SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  SCHEDULE 13D


                    Under the Securities Exchange Act of 1934


                          Alexion Pharmaceuticals, Inc.
                         -------------------------------
                                (Name of Issuer)

                                  Common Stock
                         -------------------------------
                         (Title of Class of Securities)

                                   015351-10-9
                             -----------------------
                                 (CUSIP Number)


                                 Samuel D. Isaly
                                   Viren Mehta
                                 PHARMA/wHEALTH
                             M and I Investors, Inc.
                             Caduceus Capital, L.P.
                        Caduceus Capital Management, Inc.
                       Worldwide Health Sciences Portfolio
                     Mehta and Isaly Asset Management, Inc.
                          41 Madison Avenue, 40th Floor
                               New York, NY 10010
                            Telephone: (212) 685-0800
                    ----------------------------------------
                     (Name, Address and Telephone Number of
                    Person Authorized to Receive Notices and
                                 Communications)

                                    Copy to:

                             Paul S. Schreiber, Esq.
                               Shearman & Sterling
                              599 Lexington Avenue
                            New York, New York 10022
                            Telephone: (212) 848-4000

                                 January 6, 1997
                              ---------------------
             (Date of Event which Requires Filing of this Statement)

 ...............................................................................


                               Page 1 of 128 Pages
                           Exhibit Index is at Page 41



<PAGE>

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(b)(3) or (4), check the following box |_|.

Check the following box if a fee is being paid with this Statement |_|.

                               Page 2 of 128 Pages
                           Exhibit Index is at Page 41


<PAGE>



CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         Samuel D. Isaly
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       AF
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    United States
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 3 of 128 Pages



<PAGE>




CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   IN
                                                    ---------------------------
         ----------------------------------------------------------------------


                               Page 4 of 128 Pages

<PAGE>

CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         Viren Mehta
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       AF
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    United States
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 5 of 128 Pages



<PAGE>

CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   IN
                                                    ---------------------------
         ----------------------------------------------------------------------


                               Page 6 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         PHARMA/wHEALTH
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       WC
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    Luxembourg
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 7 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   OO
                                                    ---------------------------
         ----------------------------------------------------------------------


                               Page 8 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         M and I Investors, Inc.
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       AF
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    Delaware
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 9 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   CO
                                                    ---------------------------
         ----------------------------------------------------------------------




                              Page 10 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         Caduceus Capital, L.P.
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       AF
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    Delaware
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 11 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   PN
                                                    ---------------------------
         ----------------------------------------------------------------------


                              Page 12 of 128 Pages


<PAGE>

CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         Caduceus Capital Management, Inc.
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       AF
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    Delaware
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 13 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   CO
                                                    ---------------------------
         ----------------------------------------------------------------------



                              Page 14 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         Worldwide Health Sciences Portfolio
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       WC
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    New York
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 15 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   IV
                                                    ---------------------------
         ----------------------------------------------------------------------


                              Page 16 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(1)      Name of Reporting Person
         S.S. or I.R.S. Identification No. of Above Person

         Mehta and Isaly Asset Management, Inc.
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

(2)      Check the Appropriate Box if a Member of a Group (See Instructions)

|_|      (a)  
              -----------------------------------------------------------------
|_|      (b)
              -----------------------------------------------------------------

(3)      SEC Use Only
                     ----------------------------------------------------------

(4)      Source of Funds (See Instructions)       AF
                                           ------------------------------------
         ----------------------------------------------------------------------

(5)      Check if Disclosure of Legal Proceedings is Required Pursuant to 
         Item 2(d) or 2(e).

|-|      ----------------------------------------------------------------------

(6)      Citizenship or Place of Organization    Delaware
                                              ---------------------------------
         ----------------------------------------------------------------------

- --------------------
    Number of                    (7)    Sole Voting Power
      Shares                            ----------------------------------------
   Beneficially                  (8)    Shared Voting Power    450,500
     Owned by                           ----------------------------------------
       Each                      (9)    Sole Dispositive Power
    Reporting                           ----------------------------------------
      Person                    (10)    Shared Dispositive Power    450,500
       With                             ----------------------------------------
- --------------------

(11)     Aggregate Amount Beneficially Owned by Each Reporting Person  450,500
                                                                     ----------
         ----------------------------------------------------------------------

(12)     Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
         Instructions)
|-|      ----------------------------------------------------------------------


                               Page 17 of 128 Pages


<PAGE>



CUSIP No.  015351-10-9

(13)     Percent of Class Represented by Amount in Row (11)    6.1%
                                                           --------------------
         ----------------------------------------------------------------------
(14)     Type of Reporting Person (See Instructions)   IA
                                                    ---------------------------
         ----------------------------------------------------------------------



                              Page 18 of 128 Pages


<PAGE>



Item 1. Security and Issuer.

        The class of equity securities to which this Statement on Schedule 13D
relates is the Common Stock, par value $0.0001 per share (the "Securities"), of
Alexion Pharmaceuticals, Inc. (the "Issuer"), a Delaware corporation, with its
principal executive offices located at 25 Science Park, New Haven, Connecticut
06511.

Item 2. Identity and Background.

        (a) This statement is being filed by Samuel D. Isaly, an individual,
("Isaly"), Viren Mehta, an individual, ("Mehta"), PHARMA/wHEALTH, an
unincorporated coproprietorship organized under the laws of the Grand-Duchy of
Luxembourg, M and I Investors, Inc., a corporation organized under the laws of
Delaware ("M and I"), Caduceus Capital, L.P., a limited partnership organized
under the laws of Delaware ("CCLP"), Caduceus Capital Management, Inc., a
corporation organized under the laws of Delaware ("CCMI"), Worldwide Health
Sciences Portfolio, a trust organized under the laws of New York ("Worldwide")
and Mehta and Isaly Asset Management, Inc., a corporation organized under the
laws of Delaware ("MIAMI" and together with Isaly, Mehta, PHARMA/wHEALTH, M and
I, CCLP, CCMI and Worldwide, the "Reporting Persons").

        (b)-(c) PHARMA/wHEALTH is an unregistered foreign investment fund that
is not making, nor does it propose to make, any public offering of its
securities in the United States or to U.S. resident investors and currently has
no U.S. resident investors. PHARMA/wHEALTH has its principal offices at 31 Allee
Scheffer, L-2520, Luxembourg. M and I acts as the investment adviser to
PHARMA/wHEALTH pursuant to an Advisory Agreement dated October 14, 1993 (the
"PHARMA/wHEALTH Advisory Agreement") and, as such, has full discretionary
investment management authority with respect to the assets of PHARMA/wHEALTH. M
and I is an unregistered investment adviser and does not hold itself out to the
general public as an investment adviser. During the preceding 12 months, M and I
has acted as the investment adviser to fewer than 15 clients, none of which were
investment companies required to be registered under the Investment Company Act
of 1940, as amended. M and I has its principal offices at 41 Madison Avenue,
40th Floor, New York, NY 10010.

        CCLP is an unregistered fund that has less than 100 investors and is not
making, nor does it propose to make, any public offering of its securities. CCLP
has its principal offices at 41 Madison Avenue, 40th Floor, New York, NY 10010.
Caduceus Management Partners, L.P. ("CMPLP") is the general partner of CCLP and,
pursuant to the Limited Partnership Agreement of CCLP dated January 1, 1994 (the
"CCLP Limited Partnership Agreement"), CMPLP has full discretionary investment
management authority with respect to the assets of CCLP. CCMI is the general
partner of CMPLP and, pursuant to the Limited Partnership Agreement of CMPLP
dated July 1, 1994 (the "CMPLP Limited Partnership Agreement"), CCMI has full
control over the management and operation of CMPLP. Thus, CCMI has full
discretionary investment management authority with respect


                              Page 19 of 128 Pages



<PAGE>

to the assets of CCLP by virtue of its control over the management and operation
of CMPLP. CCMI is an unregistered investment adviser and does not hold itself
out to the general public as an investment adviser. During the preceding 12
months, CCMI has only acted as an investment adviser to CCLP. CCMI has its
principal offices at 41 Madison Avenue, 40th Floor, New York, NY 10010.

        Worldwide is a registered open-end management investment company that
has its principal offices at 24 Federal Street, Boston, MA 02110. MIAMI,
formerly known as "G/A Capital Management, Inc," is a registered investment
adviser that has its principal offices at 41 Madison Avenue, 40th Floor, New
York, NY 10010. MIAMI acts as the investment adviser to Worldwide pursuant to an
Investment Management Agreement dated June 24, 1996 (the "Worldwide Advisory
Agreement"). As such, MIAMI has full discretionary management investment
authority with respect to the assets of Worldwide.

        Mehta and Isaly, each a natural person, together own all of the
outstanding stock of, and jointly control the management and operation of, M and
I, CCMI and MIAMI. Mehta and Isaly each have as their business address the
following: 41 Madison Avenue, 40th Floor, New York, NY 10010.

        The directors and executive officers of PHARMA/wHEALTH, M and I, CCLP,
CCMI, Worldwide and MIAMI are set forth on Schedule I, Schedule II, Schedule
III, Schedule IV, Schedule V and Schedule VI respectively, attached hereto.
Schedule I, Schedule II, Schedule III, Schedule IV, Schedule V and Schedule VI
set forth the following information with respect to each such person:

               (i) name;

               (ii) business address (or residence address where indicated);

               (iii) present principal occupation or employment and the name,
               principal business and address of any corporation or other
               organization in which such employment is conducted; and

               (iv) citizenship.

        (d)-(e) During the last five years, neither the Reporting Persons nor
any person named in Schedule I, Schedule II, Schedule III, Schedule IV, Schedule
V or Schedule VI attached hereto has been (a) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (b) a party to a civil
proceeding of a judicial or


                              Page 20 of 128 Pages



<PAGE>

administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.

        (f) Both Mehta and Isaly are citizens of the United States.

Item 3. Source and Amount of Funds or Other Consideration.

        On January 6, 1997, MIAMI, pursuant to its authority under the Worldwide
Advisory Agreement, caused Worldwide to use $437,500 of its working capital to
purchase 50,000 shares of Securities of the Issuer (the "January 6
Transaction"). As of the date of the January 6 Transaction, the Reporting
Persons were the beneficial owners of 405,500 shares of Securities, representing
approximately 5.5% of the outstanding Securities of the Issuer.

        On January 17, 1997, M and I, pursuant to its authority under the
PHARMA/wHEALTH Advisory Agreement, caused PHARMA/wHEALTH to use $455,625 of its
working capital to purchase 45,000 shares of Securities of the Issuer (the
"January 17 Transaction"). As of the date of the January 17 Transaction, the
Reporting Persons were the beneficial owners of 450,500 shares of Securities,
representing approximately 6.1% of the outstanding Securities of the Issuer.

        None of the Reporting Persons have acquired any additional shares of
Securities of the Issuer since January 17, 1997.


Item 4. Purpose of Transaction.

        As described more fully in Item 3 above, this statement relates to the
acquisition of 95,000 shares of Securities by the Reporting Persons. The
Securities acquired by the Reporting Persons have been acquired for the purpose
of making an investment in the Issuer and not with the present intention of
acquiring control of the Issuer's business.

        The Reporting Persons from time to time intend to review their
investment in the Issuer on the basis of various factors, including the Issuer's
business, financial condition, results of operations and prospects, general
economic and industry conditions, the securities markets in general and those
for the Issuer's securities in particular, as well as other developments and
other investment opportunities. Based upon such review, the Reporting Persons
will take such actions in the future as the Reporting Persons may deem
appropriate in light of the circumstances existing from time to time. If the
Reporting Persons believe that further investment in the Issuer is attractive,
whether because of the market price of the Issuer's securities or otherwise,
they may acquire shares of common stock or other securities of the Issuer either
in the open market or in privately negotiated transactions. Similarly, depending
on market and other factors, the Reporting Persons may determine to dispose of


                              Page 21 of 128 Pages


<PAGE>

some or all of the Securities currently owned by the Reporting Persons or
otherwise acquired by the Reporting Persons either in the open market or in
privately negotiated transactions.

        Except as set forth above, the Reporting Persons have not formulated any
plans or proposals which relate to or would result in: (a) the acquisition by
any person of additional securities of the Issuer or the disposition of
securities of the Issuer, (b) an extraordinary corporate transaction involving
the Issuer or any of its subsidiaries, (c) a sale or transfer of a material
amount of the assets of the Issuer or any of its subsidiaries, (d) any change in
the present board of directors or management of the Issuer, (e) any material
change in the Issuer's capitalization or dividend policy, (f) any other material
change in the Issuer's business or corporate structure, (g) any change in the
Issuer's charter or bylaws or other or instrument corresponding thereto or other
action which may impede the acquisition of control of the Issuer by any person,
(h) causing a class of the Issuer's securities to be deregistered or delisted,
(i) a class of equity securities of the Issuer becoming eligible for termination
of registration or (j) any action similar to any of those enumerated above.


Item 5. Interest in Securities of the Issuer.

        (a)-(b) As a result of the January 6 Transaction and the January 17
Transaction, the Reporting Persons may be deemed to be the beneficial owners of
450,500 shares of Securities. Based upon information contained in the most
recent available filing by the Issuer with the SEC, such Securities constitute
approximately 6.1% of the issued and outstanding Securities. As described above
in Item 2, Isaly and Mehta together own all of the outstanding stock of each of
M and I, CCMI and MIAMI. M and I, CCMI and MIAMI have full discretionary
investment management authority with respect to the assets of PHARMA/wHEALTH,
CCLP and Worldwide, respectively. As a result, the Reporting Persons share power
to direct the vote and to direct the disposition of the 450,500 shares of
Securities.

        (c) Except as disclosed in Item 3, neither the Reporting Persons, nor,
to the knowledge of the Reporting Persons, any person named in Schedule I,
Schedule II, Schedule III, Schedule IV, Schedule V or Schedule VI, has effected
any transaction in the Securities during the past 60 days.

        (d) Not applicable.

        (e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
     Securities of the Issuer.

        Pursuant to the PHARMA/wHEALTH Advisory Agreement, M and I has full
discretionary investment management authority with respect to the assets of


                              Page 22 of 128 Pages



<PAGE>

PHARMA/wHEALTH. Such authority includes the power to vote and otherwise dispose
of securities purchased by M and I on behalf of PHARMA/wHEALTH.

        Pursuant to the CCLP Limited Partnership Agreement, CMPLP has full
discretionary investment management authority with respect to the assets of
CCLP. Pursuant to the CMPLP Limited Partnership Agreement, CCMI, has full
control over the management and operation of CMPLP. Through its control of
CMPLP, CCMI thus possesses full discretionary investment management authority
with respect to the assets of CCLP. Such authority includes the power to vote
and otherwise dispose of securities purchased by CCMI on behalf of CCLP.

        Pursuant to the Worldwide Investment Advisory Agreement, MIAMI has full
discretionary investment management authority with respect to the assets of
Worldwide. Such authority includes the power to vote and otherwise dispose of
securities purchased by MIAMI on behalf of Worldwide.

        Mehta and Isaly together own all of the outstanding stock of, and
jointly control the management and operation of, M and I, CCMI and MIAMI.

        Other than the investment management agreements and the relationships
mentioned above, to the best knowledge of the Reporting Persons, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any persons with
respect to any securities of the Issuer, including, but not limited to, transfer
or voting of any of the Securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving of withholding of proxies.


                              Page 23 of 128 Pages



<PAGE>

Item 7. Material to Be Filed as Exhibits.

Exhibit                             Description

A.   Advisory Agreement between PHARMA/wHEALTH and M and I Investors,
     Inc. dated October 14, 1993.

B.   Limited Partnership Agreement of Caduceus Capital, L.P. dated January 1,
     1994.

C.   Limited Partnership Agreement of Caduceus Management Partners, L.P. dated
     July 1, 1994.

D.   Investment Advisory Agreement between Worldwide Health Sciences Portfolio
     and Mehta and Isaly Asset Management, Inc. dated June 24, 1996.

E.   Joint Filing Agreement among Samuel D. Isaly, Viren Mehta,
     PHARMA/wHEALTH, M and I Investors, Inc., Caduceus Capital, L.P.,
     Caduceus Capital Management, Inc., Worldwide Health Sciences Portfolio and
     Mehta and Isaly Asset Management, Inc.


                              Page 24 of 128 Pages



<PAGE>

Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                     SAMUEL D. ISALY


                                                     By:  /s/   Samuel D. Isaly
                                                        -----------------------
                                                         Name:
                                                         Title:


                              Page 25 of 128 Pages


<PAGE>



Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                         VIREN MEHTA



                                                         By:  /s/   Viren Mehta
                                                            -------------------
                                                             Name:
                                                             Title:



                              Page 26 of 128 Pages


<PAGE>

Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                  PHARMA/wHEALTH


                                                  By:  /s/   Mirko von Restorff
                                                      -------------------------
                                                      Name:  Mirko von Restorff
                                                      Title:  Chairman


                              Page 27 of 128 Pages


<PAGE>



Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                  M AND I INVESTORS, INC.


                                                  By:  /s/   Samuel D. Isaly
                                                     --------------------------
                                                      Name:  Samuel D. Isaly
                                                      Title:  President


                              Page 28 of 128 Pages



<PAGE>

Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                     CADUCEUS CAPITAL, L.P.


                                                     By:  /s/   Samuel D. Isaly
                                                        -----------------------
                                                         Name:  Samuel D. Isaly
                                                         Title:


                              Page 29 of 128 Pages



<PAGE>

Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                CADUCEUS CAPITAL
                                                MANAGEMENT, INC.


                                                By:  /s/   Samuel D. Isaly
                                                   -----------------------
                                                    Name:  Samuel D. Isaly
                                                    Title:  President


                              Page 30 of 128 Pages



<PAGE>

Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                                WORLDWIDE HEALTH
                                                SCIENCES PORTFOLIO


                                                By:  /s/   Eric G. Woodbury
                                                   -------------------------
                                                    Name:  Eric G. Woodbury
                                                    Title:  Assistant Secretary


                              Page 31 of 128 Pages



<PAGE>

Signature



        After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.


January 28, 1997                               MEHTA AND ISALY ASSET
                                               MANAGEMENT, INC.


                                               By:  /s/   Samuel D. Isaly
                                                   -----------------------
                                                   Name:  Samuel D. Isaly
                                                   Title:  President

                              Page 32 of 128 Pages


<PAGE>

                                   Schedule I


        The name and present principal occupation of each of the
executive officers and directors of PHARMA/wHEALTH are set forth below.

===============================================================================
               Name and     Position with Reporting    Principal Occupation
              Citizenship           Person             and Business Address
- -------------------------------------------------------------------------------
Mirko von Restorff              Chairman                General Manager
                                                        Bank Sal. Oppenheim jr.
German citizen                                          & Cie. Luxembourg S.A.
                                                        31 Allee Scheffer
                                                        L-2520
                                                        Luxembourg
- -------------------------------------------------------------------------------
Rene Braginsky                  Director                Senior Vice President
                                                        Bank Sal. Oppenheim jr.
Swiss citizen                                           & Cie. (Schweiz) AG
                                                        Uraniastrasse 28
                                                        CH 8022
                                                        Zurich, Switzerland
- -------------------------------------------------------------------------------
Paul Helminger                  Director                President
                                                        Serie S.A.
Luxembourg citizen                                      55 Rue Michel Rodange
                                                        L-2430
                                                        Luxembourg
- -------------------------------------------------------------------------------
Samuel D. Isaly                 Director                Partner
                                                        Mehta and Isaly
United States citizen                                   41 Madison Avenue
                                                        40th Floor
                                                        New York, NY  10010
- -------------------------------------------------------------------------------
Joel R. Mesznik                 Director                President
                                                        Mesco Ltd.
United States citizen                                   122 East 42nd Street
                                                        Suite 4906
                                                        New York, NY  10168


                              Page 33 of 128 Pages


<PAGE>




- -------------------------------------------------------------------------------
Georg von Richter               Director                General Manager
                                                        Bank Sal. Oppenheim jr.
German citizen                                          & Cie. (Schweiz) AG
                                                        Uraniastrasse 28
                                                        CH 8022
                                                        Zurich, Switzerland
===============================================================================


                              Page 34 of 128 Pages



<PAGE>



                                   Schedule II


        The name and present principal occupation of each of the executive
officers and directors of M and I Investors, Inc. are set forth below. Unless
otherwise noted, each of these persons are United States citizens and have as
their business address 41 Madison Avenue, 40th Floor, New York, NY 10010.

===============================================================================
                     Position with Reporting
    Name                     Person                     Principal Occupation
- -------------------------------------------------------------------------------
Samuel D. Isaly         President, Director                 Partner
                                                            Mehta and Isaly
- -------------------------------------------------------------------------------
Viren Mehta             Secretary, Treasurer, Director      Partner
                                                            Mehta and Isaly
===============================================================================


                              Page 35 of 128 Pages



<PAGE>



                                  Schedule III


        The name and present principal occupation of each of the general partner
of Caduceus Capital, L.P. are set forth below. Caduceus Capital Management, Inc.
is a Delaware corporation and has as its business address 41 Madison Avenue,
40th Floor, New York, NY 10010.

===============================================================================
                     Position with Reporting
    Name                     Person                     Principal Occupation
- -------------------------------------------------------------------------------
Caduceus Capital          General Partner                  Investment advisory
Management, Inc.                                           services
===============================================================================


                              Page 36 of 128 Pages



<PAGE>

                                   Schedule IV


        The name and present principal occupation of each of the executive
officers and directors of Caduceus Capital Management, Inc. are set forth below.
Unless otherwise noted, each of these persons are United States citizens and
have as their business address 41 Madison Avenue, 40th Floor, New York, NY
10010.

