AMENDMENT NO 2 TO RESEARCH & DEVELOPMENT AGREEMENT

AMENDMENT NO. 2 TO RESEARCH & DEVELOPMENT AND

LICENSE AGREEMENT



This Amendment No. 2 to Research & Development and License Agreement is dated as of December 24, 1996 by and between Abbott Laboratories, an Illinois corporation having a principal place of business at 100 Abbott Park Road, Abbott Park, Illinois ("Abbott") and ArQule, Inc., a Delaware corporation having a principal place of business at 200 Boston Avenue, Suite 3600, Medford, Massachusetts ("ArQule").





WHEREAS, Abbott and ArQule have entered into that certain Research & Development and License Agreement, dated as of June 16, 1995, as amended by Amendment No. 1 on August 13, 1996 (as so amended, the "License Agreement"), pursuant to which ArQule agreed, inter alia, to provide Abbott with certain ArQule Core Compounds and Abbott Derivative Compounds (these and other capitalized terms used herein without definition shall have the respective meanings provided in the License Agreement) for screening in consideration of the payment by Abbott to ArQule of certain technology access license fees, milestone and royalty payments and research funding payments on the terms and subject to the conditions set forth in the License Agreement; and



WHEREAS, ArQule and Abbott desire to further amend the License Agreement to extend the Research Term thereof and to provide for additional financial terms in connection therewith.



NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:



1. The License Agreement is hereby amended as follows:



1.1. Section 2.4(b) of the License Agreement is hereby deleted in its entirety and replaced with the following:



"(b) Additional technology access fees of [

]* for each extension of the

Research Term by Abbott pursuant to Section 2.3; provided,

that, the additional technology access fee for the Initial

Contract Extension Period (as hereinafter defined) sha ...