the affairs of the Company. Chairman agrees to
         perform the Services hereunder faithfully, diligently, and to the best
         of Chairman's skill and ability.


2.       CONSULTING FEE. (a) In consideration of the performance of the services
         called for by this Agreement, the Company agrees to pay Chairman as
         compensation a retainer of $60,000 per year. To the extent the Chairman
         is called upon to dedicate materially more time to the affairs of the
         Company than contemplated by Section 1 of this Agreement, the Company
         and the Chairman may agree to fix additional compensation therefor. In
         addition, the Company will issue and deliver stock options to purchase
         200,000 shares of the Company's common stock at an exercise price of
         $.875, the fair market value of Alteon stock on December 15, 1998, when
         the Compensation Committee and the Board approved this award. The
         options will be subject to the terms and conditions of the Company's
         Amended 1995 Stock Option Plan and the Company's Standard Non-Qualified
         Stock Option Grant Agreement. The options will vest monthly over a two
         year period. The Board or the Compensation Committee in the exercise of
         its discretion may elect to accelerate this vesting schedule as a
         reward for performance. In addition, out of pocket expenses and routine
         items covered by normal business expense accounts will be covered when
         traveling and working on behalf of Alteon. The Chairman will submit a
         list of such expenses. The Company shall therefore promptly make full
         payment to Chairman in cash of the amount due for the expenses.


         (b) The Non-Qualified Stock Option Grant Agreement for the options
         provided for in the preceding paragraph contain provisions to the
         following effect:

                                      -1-
   2
                                                                   Exhibit 10.19

                           (1) The options shall be transferable to the extent
         afforded in the Company's 1995 Stock Option Plan and as may be
         permissible under the applicable registration statement filed by the
         Company under the Securities Act of 1933. The Company represents that
         it has available or shall cause to be available sufficient shares under
         the Plan to cover stock to be issued pursuant to such Plan upon the
         Chairman's exercise of the options.

                           (2) All unvested options will become exercisable
         immediately upon a merger, consolidation, acquisition of property or
         stock, reorganization (other than a mere reincorporation or the
         creation of a holding company) or liquidation of the Company, as a
         result of which the shareholders of the Company receive cash, stock or
         other property in exchange for or in connection with their shares of
         the Company's Common Stock. In addition, such options shall vest and
         become exercisable immediately in the event of a change in control of
         the Company. A change in control of the Company shall be deemed to
         occur if (a) the Company is merged with or into or consolidated with
         another corporation or other entity under circumstances where the
         shareholders of the Company immediately prior to such merger or
         consolidation do not own after such merger or consolidation shares
         representing at least fifty percent of the voting power of the Company
         or the surviving or resulting corporation or other entity, as the case
         may be, or (b) if the Company is liquidated or sells or otherwise
         disposes of substantially all of its assets to another corporation or
         entity, or (c) if any person (as such term is used in Sections 13(d)
         and 14(d)(2) of the Securities Exchange Act of 1934) shall become the
         beneficial owner (within the meaning of Rule 13d-3 under such Act) of
         forty percent (40%) or more of the Common Stock other than pursuant to
         a plan or arrangement entered into by such person and the Company or
         otherwise approved by the Board of Directors, or (d) during any period
         of two (2) consecutive years, individuals who at the beginning of such
         period constitute the entire Board of Directors shall cease for any
         reason to constitute a majority of the Board unless the election or
         nomination for election by the Company's shareholders of each new
         director was approved by a vote of at least two-thirds of the directors
         then still in office who were directors at the beginning of the period.

                           (3) In the event that the accelerated vesting caused
         by Section 4(c)(2) of this Agreement (i) constitutes a "parachute
         payment" within the meaning of Section 280G of the Internal Revenue
         Code, and (ii) but for this Section 4(c)(3), would be subject to the
         excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then
         the portion of the option which would have become immediately vested
         and exercisable under Section 4(c)(2) may be reduced to the portion
         which the Chairman, in his sole discretion, determines would result in
         no portion, or a lesser portion, of the option being subject to the
         Excise Tax. The determination by the Chairman of any reduction shall be
         conclusive and binding upon the Company. The Company shall reduce the
         portion of the option

                                      -2-
   3
                                                                   Exhibit 10.19

         which is vested and exercisable only upon written notice by the
         Chairman indicating the amount of such reduction.

3.       EMPLOYMENT TAXES AND BENEFITS. Chairman acknowledges and agrees that it
         shall be Chairman's sole obligation to report as self-employment income
         all compensation received by Chairman pursuant to this Agreement.
         Because Chairman is an independent contractor, Chairman understands
         that the Company is not obligated to pay any withholding taxes, social
         security, unemployment or disability insurance or similar items in
         connection with any payments made to Chairman by the Company pursuant
         to this Agreement. Chairman shall not be entitled to participate in any
         plans, arrangements, or distributions by the Company pertaining to any
         bonus, stock option, profit-sharing, insurance (except as provided in
         Section 9 of this Agreement) or similar benefits for Company employees.


4.       PRE-EXISTING OBLIGATIONS. Chairman represents and warrants that
         Services performed pursuant to this Agreement will not conflict with
         any other existing obligation of Chairman to any third party. Chairman
         will promptly inform the Company in advance of any potential conflicts
         of interest that may arise due to Chairman's performance of services
         for any third party and Chairman agrees not to provide services
         requested by the Company if doing so would conflict with obligations of
         Chairman to third parties that arose prior to the Company's request for
         such services.


5.       INVENTION ASSIGNMENT, CONFIDENTIAL INFORMATION AND NON-COMPETITION
         AGREEMENT. In conjunction with this Consulting Agreement the Chairman
         shall agree to the terms and conditions of the Confidential Disclosure
         and Non-Use Agreement attached hereto as Exhibit A.