===============================================================================
                     Position with Reporting
    Name                     Person                     Principal Occupation
- -------------------------------------------------------------------------------
Samuel D. Isaly          President, Director               Partner
                                                           Mehta and Isaly
- -------------------------------------------------------------------------------
Viren Mehta              Treasurer, Director               Partner
                                                           Mehta and Isaly
===============================================================================


                              Page 37 of 128 Pages



<PAGE>

                                   Schedule V


        The name and present principal occupation of each of the executive
officers and directors of Worldwide Health Sciences Portfolio are set forth
below. Unless otherwise noted, each of these persons are United States citizens.

===============================================================================
                     Position with Reporting
    Name                     Person                  Principal Occupation
- -------------------------------------------------------------------------------
Donald R. Dwight        Trustee                       President
                                                      Dwight Partners, Inc.
                                                      Clover Mill Lane
                                                      Lyme, NH  03768
- -------------------------------------------------------------------------------
James B. Hawkes         Trustee, President            President, CEO
                                                      Eaton Vance Corp.
                                                      24 Federal Street
                                                      Boston, MA  02110
- -------------------------------------------------------------------------------
Samuel L. Hayes, III    Trustee                       Professor
                                                      Harvard University
                                                      Graduate School of
                                                      Business Administration
                                                      Soldiers Field Road
                                                      Boston, MA  02163
- -------------------------------------------------------------------------------
Samuel D. Isaly         Vice President                Partner
                                                      Mehta and Isaly
                                                      41 Madison Avenue,
                                                      40th Floor
                                                      New York, NY  10010
- -------------------------------------------------------------------------------
James L. O'Connor       Treasurer                     Vice President
                                                      Eaton Vance
                                                      Management, Inc.
                                                      24 Federal Street
                                                      Boston, MA  02110
- -------------------------------------------------------------------------------
Thomas Otis             Secretary                     Vice President
                                                      Eaton Vance
                                                      Management, Inc.
                                                      24 Federal Street
                                                      Boston, MA  02110


                              Page 38 of 128 Pages



<PAGE>

- -------------------------------------------------------------------------------
Norton H. Reamer         Trustee                       President, Director
                                                       United Asset
                                                       Management Corp.
                                                       One International Plaza
                                                       Boston, MA  02110
- -------------------------------------------------------------------------------
John L. Thorndike        Trustee                       Director
                                                       Fiduciary Company
                                                       Incorporated
                                                       175 Federal Street
                                                       Boston, MA  02110
- -------------------------------------------------------------------------------
Jack L. Treynor          Trustee                       Investment Adviser,
                                                       Consultant
                                                       504 Via Almar
                                                       Palos Verdes Estates, CA
                                                       90274
===============================================================================


                              Page 39 of 128 Pages



<PAGE>

                                   Schedule VI


        The name and present principal occupation of each of the executive
officers and directors of Mehta and Isaly Asset Management, Inc. are set forth
below. Unless otherwise noted, each of these persons are United States citizens
and have as their business address 41 Madison Avenue, 40th Floor, New York, NY
10010.

===============================================================================
                     Position with Reporting
    Name                     Person                    Principal Occupation
- -------------------------------------------------------------------------------
Samuel D. Isaly      Director, President, Secretary    Partner
                                                       Mehta and Isaly
- -------------------------------------------------------------------------------
Thomas F. Tarpey     Director, Vice President,         Marketing Representative
                     Treasurer                         Marshall and Sullivan
                                                       1907 Selby Avenue
                                                       Suite 5
                                                       Los Angeles, CA  90025
===============================================================================


                              Page 40 of 128 Pages



<PAGE>

                                  EXHIBIT INDEX


===============================================================================
   Exhibit         Description                                  Page No.
- -------------------------------------------------------------------------------
   A.         Advisory Agreement between                            42
              PHARMA/wHEALTH and M and I Investors,
              Inc. dated October 14, 1993.
- -------------------------------------------------------------------------------
   B.         Limited Partnership Agreement of Caduceus             52
              Capital, L.P. dated January 1, 1994.
- -------------------------------------------------------------------------------
   C.         Limited Partnership Agreement of Caduceus             82
              Management Partners, L.P. dated July 1,
              1994.
- -------------------------------------------------------------------------------
   D.         Investment Management Agreement between               120
              Worldwide Health Sciences Portfolio and
              Mehta and Isaly Asset Management, Inc.
              dated June 24, 1996.
- -------------------------------------------------------------------------------
   E.         Joint Filing Agreement among Samuel D.                125
              Isaly, Viren Mehta, PHARMA/wHEALTH,
              M and I Investors, Inc., Caduceus Capital,
              L.P., Caduceus Capital Management, Inc.,
              Worldwide Health Sciences Portfolio and
              Mehta and Isaly Asset Management, Inc.
===============================================================================


                              Page 41 of 128 Pages




                               
                               ADVISORY AGREEMENT
                                                                    Exhibit A.
                                                                    ----------

        ADVISORY AGREEMENT, dated as of this 14th day of October, 1993 (the
"Agreement"), by and between PHARMA/wHEALTH Management Company S.A., a company
incorporated under the laws of Grand Duchy of Luxembourg (the "Management
Company"), and M and I Investors, Inc., a Delaware corporation, which will make
available the services of Messrs. Mehta and Isaly and their whole professional
organisation and its resources (the "Advisor").

        PHARMA/wHEALTH, organized under the laws of the Grand Duchy of
Luxembourg as a mutual investment fund (fond commun de placement) (the "Fund"),
has retained the Management Company to manage the Fund's assets and appoint such
advisors in so doing, and the Management Company desires to engage the Advisor
in rendering such services to the Fund.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
parties hereto agree as follows:

        1. Appointment. The Management Company hereby appoints the Advisor to
provide investment advice and other services to it on behalf of the Fund during
the period of this Agreement and on the terms and conditions contained herein,
and the Advisor hereby accepts such
 appointment.

        2. Duties of the Advisor. The Management Company may at any time give
the Advisor guidelines and/or directions relating to the Advisor's duties
hereunder, both in regard to the general policy of the Fund and in regard to
specific matters and, subject to the foregoing:

        (a) The Advisor shall manage, under the supervision and responsibility
of the Management Company, the investment and reinvestments of the Fund's assets
and sell, redeem or exchange the same, without any rights to custody or
possession of such assets, provided that the Advisor shall observe and comply
with the Management Regulations of the Fund, all investment policies and
restrictions and other limitations set out in the Prospectus of the Fund as
amended or supplemented from time to time (the "Prospectus") and all laws and
regulations applicable to the Fund and the public sale of its shares (the
"Shares");

        (b) The Advisor may enter into such contracts in the name of the Fund as
may be necessary to carry out its duties hereunder. All records relating to the
Fund's portfolio transactions maintained by the Advisor shall be made available
for inspection or audit by the Fund and the Management Company, or by a
qualified public accountant acting on their behalf or a duly appointed
representative of the Fund, both before and after termination of the Agreement.



<PAGE>

                                        2


        (c) The Advisor shall, in the event the availability of any particular
security is limited and investment in that security is in keeping with the
investment policies, guidelines and objectives of the Fund and also with the
investment policies, guidelines and objectives of one or more other funds or
client accounts for which the Advisor is responsible, treat the Fund's
requirements on a fair and equitable basis.

        3. Allocation of Charges and Expenses. Each party shall bear its own
costs and expenses (including the fees and disbursements of counsel and
accountants) incurred in connection with the negotiation, preparation and
execution of this Agreement, and all matters incident thereto.

        4. Compensation of Advisor. For the services rendered by the Advisor,
the Management Company shall pay to the Advisor at the end of each quarter a fee
based upon the average of the net assets of the Fund on the Valuation Dates (as
defined in the Prospectus) of the relevant quarter, as determined and computed
in accordance with the description of the determination of the net asset value
contained in the Prospectus, at the annual rate of five-eighths of one percent
(the "Fixed Fee"). Such fee will be calculated on each Valuation Date of each
quarter.

        The Advisor is also entitled to receive sixty-two and one-half percent
of the twenty percent annual performance fee (the "Performance Fee") received by
the Management Company if the Fund's performance is in excess of eight percent
in any year and the Advisor shall receive seventy percent of the portion of the
Performance Fee earned for performance in excess of twenty percent in any year
and the amount, if any, payable to the Advisor shall be paid no later than 7
days after receipt by the Management Company of its Performance Fee, which will
be paid after the end of each fiscal year of the Fund.

        Moreover, the Performance Fee is only paid when and if the Net Asset
Value per Share reaches a new high compared to the previous high and only on the
new excess appreciation over the previous high for the Net Asset Value per
Share. The Net Asset Value per Share will also be adjusted to reflect dividends
and other distributions.

        All matters relating to the Fixed Fee and Performance Fee shall be
determined in accordance with the Prospectus.

        The Management Company and the Advisor intend to enter into a deferred
fee agreement pursuant to which the Advisor may elect to defer the receipt of
all or any portion of the Fixed Fee and Performance Fee that shall become
payable to it for any year pursuant to this Section (4). To the extent such fees
are not deferred, the Management Company shall pay the Advisor's Fixed Fee and
Performance Fee to a bank account as designated in writing by and in accordance
with the instructions of the Advisor. At the option of the Advisor, such payment
shall be made to a bank account outside of the U.S. in currency other than



<PAGE>

                                        3

U.S. dollars. The first such payments may reflect partial periods, in which case
payments with respect thereto shall be calculated on a pro rata basis in
accordance with the number of Valuation Dates occurring therein.

        If this Agreement is terminated prior to the end of a calendar quarter,
the Fixed Fee to which the Advisor shall be entitled in respect of such quarter
shall be calculated on a pro rata basis in accordance with the number of
Valuation Dates in the quarter during which the Agreement was in effect. The
Performance Fee to which the Advisor shall be entitled during any such period
shall be commensurate to the contribution, as calculated by the Management
Company in its absolute discretion, of the Advisor to the total Performance Fee
for the complete year, with the exception of termination caused by paragraph
11(d) below, in which case the Advisor shall be entitled to the Performance Fee
accrued at the last Valuation Date of this Agreement and such Performance Fee
shall be paid to the Advisor after the completion of the Fiscal Year during
which the termination occurred.

        5. Use of Securities Broker. The Advisor may utilize the services of
whatever independent securities brokerage firm or firms it deems appropriate to
the extent that such firms are competitive with respect to price and timeliness
of execution.

        6. Limitation on Liability of the Advisor. The Advisor shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the management of the Fund,
except where such error or loss results from the Advisor's willful misfeasance,
bad faith or gross negligence in the performance of its duties, or by reason of
the reckless disregard of its obligations and duties hereunder.

        7. Indemnities. The Advisor agrees to indemnify the Management Company
and the Fund, and their respective directors, officers, agents, employees and
affiliates and any person who controls such persons or entities from, and to
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them arising out of or by reason of any
investigation, litigation or other proceeding brought or threatened, relating to
any breach or alleged breach of the Advisor's obligations, duties,
representations and warranties as set forth in this Agreement; including,
without limitation, amounts paid in settlement, court costs, and reasonable fees
and disbursements of counsel incurred in connection with any such pending or
threatened investigation, litigation or other proceedings.

        The Management Company agrees to indemnify the Advisor and its
directors, officers, agents, employees and affiliates and any person who
controls the Advisor from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them arising
out of or by reason of any investigation, litigation or other proceeding brought
or threatened, relating to the offering and distribution of shares



<PAGE>

                                        4

of the Funds ("Shares") and the Advisor's obligations and duties set forth in
this Agreement with respect to such offering and distribution of Shares
(excluding any losses, liabilities, claims, damages or expenses incurred by
reason of the breach by the Advisor of its obligations, duties, representations
or warranties hereunder or the gross negligence, bad faith or willful misconduct
of the Advisor); including, without limitation, amounts paid in settlement,
court costs, and reasonable fees and disbursements of counsel incurred in
connection with any such pending or threatened investigation, litigation or
other proceedings.

        8. Representations and Warranties. (a) The Management Company hereby
represents and warrants to the Advisor as follows: the Management Company is a
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, has the power and authority under its
Articles of Incorporation to transact the business herein contemplated and is
duly qualified and in good standing under the laws of each jurisdiction where
the conduct of its business requires, or the performance of its obligations
under this Agreement would require, and has the power and authority to execute,
deliver and perform this Agreement and all obligations required of it hereunder.
No consent of any other person including, without limitation, creditors of the
Management Company, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority, is required by the Management Company in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement. This Agreement constitutes, and each instrument or document required
hereunder when executed and delivered will constitute, the legal, valid and
binding obligation of the Management Company enforceable against the Management
Company in accordance with its terms.

        (b) The Advisor hereby represents and warrants to the Management Company
as follows:

          (i) The Advisor is a corporation duly organized, validly existing and
     in good standing under the laws of the jurisdiction of its organization,
     has the power and authority under its Certificate of Incorporation to own
     its assets and to transact the business in which it is presently engaged
     and is duly registered or exempt from registration under applicable
     securities laws and has all necessary qualifications to carry out its
     duties hereunder, and the Advisor covenants to use its best efforts to
     maintain the same at all times to the extent required for purposes of
     carrying out its duties hereunder, and shall immediately notify the
     Management Company if such registration and/or qualification should lapse
     or terminate for any reason whatsoever; and the Advisor has the power and
     authority under its Certificate of Incorporation to execute, deliver and
     perform this Agreement and all obligations required of it hereunder. This
     Agreement constitutes, and each instrument or document required hereunder
     when executed and delivered will constitute, the legal, valid and binding
     obligation of the Advisor enforceable against the Advisor in accordance
     with its



<PAGE>

                                        5

     terms. No consent of any other person including, without limitation,
     stockholders or creditors of the Advisor, and no license, permit, approval
     or authorization of, exemption by, notice or report to, or registration,
     filing or declaration with, any governmental authority, other than those
     which have been obtained or will be obtained in connection with this
     Agreement, is required by the Advisor in connection with the execution,
     delivery, performance, validity or enforceability of this Agreement.

          (ii) All of the information provided by the Advisor, including the
     information provided by it for use in the Prospectus and related documents
     in connection with the sale of Shares of the Fund, is and will continue to
     be accurate in all material respects and does not and will not omit any
     material facts necessary in order to make the statements made, in light of
     the circumstances under which they were made or shall be made, not
     misleading. The Advisor agrees to provide such of the foregoing information
     as may be required from time to time by the Management Company, and all
     such information shall also be subject to the foregoing representation and
     warranty regarding the continuous accuracy of information provided by the
     Advisor.

          (iii) The execution, delivery and performance of this Agreement and
     the documents or instruments required hereunder will not violate any
     provision of any existing law or regulation binding on the Advisor, or any
     order, judgment, award or decree of any court, arbitrator or governmental
     authority binding on the Advisor or its Certificate of Incorporation or of
     any mortgage, indenture, lease, contract or other agreement, instrument or
     undertaking to which the Advisor is a party or by which the Advisor or any
     of its assets are bound, the violations of which, taken as a whole, would
     have a material adverse affect on the business operations, assets or
     financial condition of the Advisor, and will not result in or require the
     creation or imposition of any lien on any of its property, assets or
     revenues pursuant to the provisions of any such mortgage, indenture, lease,
     contract or other agreement, instrument or undertaking.

        9. Exclusivity. Messrs. Viren Mehta and Samuel D. Isaly, the Advisor and
its affiliates, partners, associates, and employees (together, for purposes of
this Section 9, the "Advisor") do not presently and will not act as an
investment adviser, subadviser and/or portfolio manager to any European fund
other than the Fund until the later of (a) three full fiscal years of the Fund
following the date hereof or (b) for one full fiscal year of the Fund after the
date of termination hereof; provided, that (i) if the Management Company
terminates this Agreement at any time for any reason other than a beach by the
Advisor or its nonperformance of its duties and obligations hereunder, or (ii)
if the Management Company is unable to perform its duties under this Agreement
for any reason other than such a beach or nonperformance by the Advisor, the
terms of this Section 9 shall not limit the activities of the Advisor after the
effective date of such termination.



<PAGE>

                                        6

        Notwithstanding the foregoing, if after a period of 24 months from the
initial Valuation Date of the Fund (the "Period") (1) the Net Asset Value per
Share of the Fund has increased by more than (a) the percentage increase, if
any, of the Mehta and Isaly Pharma Index ("Index") during the Period plus (b) an
increase of 3% of the Net Asset Value per Share at the Fund at the end of the
Period compared to its Net Asset Value per Share at the commencement of the
Period and (2) the Fund has achieved an annualized performance in excess of 20%
above its initial Net Asset Value per Share, then the Management Company, upon
notification by the Advisor within 60 days after the end of the Period, shall be
given a period of 12 months to use its best efforts to raise an additional $50
million in assets for the Fund or an amount which would bring total assets of
the Fund to $150 million, whichever is less. If the Management Company is unable
for any reason to raise such additional assets within such 12-month period, the
terms of this Section 9 shall not preclude the Advisor from acting as an
investment adviser, subadviser and/or portfolio manager on behalf of any
European funds other than the Fund; provided that, until December 31, 1999, the
Advisor may so act on behalf of such other European funds only if the portion of
the combined assets thereof that is invested in companies with a capitalization
of under $500 million ("smaller capitalization companies"), when added to the
assets of the Fund that are invested in smaller capitalization companies, does
not exceed $150 million.

        10. Assignment. This Agreement may not be assigned by the Advisor. The
Advisor shall not delegate in any manner whatsoever its responsibilities
hereunder not engage other investment counsel in connection therewith.

        11. Term and Termination. This Agreement shall be in full force and
effect for two years from the date hereof and may not be terminated by either
party during such initial two year period, except that the Management Company
may terminate this Agreement at any time, without notice or upon such notice as
is reasonable in the circumstances (in the sole discretion of the Management
Company), in the event of:

        (a) a breach by the Advisor of any of its representations and warranties
contained herein or the nonperformance of its duties and obligations hereunder;
or bad faith, gross negligence or willful misconduct, of the Advisor:

        (b) with respect to either the Advisor [or Mehta and Isaly], its
bankruptcy or insolvency, the passing of a resolution for its dissolution or the
issuance of an order for dissolution, the making of a general assignment for the
benefit of its creditors, or the failure of either Messrs. Mehta or Isaly to
continue to be available and participate on substantially the same basis as
currently in the activities of each such entity;

        (c) in the event the Advisor fails to obtain or maintain any necessary
registration or qualification in any jurisdiction required to effect the
purposes of this Agreement; or



<PAGE>

                                        7

        (d) the failure of the Advisor for any consecutive twenty-four month
period to cause the net asset value per share of the Fund to increase by more
than (a) the increase, if any, of the Index in that period plus (b) 3% of the
closing value of the Index at the end of the period, as indicated by the Fund's
performance as calculated net of dividends on a pre-tax basis.

        After the expiration of the initial two year period, this Agreement may
be terminated at any time by either the Management Company or the Advisor by
giving the other party 60 days' prior written notice of termination. Upon
termination of this Agreement, the Advisor shall not be entitled to any further
fees except those which have accrued up to the date of such termination.
Notwithstanding any termination, (i) the Advisor shall up-date and reconcile all
books and records maintained by it and submit the same and all final financial
reports relating to the management and investment of the Fund's assets promptly
to the Management Company and (ii) the provisions of Section 9 shall remain in
effect.

        12. Notice. Any notice contemplated hereunder shall be in writing and
may be given by personal delivery or by sending the same by electronic or
computer communication to the party for whom it is intended. Any notice so
delivered or sent shall be effective on the date of delivery or sending, as the
case may be. Any party may give written notice of change of address in the same
manner, in which event, any notice shall thereafter be given to it, as herein
provided, at such changed address. Until changed, the addresses for notice of
the parties shall be:


if to the Management Company, at:              with a copy to:

      PHARMA/wHEALTH Management                Kramer, Levin, Naftalis, Nessen,
             Company S.A.                            Kamin & Frankel
      [Address]                                919 Third Avenue
      Attention:                               New York, NY  10022
      Fax No.:                                 Attn:  Paul S. Schreiber

and

if to the Advisor, at:                         with a copy to:

      [Name of Entity]                               [Name of Firm]
      [Address]                                      [Address]
      Attention:                                     Attention:
      Fax No.:                                       Fax No.:



<PAGE>

                                        8

        13. Miscellaneous.

        (a) Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles of the conflicts of laws thereof.

        (b) Entire Agreement/Amendments This Agreement contains the entire
understanding of the parties with respect to the retention of the Advisor by the
Management Company. This Agreement may not be altered, modified, or amended
except by written instrument signed by each of the parties hereto.

        (c) No Waiver The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of
such party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

        (d) Severability In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.

        (e) Arbitration: Choice of Forum Any dispute between the parties to this
Agreement arising from or relating to the terms of this Agreement or the
retention of the Advisor by the Management Company shall be submitted to
arbitration in the City of New York under the auspices of the American
Arbitration Association. Subject to the preceding sentence, the forum of any
legal action or proceeding arising from or relating to this Agreement or such
retention shall be the State of New York and, in the case of legal actions, the
United Stares federal district court for the Southern District of New York. Any
award rendered in any arbitration pursuant to this Section 13(e) may be enforced
in any such forum. By execution and delivery of this Agreement, each of the
parties to this Agreement accepts for himself or itself the non-exclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. The Advisor and the
Management Company, agree within 30 days of the date hereof, to appoint
irrevocably respective agents as their agents to receive service of process on
their behalf in any such proceeding in any such court in the State of New York.
The foregoing consents to jurisdiction and appointments of agents to receive
service of process shall not constitute general consents to service of process
in the State of New York for any purpose except as provided above and shall not
be deemed to confer rights on any person other than the respective parties to
this Agreement.

