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                                                                    Exhibit 10.3

                              PUBLIC HEALTH SERVICE



                 COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT


This Cooperative Research and Development Agreement, hereinafter referred to as
the "CRADA," consists of this Cover Page, an attached Agreement, and various
Appendices referenced in the Agreement. This Cover Page serves to identify the
Parties to this CRADA:

                  (1) THE NATIONAL CANCER INSTITUTE, hereinafter referred to as
the "NCI"; and (2) PROTARGA, INC. (formerly known as Neuromedica, Inc.), which
has offices at 1100 East Hector Street, Suite 450, Conshohocken, PA 19428,
hereinafter referred to as the "Collaborator."







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COOPERATIVE  RESEARCH AND DEVELOPMENT AGREEMENT


ARTICLE 1.    INTRODUCTION

This Cooperative Research and Development Agreement (CRADA) between NCI and the
Collaborator will be effective when signed by all Parties. The research and
development activities which will be undertaken by each of the Parties in the
course of this CRADA are detailed in the Research Plan (RP) which is attached as
Appendix A. The funding and staffing commitments of the Parties are set forth in
Appendix B. Any exceptions or changes to the CRADA are set forth in Appendix C.
This CRADA is made under the authority of the Federal Technology Transfer Act,
15 U.S.C. Section 3710a and is governed by its terms.

ARTICLE 2.    DEFINITIONS

As used in this CRADA, the following terms shall have the indicated meanings:

2.1      "AFFILIATE" means any corporation or other business entity controlled
         by, controlling, or under common control with Collaborator. For this
         purpose, "control" means direct or indirect beneficial ownership of at
         least fifty (50) percent of the voting stock or at least fifty (50)
         percent interest in the income of such corporation or other business.

2.2      "COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT" or "CRADA" means this
         Agreement, entered into by NCI pursuant to the Federal Technology
         Transfer Act of 1986, as amended, 15 U.S.C. 3710a et seq. and Executive
         Order 12591 of October 10, 1987.

2.3      "GOVERNMENT" means the Government of the United States as represented
         through the NCI agency that is a Party to this agreement.

2.4      "IP" means intellectual property.

2.5      "INVENTION" means any invention or discovery which is or may be
         patentable or otherwise protected under title 35, United States Code,
         or any novel variety or plant which is or may be protectable under the
         Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

2.6      "PRINCIPAL INVESTIGATOR(S)" or "PIS" means the persons designated
         respectively by the Parties to this CRADA who will be responsible for
         the scientific and technical conduct of the RP.

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2.7      "PROPRIETARY/CONFIDENTIAL INFORMATION" means confidential scientific,
         business, or financial information provided that such information does
         not include:

         2.7.1    information that is publicly known or available from other
                  sources who are not under a confidentiality obligation to the
                  source of the information;

         2.7.2    information which has been made available by its owners to
                  others without a confidentiality obligation;

         2.7.3    information which is already known by or available to the
                  receiving Party without a confidentiality obligation; or

         2.7.4    information which relates to potential hazards or cautionary
                  warnings associated with the production, handling or use of
                  the subject matter of the Research Plan of this CRADA.

2.8      "RESEARCH MATERIALS" means all tangible materials other than Subject
         Data first produced in the performance of this CRADA.

2.9      "RESEARCH PLAN" or "RP" means the statement in Appendix A of the
         respective research and development commitments of the Parties to this
         CRADA.

2.10     "SUBJECT INVENTION" means any Invention of the Parties, conceived or
         first actually reduced to practice in the performance of the Research
         Plan of this CRADA.

2.11     "SUBJECT DATA" means all recorded information first produced in the
         performance of this CRADA by the Parties.

ARTICLE 3.    COOPERATIVE RESEARCH

3.1      PRINCIPAL INVESTIGATORS. NCI research work under this CRADA will be
         performed by the NCI laboratory identified in the RP, and the NCI
         Principal Investigator (PI) designated in the RP will be responsible
         for the scientific and technical conduct of this project on behalf of
         NCI. Also designated in the RP is the Collaborator PI who will be
         responsible for the scientific and technical conduct of this project on
         behalf of the Collaborator.

3.2      RESEARCH PLAN CHANGE. The RP may be modified by mutual written consent
         of the Principal Investigators. Substantial changes in the scope of the
         RP will be treated as amendments under Article 13.6.

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ARTICLE 4.    REPORTS

4.1      INTERIM REPORTS. The Parties shall exchange formal written interim
         progress reports on a schedule agreed to by the PIs, but at least
         within twelve (12) months after this CRADA becomes effective and at
         least within every twelve (12) months thereafter. Such reports shall
         set forth the technical progress made, identifying such problems as may
         have been encountered and establishing goals and objectives requiring
         further effort, any modifications to the Research Plan pursuant to
         Article 3.2, and all CRADA-related patent applications filed.

4.2      FINAL REPORTS. The Parties shall exchange final reports of their
         results within four (4) months after completing the projects described
         in the RP or after the expiration or termination of this CRADA.

ARTICLE 5.   FINANCIAL AND STAFFING OBLIGATIONS

5.1      NCI AND COLLABORATOR CONTRIBUTIONS. The contributions of the Parties,
         including payment schedules, if applicable, are set forth in Appendix
         B. NCI shall not be obligated to perform any of the research specified
         herein or to take any other action required by this CRADA if the
         funding is not provided as set forth in Appendix B. NCI shall return
         excess funds to the Collaborator when it sends its final fiscal report
         pursuant to Article 5.2, except for staffing support pursuant to
         Article 10.3. Collaborator acknowledges that the U.S. Government will
         have the authority to retain and expend any excess funds for up to one
         (1) year subsequent to the expiration or termination of the CRADA to
         cover any costs incurred during the term of the CRADA in undertaking
         the work set forth in the RP.

5.2      ACCOUNTING RECORDS. NCI shall maintain separate and distinct current
         accounts, records, and other evidence supporting all its obligations
         under this CRADA, and shall provide the Collaborator a final fiscal
         report pursuant to Article 4.2.

5.3      CAPITAL EQUIPMENT. Equipment purchased by NCI with funds provided by
         the Collaborator shall be the property of NCI. All capital equipment
         provided under this CRADA by one party for the use of another Party
         remains the property of the providing Party unless other disposition is
         mutually agreed upon by in writing by the Parties. If title to this
         equipment remains with the providing Party, that Party is responsible
         for maintenance of the equipment and the costs of its transportation to
         and from the site where it will be used.

ARTICLE 6.  INTELLECTUAL PROPERTY RIGHTS AND PATENT APPLICATIONS

6.1      REPORTING. The Parties shall promptly report to each other in writing
         each Subject Invention resulting from the research conducted under this
         CRADA that is reported to


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         them by their respective employees. Each Party shall report all Subject
         Inventions to the other Party in sufficient detail to determine
         inventorship. Such reports shall be treated as Proprietary/Confidential
         Information in accordance with Article 8.4.