6.       TERM. This Agreement shall continue in effect for a period of up to two
         (2) years, subject to earlier termination as provided in Section 7.


7.       TERMINATION. This Agreement may be terminated as follows: (a) upon
         thirty (30) days written notice; (b) either party may terminate this
         Agreement in the event of a breach by the other party of any of the
         covenants contained herein if such breach continues uncured for a
         period of ten (10) days after written notice of such breach has been
         given to the breaching party, or (c) this Agreement will terminate
         automatically if Chairman ceases to serve as Chairman of the Board of
         Directors of the Company for any reason, including but not limited to,
         resignation, removal from office or failure to be re-elected by the
         Board.


8.       EFFECT OF TERMINATION. (a) Upon the termination of this Agreement, each
         party shall be released from all obligations and liabilities to the
         other occurring or arising after the date of such termination, except
         that any termination of this Agreement shall not relieve the Company of
         its obligations under Section 2 hereof to pay Chairman the consulting
         fee for services performed prior to termination and shall not relieve
         Chairman of Chairman's obligations under Sections 3, 4 and 5 hereof,
         nor shall any such termination relieve Chairman or the Company from any
         liability arising from any breach of this Agreement. Upon any such
         termination, Chairman shall promptly notify

                                      -3-
   4
                                                                   Exhibit 10.19

         the Company of all Confidential Information and Designs and Materials
         in Chairman's possession and, at the expense of the Company and in
         accordance with the Company's Instructions, shall deliver to the
         Company all such Confidential Information and Designs and Materials.


         (b)  In the event of termination of this Agreement by the Company
              pursuant to clause 7(a) hereof, all unvested options shall become
              exercisable on the effective date of termination., and the Company
              shall pay the Chairman an amount equal to six (6) months'
              severance.

9.       INDEMNIFICATION. In the event the Chairman is or becomes a party or is
         threatened to be made a party to or is involved in any action, suit or
         proceeding, whether civil, criminal, administrative or investigative,
         by reason of the fact that he is or was a director, Chairman or any
         other officer of the Company, the Company shall indemnify and hold him
         harmless to the fullest extent legally permissible under and pursuant
         to any procedure specified in the General Corporation Law of the State
         of Delaware, as amended from time to time, against all expenses,
         liabilities and losses (including attorneys' fees, judgments, fines and
         amounts paid or to be paid in settlement) incurred or suffered by him
         in connection therewith. The Company will use its best efforts to
         obtain insurance to provide the indemnification required by this
         Section 10, provided that this Agreement shall not require the Company
         to obtain insurance on other than reasonable commercial terms.


10.      NOTICES. Any notices required or permitted hereunder shall be in
         writing and shall be deemed to have been given when delivered or
         certified mail, postage prepaid, to the address of the receiving party
         set forth in this Agreement, or to any other address of the receiving
         party designated by written notice in accordance with this Section.


11.      GOVERNING LAW. This Agreement shall be governed by and construed in
         accordance with the laws of the State of New Jersey, without regard to
         its choice of law principles.


12.      COMPLETE UNDERSTANDING; MODIFICATION. This Agreement constitutes the
         entire agreement of the parties and no waiver, modification or
         amendment of any provision hereof shall be effective unless in writing
         and signed by the parties hereto.



IN WITNESS WHEREOF, the parties hereto have executed this Agreement which is
effective as of the date first written above.


Alteon Inc.


By:  /s/Elizabeth O'Dell                    By:  /s/Mark Novitch
   ---------------------------------           --------------------------------
   Elizabeth O'Dell                            Mark Novitch, M.D.
   VP Finance & Administration


                                      -4-
   5
                                                                   Exhibit 10.19



                                January 17, 2001


Mark Novitch, M.D.
3558 Albemarle Street NW
Washington, D.C. 20008

Dear Mark:

         This letter will set forth our agreement regarding the amendment of the
Consulting Agreement (the "Agreement") dated as of December 15, 1998 between you
and Alteon Inc. (the "Company").

         Section 6 of the Agreement is hereby amended to provide in its entirety
as follows:

         "6. TERM. This Agreement shall continue in effect until June 30, 2001,
subject to earlier termination as provided in Section 7."

In consideration of the performance of the services called for by the Agreement
as amended, in addition to the compensation provided therein, the Company will
issue and deliver to you stock options to purchase 50,000 shares of the
Company's common stock at an exercise price of $7.00, the fair market value of
the Company's stock on November 8, 2000 when the Company's Board of Directors
approved this award. The options will vest monthly over the period December 15,
2000 through the end of the term of the Agreement, as amended. Such stock
options will be subject to the terms and conditions set forth in Section 2 of
the Agreement (other than the terms and conditions relating to the number of
shares and the exercise price which terms and conditions are superseded by this
paragraph).

         If the foregoing is acceptable to you, please indicate your agreement
by signing and returning the enclosed copy of this letter.


                                       Sincerely,



KIM/law
Enclosure

Accepted and Agreed:


/s/ Mark Novitch                    Dated:  January 18, 2001
- -------------------------------     ------------------------
Mark Novitch, M.D.

EX-23.1

   1

                                                                    Exhibit 23.1


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the incorporation of our
report included in this annual report on Form 10-K, into the Company's
previously filed Registration Statements on Form S-8 (33-60576, 333-91437,
333-39428, 333-04496, 333-89134) and Form S-3 (33-44453, 333-48964, 333-28309).



                                                ARTHUR ANDERSEN LLP


Roseland, New Jersey
March 1, 2001