        (f) Other Arrangements It is recognized by the parties hereto that the
Bank Sal. Oppenheim jr. & Cie. Schweiz AG, the Advisor, Messrs. Mehta and Isaly,
Mr.



<PAGE>

                                        9

Joel R. Mesznik and their respective  affiliates and employees have had and will
continue to have business relationships amongst themselves which may be expanded
in the future.

        (g) Counterparts This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument. This Agreement shall
be effective when each of the parties has executed and delivered at least one
counterpart thereof.

        (h) Headings The headings of the paragraphs and subparagraphs of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof and shall not affect the interpretation hereof.

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


M AND I INVESTORS, INC.                      PHARMA/wHEALTH MANAGEMENT
                                                      COMPANY S.A.

By: /s/ Samuel D. Isaly                      By:  /s/ Joel R. Mesznik
- -------------------------------------        ----------------------------------
Title: President                             Title: Director

ATTEST:                                      ATTEST:

   /s/ Stephen E. Elliott                         /s/ Stephen E. Elliott
- -------------------------------------        ----------------------------------

As to Section 9 only.                        As to Section 9 only.

   /s/ Viren Mehta                                /s/ Samuel D. Isaly
- -------------------------------------        ----------------------------------
Mr. Viren Mehta                              Mr. Samuel D. Isaly

ATTEST:                                      ATTEST:

    /s/ Stephen E. Elliott                        /s/ Stephen E. Elliott
- -------------------------------------        ----------------------------------



                         LIMITED PARTNERSHIP AGREEMENT                Exhibit B.
                                       OF
                             CADUCEUS CAPITAL, L.P.

                  (Amended and Restated as of January 1, 1994)


                  AGREEMENT OF LIMITED PARTNERSHIP,  dated as of __________,  by
and among Caduceus  Management  Partners,  L.P. as general partner (the "General
Partner")  and all the  parties  who sign  copies  of this  agreement  to become
Limited  Partners.  (The  General  Partner  and the  persons who sign as Limited
Partners are sometimes collectively referred to as the "Partners").


                                    ARTICLE I

                               General Provisions

                  Section 1.01  Formation.  The original  parties  hereto formed
Caduceus Capital, L.P. as a limited partnership (the "Partnership")  pursuant to
the provisions of the Delaware  Revised  Uniform  Limited  Partnership  Act. The
existence of the  Partnership  commenced  upon the filing with the  Secretary of
State of Delaware of a Certificate of Limited Partnership in accordance with the
provisions of such law.

                  Section 1.02 Partnership  Name. The name of the Partnership is
Caduceus Capital, L.P.

                  Section 1.03 Purpose.  The primary  purpose of the Partnership
is to invest, reinvest and trade in securities,  other financial instruments and
rights and options relating thereto.

                  Section  1.04  Registered  Office  and  Agent for  Service  of
Process.  The  registered  office
 of the  Partnership  is at 1209 Orange  Street
Wilmington,  Delaware 19801 and the  registered  agent for service of process at
such office is The Corporation Trust Company.

                  Section  1.05  Place  of  Business.  The  principal  place  of
business of the Partnership  shall be at 41 Madison  Avenue,  New York, New York
10010 or such other place as the General  Partner shall  determine  from time to
time.

                  Section 1.06. Fiscal Year and Fiscal Periods.  The fiscal year
of the Partnership  shall end on December 31 of each year,  subject to change by
the General  Partner from time to time. A new fiscal  period  ("Fiscal  Period")
shall commence on the first day of each fiscal year, on each date of any capital
contribution  to the Partnership and on each date next following the date of any
withdrawal of capital or retirement of any Partner from the Partnership, and the
prior Fiscal  Period shall end on the date  immediately  preceding  such date of
commencement of a new Fiscal Period.



<PAGE>


                                        2


                  Section  1.07  Liability  of  Limited  Partners.  The  Limited
Partners  shall not be liable  for any  liabilities,  or for the  payment of any
debts and  obligations,  of the  Partnership  unless such  Limited  Partner,  in
addition  to the  exercise  of his  rights  and  powers  as a  Limited  Partner,
participates in the control of the Partnership or knowingly  permits his name to
be used in the name of the Partnership.

                  Section  1.08  Assignability  of  the  Interest  of a  Limited
Partner.  The  limited  partnership  interest  of  any  Limited  Partner  in the
Partnership, in whole or in part, or any beneficial interest therein, may not be
assigned without the prior written consent of the General Partner, which consent
may be  withheld  in  the  General  Partner's  sole  discretion.  Upon  such  an
assignment  of a limited  partnership  interest,  the  assignee  shall  become a
Limited  Partner upon the execution of such  agreements  and other  documents as
shall be required by the General Partner.


                                   ARTICLE II

                           Composition and Admissions

                  Section 2.01 Partners.  The names and addresses of the General
Partner and of each of the Limited  Partners shall be set forth in a schedule of
the  Partnership  to be kept on file at all  times  at the  principal  place  of
business  of the  Partnership.  A Partner  may  change  his or its  address  for
purposes  of this  Agreement  upon 5 days prior  written  notice to the  General
Partner.

                  Section 2.02 Admission of Partners.  With the prior consent of
the  General  Partner,  additional  Limited  Partners  may  be  admitted  to the
Partnership on any date selected by the General Partner. The General Partner may
admit additional or substitute  General Partners to the Partnership on the first
day of any fiscal  quarter,  provided that the General  Partner shall,  not less
than 45 days prior to the proposed  admission of any  additional  or  substitute
General Partner,  give notice of such admission to all of the Limited  Partners.
Contributions to the capital of the Partnership shall be made in cash or, at the
discretion  of the General  Partner,  in  securities  acceptable  to the General
Partner or partly in cash and partly in  securities  acceptable  to the  General
Partner,  such  securities  to be valued in  accordance  with the  provisions of
Section 8.02(b).  Each Partner who has contributed or may contribute  securities
to the Partnership shall, prior to the date of any such contribution, furnish to
the Partnership  evidence,  satisfactory to the General Partner, as to his dates
of acquisition of such securities,  his unencumbered  ownership  thereof and his
adjusted  basis  thereof  for  federal  income tax  purposes.  Each  Partner who
contributes  securities to the Partnership shall consent and agree to pay to the
Partnership,  concurrently with such contribution,  or,  alternatively,  to have
deducted from such contribution,  en' amount as the General Partner, in its sole
discretion,  may  determine  to cover the costs of selling such  securities  and
investing  the proceeds.  In  connection  with the admission of a Partner to the
Partnership, such Partner shall, in advance of such admission and as a condition
thereto,



<PAGE>


                                        3

sign a copy of this Agreement or a supplement hereto pursuant to which he agrees
to be bound by the terms of this Agreement.


                                   ARTICLE 111

                            Management of Partnership

                  Section 3.01 Actions of the General  Partner.  The Partnership
shall be managed by its General Partner,  Caduceus Management Partners, L.P. The
General Partner may appoint such agents of the Partnership as it deems necessary
who shall  hold such  offices  and shall,  under the  direction  of the  General
Partner,  exercise such powers of the General  Partner in the  management of the
Partnership  and  perform  such  duties  in  connection  therewith  as  shall be
determined from time to time by the General  Partner.  The General Partner shall
devote so much of its time and efforts to the affairs of the Partnership as may,
in its  judgment,  be necessary to accomplish  the purposes of the  Partnership.
Nothing herein  contained  shall prevent the General  Partner,  its partners and
affiliates, or any employee,  officer or shareholder thereof from conducting any
other  business,  including  any business  with respect to  securities.  Without
limiting the generality of the  foregoing,  the General  Partner,  its partners,
affiliates, or any employee, officer or shareholder thereof, from conducting any
other  buisness,  including  any business  with respect to  securities.  Without
limiting the generality of the  foregoing,  the General  Partner,  its partners,
affiliates,  and  any  employee,  officer  or  shareholder  thereof,  may act as
investment  advisers or  investment  managers  for others,  may manage  funds or
capital for others, may have, make and maintain investments in their own name or
through  other  entities,  and may serve as  officers,  directors,  consultants,
partners  or  stockholders  of  one  or  more  investment  funds,  partnerships,
securities  firms  or  advisory  firms.  It  is  recognized  that  in  effecting
transactions,  it may not always be possible,  or consistent with the investment
objectives of the various  persons  described above and of the  Partnership,  to
take or liquidate the same investment  positions at the same time or at the same
prices.

                  Section  3.02  Powers  of the  General  Partner.  The  General
Partner,  subject to the restrictions herein contained,  shall have the power on
behalf of the Partnership:

                  (a) to  purchase,  hold  and sell  securities  of any sort and
         rights therein, on margin or otherwise;

                  (b) to sell short  securities of any sort and rights  therein,
         on margin or otherwise, and to cover such short sales;

                  (c) to write,  purchase,  hold, sell and otherwise deal in put
         and call options and any combination thereof on stocks, bonds and stock
         market indices;

                  (d) to purchase, hold, sell and otherwise deal in commodities,
         commodity  contracts,  commodity futures and options in respect thereof
         (but the General Partner will



<PAGE>


                                        4

         not do so  until,  to the  extent  required,  it  has  registered  as a
         commodity pool operator with the Commodity Futures Trading Commission);

                  (e) to purchase,  hold,  sell and otherwise  deal in financial
         futures and contracts  relating to stock indices (and options  thereon)
         (but the General Partner will not do so until, to the extent  required,
         it has  registered  as a commodity  pool  operator  with the  Commodity
         Futures Trading Commission);

                  (f) to  purchase,  hold,  sell and  otherwise  deal in foreign
         currencies and futures contracts relating thereto (and options thereon)
         (but the General Partner will not do so until, to the extent  required,
         it has  registered  as a commodity  pool  operator  with the  Commodity
         Futures Trading Commission);

                  (g) to conduct margin accounts with brokers; to open, maintain
         and close bank accounts and draw checks or other orders for the payment
         of moneys;  to pledge securities for loans, and, in connection with any
         such  pledge,  to  effect  borrowings  from  brokers,  banks  and other
         financial institutions,

                  (h) to enter  into,  make and  perform  any  other  contracts,
         agreements or other  undertakings  it may deem  advisable in conducting
         the  business  of  the  Partnership,   including  but  not  limited  to
         contracts,  agreements or other  undertakings  with  persons,  firms or
         corporations with which the General Partner,  or any of its officers or
         employees, or any other Partner is affiliated; and

                  (i) to act for the Partnership in all other matters.

                  Section 3.03 Restrictions on the General Partner.  The General
Partner shall not on behalf of the  Partnership  (a) invest more than 15% of its
net assets  (computed at the time the  investment is made) in the  securities of
any one company, (b) invest more than 10% of its assets (computed at cost at the
time of the investment) in non-marketable or illiquid securities;  or (c) invest
in real estate.

                  Section 3.04  Limitation of Liability; Indemnification.

                  (a) Neither the General Partner, its partners, affiliates, any
employee,  officer or shareholder  thereof, nor any person or persons designated
pursuant to Section 6.02 shall be liable for any loss or cost arising out of, or
in  connection  with,  or any  act or  activity  undertaken  (or  omitted  to be
undertaken)  in  fulfillment  of any  obligation  or  responsibility  under this
Agreement,  including any such loss sustained by reason of any investment or the
sale or retention of any security or other asset of the Partnership, except that
any person  exculpated from liability under this Section shall not be exculpated
from  any  liability  arising  from  losses  caused  by  his,  her or its  gross
negligence or willful malfeasance.




<PAGE>


                                        5

                  (b) The Partnership  shall indemnify the General Partner,  its
partners,  affiliates and any employee, officer or shareholder thereof, from and
against  any and all  losses  or costs  suffered  or  sustained  by the  General
Partner, its partners or affiliates or any officer or employee thereof,  arising
out of or in connection with any act or activities  undertaken (or omitted to be
undertaken)  in  fulfillment  of any  obligation  or  responsibility  under this
Agreement,  including, without limitation, any judgment, settlement,  reasonable
attorney's  fees and other costs or expenses  incurred  in  connection  with the
defense of any actual or threatened action or proceeding, except that any person
entitled to be indemnified  under this Section shall not be indemnified  for any
loss or  expense  arising  out of his,  her or its gross  negligence  or willful
malfeasance.


                                   ARTICLE IV

                Expenses of Partnership, Organizational Expenses
                         and Fee to the General Partner

                  Section 4.01 Expenses of  Partnership  Generally.  The General
Partner shall be  authorized to incur all expenses on behalf of the  Partnership
which it deems necessary or desirable.  All expenses incurred in connection with
the operation of the Partnership.  shall be the  responsibility of, and be borne
by, the  Partnership.  To the extent the General Partner pays expenses for which
the  Partnership  is  responsible,  it shall be entitled to be reimbursed by the
Partnership  for such amounts.  The General Partner shall be empowered to reduce
the expenses of the Partnership  through the use of "soft" or commission dollars
to the extent legally  permissible.  The General Partner (or an affiliate of the
General  Partner)  will bear  overhead  expenses of the  Partnership,  including
salaries  of  administrative  personnel  and  research  assistants,  travel  and
research related expenses.

                  Section  4.02  Organizational  Expenses.  The General  Partner
shall be authorized  to incur on behalf of the  Partnership  the  organizational
expenses of the Partnership,  including all expenses incurred in connection with
the offer and sale of interests in the Partnership  ("Organizational Expenses").
Organizational  Expenses shall be paid by the Partnership and shall be amortized
over a period of 60 months from the formation of the Partnership.

                  Section 4.03 Management Fee Payable to the General Partner. In
consideration  for the General Partner  bearing  certain  expenses and providing
other  services,  each  Limited  Partner  shall pay the General  Partner (or any
person or entity  designated by it) a quarterly  management fee (the "Management
Fee") of 1.25% per annum of their Capital  Accounts.  Limited  Partners who have
made net capital  contributions to the Partnership of $5,000,000 or more will be
charged a Management Fee of 1.00% per annum of their Capital  Accounts.  Limited
Partners  who are  partners  of the General  Partner,  or who are  employees  or
partners of any entities  affiliated with partners of the General  Partner,  and
their respective family members ("Sponsor  Affiliates") and certain partners who
became Limited  Partners prior to November 1, 1993 may, at the discretion of the
General Partner, be charged a reduced Management Fee. The



<PAGE>


                                        6

Management Fee will be debited to the Capital  Account of each Limited  Partner,
based on the amount of the Capital Account of each Limited Partner at the end of
each quarter  (adjusted for any  contributions  or  withdrawals  made during the
quarter).  The Management Fee will be paid to the General Partner (or any person
or entity  designated  by the General  Partner)  within 10 days after the end of
each quarter and prorated for periods less than a full fiscal quarter.


                                    ARTICLE V

                Withdrawals from Capital Accounts and Retirements

                  Section 5.01 Permissible  Withdrawals.  A Partner may withdraw
all or any part of his  Capital  Account  (as  defined in  Section  7.01) in the
manner and to the extent provided in Section 5.02.

                  Section 5.02  Withdrawal Procedure.

                  (a) A  Limited  Partner  may  withdraw  all or any part of his
Capital  Account as of the last day of any fiscal  quarter;  provided,  however,
that a Limited  Partner may not withdraw all or any part of his Capital  Account
until one year following the date of his admission to the  Partnership (or until
December 31, 1993 in the case of a Limited  Partner  admitted in connection with
the initial  offering of the  Partnership);  provided  further  that any partial
withdrawal by a Limited  Partner must be at least 25% of such Limited  Partner's
Capital  Account at the time of the  withdrawal;  and  provided  further  that a
Limited  Partner may not,  without the  consent of the General  Partner,  make a
partial  withdrawal  which  would  reduce  his  Capital  Account  to  less  than
$1,000,000.  Any Limited Partner  desiring to make a withdrawal from his Capital
Account shall, not less than 30 days before the end of such fiscal quarter, give
written notice of (i) such Limited  Partner's  intention to make such withdrawal
and (ii) the amount  thereof  or the basis on which the amount  thereof is to be
determined.

                  (b) The General  Partner may  withdraw  all or any part of its
Capital Account as of the end of any fiscal quarter; provided,  however, no such
withdrawal  may be made by the General  Partner prior to December 31, 1993;  and
provided, further, that if the amount so proposed to be withdrawn by the General
Partner as of any withdrawal  date would reduce his Capital Account to less than
his original capital  contribution,  the General Partner shall, not less than 45
days before the end of such fiscal quarter, give notice to the other Partners of
(i) its intention to make such withdrawal and (ii) the amount of such withdrawal
or the manner in which the amount of such withdrawal is to be determined.

                  (c) A Partner withdrawing his entire Capital Account as of the
end of any fiscal quarter  pursuant to this Section 5.02 shall be deemed to have
retired as of the date of such withdrawal.




<PAGE>


                                        7

                  Section 5.03 Payment on  Retirement.  Retirement of a Partner,
whether by (a) withdrawal of such Partner's entire Capital Account or (b) action
of the General Partner under Section 5.04, shall be subject to the provisions of
Article X.

                  Section 5.04 Mandatory Retirement of a Limited Partner. If the
General Partner, in its sole discretion, deems it to be in the best interests of
the  Partnership or the General  Partner,  it may require any Limited Partner to
retire from the  Partnership  on the last day of any fiscal  quarter on not less
than  20 days  notice.  A  Limited  Partner  who  dies or  becomes  bankrupt  or
incapacitated  may, in the sole  discretion of the General  Partner,  be retired
from the  Partnership  at the end of the  fiscal  year  during  which such event
occurs.  If the General Partner,  in its sole discretion,  deems it to be in the
best assets of the Partnership to do so because the continued  participation  of
any Limited  Partner in the  Partnership  might cause the Partnership to violate
any law, the General Partner may on 5 days notice require the retirement of such
Limited  Partner  at any  time,  such  retirement  to be  effective  on the date
specified  in such  notice.  A  Limited  Partner  who is so  required  to retire
pursuant  to this  Section  5.04 shall be  entitled  to receive the value of his
liquidating Share (as defined in Section 10.01) computed as of the date on which
such Limited Partner's retirement shall become effective.


                  Section   5.05   Distributions   in  Cash  or  in  Kind.   All
distributions  to a Partner by reason of  withdrawals  or  retirements  from the
Partnership  shall be made in cash or, in the discretion of the General Partner,
in  securities  selected by the General  Partner or partly in cash and partly in
securities selected by the General Partner.


                                   ARTICLE VI

                       Term and Dissolution of Partnership

                  Section  6.01  Term  of  Partnership.   Unless   dissolved  as
hereinafter provided, the Partnership shall continue until December 31, 1993 and
thereafter from year to year.

                  Section 6.02  Dissolution of Partnership.  The Partnership may
be dissolved at any time by the General  Partner,  and  thereupon the affairs of
the  Partnership  shall be wound up by the General  Partner.  The  bankruptcy or
dissolution  of the General  Partner shall  dissolve the  Partnership  provided,
however,  that,  in such event,  if the Limited  Partners  unanimously  select a
general partner who agrees to continue the  Partnership,  the Partnership  shall
not be  dissolved.  In the  event of the  dissolution  of the  Partnership,  the
affairs of the  Partnership  shall be promptly wound up by the person or persons
previously designated by the General Partner or, if the General Partner has made
no such  designation,  by the person or persons  designated by Limited  Partners
owning a  majority  in  interest  of the  Capital  Accounts  of all the  Limited
Partners  as of the date of  dissolution  of the  Partnership.  Such  person  or
persons shall take all steps  necessary or appropriate to wind up the affairs of
the Partnership as promptly as practicable thereafter. Such person or persons is
hereinafter referred to as the "Liquidator". Neither the admission of



<PAGE>


                                        8

Partners nor the retirement,  bankruptcy,  dissolution, death or incapacity of a
Limited Partner shall dissolve the Partnership.

                  Section 6.03  Procedure on Winding Up.

                  (a) Upon the winding up of the Partnership,  a full accounting
of the assets and liabilities of the  Partnership  shall be taken and the assets
of the Partnership  shall be liquidated to the extent  determined by the General
Partner (or the Liquidator)  and, as promptly as practicable,  the cash proceeds
thereof shall be applied in the following order of priority:

                           (i) to the  payment  of all  debts  to  non-Partners,
                  taxes,   obligations   and   liabilities  of  the  Partnership
                  including the expenses of liquidation;

                           (ii) to the payment of all debts to Partners; and

                           (iii) to the payment to  Partners of their  remaining
                  Capital Accounts in proportion to the amounts thereof.

                  (b) In the winding up of the Partnership,  the General Partner
(or the  Liquidator)  may establish  reserves for contingent  liabilities of the
Partnership in an amount (including  estimated  expenses,  if any, in connection
therewith)  determined by the General Partner (or the Liquidator)  and, upon the
satisfaction of such contingent  liabilities,  the amounts, if any, remaining in
such reserves shall be (distributed as provided in subparagraph (a)(iii) of this
Section 6.03.

                  (c) Distributions to a Partner pursuant to subsection (a)(iii)
may be made in  installments  and shall be made in cash or, in the discretion of
the General Partner (or the Liquidator),  in securities  selected by the General
Partner (or the Liquidator), or partly in cash and partly in securities selected
by the General Partner (or the Liquidator).