6.2      COLLABORATOR EMPLOYEE INVENTIONS. If the Collaborator does not elect to
         retain its IP rights, the Collaborator shall offer to assign these IP
         rights to the Subject Invention to NCI pursuant to Article 6.5. If NCI
         declines such assignment, the Collaborator may release its IP rights as
         it may determine.

6.3      NCI EMPLOYEE INVENTIONS. NCI on behalf of the U.S. Government may elect
         to retain IP rights to each Subject Invention made solely by NCI
         employees. If NCI does not elect to retain IP rights, NCI shall offer
         to assign these IP rights to such Subject Invention to the Collaborator
         pursuant to Article 6.5. If the Collaborator declines such assignment,
         NCI may release IP rights in such Subject Invention to its employee
         inventors pursuant to Article 6.6.

6.4      JOINT INVENTIONS. Each Subject Invention made jointly by NCI and
         Collaborator employees shall be jointly owned by NCI and the
         Collaborator. The Collaborator may elect to file the joint patent or
         other IP application(s) thereon and shall notify NCI promptly upon
         making this election. If the Collaborator decides to file such
         applications, it shall do so in a timely manner and at its own expense.
         If the Collaborator does not elect to file such application(s), NCI on
         behalf of the U.S. Government shall have the right to file the joint
         application(s) in a timely manner and at its own expense. If either
         Party decides not to retain its IP rights to a jointly owned Subject
         Invention, it shall offer to assign such rights to the other Party
         pursuant to Article 6.5. If the other Party declines such assignment,
         the offering Party may release its IP rights as provided in Articles
         6.2, 6.3, and 6.6.

6.5      FILING OF PATENT APPLICATIONS. With respect to Subject Inventions made
         by the Collaborator as described in Article 6.2, or by NCI as described
         in Article 6.3, a Party exercising its right to elect to retain IP
         rights to a Subject Invention agrees to file patent or other IP
         applications in a timely manner and at its own expense and after
         consultation with the other Party. The Party shall notify the other
         Party of its decision regarding filing in countries other than the
         United States in a timely manner. The Party may elect not to file a
         patent or other IP application thereon in any particular country or
         countries provided it so advises the other Party ninety (90) days prior
         to the expiration of any applicable filing deadline, priority period or
         statutory bar date, and hereby agrees to assign its IP right, title and
         interest in such country or countries to the Subject Invention to the
         other Party and to cooperate in the preparation and filing of a patent
         or other IP applications. In any countries in which title to patent or
         other IP rights is transferred to the Collaborator, the Collaborator
         agrees that NCI inventors will share in any royalty distribution that
         the Collaborator pays to its own inventors.


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6.6      RELEASE TO INVENTORS. In the event neither of the Parties to this CRADA
         elects to file a patent or other IP application on a Subject Invention,
         either or both (if a joint invention) may retain or release their IP
         rights in accordance with their respective policies and procedures.
         However, the Government shall retain a nonexclusive, non-transferable,
         irrevocable, royalty-free license to practice any such Subject
         Invention or have it practiced throughout the world by or on behalf of
         the Government.

6.7      PATENT EXPENSES. The expenses attendant to the filing of patent or
         other IP applications generally shall be paid by the Party filing such
         application. If an exclusive license to any Subject Invention is
         granted to the Collaborator, the Collaborator shall be responsible for
         all past and future out-of-pocket expenses in connection with the
         preparation, filing, prosecution and maintenance of any applications
         claiming such exclusively-licensed inventions and any patents or other
         IP grants that may issue on such applications. The Collaborator may
         waive its exclusive license rights on any application, patent or other
         IP grant at any time, and incur no subsequent compensation obligation
         for that application, patent or IP grant.

6.8      PROSECUTION OF INTELLECTUAL PROPERTY APPLICATIONS. Within one month of
         receipt or filing, each Party shall provide the other Party with copies
         of the applications and all documents received from or filed with the
         relevant patent or other IP office in connection with the prosecution
         of such applications. Each Party shall also provide the other Party
         with the power to inspect and make copies of all documents retained in
         the patent or other IP application files by the applicable patent or
         other IP office. Where licensing is contemplated by Collaborator, the
         Parties agree to consult with each other with respect to the
         prosecution of applications for NCI Subject Inventions described in
         Article 6.3 and joint Subject Inventions described in Article 6.4. If
         the Collaborator elects to file and prosecute IP applications on joint
         Subject Inventions pursuant to Article 6.4, NCI will be granted an
         associate power of attorney (or its equivalent) on such IP
         applications.

ARTICLE 7.    LICENSING

7.1      OPTION FOR COMMERCIALIZATION LICENSE. With respect to Government IP
         rights to any Subject Invention not made solely by the Collaborator's
         employees for which a patent or other IP application is filed, NCI
         hereby grants to the Collaborator an EXCLUSIVE option to elect an
         exclusive or nonexclusive commercialization license, which is
         substantially in the form of the appropriate model NCI license
         agreement. This option does not apply to Subject Inventions conceived
         prior to the effective date of this CRADA that are reduced to practice
         under this CRADA, if prior to that reduction to practice, NCI has filed
         a patent application on the invention and has licensed it or offered to
         license it to a third party. The terms of the license will fairly
         reflect the nature of the invention, the relative contributions of the
         Parties to the invention and the CRADA, the risks incurred by the


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         Collaborator and the costs of subsequent research and development
         needed to bring the invention to the marketplace. The field of use of
         the license will be commensurate with the scope of the RP.

7.2      EXERCISE OF LICENSE OPTION. The option of Article 7.1 must be exercised
         by written notice mailed within three (3) months after either (i)
         Collaborator receives written notice from NCI that the patent or other
         IP application has been filed; or (ii) the date Collaborator files such
         IP application. Exercise of this option by the Collaborator initiates a
         negotiation period that expires nine (9) months after the exercise of
         the option. If the last proposal by the Collaborator has not been
         responded to in writing by NCI within this nine (9) month period, the
         negotiation period shall be extended to expire one (1) month after NCI
         so responds, during which month the Collaborator may accept in writing
         the final license proposal of NCI. In the absence of such acceptance,
         or an extension of the time limits by NCI, NCI will be free to license
         such IP rights to others. In the event that the Collaborator elects the
         option for an exclusive license, but no such license is executed during
         the negotiation period, NCI agrees not to make an offer for an
         exclusive license on more favorable terms to a third party for a period
         of six (6) months without first offering Collaborator those more
         favorable terms. These times may be extended at the sole discretion of
         NCI upon good cause shown in writing by the Collaborator.

7.3      LICENSE FOR NCI EMPLOYEE INVENTIONS AND JOINT INVENTIONS. Pursuant to
         15 U.S.C. Section 3710a(b)(1)(A), for Subject Inventions made under
         this CRADA by a NCI employee(s) or jointly by such employee(s) and
         employees of the Collaborator pursuant to Articles 6.3 and 6.4 and
         licensed pursuant to the option of Article 7.1, the Collaborator grants
         to the Government a nonexclusive, nontransferable, irrevocable, paid-up
         license to practice the invention or have the invention practiced
         throughout the world by or on behalf of the Government. In the exercise
         of such license, the Government shall not publicly disclose trade
         secrets or commercial or financial information that is privileged or
         confidential within the meaning of 5 U.S.C. 552(b)(4) or which would be
         considered as such if it had been obtained from a non-Federal party.

