Exhibit
      10.3

    


    INTELLECTUAL
      PROPERTY SECURITY AGREEMENT

    


    INTELLECTUAL
      PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as of January 11, 2007, by
      and among Alteon Inc., a Delaware corporation (“Alteon”), HaptoGuard, Inc., a
      Delaware corporation (“HaptoGuard”) (Alteon and HaptoGuard sometimes referred to
      as “Debtor”), and Baker Bros Advisors, LLC, as Collateral Agent for the Secured
      Parties (together with its successors and assigns in such capacity, the
“Collateral Agent”). 

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      pursuant to a Convertible Note and Warrant Purchase Agreement, dated the date
      hereof, between Alteon and the Collateral Agent (the “Purchase Agreement”),
      Alteon has agreed to issue to the Collateral Agent and the Collateral Agent
      has
      agreed to purchase from Alteon certain of Alteon’s Convertible Secured Notes
      (the “Notes”), and warrants to purchase shares of Alteon’s Common Stock, $0.01
      par value per share as described in the Purchase Agreement.

     

    WHEREAS,
      in order to induce the Lenders (as defined in the Purchase Agreement) to
      purchase the Notes, each Debtor has agreed to execute and deliver to the
      Collateral Agent for the benefit of the Secured Parties (as defined in the
      Security Agreement) that certain Security Agreement dated the date hereof for
      the benefit of the Collateral Agent and the Secured Parties in which each Debtor
      has, among other things, granted to the Collateral Agent a security interest
      in
      the Collateral (as defined in the Security Agreement) including a security
      interest in the all United States and foreign patents and certificates of
      invention, or similar industrial property rights, and applications for any
      of
      the foregoing, including, without limitation: (i) each patent and patent
      application referred to in Schedule
      I
      hereto,
      (ii) all reissues, divisions, continuations, continuations-in-part, extensions,
      renewals, and reexaminations thereof, (iii) all rights corresponding thereto
      throughout the world, (iv) all inventions and improvements described therein,
      (v) all rights to sue for past, present and future infringements thereof, (vi)
      all licenses, claims, damages, and proceeds of suit arising therefrom, and
      (vii)
      all Proceeds of the foregoing, including, without limitation, licenses,
      royalties, income, payments, claims, damages, and proceeds of suit (collectively
      the “Patent Collateral”) and all United States, and foreign trademarks, trade
      names, corporate names, company names, business names, fictitious business
      names, Internet domain names, service marks, certification marks, collective
      marks, logos, other source or business identifiers, designs and general
      intangibles of a like nature, all registrations and applications for any of
      the
      foregoing including, without limitation: (i) the registrations and applications
      referred to in Schedule
      II,
      (ii)
      all extensions or renewals of any of the foregoing, (iii) all of the goodwill
      of
      the business connected with the use of and symbolized by the foregoing, (iv)
      the
      right to sue for past, present and future infringement or dilution of any of
      the
      foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing,
      including, without limitation, licenses, royalties, income, payments, claims,
      damages, and proceeds of suit (collectively, the “Trademark Collateral” and
      together with the Patent Collateral the “IP Collateral.”to secure the payment
      and performance of all of the Obligations (as defined in the Security
      Agreement);

     

    
      
         

      

      
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    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Borrower and the Collateral Agent agree
      as
      follows:

    


    1. Each
      Debtor hereby grants to the Collateral Agent, for the benefit of the Collateral
      Agent, a continuing security interest in (i) all of such Debtor’s right, title
      and interest in and to the IP Collateral, (ii) the right (but not the
      obligation) to sue or bring like proceedings in the name of such Debtor or
      in
      the name of the Collateral Agent for past, present and future infringements
      of
      the IP Collateral and (iii) all rights (but not obligations) corresponding
      thereto in the United States and any foreign country. Each Debtor hereby further
      acknowledges and affirms that the rights and remedies of the Collateral Agent
      with respect to the security interest in the IP Collateral are more fully set
      forth in the Security Agreement, the terms and provisions of which are
      incorporated by reference herein as if fully set forth herein.

    


    2. All
      notices, demands, consents, statements, requests, approvals or other
      communications which are permitted or required to be given by either party
      to
      the other hereunder shall be in writing and shall be given as provided in
      Section 11 of the Purchase Agreement.

    


    3. This
      Agreement cannot be modified, changed or discharged except by an agreement
      in
      writing signed by each Debtor and the Collateral Agent.

    


    4. This
      Agreement shall be construed and enforced in accordance with the laws of the
      State of New York.

    


    5. This
      Agreement is subject in all respects to the Security Agreement, the terms of
      which are incorporated herein by this reference.

    


    6. The
      security interests created hereunder and under the Security Agreement in the
      IP
      Collateral shall cease and be released in accordance with the terms of the
      Security Agreement and the Purchase Agreement.

    


    7. If
      any
      provision hereof conflicts with any provision of the Security Agreement, the
      terms of the Security Agreement shall control to the extent of such
      inconsistency.

    


    8. Each
      Debtor and the Collateral Agent hereby request that the Commissioner of Patents
      and Trademarks record this Agreement with respect to the applicable IP
      Collateral. 

    


    
      
         

      

      
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    9.
      Authorization to Supplement. If any Debtor shall obtain rights to any additional
      patent application, patent, trademark or trademark application or for any
      reissue, division, or continuation, of any patent or trademark, the provisions
      of this Agreement shall automatically apply thereto. Each Debtor shall give
      prompt notice in writing to Collateral Agent with respect to any such new patent
      rights. Without limiting the Debtors’ obligations under this Section 9, Debtor
      authorizes Collateral Agent unilaterally to modify this Agreement by amending
      Schedules I and II respectively to include any such new patent rights or
      trademark rights. Notwithstanding the foregoing, no failure to so modify this
      Agreement or amend Schedule I or II shall in any way affect, invalidate or
      detract from Collateral Agent's continuing security interest in all Collateral,
      whether or not listed on Schedule I or II. 

    


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    IN
      WITNESS WHEREOF, each Debtor and Collateral Agent have caused this Intellectual
      Property Security Agreement to be duly executed and delivered as of the day
      and
      year first above written.

    


    DEBTORS:

     

    


     

    ALTEON
      INC.

     

    


     

    By:
      _/s/
      Noah Berkowitz____________________

    Name:
      Noah Berkowitz

    Title:
      President and Chief Executive Officer

    


    


    HAPTOGUARD,
      INC.

    


    


    By:
      _/s/
      Noah Berkowitz____________________

    Name:
      Noah Berkowitz

    Title:
      President

    


    


    


    COLLATERAL
      AGENT:

    


    


    BAKER
      BROS. ADVISORS, LLC

    


    


    By: _/s/
      Felix Baker___________________

    Name:
      Felix Baker, Ph.D.

    Title:
      Managing Member 

    


     

    


    
      
         

      

      
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    SCHEDULE
      I

    


    PATENTS
      AND PATENT APPLICATIONS

    


    


    See
      Attached.

     

    
      
         

      

      
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    SCHEDULE
      II

    


    TRADEMARKS
      AND TRADEMARK APPLICATIONS

    


    


    See
      Attached.

    


    


    


    


    


    


    


    


    
      
         

      

      
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