                  (d) Upon the  winding up of the  Partnership,  the name of the
Partnership  and  its  goodwill  shall  not  be  appraised,  sold  or  otherwise
liquidated but shall remain the exclusive property of the General Partner.

                  (e) As  promptly  as  possible  after  the  completion  of the
winding up of the  Partnership,  the General Partner (or the  Liquidator)  shall
cause to be prepared and forwarded to each Partner a final  statement and report
of the Partnership.

                  (f) If the  Partnership  is  wound up by the  Liquidator,  the
Liquidator  shall be entitled to  reasonable  compensation  for his  services in
winding up the Partnership.


                                   ARTICLE VII




<PAGE>


                                        9

                   Capital Accounts and Capital Contributions

                  Section 7.01 Capital Accounts.  A Partner's  "Capital Account"
as of a particular date shall consist of the following:

                  (a)  an  amount  equal  to  such  Partner's  original  capital
         contribution;

                  (b) any  additional  capital  contributions  made on or before
         such date; and

                  (c) the  adjustments,  if any, to such  account in  accordance
         with the provisions of Section 7,03, Article VII and Section 1.01.

                  Section 7.02 Capital Contributions.  Each Limited Partner must
make a minimum contribution of $1,000,000 to the Partnership, unless the General
Partner exercise its discretion to waive this minimum requirement. Contributions
to the capital of the Partnership shall be made in cash or, at the discretion of
the General  Partner,  in  securities  acceptable to the General  Partner,  such
securities to be valued in accordance  with the  provisions of Section  8.02(b).
The General  Partner shall at all times maintain its Capital Account equal to at
least 1% of the total capital of the Partnership.

                  Section 7.03  Adjustments to Capital Accounts for Withdrawals.
The amount of withdrawals, if any, made by a Partner shall be deducted from such
Partner's Capital Account as of the date of such withdrawal.

                  Section 7.04 Additional  Contributions  to Capital.  A Partner
may, with the consent of the General Partner,  make additional  contributions to
the  capital of the  Partnership  on any date or dates  selected  by the General
Partner.


                                  ARTICLE VIII

                  Allocation of Net Profits and Net Losses and
                   Determination of Net Profits and Net Losses

                  Section 8.01  Allocation of Net Profits and Net Losses.

                  (a) Except as otherwise provided in Section 8.03 regarding the
treatment of the "Hot Issues Account" (as defined  therein),  any Net Profits or
Net  Losses  (as  defined in Section  8.02)  during any Fiscal  Period  shall be
allocated as of the end of such Fiscal Period to the Capital Accounts of all the
Partners in the proportions  which (i) each Partner's  Capital Account as of the
beginning of such Fiscal Period bore to (ii) the sum of the Capital  Accounts of
all the Partners as of the beginning of such Fiscal Period.




<PAGE>


                                       10

                  (b) If in any fiscal  year  ("Current  Year") the Net  Profits
allocated  to  a  particular  Limited  Partner's  Capital  Account  (except  for
employees,  family  members or  affiliates of the General  Partner)  pursuant to
Section 8.01 (a) exceed the Net Losses so  allocated  to such Limited  Partner's
Capital Account, there shall be reallocated to the General Partner as of the end
of the Current Year an amount equal to 20% of such  excess,  provided,  however,
that this  reallocation  will be subject to a loss  carryforward  provision such
that the amount so reallocated  to the General  Partner for the Current Year may
not exceed 20% of the excess of the Net Profits  for the  Current  Year over the
loss carryforward  amount, if any, applicable to the Current Year and, provided,
however,  the amount reallocated to the General Partner shall not exceed the Net
Profits  of the  Partnership  for the fiscal  year.  For  purposes  of the first
proviso of the preceding  sentence,  the loss carryforward  amount applicable to
the Current Year shall be the sum of all prior year Net Losses  allocated to the
Limited Partner and not subsequently offset by prior year Net Profits.  The loss
carryforward  amount  shall  be  reduced  proportionately  to  reflect  any  net
withdrawals  made by such Limited Partner  subsequent to any such prior year Net
Losses.

                  The total amount so reallocated  pursuant to this Section 8.01
(b) shall be credited as of the end of the fiscal year to the Capital Account of
the General Partner (and to the Capital Accounts of such Limited Partners as may
from time to time be designated by the General Partner in its sole  discretion);
provided that the portion,  if any, of such Net Profit that has been reallocated
to the Capital  Account of the General  Partner  pursuant to this subsection (b)
which is represented by net unrealized gains may not be withdrawn by the General
Partner from its Capital Account until such gains are realized.

                  Sponsor  Affiliates  and certain  partners who became  Limited
Partners prior to November 1, 1993 may be charged a lower incentive allocation.

                  (c) In the event of the  retirement  of a Partner  at  anytime
other than the end of a fiscal year, the allocation  and/or  deduction  provided
for in  Section  8.01 (b) shall be made with  respect  to such  Partner  for the
Fiscal  Period  ending on such date as though the last day of such Fiscal Period
was the last day of a fiscal  year.  The  amount so  deducted  from the  Capital
Accounts of all  Partners  who so retire  shall be held in a "Suspense  Account"
until the end of such fiscal year at which time the total of such amounts  shall
be credited to the Capital  Accounts of the General  Partner up to the amount by
which the Net Profit of the  Partnership for such fiscal year exceeds the amount
reallocated  from the Limited  Partners  under  Section  8.01 (b) or such fiscal
year,  and the balance,  if any, of such amount shall be credited to the Capital
Accounts of the Partners as of the last day of such fiscal year.

                  Section 8.02 Determination of Net Profits and Net Losses. "Net
Profits" or "Net Losses" of the Partnership shall mean the net operating profits
or net operating  losses,  as the case may be, for a Fiscal Period determined on
the accrual basis of accounting in accordance with generally accepted accounting
principles consistently applied and further in accordance with the following:




<PAGE>


                                       11

                  (a) Net  Profits and Net Losses  shall  include  realized  and
         unrealized profits and losses with respect to all securities positions.
         In such computation,  realized and unrealized  profits and losses shall
         mean for each position held in a security during any Fiscal Period, the
         realized  or  unrealized  appreciation  or the  realized  or  unrelated
         depreciation,  as the  case  may be,  with  respect  to such  position,
         determined  by comparing  the net  proceeds  from the closing or deemed
         closing of such  position or the market  value of such  position at the
         end of such  Fiscal  Period  with  (i) the  cost  of such  position  if
         established  during such  Fiscal  Period or (ii) if such  position  was
         established  during a prior  Fiscal  Period,  the market  value of such
         position at the end of the last preceding Fiscal Period.

                  (b) The market value of positions  in  securities  shall be as
         follows:  securities that are listed on the  consolidated  tape and are
         freely  transferable  shall be valued at their last sales  price on the
         consolidated tape on the date of determination or, if no sales occurred
         on such day, at the "bid" price on the  consolidated  tape at the close
         of business  on such day and if sold short at the "asked"  price at the
         close of business on such day. Securities traded over the counter which
         are freely  transferable shall be valued at the last sales price on the
         date of  determination,  or, if no sales  occurred  on such day, at the
         "bid"  price at the close of  business on such day and if sold short at
         the "asked" price at the close of business on such day. Notwithstanding
         the foregoing, if the securities to be valued constitute a block which,
         in the judgment of the General  Partner,  could not be  liquidated in a
         reasonable time without depressing the market, such block shall then be
         valued by the General  Partner but not at a unit value in excess of the
         quoted  market  price  for  such  security.  All  other  assets  of the
         Partnership  shall be valued in the manner  determined  by the  General
         Partner.

                  (c) There shall be deducted in  computing  Net Profits and Net
         Losses estimated expenses,  including  accounting and legal services in
         respect of the particular  Fiscal Period (whether  performed therein or
         to  be  performed   thereafter),   and  such  reserves  for  contingent
         liabilities of the Partnership,  including related expenses, if any, in
         connection  therewith,  as the General Partner shall  determine.  There
         shall be separately charged to each Limited Partner,  the fee described
         in Section 4.03 to the General Partner.

                  (d) In  computing  the  Net  Profits  and  Net  Losses  of the
         Partnership,  the Organizational  Expenses of the Partnership  incurred
         pursuant to Section 4.02 shall be amortized  over a period of 60 months
         from the formation of the Partnership  and the  amortizable  portion of
         the Organizational  Expenses shall be deducted in computing Net Profits
         and Net Losses.

                  Section  8.03 Hot  Issues.  In the event the  General  Partner
decides to invest in securities  which are the subject of a public  distribution
and which the General  Partner,  in its sole  discretion,  believes may become a
"hot  issue" as that term is defined in Article  111,  Section 1 of the Rules of
Fair  Practice of the National  Association  of  Securities  Dealers,  Inc. (the
"Association"),  such investment  shall be made in accordance with the following
provisions:



<PAGE>


                                       12


                  (a) any such  investment  made in a particular  Fiscal  Period
         shall be made in a special account (the "Hot Issues Account");

                  (b)  only  those   Partners   who  do  not  fall   within  the
         proscription  of Article 111,  Section 1 of said Rules of Fair Practice
         ("Unrestricted Partners") shall have any beneficial interest in the Hot
         Issues Account;

                  (c) each Unrestricted Partner shall have a beneficial interest
         in the Hot Issues Account for any Fiscal Period in the proportion which
         (i) such Unrestricted  Partner's Capital Account as of the beginning of
         the Fiscal  Period bore to (ii) the sum of the Capital  Accounts of all
         Unrestricted Partners as of the beginning of such Fiscal Period;

                  (d) funds  required to make a particular  investment  shall be
         referred  to the Hot Issues  Account  from the  regular  account of the
         Partnership;  securities  involved in the public  distribution shall be
         purchased in the Hot Issues Account, held in the Hot Issues Account and
         eventually  sold from the Hot  Issues  Account  or  transferred  to the
         regular  account  at fair  market  value as of the day of  transfer  as
         determined by the General Partner with such transfer being treated as a
         sale;  if such  securities  are sold from the Hot Issues  Account,  the
         proceeds of the sale shall be  transferred  from the Hot Issues Account
         to the regular account of the Partnership;

                  (e) as of the  last  day of  each  Fiscal  Period  in  which a
         particular  investment  or  investments  are  held  in the  Hot  Issues
         Account:  (A) interest shall be debited to the Capital  Accounts of the
         Unrestricted  Partners in accordance with their beneficial interests in
         the  Hot  Issues  Account  at  the  interest  rate  being  paid  by the
         Partnership  from time to time for borrowed  funds during the period in
         that Fiscal  Period that funds from the regular  account have been held
         in or made  available to the  particular  Hot issues  Account or, if no
         such funds are being  borrowed  during such period,  the interest  rate
         that the General Partner  determines  would have been paid if funds had
         been borrowed by the  Partnership  during such period and such interest
         shall be  credited to the Capital  Accounts of all the  Partners,  both
         General  and  Limited,  in the  proportions  which  (i) each  Partner's
         Capital  Account as of the beginning of such Fiscal Period bore to (ii)
         the sum of the Capital  Accounts of all Partners as of the beginning of
         such Fiscal  Period and (B) any Net  Profits or Net Losses  during such
         Fiscal Period with respect to the Hot Issues Account shall be allocated
         to the Capital Accounts of the Unrestricted Partners in accordance with
         their beneficial interests in the Hot Issues Account during such Fiscal
         Period; and

                  (f) the  determination  of the General Partner as to whether a
         particular  Partner  falls  within the  proscription  of  Article  111,
         Section 1 of said Rules of Fair Practice shall be final.

                  Section 8.04 Allocation of Prior Fiscal Period Items. Anything
herein  to the  contrary  notwithstanding,  any item of  income,  gain,  loss or
deduction for a Fiscal Period



<PAGE>


                                       13

attributable to any Partnership  matter or transaction  occurring during a prior
Fiscal  Period (such items of income,  gain,  loss or deduction  are referred to
herein as "Prior  Fiscal  Period  items") which shall exceed the lesser of (a) $
100,000 or (b) one  percent of the Capital  Accounts  of all  Partners as of the
beginning of the current  Fiscal  Period may, in the  discretion  of the General
Partner,  be allocated among the Partners  (including persons who have ceased to
be Partners) in proportion to their Capital Accounts as of the beginning of such
prior Fiscal Period. In the case of a person who is a Partner during the Current
Fiscal Period,  the Prior Fiscal Period Items shall be considered an item of Net
Profit or Net Loss for the Current  Fiscal  Period for  purposes of Section 8-01
(b).  In the case of a person who has ceased to be a Partner,  the Prior  Fiscal
Period Items shall be  considered  an Item of Net Profit or Net Loss in the last
fiscal  period in which such person was a Partner for purposes of computing  the
allocation of such Prior Fiscal Period Items between the person who ceased to be
a Partner and the General Partner.


                                   ARTICLE IX

                      Allocation of Income For Tax Purposes

                  Section 9.01  Ordinary  Deductions  and Ordinary  Income.  For
Federal income tax purposes,  all items of deduction other than realized capital
losses, and all items of income other than capital gains, shall be allocated, as
nearly as is  practicable,  in accordance with the manner in which such items of
deduction or income  affected  the amounts  which were either  deducted  from or
added to the Capital Accounts of the Partners.

                  Section 9.02 Capital Gains and Losses.  For Federal income tax
purposes,  capital gains and capital losses  (short-term  and long-term,  as the
case may be) recognized by the Partnership  shall be allocated,  as nearly as is
practicable,  in  accordance  with the  manner  in which  the  aggregate  of the
increase  or decrease in the value of the  securities  positions  giving rise to
such gains or losses was added to or deducted  from the Capital  Accounts of the
Partners.

                  Section 9.03 Allocation of Capital Gains to Retiring Partners.
Notwithstanding  Section 9.02 above, in the event a Partner withdraws all of his
Capital Account from the Partnership, the General Partner in its sole discretion
may make a special allocation to said Partner for Federal income tax purposes in
the last year that such Partner participates in the Partnership's  operations of
the net capital  gains  recognized by the  Partnership  in such a manner as will
reduce the amount, if any, by which such Partner's Liquidating Share (as defined
in Section  10.01 ) exceeds his Federal  income tax basis in his interest in the
Partnership before such allocation.  For example, if a Partner retires at a time
when his Capital Account reflects  significant  unrealized gains which should be
appropriately  taxed to such retiring Partner rather than the remaining Partners
in the Partnership, the General Partner may, in its sole discretion,  employ the
provisions of this Section 9.03 in order to fairly  apportion the realized gains
for the fiscal year such Partner retires  between such retiring  Partner and the
remaining Partners.





<PAGE>


                                       14

                                    ARTICLE X

                           Payments to and by a Person
                         Who Has Ceased to be a Partner

                  Section  10.01  Payments  on  Retirement,  Death,  Bankruptcy,
Insanity or Disability of any Partner.  Within thirty days after (a) the date of
retirement of a Partner in accordance with the terms of this Agreement or (b) in
the discretion of the General Partner, the day of the fiscal year during which a
Partner died or became bankrupt or legally incapacitated, there shall be paid or
distributed to such Partner or to the legal  representative of such Partner,  an
amount in cash or, as determined by the General Partner,  securities selected by
the General Partner or in cash and securities  selected by the General  Partner,
equal in value to not less than 95% of the estimated  amount of the  Liquidating
Share (as  hereinafter  defined)  of such  Partner.  Promptly  after the General
Partner has determined the Capital Accounts of the Partners as of such date and,
if such  date is the  last  day of a  fiscal  year  and the  independent  public
accountants  have completed its examination  thereof  required by Section 11.03,
the Partnership shall pay to such Partner or its representative, in cash or such
securities or cash and such  securities,  as determined by the General  Partner,
the amount of the excess,  if any, of the Liquidating Share of such Partner over
the  amount  so  paid,  or  such  Partner  or  representative  shall  pay to the
Partnership  the amount of the  excess,  if any, of the amount so paid over such
Liquidating  Share, in each case together with interest  thereon,  to the extent
permitted by applicable law, from the applicable date referred to in clauses (a)
or (b) above to the date of the  payment  at an annual  rate  equal to 1/2 of 1%
above the brokers' call rate charged by the Partnership's  principal broker. The
term  "Liquidating  Share",  when used with respect to any  retiring,  deceased,
bankrupt or legally  incapacitated  Partner,  shall mean the Capital  Account of
such  Partner on the date in question  after  giving  effect to all  adjustments
thereto.

                  Section  10.02  Reserve for  Liability  and  Payments of Prior
Fiscal Period Items by Person Who Has Ceased to be a Partner.

                  (a) The right of any  retired,  deceased,  bankrupt or legally
         incapacitated Partner (or his legal representative) to have distributed
         the Liquidating Share of such Partner shall in all instances be subject
         to retention by the  Partnership of a reserve,  in such amount as shall
         be  determined  by the General  Partner,  in its sole  discretion,  for
         Partnership liabilities and for other contingencies.  Commencing on the
         applicable  date  referred to in clauses (a) and (b) of Section  10.01,
         the reserve shall bear interest, payable on each December 31 after such
         date, at an annual rate equal to 1/2 of 1% above the brokers' call rate
         charged by the Partnership's  principal broker.  Upon the determination
         of the General  Partner  that such  reserve (or portion  thereof) is no
         longer  required  there  shall  be  distributed  to  such  Partner  his
         proportionate share of the reserve which is no longer required together
         with interest thereon.

                  (b) A person who has ceased to be a Partner will be liable for
         his  proportionate  share of Prior  Fiscal  Period Items as provided in
         Section 804 in excess of



<PAGE>


                                       15

         his  share of the  reserve  established  with  respect  to such  person
         pursuant to Section  10.02(a)  and such  person  shall pay his share of
         such amounts promptly on demand, but the amount to be paid shall not be
         in excess of his Capital  Account at the time such Prior Fiscal  Period
         Item arose.


                                   ARTICLE XI

                            Miscellaneous Provisions

                  Section  11.01  Withholding  Taxes.  Any taxes,  fees or other
charges  the  Partnership  is required to  withhold  under  applicable  law with
respect to any Partner  shall be withheld  by the  Partnership  (and paid to the
appropriate  governmental  authorities)  and shall be deducted  from the Capital
Account of such Partner as of the last day of the Fiscal  Period with respect to
which such amount is required to be withheld.

                  Section  11.02  Maintaining  Books  of  Account.   Proper  and
complete  books of  account  shall  be kept at all  times  and  shall be open to
inspection by any Partner or their accredited representative at reasonable times
during office hours.

                  Section 11.03 Audit of Books. The books of account and records
of the  Partnership  shall  be  audited  as of the  end of each  fiscal  year by
independent  certified  public  accountants  designated from time to time by the
General Partner.

                  Section 11.04  Amendment of Agreement.  This  Agreement may be
amended by the General Partner in any manner that does not adversely  affect the
rights of any  Limited  Partner.  This  Agreement  may also be amended by action
taken by both (a) the  General  Partner and (b) the  Limited  Partners  owning a
majority in interest of the Capital  Accounts  owned by the Limited  Partners at
the time of the amendment,  provided that such  amendment does not  discriminate
among the Limited Partners.

                  Section  11.05  Notices.  All notices  provided for under this
Agreement  shall be in writing and shall be deemed to have been duly given as of
the date of postmark if sent by first  class mail to such  Partner's  address as
set forth in the schedule in the files of the Partnership as of the date of such
notice.

                  Section  11.06  Reports to  Partners.  The  Partnership  shall
furnish to the Partners  reports with  respect to the  Partnership's  activities
after the end of each  fiscal  quarter  and  audited  financial  reports  of the
Partnership  prepared by the  Partnership's  independent  certified  accountants
promptly  after  the end of each  fiscal  year.  In  addition,  as  promptly  as
practicable  after the end of each fiscal year,  the  Partnership  shall send to
each Partner a report indicating the amounts representing their respective share
of net  long-term  capital gain or loss,  net  short-term  capital gain or loss,
operating  profit or loss and dividends  for purposes of reporting  such amounts
for income tax purposes.



<PAGE>


                                       16


                  Section 11.07 Binding  Effect of  Agreement.  This  Agreement,
including Section 11.09 hereof, shall be binding on the successors,  assigns and
the legal representatives of each of the Partners.

                  Section 11.08 Counterparts.  This Agreement may be executed in
more than one counterpart with the same effect as if the Partners  executing the
several counterparts had all executed one document.

                  Section 11.09 Designation of Attorney. Each of the undersigned
for himself or herself hereby  irrevocably  constitutes  and appoints  Samuel D.
lsaly  and Viren  Mehta his true and  lawful  attorneys  in his name,  place and
stead, to make, execute, sign and file:

                  (a) the  Certificate of Limited  Partnership and any amendment
         thereto or termination  thereof which is or may be required by the laws
         of the State of Delaware;

                  (b) any  certificate  required by reason of the dissolution of
         the Partnership; and

                  (c) any application, certificate, report or similar instrument
         or document required to be submitted by or on behalf of the Partnership
         to any governmental or administrative agency or body, to any securities
         exchange, board of trade, clearing corporation or association or to any
         self-regulatory organization or trade association.

                  Said  attorneys  are not by this  Section  11.09  granted  any
authority on behalf of the  undersigned  to amend this Agreement in any way that
adversely affects a Limited Partner.





<PAGE>

                                       17

                  IN WITNESS  WHEREOF,  the undersigned has hereunto signed this
Agreement as of the date first written above.