7.4      LICENSE IN COLLABORATOR INVENTIONS. Pursuant to 15 U.S.C. Section
         3710a(b)(2), for inventions made solely by Collaborator employees under
         this CRADA pursuant to Article 6.2, the Collaborator grants to the
         Government a nonexclusive, nontransferable, irrevocable, paid-up
         license to practice the invention or have the invention practiced
         throughout the world by or on behalf of the Government for research or
         other Government purposes.

7.5      THIRD PARTY LICENSE. Pursuant to 15 U.S.C. Section 3710a(b)(1)(B), if
         NCI grants an exclusive license to a Subject Invention made wholly by
         NCI employees or jointly with a Collaborator under this CRADA, pursuant
         to Articles 6.3 and 6.4, the Government shall


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         retain the right to require the Collaborator to grant to a responsible
         applicant a nonexclusive, partially exclusive, or exclusive sublicense
         to use the invention in Collaborator's licensed field of use on terms
         that are reasonable under the circumstances; or if the Collaborator
         fails to grant such a license, to grant the license itself. The
         exercise of such rights by the Government shall only be in exceptional
         circumstances and only if the Government determines (i) the action is
         necessary to meet health or safety needs that are not reasonably
         satisfied by Collaborator, (ii) the action is necessary to meet
         requirements for public use specified by Federal regulations, and such
         requirements are not reasonably satisfied by the Collaborator; or (iii)
         the Collaborator has failed to comply with an agreement containing
         provisions described in 15 U.S.C. 3710a(c)(4)(B). The determination
         made by the Government under this Article is subject to administrative
         appeal and judicial review under 35 U.S.C. 203(2).

7.6      JOINT INVENTIONS NOT EXCLUSIVELY LICENSED. In the event that the
         Collaborator does not acquire an exclusive commercialization license to
         IP rights in all fields in joint Subject Inventions described in
         Article 6.4, then each Party shall have the right to use the joint
         Subject Invention and to license its use to others in all fields not
         exclusively licensed to Collaborator. The Parties may agree to a joint
         licensing approach for such IP rights.

ARTICLE 8.    PROPRIETARY RIGHTS AND PUBLICATION

8.1      RIGHT OF ACCESS. NCI and the Collaborator agree to exchange all Subject
         Data produced in the course of research under this CRADA. Research
         Materials will be shared equally by the Parties to the CRADA unless
         other disposition is agreed to by the Parties. All Parties to this
         CRADA will be free to utilize Subject Data and Research Materials for
         their own purposes, consistent with their obligations under this CRADA.

8.2      OWNERSHIP OF SUBJECT DATA AND RESEARCH MATERIALS. Subject to the
         sharing requirements of Paragraph 8.1 and the regulatory filing
         requirements of Paragraph 8.3, the producing Party will retain
         ownership of and title to all Subject Inventions, all Subject Data and
         all Research Materials produced solely by their investigators. Jointly
         developed Subject Inventions, Subject Data and Research Materials will
         be jointly owned.

8.3      DISSEMINATION OF SUBJECT DATA AND RESEARCH MATERIALS. To the extent
         permitted by law, the Collaborator and NCI agree to use reasonable
         efforts to keep Subject Data and Research Materials confidential until
         published or until corresponding patent applications are filed. Any
         information that would identify human subjects of research or patients
         will always be maintained confidentially. To the extent permitted by
         law, the Collaborator shall have the exclusive right to use any and all
         CRADA Subject Data in and for any regulatory filing by or on behalf of
         Collaborator, except that NCI shall have the exclusive right to use
         Subject Data for that purpose, and authorize others to do so, if the
         CRADA is terminated or if Collaborator abandons its commercialization
         efforts.


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8.4      PROPRIETARY/CONFIDENTIAL INFORMATION. Each Party agrees to limit its
         disclosure of Proprietary/Confidential Information to the amount
         necessary to carry out the Research Plan of this CRADA, and shall place
         a confidentiality notice on all such information. Confidential oral
         communications shall be reduced to writing within 30 days by the
         disclosing Party. Each Party receiving Proprietary/Confidential
         Information agrees that any information so designated shall be used by
         it only for the purposes described in the attached Research Plan. Any
         Party may object to the designation of information as
         Proprietary/Confidential Information by another Party. Subject Data and
         Research Materials developed solely by the Collaborator may be
         designated as Proprietary/ Confidential Information when they are
         wholly separable from the Subject Data and Research Materials developed
         jointly with NCI investigators, and advance designation of such data
         and material categories is set forth in the RP. The exchange of other
         confidential information, e.g., patient-identifying data, should be
         similarly limited and treated. Jointly developed Subject Data and
         Research Material derived from the Research Plan may be disclosed by
         Collaborator to a third party under a confidentiality agreement for the
         purpose of possible sublicensing pursuant to the Licensing Agreement
         and subject to Article 8.7.

8.5      PROTECTION OF PROPRIETARY/CONFIDENTIAL INFORMATION.
         Proprietary/Confidential Information shall not be disclosed, copied,
         reproduced or otherwise made available to any other person or entity
         without the consent of the owning Party except as required under court
         order or the Freedom of Information Act (5 U.S.C. 552). Each Party
         agrees to use its best efforts to maintain the confidentiality of
         Proprietary/Confidential Information. Each Party agrees that the other
         Party is not liable for the disclosure of Proprietary/Confidential
         Information which, after notice to and consultation with the concerned
         Party, the other Party in possession of the Proprietary/Confidential
         Information determines may not be lawfully withheld, provided the
         concerned Party has been given an opportunity to seek a court order to
         enjoin disclosure.

8.6      DURATION OF CONFIDENTIALITY OBLIGATION. The obligation to maintain the
         confidentiality of Proprietary/Confidential Information shall expire at
         the earlier of the date when the information is no longer Proprietary
         Information as defined in Article 2.7 or three (3) years after the
         expiration or termination date of this CRADA. The Collaborator may
         request an extension to this term when necessary to protect
         Proprietary/Confidential Information relating to products not yet
         commercialized.

8.7      PUBLICATION. The Parties are encouraged to make publicly available the
         results of their research. Before either Party submits a paper or
         abstract for publication or otherwise intends to publicly disclose
         information about a Subject Invention, Subject Data or Research
         Materials, the other Party shall be provided thirty (30) days to review
         the proposed publication or disclosure to assure that
         Proprietary/Confidential Information is


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         protected. The publication or other disclosure shall be delayed for up
         to thirty (30) additional days upon written request by any Party as
         necessary to preserve U.S. or foreign patent or other IP rights.

ARTICLE 9.    REPRESENTATIONS AND WARRANTIES

9.1      REPRESENTATIONS AND WARRANTIES OF NCI. NCI hereby represents and
         warrants to the Collaborator that the official signing this CRADA has
         authority to do so.