General Partner:                             Limited Partner:



CADUCEUS MANAGEMENT PARTNERS,                  /s/ Samuel D. Isaly
  L.P.                                       ----------------------------------
                                             Signature of Limited Partner


By:  Caduceus Capital Management, Inc.                   Samuel D. Isaly
         General Partner                     ----------------------------------
                                             Type in Name of Limited Partner


By:  /s/ Samuel D. Isaly                     Date of Signature:     12/31/92
    --------------------------------                                ---------- 


   /s/ Nicholas G. Palevsky                     /s/ Viren Mehta
- -------------------------------------        ----------------------------------
Signature of Limited Partner                 Signature of Limited Partner
                                        
                                        
   Nicholas G. Palevsky                         Viren Mehta
- -------------------------------------        ----------------------------------
Type in Name of Limited Partner              Type in Name of Limited Partner
                                        
                                        
Date of Signature:     6/29/94               Date of Signature:     4/30/93
                    -----------------                               ---------- 










<PAGE>


                                       18


   /s/ David Martin                              /s/ Sven H. Borho
- -------------------------------------        ----------------------------------
Signature of Limited Partner                 Signature of Limited Partner


  Croesus Investment Partners VI                Sven H. Borho
- -------------------------------------        ----------------------------------
Type in Name of Limited Partner              Type in Name of Limited Partner


Date of Signature:     4/3/95                Date of Signature:     4/30/95
                    -----------------                              ------------




   /s/ George Hibon                               /s/ Stephen E. Elliott
- -------------------------------------        ----------------------------------
Signature of Limited Partner                 Signature of Limited Partner


   George Hibon                                 Stephen E. Elliott
- -------------------------------------        ----------------------------------
Type in Name of Limited Partner              Type in Name of Limited Partner


Date of Signature:     6/28/96               Date of Signature:     11/4/96
                    -----------------                              ------------



   /s/ Steven A. Lisi                            /s/ Michael B. Sheffery
- -------------------------------------        ----------------------------------
Signature of Limited Partner                 Signature of Limited Partner


   Steveb A. Lisi                                 Michael B. Sheffery
- -------------------------------------        ----------------------------------
Type in Name of Limited Partner              Type in Name of Limited Partner


Date of Signature:     11/4/96               Date of Signature:     11/4/96
                    -----------------                              ------------







<PAGE>


                                       19





   /s/ Jane C. Brissette
- -------------------------------------        
Signature of Limited Partner


The Pooled Employee Trust Funds of Carolina First Bank
- ------------------------------------------------------
Type in Name of Limited Partner


Date of Signature:     10/31/96
                    ----------------- 




   /s/ Carl L. Gordon
- ----------------------------------
Signature of Limited Partner


   Carl L. Gordon
- ----------------------------------
Type in Name of Limited Partner


Date of Signature:     11/1/96
                     ------------




   /s/ Edmund A. Debler
- ----------------------------------
Signature of Limited Partner


   Edmund A. Debler
- ----------------------------------
Type in Name of Limited Partner


Date of Signature:     4/30/96
                      ------------





                                                                      Exhibit C





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











                        CADUCEUS MANAGEMENT PARTNERS L.P.


                          LIMITED PARTNERSHIP AGREEMENT



                            Dated as of July 1, 1994










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



<PAGE>

                                TABLE OF CONTENTS



                                                                            Page

                                    ARTICLE I

                                   Definitions

SECTION 1.1.          Definitions............................................  1
SECTION l.2.          Terms Generally........................................  7

                          ARTICLE II

                      General Provisions

SECTION 2.1.          Partners...............................................  7
SECTION 2.2.          Name...................................................  7
SECTION 2.3.          Liability of General and Limited Partners..............  8
SECTION 2.4.          Term...................................................  8
SECTION 2.5.          Purpose; Powers........................................  8
SECTION 2.6.          Place of Business...................................... 10

                          ARTICLE III

          Management and Operation of the Partnership

SECTION 3.1.          Management............................................. 10
SECTION 3.2.          Partner Consent Matters................................ 11
SECTION 3.3.          Certain Duties and Obligations of the Partners......... 13
SECTION 3.4.          Restrictions on Authority of the General Partner....... 14

                                   ARTICLE IV

                              Scope of Partnership

SECTION 4.1.          Other Activities....................................... 15
SECTION 4.2.          Early Termination...................................... 15
SECTION 4.3.          Withdrawal of Partners................................. 16





<PAGE>


                                      -ii-
                                                                            Page

SECTION 5.1.          Capital Contributions.................................. 18
SECTION 5.2.          Capital Accounts....................................... 18
SECTION 5.3.          Allocations............................................ 19
SECTION 5.4.          Distributions.......................................... 20
SECTION 5.5.          Restricted Payments.................................... 20
SECTION 5.6.          Expenses............................................... 20

                          ARTICLE VI

                Books and Reports; Tax Matters

SECTION 6.1.          General Accounting Matters............................. 21
SECTION 6.2.          Certain Tax Matters.................................... 22

                          ARTICLE VII

                          Dissolution

SECTION 7.1.          Dissolution............................................ 23
SECTION 7.2.          Winding-up............................................. 23
SECTION 7.3.          Final Distribution..................................... 23


                         ARTICLE VIII

             Transfer of Partners' Interests; Sale

SECTION 8.1.          Certain Provisions Relating to Sale of the Partnership or
                      Partnership Interests.................................. 24
SECTION 8.2.          Other Transfer Provisions.............................. 27

                          ARTICLE IX

                         Miscellaneous

SECTION 9.1.          Arbitration............................................ 28
SECTION 9.2.          Ownership and Use of Names............................. 28
SECTION 9.3.          Governing Law.......................................... 29
SECTION 9.4.          Successors and Assigns................................. 29
SECTION 9.5.          Access; Confidentiality................................ 29
SECTION 9.6.          Notices................................................ 29
SECTION 9.7.          Counterparts........................................... 29
SECTION 9.8.          Entire Agreement....................................... 30
SECTION 9.9.          Amendments............................................. 30
SECTION 9.10.         Blackstone Investment.................................. 30



<PAGE>


                                      -iii-
                                                                            Page
SECTION 9.11.         Section Titles......................................... 30
SECTION 9.12.         Representations and Warranties......................... 30


SCHEDULE A            PARTNERS OF THE PARTNERSHIP



<PAGE>
                        CADUCEUS MANAGEMENT PARTNERS L.P.


                  LIMITED PARTNERSHIP AGREEMENT, dated as of November 1, 1993,
by and among Caduceus Capital Management, Inc., a Delaware corporation ("CCM"),
as general partner, and Blackstone Alternative Asset Management L.P., a Delaware
limited partnership ("Blackstone"), Samuel D. Isaly and Viren Mehta, as limited
partners (together, the "Limited Partners").

                              Preliminary Statement

                  The parties hereto are executing this Limited Partnership
Agreement for the purpose of forming a limited partnership pursuant to the
provisions of the Partnership Act (as defined herein). Accordingly, in
consideration of the mutual promises and agreements herein made and intending to
be legally bound hereby, the parties hereto agree as follows:


                                    ARTICLE I

                                   Definitions

                  SECTION  1.1.   Definitions.   Unless  the  context  otherwise
requires,  the following terms shall have the following meanings for purposes of
this Agreement:

                  "Affiliate" with respect to any Person means any other Person
         who controls, is controlled by or is under common control with such
         Person.

                  "Agreement" means this Limited Partnership Agreement of the
         Partnership, as it may be amended, supplemented, modified or restated
         from time to time.

                  "Asset Management Business" means the business of serving as
         the general partner of any investment vehicle, including the Private
         Fund, or serving as the investment manager or investment adviser of
         Separate Accounts or other similar capacity for investors sourced in
         the United States, in each case specializing in buying and selling
         Securities in the pharmaceutical, health care and biotechnology
         industries. Notwithstanding the foregoing, for purposes hereof the term
         "Asset Management Business" shall specifically not include the
         activities of the (i) Offshore Fund or (ii) Public Fund; provided, that
         the Partners acknowledge their intent to enter into separate business
         arrangements (directly or indirectly through Affiliates) relating to
         the Public Fund that satisfy applicable law and regulation.

                  "Blackstone  Change of Control"  means that none of Sheldon S.
         Gordon, Michael F. Holland or Mark J. Kenyon continues to be an officer
         of Blackstone.

                  "Blackstone  Entity"  means  Blackstone  and any  Affiliate of
         Blackstone at any time in question.



<PAGE>


                                        2


                  "Blackstone Expenses" means (i) all costs and expenses (other
         than Organizational Expenses and Maintenance Expenses) incurred by
         Blackstone and its Affiliates in connection with the performance of
         their obligations and responsibilities under this Agreement, including
         costs and expenses of travel, staff, salary and office overhead.

                  "Blackstone  Partner"  means any Partner which is a Blackstone
         Entity.

                  "Business Day" shall mean any day which is not a Saturday,
         Sunday or a day on which the commercial banks in New York are required
         or authorized by applicable law to close.

                  "Buy/Sell  Closing"  has the  meaning  set  forth  in  Section
         8.1(c).

                  "Buy/Sell  Closing  Date" has the meaning set forth in Section
         8.1(c).

                  "Buy/Sell  Option Period" has the meaning set forth in Section
         8.1(c).

                  "Buy/Sell Price" has the meaning set forth in Section 8.1(c).

                  "Buyer" has the meaning set forth in Section 8.1(c).

                  "Capital Account" has the meaning set forth in Section 5.2.

                  "Carrying Value" shall mean, with respect to any Partnership
         asset, the asset's adjusted basis for U.S. federal income tax purposes,
         except that the Carrying Values of all Partnership assets shall be
         adjusted to equal their respective fair market values, in accordance
         with the rules set forth in Regulations Section 1.704-1(b)(2)(iv)(f),
         except as otherwise provided herein, as of: (a) the date of the
         acquisition of any additional Partnership interest by any new or
         existing Partner in exchange for more than a de minimis Capital
         Contribution, other than pursuant to the initial formation of the
         Partnership; (b) the date of the distribution of more than a de minimis
         amount of Partnership property to a Partner; (c) the date a Partnership
         interest is relinquished to the Partnership or (d) the date of the
         termination of the Partnership under Section 708(b)(i)(B) of the Code;
         provided, however, that adjustments pursuant to clauses (a), (b) and
         (c) above shall be made only if the General Partner determines that
         such adjustments are necessary or appropriate to reflect the relative
         economic interests of the Partners. The Carrying Value of any
         Partnership asset distributed to any Partner shall be adjusted
         immediately prior to such distribution to equal its fair market value.
         Depreciation shall be calculated by reference to Carrying Value,
         instead of tax basis once Carrying Value differs from tax basis.

                  "Cause"  means  the  occurrence  or  existence  of  any of the
         following  with  respect  to a Partner:  (i) a  material  breach of the
         Partner's obligations under this



<PAGE>


                                        3

         Agreement; (ii) any act of fraud, misappropriation, dishonesty,
         embezzlement or similar conduct against the Partnership; or (iii)
         conviction of a felony or any crime involving moral turpitude.

                  "Code" means the Internal Revenue Code of 1986, as amended
         from time to time, or any successor statute. Any reference herein to a
         particular provision of the Code shall mean, where appropriate, the
         corresponding provision in any successor statute.

                  "Confidential  Information"  has  the  meaning  set  forth  in
         Section 9.5.

                  "Deficient Performance" means (i) with respect to the General
         Partner, the failure of the Private Fund to achieve a gross return not
         less than the Mehta and Isaly Index for the Performance Period or, if
         that index is not available, any other similar industry index selected
         upon a Partner Consent, and (ii) with respect to Blackstone, the
         failure of the Partnership to obtain Funds Under Management of an
         amount greater than or equal to $50 million at the end of such period,
         which for this purpose shall include investments made through the
         Private Fund, other similar vehicles in which the Partnership serves as
         general partner or investment adviser (excluding the Offshore Fund),
         the Public Fund and the Separate Accounts (whether or not such assets
         were invested prior to the formation of the Partnership).

                  "Disabling Event" means any event which would cause the
         General Partner to cease to be the general partner of the Partnership
         pursuant to Section 17-402 of the Partnership Act other than as
         permitted by Section 8.1.

                  "Fiscal Period" has the meaning set forth in Section 5.4.

                  "Fiscal Year" means the one-year period ending on December 31
         of each year.

                  "Funds Under Management" with respect to any Person means the
         funds under management by such Person as part of the Asset Management
         Business; provided, that (i) Funds Under Management shall include only
         actual funds contributed by a client rather than funds under management
         after giving effect to account leverage and (ii) Funds Under Management
         shall not include any increase or decrease due to trading profits or
         losses.

                  "General Partner" means CCM and any Person admitted to the
         Partnership as an additional or substitute general partner of the
         Partnership in accordance with the provisions of this Agreement, until
         such time as such Person ceases to be a general partner of the
         Partnership as provided herein.

                  "Individual Mehta and Isaly Partner" means any Mehta and Isaly
         Partner that is an individual person.



<PAGE>


                                        4


                  "Interest" has the meaning set forth in 8.1(b).

                  "Limited Partner" means Blackstone, Samuel D. Isaly, Viren
         Mehta and any Person admitted to the Partnership as an additional or
         substituted limited partner of the Partnership in accordance with the
         provisions of this Agreement.

                  "Liquidator" has the meaning set forth in Section 7.2.

                  "Maintenance Expenses" means (i) the marginal increases in
         fees and expenses of statutory or registered agents and offices of the
         Partnership attributable to the creation of the Partnership, (ii) the
         fees and expenses incurred in connection with the maintenance of the
         Partnership's books and records attributable to the creation of the
         Partnership and the preparation of the Partnership's tax returns and
         any tax audits or disputes arising therefrom and (iii) any other
         maintenance expenses of the Partnership approved by a written Partner
         Consent. For purposes hereof, "Maintenance Expenses" shall also include
         the amount of New York City unincorporated business tax ("UBT") paid by
         the Partnership; provided, that if the Partnership receives a credit
         against such payment of UBT or the amount of UBT payable by the
         Partnership is otherwise reduced as a result of the payment of UBT on
         income derived from the Partnership by a direct or indirect owner of a
         Mehta and Isaly Partner or a Blackstone Partner, as the case may be,
         then the expense relating to the reduction in the amount of UBT paid by
         the Partnership shall not be allocated to the Mehta and Isaly Partners
         or the Blackstone Partners, as the case may be, but shall be specially
         allocated to the Blackstone Partners or the Mehta and Isaly Partners,
         as the case may be, as provided in Section 5.3(b).

                  "Mehta and Isaly Entity" means any Affiliate of Samuel D.
         Isaly or Viren Mehta (and each of them in their individual capacity).

                  "Mehta and Isaly Expenses" means all costs and expenses (other
         than Organizational Expenses and Maintenance Expenses) incurred by the
         General Partner and its Affiliates in connection with the performance
         of its obligations and responsibilities under this Agreement, including
         costs and expenses of travel, staff, salary and office overhead.

                  "Mehta and Isaly Group" means collectively, CCM, Samuel D.
         Isaly and Viren Mehta and any permitted assigns of such Partners.

                  "Mehta and Isaly Index" means The Pharmaceutical and Health
         Care Equity Securities Index as determined by Mehta and Isaly, a New
         York general partnership (or any successor entity), and published
         monthly in The Mehta and Isaly Pharmaceutical Portfolio Recommendations
         (or any successor publication).




<PAGE>


                                        5

                  "Mehta and Isaly Partner" means any Partner which is a member
         of the Mehta and Isaly Group.

                  "Net Income (Loss)" shall mean for each Fiscal Year or other
         period, the taxable income or loss of the Partnership, or particular
         items thereof, determined in accordance with the accounting method used
         by the Partnership for U.S. federal income tax purposes with the
         following adjustments: (i) all items of income, gain, loss or deduction
         allocated pursuant to Section 5.3(c) shall not be taken into account in
         computing such taxable income or loss; (ii) any income of the
         Partnership that is exempt from U.S. federal income taxation and not
         otherwise taken into account in computing Net Income and Net Loss shall
         be added to such taxable income or loss; (iii) if the Carrying Value of
         any asset differs from its adjusted tax basis for U.S. federal income
         tax purposes, any depreciation, amortization or gain resulting from a
         disposition of such asset shall be calculated with reference to such
         Carrying Value; (iv) upon an adjustment to the Carrying Value of any
         asset, pursuant to the definition of Carrying Value, the amount of the
         adjustment shall be included as gain or loss in computing such taxable
         income or loss; (v) except for items in (i) above, any expenditures of
         the Partnership not deductible in computing taxable income or loss, not
         properly capitalizable and not otherwise taken into account in
         computing Net Income and Net Loss pursuant to this definition shall be
         treated as deductible items and (vi) items of loss, deduction or
         expense constituting Blackstone Expenses or Mehta and Isaly Expenses
         shall be excluded from Net Income (Loss).

                  "Offeree" has the meaning set forth in Section 8.1(c).

                  "Offered Interest" has the meaning set forth in Section
         8.1(b).

                  "Offering Notice" has the meaning set forth in Section 8.1(c).

                  "Offeror" has the meaning set forth in Section 8.1(c).

                  "Offshore Funds" means PHARMA w/HEALTH, a mutual investment
         fund incorporated under the laws of the Grand-Duchy of Luxembourg.

                  "Organizational Expenses" means all costs and expenses
         pertaining to the organization of the Partnership and the registration,
         qualification or exemption of the Partnership and, to the extent
         necessary for the operation of the Partnership as contemplated hereby,
         the Partners or their Affiliates, under any applicable federal, state
         or foreign laws, including fees of counsel to the Partnership and the
         Partners.

                  "Partner" means any Person who is a partner of the
         Partnership, whether a General Partner or a Limited Partner.




<PAGE>


                                        6

                  "Partner Consent" means the approval of an item or matter as
         provided in Section 3.2 by both the General Partner and Blackstone.

                  "Partnership"  means  Caduceus  Management  Partners  L.P.,  a
         Delaware limited partnership.

                  "Partnership  Act" means the Delaware  Revised Uniform Limited
         Partnership Act, 6 Del. C. ss.ss. 17-101, et seq., as it may be amended
         from time to time, and any successor to such statute.

                  "Partnership Business" means (a) the Asset Management Business
         and (b) any other related business to the extent such business is
         determined by a written Partner Consent to be within the purpose and
         scope of the Partnership; provided, however, that, except as may
         otherwise be agreed upon by a written Partner Consent, Partnership
         Business shall not include any business that would otherwise constitute
         Partnership Business conducted by Blackstone and its Affiliates, on the
         one hand, or the General Partner and its Affiliates, on the other hand,
         if such Partner has proposed in writing that such business be conducted
         by the Partnership but the other Partner has not consented in writing
         to such business being conducted by the Partnership.

                  "Performance Period" means the two-year period beginning on
         July 1, 1994 and ending on and including June 30, 1996.

                  "Person" means any individual, partnership, joint venture,
         corporation, unincorporated organization or association, trust
         (including the trustees thereof in their capacity as such) or other
         entity.

                  "Private  Fund" means  Caduceus  Capital,  L.P.,  a.  Delaware
         limited partnership.

                  "Profit Sharing Percentage" means the percentage interest of a
         Partner in Net Income (Loss) set forth on Schedule A hereto as amended
         from time to time in accordance herewith.

                  "Public Fund" means Medical Research  Investment Fund, Inc., a
         Maryland  corporation and an investment  company  registered  under the
         Investment Company Act of 1940, as amended.

                  "Securities" has the meaning set forth in Section 2.5(b)(vi).

                  "Seller" has the meaning set forth in Section 8.1(c).




<PAGE>


                                        7

                  "Separate Accounts" means segregated accounts managed by the
         Partnership in which the Partnership is granted authority to manage the
         assets of such account on a discretionary basis.

                  "Special Limited Partner" shall mean any Partner that has
         withdrawn (or is deemed to have withdrawn) from the Partnership and has
         been readmitted upon the terms and conditions provided herein.

                  "Tax  Matters  Partner"  has the  meaning set forth in Section
         6.2(b).

                  "Transfer" has the meaning set forth in Section 8.1(a).

                  "Transferor" has the meaning set forth in Section 8.1(b).

                  SECTION l.2. Terms Generally. The definitions in Section 1.1
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".


                                   ARTICLE II

                               General Provisions

                  SECTION 2.1. Partners. Schedule A attached hereto contains the
name, address and Profit Sharing Percentage of each Partner as of the date of
this Agreement. Schedule A shall be revised by the General Partner from time to
time to reflect the admission or withdrawal of a Partner or the transfer or
assignment of interests in the Partnership in accordance with the terms of this
Agreement and other modifications to or changes in the information set forth
therein.

                  SECTION 2.2. Name. Subject to Section 9.2, the Partnership
shall conduct its activities under the name of Caduceus Management Partners L.P.
The General Partner shall have the power at any time to change the name of the
Partnership if such name change has been approved in writing by a Partner
Consent; provided that the name shall always contain the words "Limited
Partnership" or the letters "L.P." The General Partner shall give prompt notice
of any such change to each Partner.

                  SECTION 2.3.  Liability of General and Limited  Partners.  (a)
The General  Partner shall have  unlimited  liability for the  satisfaction  and
discharge of all losses, liabilities and expenses of the Partnership.




<PAGE>


                                        8

                  (b) In no event shall any Limited Partner or former Limited
Partner (i) be obligated to make any capital contribution to the Partnership
except pursuant to Section 5.1, (ii) have any liability in excess of such
Limited Partner's obligation to make capital contributions pursuant to Section
5.1 and other payments provided for in this Agreement or (iii) have any
liability to return distributions received by such Limited Partner from the
Partnership except as required by this Agreement or applicable law.

                  SECTION 2.4. Term. The existence of the Partnership shall
continue until November 1, 2023 unless and until the Partnership is earlier
dissolved, wound up and terminated in accordance with Article VII.

                  SECTION 2.5. Purpose; Powers. (a) The purpose of the
Partnership shall be, directly or indirectly through subsidiaries or Affiliates,
(i) to engage in the Asset Management Business and receive revenues in
connection therewith as contemplated hereby, (ii) to engage in any other
Partnership Business to the extent agreed upon by a written Partner Consent and
(iii) to do all things necessary or incidental thereto.

                  (b) In furtherance of its purposes, the Partnership shall have
all powers necessary, suitable or convenient for the accomplishment of its
purposes, alone or with others, including the following:

                  (i) to render asset management services for the account of
         others in connection with the Partnership Business;

                  (ii) to act as a general partner for the Private Fund;

                  (iii) to act as an investment advisor or investment manager
         for Separate Accounts;

                  (iv) to invest and reinvest the cash assets of the Partnership
         in money market or other short-term investments;

                  (v) to purchase, hold, receive, mortgage, pledge, transfer,
         exchange, otherwise dispose of, grant options with respect to and
         otherwise deal in and exercise all rights, powers, privileges and other
         incidents of ownership or possession with respect to all Securities and
         other property;

                  (vi) to buy and sell equity and equity-related securities in
         the pharmaceutical, health care and biotechnology industries, including
         stocks, convertible securities, warrants and options to buy and sell
         securities, as well as bonds, debentures and money market obligations,
         repurchase and reverse repurchase agreements, foreign securities,
         commodities, futures and forward contracts or options on or derivatives
         with respect to any of the foregoing ("Securities").




<PAGE>


                                        9

                  (vii) to engage in any other lawful transactions in Securities
         which the General Partner from time to time determines to be in the
         best interest of the clients of the Partnership Business;

                  (viii) to have and maintain one or more offices within or
         without the State of Delaware, and in connection therewith, to rent or
         acquire office space, engage personnel and compensate them and do such
         other acts and things as may be advisable or necessary in connection
         with the maintenance of such office or offices;

                  (ix) to open, maintain and close accounts, including margin
         accounts, with brokers;

                  (x) to open, maintain and close bank accounts and draw checks
         and other orders for the payment of moneys;

                  (xi) to engage employees (with such titles and delegated
         responsibilities as may be determined), accountants, auditors,
         custodians, investment advisers, attorneys and any and all other agents
         and assistants, both professional and nonprofessional, and to
         compensate them as may be necessary or advisable;

                  (xii) to form or cause to be formed and to own the stock of
         one or more corporations, whether foreign or domestic, and to form or
         cause to be formed and to participate in partnerships and joint
         ventures, whether foreign or domestic;

                  (xiii) to enter into, make and perform all contracts,
         agreements and other undertakings as may be necessary or advisable or
         incident to carrying out its purposes;

                  (xiv) to sue, prosecute, settle or compromise all claims
         against third parties, to compromise, settle or accept judgment of
         claims against the Partnership, and to execute all documents and make
         all representations, admissions and waivers in connection therewith;

                  (xv) to distribute, subject to the terms of this Agreement, at
         any time and from time to time to Partners cash or investments or other
         property of the Partnership, or any combination thereof; and

                  (xvi) to take such other actions necessary or incidental
         thereto as may be permitted under applicable law.

                  SECTION 2.6. Place of Business. The Partnership shall maintain
a registered office at The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, or such other
office as is approved by a Partner Consent. The Partnership shall maintain an
office and principal place of business at



<PAGE>


                                       10

41 Madison Avenue, 40th Floor, New York, New York, 10010 or at such other place
as may from time to time be determined by a written Partner Consent; the General
Partner shall give notice to the other Partners of any change in the
Partnership's principal place of business. The name and address of the
Partnership's registered agent as of the date of this Agreement is The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.


                                   ARTICLE III

                   Management and Operation of the Partnership

                  SECTION 3.1. Management. (a) Except as otherwise provided
herein, (a) the management, control and operation of the Partnership and the
formulation and execution of business and investment policy shall be vested
exclusively in the General Partner and (b) the General Partner shall exercise
all powers necessary and convenient for the purposes of the Partnership,
including those enumerated in Section 2.5, on behalf and in the name of the
Partnership.

                  (b) Except as otherwise provided herein, Limited Partners as
such shall have no right to, and shall not, take part in the management or
affairs of the Partnership, nor in any event shall any Limited Partner have the
power to act for or bind the Partnership. The exercise by any Limited Partner of
any right or power conferred herein shall not be construed to constitute
participation by such Limited Partner in the control of the business of the
Partnership so as to make such Limited Partner liable as a general partner for
the debts and obligations of the Partnership for purposes of the Partnership
Act.

                  SECTION 3.2. Partner Consent Matters. (a) Subject to Section
4.3(i), the following Partnership matters shall require a written Partner
Consent:

                  (i) the dissolution, termination and winding up of the
         Partnership pursuant to Section 7.1;

                  (ii) the sale, exchange, lease, mortgage, assignment, pledge
         or other transfer of, or granting of a security interest in, any
         significant asset or assets of the Partnership, or the merger or
         consolidation of the Partnership with or into any other business entity
         pursuant to Section 17-211 of the Partnership Act;

                  (iii) the incurrence, renewal, refinancing or payment or other
         discharge of indebtedness for borrowed money by the Partnership;

                  (iv) a change in the business of the Partnership to include
         any business other than the Asset Management Business;




<PAGE>


                                       11

                  (v) an amendment to this Agreement, including a modification
         of the Profit Sharing Percentages of any Partner other than as a result
         of a transfer of a Partnership interest in accordance with this
         Agreement, or an amendment to the Certificate of Limited Partnership of
         the Partnership;

                  (vi) except as required by Section 5.1, the amount and timing
         of any capital contributions to the Partnership pursuant to Section
         5.1;

                  (vii) any expenditure (other than a Mehta and Isaly Expense or
         a Blackstone Expense) greater than $10,000 individually or $100,000 in
         the aggregate for any Fiscal Year or any investment by the Partnership
         for its own account (other than money-market or other short-term
         investments);

                  (viii) any lease entered into by the Partnership;

                  (ix) the formation by the Partnership of any subsidiary or
         partnership in which the Partnership owns an equity interest to conduct
         any portion of the Partnership's business;

                  (x) the reorganization of the Partnership as a corporation or
         other entity, or the creation of a holding corporation or partnership
         to own all or any substantial portion of the assets or all the equity
         interests in the Partnership;

                  (xi) the engagement of any independent accountant, counsel,
         actuary or consultant to the Partnership or any significant change in
         or termination of any engaged independent accountant, counsel, actuary
         or consultant to the Partnership, including pursuant to Section 6.1(b);
         provided, that no Partner Consent shall be required for the engagement
         of Seward & Kissel, Simpson Thacher & Bartlett, Deloitte & Touche or
         Rothstein, Kass & Co.;

                  (xii) the commencement, termination or settlement of any
         litigation;

                  (xiii) the establishment of any period other than a calendar
         quarter as a Fiscal Period pursuant to Section 5.4, the determination
         of reserves and retained net earnings pursuant to Section 5.4 and,
         except as may be required by Section 5.4, any distribution of cash or
         investments or other property of the Partnership to the Partners or any
         withdrawals of capital from the Partnership;

                  (xiv) the acceptance of any new client and the fees for
         services provided by the Partnership to such client in connection with
         the opening of and maintaining of Separate Accounts;




<PAGE>


                                       12

                  (xv) any change in the name of the Partnership or the use of
         another name by the Partnership to carry on any business of the
         Partnership other than as contemplated by Section 9.2;

                  (xvi) a transaction or other matter involving any actual or
         potential conflict of interest affecting any Partner or Affiliate
         thereof (including pursuant to clause (iii) of Section 3.3(d));

                  (xvii) the maintenance of a registered office in Delaware
         other than that specified in Section 2.6;

                  (xviii) the determination of Net Income (Loss) pursuant to
         Section 6.1(a) and other determinations, valuations and other matters
         of judgment required to be made for accounting purposes pursuant to
         Section 6.1(e);

                  (xix) the determination and approval of such tax matters as
         are specified in Section 6.2;

                  (xx) the allocation of amounts in respect of a transferred
         interest in the Partnership pursuant to Section 8.2(f);

                  (xxi) the disclosure of Confidential Information to a Person
         other than a Partner and its Affiliates and advisors (including their
         respective employees) pursuant to Section 9.6;

                  (xxii) the withdrawal of a Partner from the Partnership or
         admission of an additional Partner to the Partnership pursuant to
         Section 8.2;

                  (xxiii) the determination of any titles and responsibilities
         of employees of the Partnership pursuant to Section 2.5(b);

                  (xxiv) any material action taken or decision made by the
         Partnership in its capacity as general partner of the Private Fund (or
         similar investment vehicle) or in its capacity as investment adviser or
         investment manager of any Separate Accounts, except for any action
         taken or decision made with respect to investments of the Private Fund
         (or similar investment vehicle) or of any Separate Accounts; and

                  (xxv) any other matter expressly stated in this Agreement to
         be subject to approval by a Partner Consent.

                  (b) A Partner shall not be obligated to abstain from voting on
any matter (or vote in any particular manner) because of any interest (or
conflict of interest) of such Partner (or any Affiliate thereof) in such matter.




<PAGE>


                                       13

                  (c) Each Partner agrees that, except as otherwise specifically
provided herein and to the fullest extent permitted by applicable law, for
purposes of granting the approval of the Partners with respect to any proposed
action of or relating to the Partnership, the approval of such action by the
Partner Consent as provided herein shall bind each Partner and shall have the
same legal effect as the approval of each Partner of such action.

                  (d) The failure to vote by Blackstone on any matter requiring
Partner Consent hereunder shall be deemed a Partner Consent with respect thereto
if Blackstone does not respond to the notice regarding such matter within ten
Business Days of the delivery of such notice.

                  SECTION 3.3. Certain Duties and Obligations of the Partners.
(a) The General Partner shall take all action which may be necessary or
appropriate (i) for the formation and continuation of the Partnership as a
limited partnership under the laws of the State of Delaware and (ii) for the
development, maintenance, preservation and operation of the business of the
Partnership in accordance with the provisions of this Agreement and applicable
laws and regulations.

                  (b) Each Partner shall use its best efforts to conduct the
affairs of the Partnership so as to cause the Partnership to be classified for
Federal income tax purposes as a partnership and not as an association taxable
as a corporation.

                  (c) The General Partner shall take (and each Limited Partner
agrees to cooperate with the General Partner and approves of the General
Partner's taking on its behalf) all action which is necessary (i) to form or
qualify the Partnership to conduct the business in which the Partnership is
engaged under the laws of any jurisdiction in which the Partnership is doing
business and to continue in effect such formation or qualification and (ii) in
order to protect the limited liability of the Limited Partners under the laws of
any jurisdiction in which the Partnership is doing business. To the extent
necessary for the conduct of the Partnership's business or the performance by
the General Partner of its responsibilities hereunder, the General Partner shall
take or cause to be taken all action required to register or qualify the
Partnership, the General Partner or the General Partner's Affiliates with the
Commodity Futures Trading Commission as a commodity pool operator and to apply
for membership with the National Futures Association in connection therewith,
and to register with the Securities and Exchange Commission as an investment
adviser, and to maintain such registrations, qualifications and memberships in
effect for so long as required.

                  (d) The General Partner shall not take, or cause to be taken,
any action that would result in any Limited Partner having any personal
liability for the obligations of the Partnership. The General Partner shall be
under a duty as described herein to conduct the affairs of the Partnership in
the best interests of the Partnership and of the Partners including the
safekeeping and use of all Partnership funds and assets and the use thereof for
the exclusive benefit of the Partnership. Neither any Partner nor any Affiliate
of any Partner



<PAGE>


                                       14

shall enter into any transaction with the Partnership unless the transaction (i)
is expressly permitted hereunder, (ii) is entered into on arm's-length terms in
the ordinary course of Partnership business or (iii) is approved by a Partner
Consent upon disclosure of any direct or indirect interest the Partner or
Affiliate thereof may have in the transaction.

                  SECTION 3.4. Restrictions on Authority of the General Partner.
The General Partner shall not have the authority to:

                  (a) do any act in contravention of this Agreement;

                  (b) do any act which would make it impossible to carry on the
         ordinary business of the Partnership, except in connection with the
         dissolution, winding up and termination of the Partnership as approved
         by a Partner Consent pursuant to Section 3.2(a)(i);

                  (c) possess Partnership property, or assign their rights in
         specific Partnership property, for other than a Partnership purpose;

                  (d) admit a Person as a Partner except as provided in this
         Agreement;

                  (e) knowingly perform any act that would subject any Limited
         Partner to liability as a general partner in any jurisdiction; or

                  (f) knowingly perform any act in violation of the express
         terms of a prior unrevoked Partner Consent.


                                   ARTICLE IV

                              Scope of Partnership

                  SECTION 4.1. Other Activities. (a) Except as provided in
Section 4.1(b), this Agreement shall not be construed in any manner to preclude
any Partner or any of its Affiliates from engaging in any activity whatsoever
permitted by applicable law (whether or not such activity might compete, or
constitute a conflict of interest, with the Partnership), including providing
brokerage, financial or investment advisory services to any Person, managing
investments or receiving compensation or profit therefrom.

                  (b) Neither any Blackstone Entity nor any Mehta and Isaly
Entity shall engage in Partnership Business or receive compensation therefrom
except through and for the account of the Partnership, and all revenues received
by any Blackstone Entity or Mehta and Isaly Entity from or arising in connection
with Partnership Business (including management and incentive fees, interest
income and any other compensation) shall be for the account of the Partnership;
provided, that a Mehta and Isaly Entity may engage in the Asset



<PAGE>


                                       15

Management Business outside of the Partnership and for its own account with
respect to funds under management raised from or through the following sources:

                  (i) the Public Fund, unless otherwise agreed upon by a
         Blackstone Entity and Mehta and Isaly Entity; and

                  (ii) the Offshore Fund.

                  (c) A Partner and its Affiliates may engage in any Partnership
Business outside of the Partnership and for their own account to the extent
provided for in a written Partner Consent.

                  SECTION 4.2. Early Termination. Notwithstanding anything
contained herein to the contrary, the Partnership may be terminated:

                  (a) upon 30 days written notice by the General Partner to
         Blackstone in the event of Deficient Performance by Blackstone, which
         notice must be given within 30 days after the end of the Performance
         Period; or

                  (b) upon 30 days written notice by Blackstone in the event
         that both Samuel D. Isaly and Viren Mehta cease to be actively involved
         in the business of the Partnership (or have both otherwise withdrawn
         (or are deemed to have withdrawn) therefrom as a Limited Partner);

                  SECTION 4.3. Withdrawal of Partners. (a) Any Partner may
withdraw by voluntary resignation from the Partnership on the last day of any
calendar month, on not less than 15 days' prior written notice by such Partner
to the remaining Partners. Any Partner so withdrawing shall receive the amount
of its Capital Account balance as of the effective date of such withdrawal
within a reasonable period of time after such amount is determined, and
thereafter such Partner shall have no further interest herein.

                  (b) Upon the death or permanent disability of any Individual
Mehta and Isaly Partner, such Partner shall thereupon cease to be a Partner.
Such withdrawn Partner (or his estate or heirs) shall be admitted to the
Partnership as a Special Limited Partner. The Profit Sharing Percentage of such
Special Limited Partner shall be equal to the following percentages of the
Profit Sharing Percentage of such Individual Mehta and Isaly Partner at the time
of such withdrawal for the following one year periods from and after such
Special Limited Partner's admission date:


                                        Profit Sharing Percentage as a
                                         Percentage of Profit Sharing
                                             Percentage at Time of
                Year                              Withdrawal
                ----                              ----------




<PAGE>


                                       16



                 1                                   100%

                 2                                    50%

                 3 and thereafter                      0%




                  (c) In the event of Deficient Performance by Blackstone, in
lieu of early termination of the Partnership as provided in Section 4.2(a), the
General Partner may specify in the notice described under Section 4.2(a) that it
has elected (in lieu of such early termination) to cause the Blackstone Partners
to withdraw from the Partnership. In such case, (A) Section 4.1(b) shall have no
further force or effect and (B) each Blackstone Partner shall be admitted to the
Partnership as a Special Limited Partner, and its Profit Sharing Percentage
shall be, from and after its admission date, equal to its Profit Sharing
Percentage at the time of withdrawal; provided, that such Special Limited
Partner shall not be allocated its Profit Sharing Percentage of the total amount
of Net Income as provided in Section 5.3, but shall only be entitled to its
Profit Sharing Percentage of that portion of Net Income that is attributable to
those Funds Under Management with the Partnership as of such Special Limited
Partner's admission date, plus those additional Funds Under Management invested
with the Partnership by those investors that had Funds Under Management with the
Partnership as of such admission date.

                  (d) In the event of the occurrence of the event specified in
Section 4.2(b), Blackstone may specify in the notice described under Sections
4.2(b) that it has elected (in lieu of such early termination) to cause the
remaining Mehta & Isaly Partners to withdraw from the Partnership (to the extent
such Partners have not otherwise withdrawn from the Partnership in accordance
with the terms hereof). In that case, the Mehta and Isaly Partners shall receive
the amount of each of their Capital Account balances as of the effective date of
the withdrawal within a reasonable period of time after such amount is
determined; provided, that if this Section 4.3(d) is operable as a result of the
death or permanent disability of a Mehta and Isaly Partner that is an
individual, then such Mehta and Isaly Partner shall be admitted to the
Partnership as a Special Limited Partner as provided in Section 4.3(b). If upon
the withdrawal of the General Partner as provided in this Section 4.3(d) there
shall be no remaining General Partner, the Partnership nonetheless shall not be
dissolved and shall not be required to be wound up if, upon the occurrence of
such withdrawal, the Blackstone Partners agree in writing to continue the
business of the Partnership and to the appointment, effective as of the date of
such withdrawal, of one or more replacement General Partners upon such terms and
conditions as the Blackstone Partners and the replacement General Partner(s)
agree.

                  (e) In the event of Deficient Performance by the General
Partner, notice may be given by Blackstone, within 30 days after the date on
which The Mehta and Isaly Index as at June 30, 1996 is published and publicly
available, stating that the Blackstone



<PAGE>


                                       17

Partners elect to withdraw from the Partnership. In that case, each Blackstone
Partner shall be admitted to the Partnership as a Special Limited Partner each
having for the term of the Partnership the same Profit Sharing Percentage as it
had upon its withdrawal from the Partnership.

                  (f) A withdrawn General Partner shall remain liable for all
obligations of the Partnership incurred while it was a General Partner and
resulting from its acts or omissions as a General Partner to the fullest extent
provided by law.

                  (g) If the withdrawal of a Partner (or withdrawal and
subsequent admission of such Partner as a Special Limited Partner) causes the
aggregate Profit Sharing Percentages of all Partners (including Special Limited
Partners) to be less than 100% (or there otherwise remains an amount of
unallocated Net Income), such unallocated amount of Profit Sharing Percentage
(or Net Income as the case may be) shall be reallocated to the remaining
Partners (other than the Special Limited Partners) pro rata in accordance with
each of their Profit Sharing Percentages as of the time of such withdrawal;
provided, that if such withdrawal occurs with respect to an Individual Mehta and
Isaly Partner, and there remains at least one Individual Mehta and Isaly Partner
that is not a Special Limited Partner, then such unallocated amount shall be
reallocated to the remaining Mehta and Isaly Partners pro rata in accordance
with each of their Profit Sharing Percentages as of the time of such withdrawal.

                  (h) Upon the occurrence of an event constituting Cause with
respect to any Partner, such Partner shall immediately be deemed to have
withdrawn from the Partnership with no further interest therein, and its Profit
Sharing Percentage shall be reallocated to the remaining Partners as provided in
Section 4.3(g).

                  (i) If Blackstone becomes a Special Limited Partner pursuant
         hereto, (A) only those matters contained in clauses (i), (iv), (v),
         (vi), (xvi), (xviii) and (xxii) of Section 3.2 shall require a Partner
         Consent and (B) the Partnership, the Private Fund and any other portion
         of the Partnership Business shall not in any way be associated with
         Blackstone (or its Affiliates) in any written materials or other
         communications by any Partner or the Partnership to any Person.


                                    ARTICLE V

                             Capital Contributions;
                           Allocations; Distributions

                  SECTION 5.1. Capital Contributions. Each Partner, severally,
agrees to make an initial capital contribution in cash equal to its pro rata
share, based upon Profit Sharing Percentages, of the Organizational Expenses of
the Partnership. Thereafter, each Partner, severally, agrees to make
contributions of capital in cash to the Partnership at such time and in such
amounts as are required by a written Partner Consent. Such capital



<PAGE>


                                       18

contributions shall be made by the Partners pro rata based on their Profit
Sharing Percentages.

                  SECTION 5.2. Capital Accounts. There shall be established for
each Partner on the books of the Partnership as of the date of the formation of
the Partnership, or such later date on which such Partner is admitted to the
Partnership, a capital account (each being a "Capital Account"). The
contribution of capital of a Partner shall be credited to the Capital Account of
such Partner on the date such contribution of capital is paid to the
Partnership. Thereafter, each Partner's Capital Account shall be (i) credited
with additional capital contributions, if any, to the capital of the Partnership
made by such Partner and such Partner's allocable share of the Partnership's Net
Income, and (ii) debited with distributions to such Partner of cash or the fair
market value of other property, such Partner's allocable share of the
Partnership's Net Loss and of expenditures of the Partnership described in
Section 705(a)(2)(B) of the Code, and otherwise maintained in accordance with
the provisions of the Code. Capital Accounts shall be adjusted to reflect any
transfer of a Partner's interest in the Partnership as provided herein and as
otherwise provided in this Article V and in Article VI. Interest shall not be
payable on Capital Account balances.