9.2      REPRESENTATIONS AND WARRANTIES OF THE COLLABORATOR.

         (a) The Collaborator hereby represents and warrants to NCI that the
         Collaborator has the requisite power and authority to enter into this
         CRADA and to perform according to its terms, and that the
         Collaborator's official signing this CRADA has authority to do so. The
         Collaborator further represents that it is financially able to satisfy
         any funding commitments made in Appendix B.

         (b) The Collaborator certifies that the statements herein are true,
         complete, and accurate to the best of its knowledge. The Collaborator
         is aware that any false, fictitious, or fraudulent statements or claims
         may subject it to criminal, civil, or administrative penalties.

ARTICLE 10.    TERMINATION

10.1     TERMINATION BY MUTUAL CONSENT. NCI and the Collaborator may terminate
         this CRADA, or portions thereof, at any time by mutual written consent.
         In such event the Parties shall specify the disposition of all
         property, inventions, patent or other IP applications and other results
         of work accomplished or in progress, arising from or performed under
         this CRADA, all in accordance with the rights granted to the Parties
         under the terms of this Agreement.

10.2     UNILATERAL TERMINATION. Either NCI or the Collaborator may unilaterally
         terminate this entire CRADA at any time by giving written notice at
         least thirty (30) days prior to the desired termination date, and any
         rights accrued in property, patents or other IP rights shall be
         disposed of as provided in paragraph 10.1.

10.3     STAFFING. If this CRADA is mutually or unilaterally terminated prior to
         its expiration, funds will nevertheless remain available to NCI for
         continuing any staffing commitment made by the Collaborator pursuant to
         Article 5.1 above and Appendix B, if applicable, for a period of six
         (6) months after such termination. If there are insufficient funds to
         cover this expense, the Collaborator agrees to pay the difference.


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10.4     NEW COMMITMENTS. No Party shall make new commitments related to this
         CRADA after a mutual termination or notice of a unilateral termination
         and shall, to the extent feasible, cancel all outstanding commitments
         and contracts by the termination date.

10.5     TERMINATION COSTS. Concurrently with the exchange of final reports
         pursuant to Articles 4.2 and 5.2, NCI shall submit to the Collaborator
         for payment a statement of all costs incurred prior to the date of
         termination and for all reasonable termination costs including the cost
         of returning Collaborator property or removal of abandoned property,
         for which Collaborator shall be responsible.

ARTICLE 11.    DISPUTES

11.1     SETTLEMENT. Any dispute arising under this CRADA which is not disposed
         of by agreement of the Principal Investigators shall be submitted
         jointly to the signatories of this CRADA. If the signatories are unable
         to jointly resolve the dispute within thirty (30) days after
         notification thereof, the Assistant Secretary for Health (or his/her
         designee or successor) shall propose a resolution. Nothing in this
         Article shall prevent any Party from pursuing any additional
         administrative remedies that may be available and, after exhaustion of
         such administrative remedies, pursuing all available judicial remedies.

11.2     CONTINUATION OF WORK. Pending the resolution of any dispute or claim
         pursuant to this Article, the Parties agree that performance of all
         obligations shall be pursued diligently in accordance with the
         direction of the NCI signatory.

ARTICLE 12.    LIABILITY

12.1     PROPERTY. The U.S. Government shall not be responsible for damages to
         any Collaborator property provided to NCI, where Collaborator retains
         title to the property, or any property acquired by Collaborator for its
         own use pursuant to this CRADA.

12.2     NO WARRANTIES. EXCEPT AS SPECIFICALLY STATED IN ARTICLE 9, THE PARTIES
         MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO ANY MATTER WHATSOEVER,
         INCLUDING THE CONDITIONS OF THE RESEARCH OR ANY INVENTION OR PRODUCT,
         WHETHER TANGIBLE OR INTANGIBLE, MADE, OR DEVELOPED UNDER THIS CRADA, OR
         THE OWNERSHIP, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF
         THE RESEARCH OR ANY INVENTION OR PRODUCT.

12.3     INDEMNIFICATION. The Collaborator agrees to hold the U.S. Government
         harmless and to indemnify the Government for all liabilities, demands,
         damages, expenses and losses arising out of the use by the Collaborator
         for any purpose of the Subject Data, Research Materials and/or Subject
         Inventions produced in whole or part by NCI employees under


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         this CRADA, unless due to the negligence or willful misconduct of NCI,
         its employees, or agents. The Collaborator shall be liable for any
         claims or damages it incurs in connection with this CRADA. NCI has no
         authority to indemnify the Collaborator.

12.4     FORCE MAJEURE. Neither Party shall be liable for any unforeseeable
         event beyond its reasonable control not caused by the fault or
         negligence of such Party, which causes such Party to be unable to
         perform its obligations under this CRADA, and which it has been unable
         to overcome by the exercise of due diligence. In the event of the
         occurrence of such a FORCE MAJEURE event, the Party unable to perform
         shall promptly notify the other Party. It shall further use its best
         efforts to resume performance as quickly as possible and shall suspend
         performance only for such period of time as is necessary as a result of
         the FORCE MAJEURE event.

ARTICLE 13.    MISCELLANEOUS

13.1     GOVERNING LAW. The construction, validity, performance and effect of
         this CRADA shall be governed by Federal law, as applied by the Federal
         Courts in the District of Columbia. Federal law and regulations will
         preempt any conflicting or inconsistent provisions in this CRADA.

13.2     ENTIRE AGREEMENT. This CRADA constitutes the entire agreement between
         the Parties concerning the subject matter of this CRADA and supersedes
         any prior understanding or written or oral agreement.

13.3     HEADINGS. Titles and headings of the articles and subarticles of this
         CRADA are for convenient reference only, do not form a part of this
         CRADA, and shall in no way affect its interpretation. The NCI component
         that is the Party for all purposes of this CRADA is the Bureau(s),
         Institute(s), Center(s) or Division(s) listed on the Cover Page herein.

13.4     WAIVERS. None of the provisions of this CRADA shall be considered
         waived by any Party unless such waiver is given in writing to the other
         Party. The failure of a Party to insist upon strict performance of any
         of the terms and conditions hereof, or failure or delay to exercise any
         rights provided herein or by law, shall not be deemed a waiver of any
         rights of any Party.

13.5     SEVERABILITY. The illegality or invalidity of any provisions of this
         CRADA shall not impair, affect, or invalidate the other provisions of
         this CRADA.

13.6     AMENDMENTS. If either Party desires a modification to this CRADA, the
         Parties shall, upon reasonable notice of the proposed modification or
         extension by the Party desiring the change, confer in good faith to
         determine the desirability of such modification or extension. Such
         modification shall not be effective until a written amendment is signed


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         by the signatories to this CRADA or by their representatives duly
         authorized to execute such amendment.

13.7     ASSIGNMENT. Neither this CRADA nor any rights or obligations of any
         Party hereunder shall be assigned or otherwise transferred by either
         Party without the prior written consent of the other Party.