                  SECTION 5.3. Allocations. (a) Net Income (Loss) of the
Partnership shall be allocated to the Capital Accounts of all the Partners
(including the General Partner) in proportion to their respective Profit Sharing
Percentages set forth on Schedule A hereto; provided, however, that in no event
shall a Limited Partner be allocated a Net Loss which would cause such Limited
Partner's Capital Account balance to be reduced below zero. Net Loss in excess
of the limitation set forth in the proviso in the immediately preceding sentence
shall be allocated to the General Partner; provided, that 100% of Net Income of
the Partnership shall thereafter be first allocated to the General Partner until
the General Partner is allocated an amount equal to the Net Loss allocated to
the General Partner pursuant to this sentence.

                  (b) To the extent, if any, that Blackstone Expenses or Mehta
and Isaly Expenses and any item of loss, expense or deduction resulting
therefrom are deemed to constitute items of Partnership loss, expense or
deduction rather than items of loss, expense or deduction of the Blackstone
Entities or the Mehta and Isaly Entities, as the case may be, such Blackstone
Expenses or Mehta and Isaly Expenses, as the case may be, and resulting items of
loss, expense or deduction shall, unless otherwise agreed by a written Partner
Consent, be allocated 100% to Blackstone and their transferees or the Mehta and
Isaly Partners and their transferees, as the case may be, pro rata in proportion
to the Profit Sharing Percentages of the Blackstone Partners and their
transferees or the Mehta and Isaly Partners and their transferees, as the case
may be.

                  (c) Notwithstanding anything herein to the contrary, in the
event any Partner unexpectedly receives any adjustments, allocations or
distributions described in paragraphs (b)(2)(ii)(d)(4), (5) or (6) of Section
1.704-1 of the regulations under the Code, there shall be specially allocated to
such Partner such items of Partnership income and gain,



<PAGE>


                                       19

at such times and in such amounts as will eliminate as quickly as possible that
portion of any deficit in its Capital Account caused or increased by such
adjustments, allocations or distributions. To the extent permitted by the Code
and the regulations thereunder, any special allocations of items of income or
gain pursuant to this Section 5.3(c) shall be taken into account in computing
subsequent allocations of Net Income (Loss) pursuant to this Section 5.3 so that
the net amount of any items so allocated and the subsequent Net Income (Loss)
allocated to the Partners pursuant to this Section 5.3 shall, to the extent
possible, be equal to the net amounts that would have been allocated to each
such Partner pursuant to the provisions of this Section 5.3 if such unexpected
adjustments, allocations or distributions had not occurred.

                  (d) Notwithstanding any provision of this Agreement to the
contrary, the General Partner shall at all times be allocated at least 1% of
each item of income, gain, loss, deduction and credit of the Partnership.

                  SECTION 5.4. Distributions. (a) Within 30 days after the end
of each fiscal quarter or such other period as shall be established pursuant to
a Partner Consent (a "Fiscal Period"), the Partnership shall, to the extent cash
is available therefor, distribute cash to the Partners in an amount equal to
substantially all of its Net Income for such Fiscal Period, net of cash reserves
in the amount as may be determined by a Partner Consent to be reasonably
appropriate or necessary to pay Maintenance Expenses.

                  (b) Each Partner shall furnish the Partnership with such
information, forms and certifications as it may require and as are necessary to
comply with the regulations governing the obligations of withholding tax agents.
Each Partner represents and warrants that any such information and forms
furnished by him shall be true and accurate. Notwithstanding any provision of
this Agreement to the contrary, each Partner agrees to pay, and to indemnify the
Partnership and the other Partners on an aftertax basis from, any and all
damages, costs and expenses (including any liability for any taxes of any type
whatsoever, penalties, additions to tax or interest) in respect of income of
(including such Partner's share of Partnership income) or distributions,
transfers or payments to such Partner. To the extent the indemnifying Partner is
otherwise entitled to distributions from the Partnership, such damages, costs
and expenses may be paid by the Partnership out of amounts that would otherwise
be distributed to such Partner. For purposes of this Agreement any such payment
shall be deemed to be a distribution to such Partner (and in the case of a tax
such as the New York City unincorporated business tax that is a tax imposed upon
the Partnership, the Partner shall be deemed to have recontributed such amount
to the Partnership). In all other events, such Partner shall make such payment
directly from its own funds.

                  SECTION 5.5. Restricted Payments. Notwithstanding any
provisions to the contrary in this Agreement, the Partnership and the General
Partner on behalf of the Partnership shall not make a distribution if such
distribution would violate the Partnership Act.




<PAGE>


                                       20

                  SECTION 5.6. Expenses. (a) As between the Blackstone Partners
and their transferees and the Partnership, the Blackstone Partners and their
transferees shall be solely responsible for and shall pay or cause to be paid
all Blackstone Expenses.

                  (b) As between the Mehta and Isaly Partners and their
transferees and the Partnership, the Mehta and Isaly Partners and their
transferees shall be solely responsible for and shall pay or cause to be paid
all Mehta and Isaly Expenses.

                  (c) The Partnership shall be responsible for and shall pay all
Organizational Expenses and Maintenance Expenses out of funds of the
Partnership.


                                   ARTICLE VI

                         Books and Reports; Tax Matters

                  SECTION 6.1. General Accounting Matters. (a) Net Income (Loss)
shall be determined by or under the direction of the General Partner and
approved by a Partner Consent at the end of each Fiscal Period and shall be
allocated as described in Section 5.3.

                  (b) As promptly as possible after the close of each Fiscal
Year of the Partnership, the General Partner shall cause an examination of the
financial statements of the Partnership as of the end of each such year to be
made in accordance with generally accepted auditing standards as in effect on
the date thereof, by Deloitte & Touche or such other firm of certified public
accountants as may be selected by a Partner Consent. As soon as is practicable
after the close of each Fiscal Year, a copy of the financial statements of the
Partnership, including the report of such certified public accountants, shall be
furnished to each Partner and shall include, as of the end of such Fiscal Year:

                  (i) a statement of net assets of the Partnership;

                  (ii) a statement of income and capital of the Partnership; and

                  (iii) a statement of changes in net assets of the Partnership.

                  In addition, each Partner shall be supplied with all other
Partnership information necessary to enable such Partner to prepare its Federal
and state and local income tax returns and a statement as to such Partner's
Capital Account as at the close of such Fiscal Year.

                  (c) As promptly as possible after the close of each of the
first three fiscal quarters of each Fiscal Year of the Partnership, the General
Partner shall furnish each Partner with unaudited financial statements of the
Partnership consisting of the statements



<PAGE>


                                       21

described in Section 6.1(b) with respect to such quarter, and a statement of
such Partner's Capital Account as at the end of such quarter.

                  (d) The General Partner shall keep or cause to be kept books
and records pertaining to the Partnership's business showing all of its assets
and liabilities, receipts and disbursements, realized profits and losses,
Partners' Capital Accounts and all transactions entered into by the Partnership.
Such books and records of the Partnership shall be kept at its principal office,
and the Partners and their representatives shall at all reasonable times have
free access thereto for the purpose of inspecting or copying the same.
Blackstone and any party it may designate on its behalf shall at all reasonable
times have free access to the books and records of all funds and accounts
managed by the Partnership to the same extent as are available to the General
Partner.

                  (e) All determinations, valuations and other matters of
judgment required to be made for accounting purposes under this Agreement shall
be made by or under the direction of the General Partner and approved by a
Partner Consent and shall be conclusive and binding on all Partners, former
Partners, their successors or legal representatives and any other Person except
for computational errors or fraud, and to the fullest extent permitted by law no
such Person shall have the right to an accounting or an appraisal of the assets
of the Partnership or any successor thereto except for computational errors or
fraud.

                  SECTION 6.2. Certain Tax Matters. (a) All items of income,
gain, loss, deduction and credit of the Partnership shall be allocated among the
Partners for Federal, state and local income tax purposes in the same manner as
the corresponding constituent items of Net Income (Loss) shall be allocated
among the Partners pursuant to this Agreement, except as may otherwise be
provided herein or by the Code. To the extent Treasury Regulations promulgated
pursuant to Subchapter K of the Code (including under Sections 704(b) and (c) of
the Code) require allocations for tax purposes that differ from the foregoing
allocations, the General Partner may, subject to a Partner Consent, determine
the manner in which such tax allocations shall be made so as to comply more
fully with such Treasury Regulations or other applicable law and, at the same
time to the extent reasonably possible, preserve the economic relationships
among the Partners as set forth in this Agreement.

                  (b) The taxable year of the Partnership shall be the same as
its Fiscal Year. The General Partner shall cause to be prepared all Federal,
state and local tax returns of the Partnership for each year for which such
returns are required to be filed and, after approval of such returns by a
Partner Consent, shall cause such returns to be timely filed. The General
Partner shall, subject to a Partner Consent, determine the appropriate treatment
of each item of income, gain, loss, expense, deduction and credit of the
Partnership and the accounting methods and conventions under the tax laws of the
United States, the several states and other relevant jurisdictions as to the
treatment of any such item or any other method or procedure related to the
preparation of such tax returns. The General Partner may, subject to a Partner
Consent, cause the Partnership to make or refrain from making any



<PAGE>


                                       22

and all elections permitted by such tax laws. The Partnership and each Partner
hereby designate the General Partner as the "tax matters partner" for purposes
of Section 6231(a)(7) of the Code (the "Tax Matters Partner"). The Tax Matters
Partner shall have all of the rights, duties, powers and obligations provided
for in Sections 6221 through 6232 of the Code; provided, however, that the Tax
Matters Partner shall not take any action to extend the statute of limitations
with respect to the tax returns of the Partnership, or make any decisions on
behalf of the Partnership to contest or settle any adverse Internal Revenue
Service decision related to a Partnership return without a written Partner
Consent.


                                   ARTICLE VII

                                   Dissolution

                  SECTION 7.1. Dissolution. The Partnership shall be dissolved
and subsequently terminated upon the occurrence of the first of the following
events:

                  (i) a determination by a written Partner Consent to dissolve
the Partnership;

                  (ii) the occurrence of a Disabling Event with respect to the
General Partner, provided that the Partnership shall not be dissolved if, within
90 days after the Disabling Event, all of the Limited Partners agree in writing
to continue the business of the Partnership and to the appointment, effective as
of the date of the Disabling Event, of another General Partner; and

                  (iii) the election of a Partner to terminate the Partnership
pursuant to Section 4.2.

                  SECTION 7.2. Winding-up. When the Partnership is dissolved,
the business and property of the Partnership shall be wound up and liquidated by
the General Partner, unless (i) in the event of the unavailability of the
General Partner (ii) pursuant to clause (ii) of Section 7.1 or (iii) pursuant to
Section 4.2 if Blackstone is the electing Partner in connection therewith, by
Blackstone (the General Partner, or Blackstone as the case may be, being
hereinafter referred to as the "Liquidator"). The Liquidator shall use its best
efforts to reduce to cash and cash equivalent items such assets of the
Partnership as the Liquidator shall deem it advisable to sell, subject to
obtaining fair value for such assets and any tax or other legal considerations.

                  SECTION 7.3. Final Distribution. Within 120 calendar days
after the effective date of dissolution of the Partnership, the assets of the
Partnership shall be distributed in the following manner and order:




<PAGE>


                                       23

                  (a) to the payment of the expenses of the winding-up,
liquidation and dissolution of the Partnership;

                  (b) to pay all creditors of the Partnership, other than
Partners, either by the payment thereof or the making of reasonable provision
therefor;

                  (c) to establish reserves, in amounts established by the
Liquidator, to meet other liabilities of the Partnership; and

                  (d) to pay, in accordance with the terms agreed among them and
otherwise on a pro rata basis, all creditors of the Partnership that are
Partners, either by the payment thereof or the making of reasonable provision
therefor.

The remaining assets of the Partnership shall be applied and distributed in
accordance with the positive balances of the Partners' capital accounts, as
determined after taking into account all adjustments to capital accounts for the
Partnership taxable year during which the liquidation occurs. For purposes of
the application of this Section 7.3 and determining capital accounts on
liquidation, all unrealized gains, losses and accrued income and deductions of
the Partnership shall be treated as realized and recognized immediately before
the date of distribution.


                                  ARTICLE VIII

                      Transfer of Partners' Interests; Sale

                  SECTION 8.1. Certain Provisions Relating to Sale of the
Partnership or Partnership Interests. (a) Subject to 8.1(b), no Partner may,
directly or indirectly, assign, sell, exchange, transfer, pledge, hypothecate or
otherwise dispose of all or any part of its interest in the Partnership (any
assignment, sale, exchange, transfer, pledge, hypothecation or other disposition
of an interest in the Partnership being herein collectively called a "Transfer")
without the prior written consent of the General Partner and Blackstone, which
consent may be given or withheld in each of their sole discretion.

                  (b) (i) Subject to the remainder of this Section 8.1(b),
Blackstone may Transfer all or any portion of its interest in the Partnership
(the "Interest") without the prior written consent of any Partner. If Blackstone
(the "Transferor") at any time wishes to Transfer to a Person other than an
Affiliate of Blackstone all or a portion of its interest in the Partnership,
Transferor shall first give written notice (a "Transferor's Notice") to the
Mehta and Isaly Partners stating that the Transferor wishes to offer to Transfer
the Interest and setting forth the amount of such interest which Blackstone
wishes to offer to Transfer (the "Offered Interest").




<PAGE>


                                       24

                  (ii) If within fifteen (15) Business Days after the date on
which the Transferor's Notice is received by the Mehta and Isaly Partners, the
Mehta and Isaly Partners give notice to the Transferor that the Mehta and Isaly
Partners thereby make an irrevocable offer in writing to purchase all but not
less than all of the Offered Interest (an "Offer Notice") and sets forth therein
the proposed amount and form of consideration for the Offered Interest and each
of the other material terms of such offer, the Transferor may Transfer the
Offered Interest to a third party in accordance with this Section 8.1(b) for a
period of one hundred eighty (180) days after delivery of such Offer Notice only
if the terms of such transaction are more favorable to the Transferor than the
terms set forth in the Offer Notice. The fair market value of any non-cash
consideration offered by the Mehta and Isaly Partners or a third party, as the
case may be, shall be reasonably determined by the Transferor.

                  (iii) If an Offer Notice is not received within fifteen (15)
Business Days after the date on which the Transferor's Notice is received by the
Mehta and Isaly Partners, the Transferor may offer for sale and sell the Offered
Interest for a period of one hundred eighty (180) days after the expiration of
such fifteen (15) Business Day period on any terms offered therefor.

                  (iv) If the Offered Interest has not been sold either to the
Mehta and Isaly Partners or a third party for any reason before the expiration
of the one hundred eighty (180) day period described in 8.1(b)(iii) above, all
of the provisions of this Section 8.1(b) shall again become applicable to any
sales or offers to sell the Offered Interest by the Transferor.

                  (v) If the Mehta and Isaly Partners purchase the Offered
Interest in accordance with this Section 8.1(b), the closing of the purchase of
the Offered Interest shall take place on the tenth Business Day after the
expiration of the one hundred eighty (180) day period described in 8.1(b)(ii)
above. The Seller and the Mehta and Isaly Partners shall use their best efforts
to make all necessary filings and to secure any approvals required and to comply
as soon as practicable with all applicable United States federal and state laws
and regulations in connection with such purchase.

                  (c) (i) Each of Blackstone and the Mehta and Isaly Group
shall, at the end of each Fiscal Year beginning with December 31, 1996 (or in
the case of the Mehta and Isaly Group such earlier date as is within 30 days
after the occurrence of a Blackstone Change of Control), have the right to
purchase or sell all of its respective Interests each to the other in the manner
set forth in this Section 8.1(c); provided, however, that Blackstone shall not
then have initiated procedures for Transfer of its Interests pursuant to Section
8.1(b).

                  (ii) Either Blackstone or the Mehta and Isaly Group, as the
case may be (the "Offeror"), may serve upon the other (the "Offeree") a notice
(the "Offering Notice") which shall contain the following terms:




<PAGE>


                                       25

                  (A) a statement of intent to rely on this Section 8.1(c).

                  (B) the aggregate dollar amount (the "Buy/Sell Price") which
         the Offeror would be willing to pay for all the Offeree's Interests as
         of that date.

                  (iii) The Offeree shall then have the obligation either:

                  (A) to sell its full Interest to the Offeror for the Offer
         Price; or

                  (B) to purchase the full Interest of the Offeror for an amount
         equal to a percentage of the Offer Price equal to the quotient (stated
         as a percentage) derived by dividing the Offeror's Profit Sharing
         Percentage by the Offeree's Profit Sharing Percentage.

                  (iv) Within 30 days after receipt of the Offering Notice by
the Offeree (the "Buy/Sell Option Period"), the Offeree shall notify the Offeror
as to whether the Offeree will elect to purchase the Interest of the Offeror or
will elect to sell its Interest to the Offeror. If the Offeree does not notify
the Offeror of its election prior to expiration of the Option Period, the
Offeree shall for all purposes be conclusively deemed to have elected to sell
its Interest to the Offeror as provided in this Section.

                  (v) The Person obligated to purchase (the "Buyer") under this
Section 8.1(c) shall fix a date (the "Buy/Sell Closing Date") upon which the
closing of such purchase (the "Buy/Sell Closing") shall occur not later than 60
days following the stated expiration of the Option Period. The Buy/Sell Closing
shall take place at a location in New York City as designated by the Buyer.

                  (vi) At the Buy/Sell Closing, the selling Person (the
"Seller") shall execute and deliver to the Buyer assignments of interest, deeds,
bills of sale, instruments of conveyance, and other instruments as the Buyer may
reasonably require, to give it title to all of the Seller's right, title and
interest in and to the Partnership, and of the Partnership's right, title and
interest in and to the Partnership Assets, and the Seller hereby irrevocably
constitutes and appoints the Buyer its attorney-in-fact to execute, acknowledge
and deliver such instruments as may be necessary or appropriate to carry out and
enforce the provisions of this Section 8.1(c). The Buyer may elect to retain any
Partnership loans which are secured by liens or mortgages on Partnership Assets
provided that the Seller is released, if necessary, from any liability for the
payment thereof.

                  (vii) The Offering Price shall be paid pursuant to this
Section 8.1(c), at the option of the Buyer, in the form of (i) cash, (ii) a
Buy/Sell Note (as defined below) or (iii) a combination of cash and a Buy/Sell
Note. For purposes of this Section 8.1(c), a "Buy/Sell Note" shall mean a note
issued by the Buyer on the Buy/Sell Closing Date having (A) a maturity
determined by the Buyer no longer than five years from the Buy/Sell Closing
Date, (B) equal annual installments of principal payments on such note, plus
accrued interest



<PAGE>


                                       26

thereon payable on such date, beginning 12 months from the Buy/Sell Closing Date
and (C) a fixed annual interest rate equal to the "prime rate" of Chemical Bank
prevailing on the Buy/Sell Closing Date plus 1%. A Buy/Sell Note may be prepaid
in full by the Buyer at any time by making a payment to the Seller of the amount
of the remaining principal payments on such Buy/Sell Note, plus accrued interest
thereon to the date of such prepayment.

                  (viii) For the period of two years from the Buy/Sell Closing
Date, the Seller agrees to remit to the Buyer a percentage of any revenues that
it receives relating to or in connection with any business which is comparable
to the Partnership Business (in terms of its focus on the pharmaceutical,
biotechnology and health care industries) equal to the Buyer's Profit Sharing
Percentage immediately prior to initiation of the procedures of this Section
8.1(c).

                  SECTION 8.2. Other Transfer Provisions. (a) Any purported
Transfer by a Partner of all or any part of its interest in the Partnership in
violation of this Article VIII shall be null and void and of no force or effect.

                  (b) Except as provided in this Article VIII, no Partner shall
have the right to withdraw from the Partnership prior to its termination and no
additional Partner may be admitted to the Partnership without a written Partner
Consent. In the event of any withdrawal of the General Partner in violation of
this Agreement, including as a result of a Disabling Event, the General Partner
shall be liable to the Partnership as provided in Section 17-602 of the
Partnership Act.

                  (c) Notwithstanding any provision of this Agreement to the
contrary, a Partner may not Transfer all or any part of its interest in the
Partnership if such Transfer would jeopardize the status of the Partnership as a
partnership for federal income tax purposes, cause a dissolution of the
Partnership under the Partnership Act or would violate, or would cause the
Partnership to violate, any applicable law or regulation, including any
applicable federal or state securities laws.

                  (d) The General Partner shall admit as an additional or
substitute Limited Partner any Person to whom an interest in the Partnership is
Transferred by a Limited Partner in accordance with the terms of this Agreement.

                  (e) Concurrently with the admission of any substitute or
additional Partner, the General Partner shall forthwith cause any necessary
papers to be filed and recorded and notice to be given wherever and to the
extent required showing the substitution of a Transferee as a substitute Partner
in place of the Transferring Partner, or the admission of an additional Partner,
all at the expense, including payment of any professional and filing fees
incurred, of such substituted or added Partner. The admission of any Person as a
substitute or additional Partner shall be conditioned upon such Person's written
acceptance and adoption of all the terms and provisions of this Agreement.




<PAGE>


                                       27

                  (f) Any transferor of a Partner's Interest admitted to the
Partnership as a Limited Partner shall succeed to all of the rights and
obligations of the transferring Partner pursuant hereto.


                                   ARTICLE IX

                                  Miscellaneous

                  SECTION 9.1. Arbitration. To the fullest extent permitted by
law, any dispute, controversy or claim arising out of or relating to this
Agreement or to the Partnership's affairs or the rights or interests of the
Partners or the breach or alleged breach of this Agreement, whether arising
during the Partnership term or at or after its termination or during or after
the liquidation of the Partnership, shall be settled by arbitration in New York
City (or, if applicable law requires some other forum, then such other forum) in
accordance with the rules then obtaining of the American Arbitration
Association. If the parties to any such controversy are unable to agree upon a
neutral arbitrator or arbitrators, then an arbitrator shall be selected by each
party and such two arbitrators shall appoint a third arbitrator to decide the
matter in accordance with such rules. The parties consent to the nonexclusive
jurisdiction of the Supreme Court of the State of New York, and of the United
States District Court for the Southern District of New York, for all purposes in
connection with any such arbitration. The parties agree that any process or
notice of motion or other application to either of such courts, and any paper in
connection with any such arbitration, may be served by certified mail, return
receipt requested, or by personal service or in such other manner as may be
permissible under the rules of the applicable court or arbitration tribunal,
provided a reasonable time for appearance is allowed.

                  SECTION 9.2. Ownership and Use of Names. Rights to the name
"Blackstone" shall belong solely to the Blackstone Entities. Rights to the name
"Mehta and Isaly" shall belong solely to the Mehta and Isaly Group. The
ownership of, and the right to use, sell or otherwise dispose of, the names,
"Caduceus Management Partners L.P." or "Caduceus Capital, L.P." or any
abbreviation or modification thereof, shall belong to the Partnership. The
General Partner agrees to take all actions, and to approve, execute and file any
document or instrument proposed by Blackstone to protect the rights of
Blackstone to the name "Blackstone." Blackstone agrees to take all actions, and
to approve, execute and file any document or instrument proposed by the General
Partner to protect the rights of the General Partner to the name "Mehta and
Isaly".

                  SECTION 9.3. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware. In
particular, the Partnership is formed pursuant to the Partnership Act, and the
rights and liabilities of the General Partner and Limited Partners shall be as
provided therein, except as herein otherwise expressly provided.




<PAGE>


                                       28

                  SECTION 9.4. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
respective successors and assigns.

                  SECTION 9.5. Access; Confidentiality. By executing this
Agreement, each Partner expressly agrees, at all times during the term of the
Partnership and thereafter and whether or not at the time a Partner of the
Partnership, to maintain the confidentiality of, and not to disclose to any
Person other than its Affiliates, another Partner or its Affiliates and their
respective advisors (including their respective employees) or a Person
designated by a Partner Consent any information ("Confidential Information")
relating to the business (including trade secrets), financial structure,
financial position or financial results, clients or affairs of the Partnership
and the Partners that shall not be generally, known to the public or the
securities or commodities industry, except as required for any arbitration
proceeding pursuant to Section 9.1 or as required by law, by rule or regulation
having the force of law, by any regulatory or self-regulatory organization
having jurisdiction or by legal process. Each Partner shall inform the Persons
to whom it discloses Confidential Information as permitted under this Section
9.5 of the confidential nature of the Confidential Information and shall cause
such Persons to agree to maintain the confidentiality of the Confidential
Information. The provisions of this Section 9.5 shall survive the termination of
the Partnership.

                  SECTION 9.6. Notices. Whenever notice is required or permitted
by this Agreement to be given, such notice shall be in writing (including cable,
telex, facsimile or similar writing) and shall be given to any Partner at its
address or telex number shown in the Partnership's books and records (including
Schedule A hereto) or, if given to a General Partner, at the address of the
principal place of business of the Partnership. Each such notice shall be
effective (i) if given by telex or facsimile, upon electronic or oral
confirmation of receipt, (ii) if given by mail, on the fourth day after deposit
in the mails (certified return receipt requested) addressed as aforesaid and
(iii) if given by any other means, when delivered to and receipted for at the
address of such Partner or the General Partner, as the case may be, specified as
aforesaid.

                  SECTION 9.7. Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument.

                  SECTION 9.8. Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or, referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

                  SECTION 9.9. Amendments. This Agreement may be amended only
pursuant to a written Partner Consent; provided that no such amendment may
convert a



<PAGE>


                                       29

Limited Partner to a General Partner or cause a Limited Partner to have personal
liability for the obligations of the Partnership without the consent of the
affected Limited Partner. To the extent that any amendment is so approved, it
shall be evidenced by an amendment to this Agreement in writing executed by
Blackstone and the General Partner (and if required by the immediately preceding
sentence, shall also be executed by any affected Limited Partner).

                  SECTION 9.10. Blackstone Investment. Blackstone and its
Affiliates have provided to the Private Fund an initial contribution of $1.5
million. Blackstone will maintain this investment for a minimum of one year from
the date hereof, subject to the terms of the Private Fund's partnership
agreement and the continued participation of the Mehta and Isaly Partners in the
business of the Partnership.

                  SECTION 9.11. Section Titles. Section titles are for
descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text hereof.

                  SECTION 9.12. Representations and Warranties. (a) Each Partner
represents, warrants and covenants to each other Partner and to the Partnership
that:

                  (i) such Partner, if not a natural Person, is duly formed and
         validly existing under the laws of the jurisdiction of its organization
         with full power and authority to conduct its business to the extent
         contemplated in this Agreement;

                  (ii) this Agreement has been duly authorized, executed and
         delivered by such Partner and constitutes the valid and legally binding
         agreement of such Partner enforceable in accordance with its terms
         against such Partner except as enforceability thereof may be limited by
         bankruptcy, insolvency, moratorium and other similar laws relating to
         creditors' rights generally, by general equitable principles and by an
         implied covenant of good faith and fair dealing;

                  (iii) the execution and delivery of this Agreement by such
         Partner and the performance of its duties and obligations hereunder do
         not result in a breach of any of the terms, conditions or provisions
         of, or constitute a default under, any indenture, mortgage, deed of
         trust, credit agreement, note or other evidence of indebtedness, or any
         lease or other agreement, or any license, permit, franchise or
         certificate, to which such Partner is a party or by which it is bound
         or to which its properties are subject, or require any authorization or
         approval under or pursuant to any of the foregoing, or violate any
         statute, regulation, law, order, writ, injunction, judgment or decree
         to which such Partner is subject;

                  (iv) such Partner is not in default (nor has any event
         occurred which with notice, lapse of time, or both, would constitute a
         default) in the performance of any obligation, agreement or condition
         contained in any indenture, mortgage, deed of trust, credit agreement,
         note or other evidence of indebtedness or any lease or other



<PAGE>


                                       30

         agreement, or any license, permit, franchise or certificate, to which
         it is a party or by which it is bound or to which the properties of it
         are subject, nor is it in violation of any statute, regulation, law,
         order, writ, injunction, judgment or decree to which it is subject,
         which default or violation would materially adversely affect such
         Partner's ability to carry out its obligations under this Agreement;

                  (v) there is no litigation, investigation or other proceeding
         pending or, to the knowledge of such Partner, threatened against such
         Partner or any of its Affiliates which, if adversely determined, would
         materially adversely affect such Partner's ability to carry out its
         obligations under this Agreement; and

                  (vi) no consent, approval or authorization of, or filing,
         registration or qualification with, any court or governmental authority
         on the part of such Partner is required for the execution and delivery
         of this Agreement by such Partner and the performance of its
         obligations and duties hereunder, except as may be required in
         connection with registration of the Partnership or such Partner under
         federal commodities and securities laws.

                  (b) Except as otherwise provided in this Agreement, CCM
represents, warrants and covenants to Blackstone that (i) the day-to-day
operations of the Partnership will be managed by and under the direction of
Samuel D. Isaly and Viren Mehta and



<PAGE>


                                       31

(ii) Samuel D. Isaly and Viren Mehta will at all times own, directly or
indirectly, all of the capital stock of CCM.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first above written.

GENERAL PARTNER:

CADUCEUS CAPITAL MANAGEMENT, INC.


By:   /s/      Samuel D. Isaly
- ---------------------------------
      Name:    Samuel D. Isaly
      Title:   President



LIMITED PARTNERS:

BLACKSTONE ALTERNATIVE ASSET
  MANAGEMENT L.P.,


By:   /s/ Mark J. Kenyon
- ---------------------------------
      Name:
      Title:



     /s/ Samuel D. Isaly
- ---------------------------------
Samuel D. Isaly


     /s/  Viren Mehta
- ---------------------------------
Viren Mehta




<PAGE>



                                                                    SCHEDULE A



                           PARTNERS OF THE PARTNERSHIP



                                                                Profit Sharing
                                                               Percentage as of
General Partner                 Address                        November 1, 1993
- ---------------                 -------                        ----------------

Caduceus Capital                41 Madison Avenue                   1.00%
     Management, Inc.           40th Floor
                                New York, New York  10010




                                                               Profit Sharing
                                                               Percentage as of
Limited Partner                 Address                        November 1, 1993
- ---------------                 -------                        ----------------

Blackstone                      118 North Bedford Road               40.0%
     Alternative                Mount Kisco, NY  10549
     Asset Management L.P.

Samuel D. Isaly                 c/o Caduceus Capital                 29.5%
                                     Management, Inc.
                                41 Madison Avenue
                                40th Floor
                                New York, New York  10010

Viren Mehta                     c/o Caduceus Capital                 29.5%
                                     Management, Inc.
                                41 Madison Avenue
                                40th Floor
                                New York, New York  10010












                       WORLDWIDE HEALTH SCIENCES PORTFOLIO

                          INVESTMENT ADVISORY AGREEMENT             Exhibit D.


                  AGREEMENT made this 24th day of June, 1996, between Worldwide
Health Sciences Portfolio, a New York trust (the "Trust") and G/A Capital
Management, Inc., a Delaware corporation (the "Adviser").

                  1. Duties of the Adviser. The Trust hereby employs the Adviser
to act as investment adviser for and to manage the investment and reinvestment
of the assets of the Trust, subject to the supervision of the Trustees of the
Trust, for the period and on the terms set forth in this Agreement.

                  The Adviser hereby accepts such employment and undertakes to
afford to the Trust the advice and assistance of the Adviser's organization in
the choice of investments and in the purchase and sale of securities for the
Trust and to furnish for the use of the Trust office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Trust and to pay the salaries and fees of all officers and Trustees of the Trust
who are members of the Adviser's organization and all personnel of the Adviser
performing services relating to research and investment activities. The Adviser
shall for all purposes herein be deemed to be independent
 contractors and shall,
except as otherwise expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed an agent of the
Trust.

                  The Adviser shall provide the Trust with such investment
management and supervision as the Trust may from time to time consider necessary
for the proper supervision of the Trust. As investment adviser to the Trust, the
Adviser shall furnish continuously an investment program and shall determine
from time to time what securities and other investments shall be acquired,
disposed of or exchanged and what portion of the Trust's assets shall be held
uninvested, subject always to the applicable restrictions of the Declaration of
Trust, By-Laws and registration statement of the Trust under the Investment
Company Act of 1940, all as from time to time amended. Should the Trustees of
the Trust at any time, however, make any specific determination as to investment
policy for the Trust and notify the Adviser thereof in writing, the Adviser
shall be bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination has been revoked. The
Adviser shall take, on behalf of the Trust, all actions which they deem
necessary or desirable to implement the investment policies of the trust.

                  The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the Trust either directly with the
issuer or with brokers or dealers selected by the Adviser, and to that end the
Adviser is authorized as the agent of the Trust to give instructions to the
custodian of the Trust as to deliveries of securities and payments of cash for
the account of the Trust. In connection with the selection of such



<PAGE>


                                        2

brokers or dealers and the placing of such orders, the Adviser shall use its
best efforts to seek to execute security transactions at prices which are
advantageous to the Trust and (when a disclosed commission is being charged) at
reasonably competitive commission rates. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser
and the Adviser is expressly authorized to pay any broker or dealer who provides
such brokerage and research services a commission for executing a security
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
overall responsibilities which the Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. Subject to the
requirement set forth in the second sentence of this paragraph, the Adviser is
authorized to consider, as a factor in the selection of any broker or dealer
with whom purchase or sale orders may be placed, the fact that such broker or
dealer has sold or is selling shares of any one or more investment companies
sponsored by the Adviser, Eaton Vance Management or their affiliates or shares
of any other investment company investing in the Trust.

                  The Adviser shall not be responsible for providing certain
special administrative services to the Trust under this Agreement. Eaton Vance
Management, in its capacity as Administrator of the Trust, shall be responsible
for providing such services to the Trust under the Trust's separate
Administration Agreement with the Administrator.

                  2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Adviser shall be
entitled to receive from the Trust a fee computed daily and payable monthly at
an annual rate of 1.00% of the Trust's average daily net assets up to $30
million of such assets, 0.90% of the next $20 million of such assets, and 0.75%
on such assets in excess of $50 million.

                  After 12 months, the basic advisory fee is subject to upward
or downward adjustment depending upon whether, and to what extent, the
investment performance of the Trust differs by at least one percentage point
from the record of the Standard & Poor's Index of 500 Common Stocks over the
same period. Each percentage point difference is multiplied by a performance
adjustment rate of 0.025%. The maximum adjustment plus/minus is 0.25%. One
twelfth (1/12) of this adjustment is applied each month to the average daily net
assets of the Trust over the entire performance period. This adjustment shall be
based on a rolling period of up to and including the most recent 36 months.
Trust performance shall be total return as computed under Rule 482 under the
Securities Act of 1933.




<PAGE>


                                        3

                  Such advisory fee shall be paid monthly in arrears on the last
business day of each month. The Trust's net asset value shall be computed in
accordance with the Declaration of Trust of the Trust and any applicable votes
and determinations of the Trustees of the Trust. In case of initiation or
termination of the Agreement during any month, the fee for that month shall be
based on the number of calendar days during which it is in effect.

                  The Adviser may, from time to time, waive all or a part of the
above compensation to which it is entitled hereunder.

                  3. Allocation of Charges and Expenses. It is understood that
the Trust will pay all expenses other than those expressly stated to be payable
by the Adviser hereunder, which expenses payable by the Trust shall include,
without implied limitation, (i) expenses of maintaining the Trust and continuing
its existence, (ii) registration of the Trust under the Investment Company Act
of 1940, (iii) commissions, fees and other expenses connected with the
acquisition, holding and disposition of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, and redemption of Interests in
the Trust, (viii) expenses of registering and qualifying the Trust and Interests
in the Trust under federal and state securities laws and of preparing and
printing registration statements or other offering statements or memoranda for
such purposes and for distributing the same to Holders and investors, and fees
and expenses of registering and maintaining registrations of the Trust and of
the Trust's placement agent as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to Holders and of meetings of Holders
and proxy solicitations therefor, (x) expenses of reports to governments
officers and commissions, (xi) insurance expenses, (xii) association membership
dues, (xiii) fees, expenses and disbursements of custodians and subcustodians
for all services to the Trust (including without limitation safekeeping of
funds, securities and other investments, keeping of books, accounts and records,
and determination of net asset values, book capital account balances and tax
capital account balances), (xiv) fees, expenses and disbursements of transfer
agents, dividend disbursing agents, Holder servicing agents and registrars for
all services to the Trust, (xv) expenses for servicing the account of Holders,
(xvi) any direct charges to Holders approved by the Trustees of the Trust,
(xvii) compensation and expenses of Trustees of the Trust who are not members of
one of the Adviser's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Trust to indemnify its Trustees, officers
and Holders with respect thereto.

                  4. Other Interests. It is understood that Trustees and
officers of the Trust and Holders of Interests in the Trust are or may be or
become interested in the Adviser as trustees, shareholders or otherwise and that
trustees, officers and shareholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as Holder or otherwise. It is also understood that
trustees,



<PAGE>


                                        4

officers, employees and shareholders of the Adviser may be or become interested
(as directors, trustees, officers, employees, shareholders or otherwise) in
other companies or entities (including, without limitation, other investment
companies) which the Adviser or Eaton Vance Management may organize, sponsor or
acquire, or with which it may merge or consolidate, and that the Adviser or its
subsidiaries or affiliates may enter into advisory or management agreements or
other contracts or relationships with such other companies or entities.

                  5. Limitation of Liability of the Adviser. The services of the
Adviser to the Trust are not to be deemed to be exclusive, the Adviser being
free to render services to others and engage in other business activities. In
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any Holder of
Interests in the Trust for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses which may be sustained in
the acquisition, holding or disposition of any security or other investment.

                  6. Sub-Investment Adviser. The Adviser may employ one or more
sub- investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such investment adviser
and approved by the Trustees of the Trust, all as permitted by the Investment
Company Act of 1940.

                  7. Duration and Termination of this Agreement. This Agreement
shall become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect through and including
February 28, 1997 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1997 is
specifically approved at least annually (i) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the Trust
and (ii) by the vote of a majority of those Trustees of the Trust who are not
interested persons of the Adviser or the Trust cast in person at a meeting
called for the purpose of voting on such approval.

                  Any party hereto may, at any time on sixty (60) days' prior
written notice to the others, terminate that party's obligations hereunder, or,
in the case of the Trust, terminate this Agreement in its entirety, without the
payment of any penalty, by action of Trustees of the Trust or the trustees or
directors of the Adviser, as the case may be, and the Trust may, at any time
upon such written notice to the Adviser, terminate this Agreement with respect
to the Adviser by vote of a majority of the outstanding voting securities of the
Trust. This Agreement shall terminate automatically in the event of its
assignment.




<PAGE>


                                        5

                  8. Amendments of the Agreement. This Agreement may be amended
by a writing signed by all parties hereto, provided that no amendment to this
Agreement shall be effective until approved (i) by the vote of a majority of
those Trustees of the Trust who are not interested persons of an Adviser or the
Trust cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the outstanding voting securities of
the Trust.

                  9. Limitation of Liability. The Adviser expressly acknowledge
the provision in the Declaration of Trust of the Trust (Section 5.2 and 5.6)
limiting the personal liability of the Trustees and officers of the Trust, and
the Adviser hereby agrees that it shall have recourse to the Trust for payment
of claims or obligations as between the Trust and the Adviser arising out of
this Agreement and shall not seek satisfaction from any Trustee or officer of
the Trust.

                  10. Certain Definitions. The terms "assignment" and
"interested persons" when used herein shall have the respective meanings
specified in the Investment Company Act of 1940 as now in effect or as hereafter
amended subject, however, to such exemptions as may be granted by the Securities
and Exchange Commission by any rule, regulation or order. The term "vote of a
majority of the outstanding voting securities" shall mean the vote, at a meeting
of Holders, of the lesser of (a) 67 per centum or more of the Interests in the
Trust present or represented by proxy at the meeting if the Holders of more than
50 per centum of the outstanding Interests in the Trust are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding Interests in the Trust. The terms



<PAGE>


                                        6

"Holders" and "Interests" when used herein shall have the respective meanings
specified in the Declaration of Trust of the Trust.

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


WORLDWIDE HEALTH SCIENCES PORTFOLIO


By:  /s/ James B. Hawkes
   -------------------------------
      President



G/A CAPITAL MANAGEMENT, INC.


By:  /s/ Samuel D. Isaly
   -------------------------------
      President








                                                                    Exhibit E.
                                                                    ----------

                             JOINT FILING AGREEMENT

        The undersigned hereby agree that the Statement on Schedule 13D, dated
January 28, 1997, (the "Schedule 13D"), with respect to the Common Stock, par
value $0.0001 per share, of Alexion Pharmaceuticals, Inc. is, and any amendments
thereto executed by each of us shall be, filed on behalf of each of us pursuant
to and in accordance with the provisions of Rule 13d-1(f) under the Securities
and Exchange Act of 1934, as amended, and that this Agreement shall be included
as an Exhibit to the Schedule 13D and each such amendment. Each of the
undersigned agrees to be responsible for the timely filing of the Schedule 13D
and any amendments thereto, and for the completeness and accuracy of the
information concerning itself contained therein. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument.

        IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 28th day of January, 1997.



SAMUEL D. ISALY                         VIREN MEHTA



/s/  Samuel D. Isaly                    /s/  Viren Mehta
- --------------------------              --------------------------



PHARMA/wHEALTH                          M and I INVESTORS, INC.


By: /s/  Mirko von Restorf              By: /s/  Samuel D. Isaly
- --------------------------                ------------------------
Name:  Mirko von Restorff               Name:  Samuel D. Isaly
Title:  Chairman                        Title:  President 



CADUCEUS CAPITAL,
 L.P.                  CADUCEUS CAPITAL MANAGEMENT, INC.


By: /s/  Samuel D. Isaly                By: /s/  Samuel D. Isaly
- --------------------------                 -----------------------
Name:  Samuel D. Isaly                  Name:  Samuel D. Isaly
Title:                                  Title:  President



<PAGE>
                                                                    Exhibit E.
                                                                    ----------


WORLDWIDE HEALTH                        MEHTA & ISALY ASSET
SCIENCES PORTFOLIO                      MANAGEMENT, INC.


By: /s/  Eric G. Woodbury               By: /s/  Samuel D. Isaly
- --------------------------                 -----------------------
Name:  Eric G. Woodbury                 Name:  Samuel D. Isaly
Title:  Assistant Secretary             Title:  President