13.8     NOTICES. All notices pertaining to or required by this CRADA shall be
         in writing and shall be signed by an authorized representative and
         shall be delivered by hand or sent by certified mail, return receipt
         requested, with postage prepaid, to the addresses indicated on the
         signature page for each Party. Notices regarding the exercise of
         license options shall be made pursuant to Article 7.2. Any Party may
         change such address by notice given to the other Party in the manner
         set forth above.

13.9     INDEPENDENT CONTRACTORS. The relationship of the Parties to this CRADA
         is that of independent contractors and not agents of each other or
         joint venturers or partners. Each Party shall maintain sole and
         exclusive control over its personnel and operations. Collaborator
         employees who will be working at NCI facilities may be asked to sign a
         Guest Researcher or Special Volunteer Agreement appropriately modified
         in view of the terms of this CRADA.

13.10    USE OF NAME OR ENDORSEMENTS. By entering into this CRADA, NCI does not
         directly or indirectly endorse any product or service provided, or to
         be provided, whether directly or indirectly related to either this
         CRADA or to any patent or other IP license or agreement which
         implements this CRADA by its successors, assignees, or licensees. The
         Collaborator shall not in any way state or imply that this CRADA is an
         endorsement of any such product or service by the U.S. Government or
         any of its organizational units or employees. Collaborator issued press
         releases that reference or rely upon the work of NCI under this CRADA
         shall be made available to NCI at least 7 days prior to publication for
         review and comment.

13.11    EXCEPTIONS TO THIS CRADA. Any exceptions or modifications to this CRADA
         that are agreed to by the Parties prior to their execution of this
         CRADA are set forth in Appendix C.

13.12    REASONABLE CONSENT. Whenever a Party's consent or permission is
         required under this CRADA, such consent or permission shall not be
         unreasonably withheld.

ARTICLE 14.    DURATION OF AGREEMENT

14.1     DURATION. It is mutually recognized that the duration of this project
         cannot be rigidly defined in advance, and that the contemplated time
         periods for various phases of the RP


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         are only good faith guidelines subject to adjustment by mutual
         agreement to fit circumstances as the RP proceeds. In no case will the
         term of this CRADA extend beyond the term indicated in the RP unless it
         is revised in accordance with Article 13.6.

14.2     SURVIVABILITY. The provisions of Articles 4.2, 5-8, 10.3-10.5, 11.1,
         12.2-12.4, 13.1, 13.10 and 14.2 shall survive the termination of this
         CRADA.


                        SIGNATURES BEGIN ON THE NEXT PAGE


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FOR NCI:

/s/ Alan Rabson                                      Date:    1/10/00
--------------------------------------------                  ------------------
Alan S. Rabson, M.D.
Deputy Director, National Cancer Institute


Mailing Address for Notices:

                  National Cancer Institute
                  Technology Development and
                  Commercialization Branch
                  Executive Plaza South, Ste 450
                  6120 Executive Blvd.
                  Rockville, MD 20852


FOR THE COLLABORATOR:


/s/ N. L. Webb                                       Date:    January 6, 2000
--------------------------------------------                  ------------------
Nigel L. Webb, Ph.D.
President and Chief Executive Officer, Protarga, Inc.


Mailing Address for Notices:

                  Protarga, Inc.
                  1100 East Hector Street - Suite 450
                  Conshohocken, PA 19428


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                                   APPENDIX A
                                  RESEARCH PLAN

TITLE OF CRADA:                                 Fatty Acid Mediated Delivery of
                                                Anti-neoplastic Agents for the
                                                Treatment of Cancer

NCI PRINCIPAL INVESTIGATORS:                    Edward Sausville, M.D., Ph.D.
                                                James Drake


COLLABORATOR PRINCIPAL INVESTIGATORS:           Nigel L. Webb, Ph.D.
                                                Matthews O. Bradley, Ph.D.

TERM OF CRADA:                                  Three (3) years.

I. GOALS STATEMENT

The overall goal of this research project is to develop fatty acid conjugates of
anti-neoplastic agents (supplied by the Developmental Therapeutics Program, NCI)
for targeted cancer therapeutic purposes.

II. SUMMARY AND SCIENTIFIC BACKGROUND

Protarga, Inc. ("Protarga") has developed the Targaceutical-TM- Technology for
drug targeting, in order to increase the proportion of administered therapeutic
molecules that reach medically-important cells. This technology involves
chemically linking the pharmaceutical agent of interest to a natural molecule
that is accumulated by the class of cell being targeted. Protarga has employed
this technology to conjugate fatty acids to anti-cancer drugs, with a view to
increasing anti-tumor activity and reducing systemic toxicity. Tumor cells, with
their higher growth rate and intrinsically higher rate of metabolism possess a
greater nutritional need for fatty acids and thus take them up at a greater rate
than surrounding normal tissues. Extensive preclinical studies have shown that
high and stable concentrations of cytotoxic agents may be sustained within
tumors, with a concomitant increase in efficacy. For example, when the fatty
acid docosahexaenoic acid (DHA) was covalently linked to paclitaxel, the cure
rate of paclitaxel-sensitive, syngeneic M109 tumors in mice increased from 0/8
mice using paclitaxel alone, to 8/8 mice with DHA-paclitaxel.

Protarga's Targaceutical-TM- Technology may significantly reduce the systemic
toxicity of many anti-neoplastic agents. Toxicology studies with DHA-paclitaxel
in mice, rats and dogs have shown that the Maximum Tolerated Dose for
DHA-paclitaxel was more than three times higher than that for paclitaxel alone
(calculated on a molar basis). This reduction in systemic toxicity may be due,
in part, to a significant increase in the proportion of drug retained within the
plasma and tumor compartments. Therefore, the use of this technology may allow
for a reduction in toxicity, while allowing for greater efficacy.


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Protarga owns more than 50 patents and patent applications in the U.S. and
abroad that are related to its Targaceutical(TM) Technology and is recognized by
the field as an expert in fatty acid conjugation. Protarga was chosen as the
collaborator on this CRADA project because of its expertise and unique
proprietary position concerning fatty acid conjugation. The following is a list
of patents and patent applications that Protarga owns related to its
Targaceutical(TM) Technology:


<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                       SERIAL/                                                     ISSUE
         COUNTRY                    PATENT NUMBER                   FILING DATE                    DATE
-------------------------------------------------------------------------------------------------------------------
<S>                               <C>                             <C>                        <C>
           USA                        4,939,174                       02/26/88                   07/03/90
-------------------------------------------------------------------------------------------------------------------
           USA                        4,933,324                       02/24/89                   06/12/90
-------------------------------------------------------------------------------------------------------------------
        AUSTRALIA                      635203                         02/24/89                   07/12/93
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           EP                          0401301                        02/24/89                    1/27/99
-------------------------------------------------------------------------------------------------------------------
          JAPAN                       503859/89                       02/24/89
-------------------------------------------------------------------------------------------------------------------
          KOREA                       701965/89                       02/24/89
-------------------------------------------------------------------------------------------------------------------
           WO                        US89/00757                       02/24/89
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           USA                        5,284,876                       06/11/92                   02/08/94
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           USA                        5,545,719                       02/24/93                   08/13/96
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           USA                        5,919,815                       05/22/96                    7/6/99
-------------------------------------------------------------------------------------------------------------------
           WO                        US97/08792                       05/22/97
-------------------------------------------------------------------------------------------------------------------
        AUSTRALIA                     34734/97                        05/22/97
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           EP                        97930990.3                       11/26/98
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           USA                       08/651,429                       05/22/96
-------------------------------------------------------------------------------------------------------------------
           WO                        US97/08866                       05/22/97
-------------------------------------------------------------------------------------------------------------------
        AUSTRALIA                     31424/97                        05/22/97
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           EP                        97926722.6                       11/26/98
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           USA                        5,795,909                       05/22/96                   08/18/98
-------------------------------------------------------------------------------------------------------------------
           WO                        US97/08867                       05/22/97
-------------------------------------------------------------------------------------------------------------------
</Table>


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<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                       SERIAL/                                                     ISSUE
         COUNTRY                    PATENT NUMBER                   FILING DATE                    DATE
-------------------------------------------------------------------------------------------------------------------
<S>                               <C>                             <C>                        <C>
        AUSTRALIA                     31425/97                        11/6/98
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           USA                       08/868,476                       06/03/97
-------------------------------------------------------------------------------------------------------------------
           USA                       09/021,247                       02/10/98
-------------------------------------------------------------------------------------------------------------------
           USA                       08/979,313                       11/26/97
-------------------------------------------------------------------------------------------------------------------
           WO                        W099/26620                       11/12/98
-------------------------------------------------------------------------------------------------------------------
           USA                       08/978,541                       11/26/97
-------------------------------------------------------------------------------------------------------------------
           WO                        W099/26661                       11/12/98
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
           WO                        W099/26958                       11/12/98
-------------------------------------------------------------------------------------------------------------------
           USA                        5,955,459                       11/26/97                    9/21/97
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
          [*]                           [*]                            [*]
-------------------------------------------------------------------------------------------------------------------
</Table>

The Developmental Therapeutics Program (DTP) has operated a repository of
synthetic and pure natural products, which have been evaluated as potential
anti-cancer agents, for more than 40 years. The repository has an historic
inventory of greater than 600,000 compounds that have been supplied over the
years to DTP from a variety of sources world-wide. The repository has sufficient
quantities of approximately 140,000 samples believed to be non-proprietary that
are offered to extramural research community for the discovery and development
of new agents for the treatment of cancer. Subject to the conditions of Article
7.7, it is the intention of the NCI to provide the Collaborator with synthetic
compounds under this CRADA that are non-proprietary and are not subject to third
party rights.

With respect to Natural Product Compounds, the Collaborator acknowledges that a
majority of natural product materials or isolates in the NCI's repository have
been obtained from foreign countries (source country) under the principles of
the model NCI Letter of Collection Agreement ("LOC"). As such, Collaborator is
aware that its access to Natural Product Compounds is subject to Article 7.8.



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III. RESEARCH STRATEGY

The DTP of the National Cancer Institute (NCI) will supply selected Biological
Evaluation Committee or Decision Network (DN) approved anti-neoplastic agents
(NCI Provided Compunds) to Protarga with the desired properties for conjugation.
Protarga will perform the initial conjugation using its Targaceutical-TM-
Technology. Protarga will characterize the derived Targaceutical-TM- Conjugates.
The DTP will conduct the initial IN VITRO and IN VIVO evaluations of the
Targaceutical-TM- Conjugates. For those Targaceutical-TM- Conjugates judged by
the NCI and the CRADA Steering Committee to possess potential anti-tumor
activity the DTP will conduct further preclinical development, subject to NCI DN
approval.


IV. RESPECTIVE CONTRIBUTIONS OF THE PARTIES

COLLABORATOR RESPONSIBILITIES
Protarga's contributions to the collaborative research and development of the
agent will include the following:

o        Protarga has an active research program in fatty acid conjugate
         chemistry and will contribute expertise towards this collaboration;

o        Protarga will conjugate agents supplied by the Pharmaceutical Resources
         Branch of the DTP with the appropriate fatty acid using their
         proprietary Targaceutical-TM- Technology;

o        Protarga will characterize the initial purity and stability of the
         Targaceutical-TM- Conjugates; and

o        Protarga will provide initial supplies of the conjugated drug
         sufficient for preclinical testing of the Targaceutical-TM- Conjugates.

NCI RESPONSIBILITIES

NCI's contribution to the collaborative research and development of the
compounds will include the following:

o        NCI, based on their expertise, in conjunction with the CRADA Steering
         Committee (described below), will select up to twelve agents per month
         from its repository, to be linked to fatty acids. These agents will
         exhibit a novel mechanism of action, a need to reduce toxicity or
         increase efficacy, an appropriate chemical group for conjugation, and
         the presence of sufficient compound in the NCI repository. The quantity
         supplied of any agent selected will not exceed 50% of NCI's current
         inventory;

o        NCI will supply the agent for all preclinical efficacy
         toxicology/pharmacology studies set forth under the scope of this
         CRADA. If there is insufficient compound remaining in the NCI
         repository to complete these studies it shall be the responsibility of
         the NCI to resynthesize additional compound, where practicable and
         feasible;


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o        NCI will collaborate solely with Protarga for the development of
         Targaceutical-TM- Conjugates based on Protarga's proprietary technology
         for attaching anti-neoplastic molecules to fatty acids for therapeutic
         effectiveness in cancer; and

o        NCI will evaluate each of the active studies as they progress to ensure
         that the appropriate questions are being addressed and to ensure that
         the studies are modified as required based on the developing data.

If there are Targaceutical-TM- Conjugates emerging from these studies which
exhibit enough initial IN VIVO and IN VITRO activity as to warrant further
preclinical development, the results of the studies will be presented to the NCI
DN for approval to conduct studies at the DNIIA level of preclinical
development. If approved by the DN and the CRADA Steering Committee, the DTP
will conduct the following preclinical studies:

o        Determine or develop the optimal formulation for the agent to allow
         preclinical and anticipated clinical use;

o        Determine stability of drug as bulk substances; dilution stability;
         stability in clinical dosage forms;

o        Develop a detailed assay for the bulk drug, as well as drug dissolved
         in vehicles, body fluids, and possibly tissues;

o        Determine schedule dependence for demonstration of anti-tumor activity,
         and to demonstrate the feasibility for administration of the agent to
         at least two animal species at a dose likely to have therapeutic
         effect; and

o        Develop assays that allow for pharmacokinetic monitoring of the drug in
         initial clinical trials.

Following completion of studies at the DNIIA level, the compound will be
presented to the DN again, for review at the DNIIB level of preclinical
development. If approved by the DN and the CRADA Steering Committee, DTP will
conduct IND-directed toxicology evaluation in at least two animal species (one
not a rodent) optimally using the same lot of Targaceutical-TM- Conjugates as
formulated for clinical trials. These studies will be carried out using a
schedule that simulates the schedule projected for the initial clinical trials.
Further, this effort will be conducted with correlative histopathologic and
pharmacologic studies.

Evaluation of a range of compound concentrations that encompasses the maximum
tolerated dose, and includes at least one dose level with evidence of reversible
toxicity and one dose level of nonreversible toxicity will be accomplished.
These studies will be carried out under recognized Good Laboratory Practice
regulations. The results of DNIIB studies will allow for the definition of
initial dose, route and schedule, for the design of Phase I clinical trials.


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JOINT RESPONSIBILITIES

Both Parties will work closely together to ensure that the proposed preclinical
studies move forward expeditiously. The ultimate goal of this collaboration is
to determine whether drug-fatty acid conjugates created using Protarga's
proprietary Targaceutical-TM- technology are effective as therapeutic agents
against cancer. If efficacy can be demonstrated without unacceptable toxicity,
the clinical development will proceed, with mutual consent of the parties, and
amendment of this CRADA in accordance with Article 13.6

Compound Selection: The Steering Committee (described below) will jointly select
and prioritize those compounds from the NCI repository for use in conjunction
with the Protarga technology, and determine which Targaceutical-TM- Carrier or
Carriers might be most appropriate. Compound selection will be based on at least
the following criteria: novel mechanism of compound action, need to reduce
toxicity or increase efficacy of the compound based on prior data, appropriate
chemical group on the compound for conjugating to a chosen carrier, availability
of sufficient compound in the NCI library, and whether the compound is synthetic
or natural.

The NCI and Protarga will decide on an appropriate plan for initial IN VITRO and
IN VIVO testing of the Targaceutical-TM- Conjugates.

STEERING COMMITTEE

A joint steering committee will be established, with equal participation by NCI
and Protarga (Steering Committee). The Steering Committee shall be comprised of
the Principal Investigators on the CRADA plus appropriate staff, as needed.
These Investigators will be authorized by NCI and Protarga, respectively, to
determine such things as, but not limited to, which Targaceutical-TM- Conjugates
are synthesized and tested under the CRADA and which testing protocols will be
used. The Investigators would be encouraged to elicit expert recommendations
from their respective organizations prior to each Steering Committee meeting.
The Steering Committee will determine the frequency and location of its
meetings. NCI and Protarga contemplate that the scope and type of synthesis and
testing will evolve commensurate with scientific progress, and the Committee
will be encouraged to harness the resources of both organizations.


V.       DESCRIPTION OF OTHER NIH AND PROTARGA AGREEMENTS

Other than this CRADA, no agreements between the parties are currently effective
or under negotiations. However, the National Institute of Mental Health
conducted a CRADA project with Protarga (formerly known as Neuromedica)
entitled, Therapeutic and Diagnostic Research Using a Novel Carrier System for
the Delivery of Compounds to the Brain, from October 31, 1994 to October 31,
1999.


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VI. ABSTRACT OF RESEARCH PLAN FOR PUBLIC RELEASE

This abstract of the CRADA Research Plan may be released to the public:

The National Cancer Institute and Protarga, Inc. have entered into a Cooperative
Research and Development Agreement (CRADA) for the development of cancer
therapeutics. It is the objective of the CRADA to accelerate discovery of new
cancer therapies by chemically linking promising anti-neoplastic drugs to fatty
acids using Protarga's proprietary Targaceutical-TM- Technology and evaluating
the resulting conjugates both IN VITRO and in animal tumor models for tumor
specificity and therapeutic efficacy.


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                                   APPENDIX B

               FINANCIAL AND STAFFING CONTRIBUTIONS OF THE PARTIES

For NIH:

The NCI, DTP estimates that two to three person years of effort will be required
to conduct a range of studies necessary for the preclinical development of
Targaceutical(TM) Conjugates identified as leads under the CRADA NCI shall, in
addition to its Principal Investigators, provide sufficient staffing to execute
and fulfill the obligations of the CRADA.

NCI will provide no funding to Collaborator for collaborative research and
development pursuant to this CRADA, inasmuch as financial contributions by the
U.S. government to non-Federal parties under a CRADA is prohibited under the
Federal Technology Transfer Act of 1986 (15 U.S.C. 3710a(d)(1)).


For Collaborator:

PERSONNEL:

Collaborator intends to commit 4.6 person-years per year of effort to permit the
timely execution of the studies implemented under this CRADA. More specifically,
this staffing shall include Collaborator full-time employees, consultants to the
company, external contract agencies and contract research organizations.

FUNDING:

Collaborator agrees to fund up to [*] per year for transportation and lodging
costs to support the participation of NCI staff at selected scientific or
development meetings where such participation will substantially foster
development under this CRADA. Collaborator and NCI must mutually agree to the
activities that are appropriate under this Agreement. Travel arrangements
will be made in accordance with the Federal Travel Rules and Regulations for
all government staff whether paid for by government or private Collaborator
funds.

If additional funding to support additional preclinical studies is determined to
be necessary and agreed upon by the Parties hereto, an appropriate written
amendment pursuant to Article 13.6 will be executed.

No funds provided under this CRADA by Collaborator will be used by NCI to pay
the salary of any full-time tenured federal employees.



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PAYMENT SCHEDULE:

Payments by the Collaborator shall be made annually. The first payment will be
due within thirty(30)days of the signing of this CRADA. Subsequent payment for
years two and three should be made within 30 days of the anniversary date of the
execution of the CRADA. A check in the amount of [*] should be deposited in
the CRADA account. Checks should be made payable to the National Cancer
Institute and sent via express mail to:

                            CRADA Funds Coordinator;
                            Technology Development and Commercialization Branch,
                            National Cancer Institute
                            6120 Executive Blvd., Suite. 450
                            Rockville, MD 20852

with a clear reference to the NCI CRADA Number and Title: #888, Fatty Acid
Mediated Delivery of Anti-Neoplastic Agents for the Treatment of Cancer. A copy
of the check and letter should be faxed to James Drake at 301-402-0831.












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                                   APPENDIX C

                    EXCEPTIONS OR MODIFICATIONS TO THIS CRADA



ARTICLE 2.        DEFINITIONS

Add:     2.12     "Targaceutical(TM) Technology" means Protarga's proprietary
                  information and property relating to chemical conjugates of
                  fatty acids with natural and synthetic agents, including, but
                  not limited to, trade secrets, technology, know-how,
                  patentable and unpatentable inventions, discoveries, formulae,
                  synthetic methods, specifications, processes, test procedures,
                  samples, specimens, results, data, computer programs, and
                  manufacturing, toxicology, regulatory and clinical information
                  and other valuable information that relates thereto. Protarga
                  is the owner of the patents and patent applications related to
                  Targaceutical(TM) Technology listed in Appendix A, Section II
                  of this CRADA.

         2.13     "Targeceutical Conjugate" means an NCI Provided Compound
                  linked to a "Targaceutical Carrier" using Targaceutical(TM)
                  Technology.

         2.14     "NCI Provided Compound" means any and all compounds, materials
                  and data, other than collaborator compounds, and including
                  both synthetic and Natural Product Compounds, that are
                  supplied to Collaborator by the NCI pursuant to this CRADA.

         2.15     "Targaceutical Carrier" means a fatty acid which will be
                  linked to any NCI Provided Compound

         2.16     "Natural Product Compound" means a NCI Provided Compound that
                  was obtained from a foreign country under a Letter of
                  Collection or any natural compound provided to the
                  Collaborator by the NCI from the NCI Natural Products
                  Repository.

         2.17     "Steering Committee" means the committee, comprised of the
                  Principal Investigators on the CRADA and any appropriate
                  staff, that will determine such things as, but not limited to,
                  which Targaceutical(TM) Conjugates are synthesized, which
                  testing protocols will be used and whether an NCI Contractor
                  will be used under the CRADA.


ARTICLE 6.        INTELLECTUAL PROPERTY RIGHTS AND PATENT APPLICATIONS

Replace old 6.2 with new 6.2:


                                      C-1

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         6.2      COLLABORATOR EMPLOYEE, CONTRACTORS AND CONSULTANT INVENTIONS.
                  The Collaborator shall retain IP rights to any Subject
                  Invention made solely by Collaborator employees, its
                  contractors, or its consultants.

Add:     6.9      CONTRACTOR INTELLECTUAL PROPERTY RIGHTS.  In conducting a
                  portion of the CRADA research, it may be necessary for NCI to
                  utilize the services of a contractor under a funding agreement
                  as defined by 35 U.S.C.sec.201(b) ("NCI Contractor"). The
                  Collaborator is aware that such a NCI Contractor is not a
                  party to this CRADA, and that under the Bayh-Dole Act (see 35
                  U.S.C. 200 et seq.) and 37 Code of Federal Regulations Part
                  401, such a contractor has the right to elect title to any
                  invention discovered solely or jointly by its employee in the
                  performance of a funding agreement.

                  The NCI may utilize the services of a NCI Contractor under
                  this CRADA only after the Steering Committee has approved such
                  use. In determining whether a NCI Contractor will be utilized,
                  the NCI will provide to the Steering Committee the name and
                  contact information for the proposed contractor and a draft
                  work scope for the proposed contract services.

                  If the Steering Committee determines that such a contractor
                  will be utilized, prior to the NCI sending a
                  Targacuetical(TM) Conjugate to the contractor for study, the
                  contractor must agree to the terms of Appendix E attached
                  hereto. Pursuant to Appendix E, the Collaborator may approach
                  the contractor or contractor employee to secure a license to
                  commercialize the invention.

                  If the Steering Committee determines that it is not in the
                  best interest of the Parties to use a NCI Contactor to perform
                  a specific task under the CRADA research plan, or if such a
                  contractor refuses to agree to the terms of Appendix E, the
                  Collaborator may elect to perform the proposed studies at its
                  own expense or may elect to waive the obligations of the NCI
                  Contractor set forth herein, whereupon the NCI Contractor will
                  be utilized.

Add:     6.10     TRADEMARKS. The Collaborator has adopted, and has registered
                  or intends to register, a number of trademarks, including
                  "Protarga", "Targaceutical", "T2000", and "Taxoprexin", that
                  it considers to be valuable property, and intends to adopt or
                  register additional trademarks in the future. In any
                  communication by NCI that includes a trademark adopted by
                  Collaborator, including the trademarks listed above, NCI will
                  acknowledge that Collaborator is the owner of such trademark.
                  No license to NCI or the U.S. Government for such trademarks
                  is intended or implied by this paragraph.

ARTICLE 7.        LICENSING

Add as a new 7.7


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         7.7      REASONABLE INQUIRY. Before any NCI Provided Compound is sent
                  to the Collaborator for research under the CRADA, NCI will
                  perform a reasonable inquiry into whether patent or license
                  rights owned or granted by NCI exist in the compound which
                  could preclude the Collaborator from performing its
                  obligations under the CRADA or block the Collaborator from
                  exercising its rights in a Subject Invention. NCI will inform
                  the Collaborator of any such findings prior to providing said
                  compound to Collaborator.

                  However, the NCI makes no representation that the use of a NCI
                  Provided Compound will not infringe any patent or proprietary
                  rights of third parties. Nonetheless, if it is known to the
                  NCI that a third party has a proprietary interest in a NCI
                  Provided Compound, the NCI will provide notice to the
                  Collaborator of such interest and provide any information, in
                  the possession of the NCI, that would allow that Collaborator
                  to contact the third party in order to conduct its own inquiry
                  concerning the third party's rights.

                  To the extent that a license in an NCI Provided Compound is
                  necessary to commercialize a Subject Invention, NCI will in
                  good faith consider in accordance with 37 CFR 404 an
                  application submitted by Collaborator for an exclusive or
                  nonexclusive license to that NCI Compound owned compound.

Add a new 7.8

         7.8      Policy Related to Natural Product Compounds. Collaborator is
                  put on notice, and agrees to the following NCI guideline for
                  access to Natural Product Compounds from the NCI Natural
                  Products Repository:

                  (A)      Collaborator acknowledges that the majority of
                  Natural Product Compounds or isolates in the NCI Natural
                  Products Repository have been obtained from foreign countries
                  under the principles of the model NCI Letter of Collection
                  Agreement ("LOC"), which appears under Appendix F. Articles
                  8-10 and 13 of the LOC stipulate that NCI require a commercial
                  licensee of an invention derived from a Natural Product
                  Compound to enter into an agreement with the Source Country of
                  the Natural Product Compound (or an appropriate organization
                  thereof). This agreement will address the reasonable concerns
                  of the signatory Source Country Government ("SCG") agency or
                  Source County Organization ("SCO") related to (a) ensuring a
                  long-term source of supply of the Natural Product Compound and
                  other conservation measures and (b) sharing in commercial
                  benefits that arise from development of the Natural Product
                  Compound. In the case of a Natural Products Repository
                  material not covered under a formal LOC, Collaborator agrees
                  to negotiate and execute such an agreement with the SCG agency
                  that issued the collection permit for the Natural Product
                  Compound. These steps are necessary for NCI to comply with (a)
                  the mutual understandings between NCI, NCI's contract
                  collectors and the SCG permit-issuing-agencies, under which
                  the Natural Product Compounds were collected, and (b) the
                  NCI's policy of adhering to the principles of the United


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                  Nations Convention on Biological Diversity ("U.N. CBD"), which
                  calls for "sharing in a fair and equitable way the results of
                  research and development and the benefits arising from the
                  commercial and other utilization of genetic resources with the
                  [source country] providing such resources." (U.N. CBD; Article
                  15.7). Therefore:

                  (B)      Should NIH license or assign to Collaborator NCI
                  rights in any CRADA Subject Invention derived from material
                  from the Natural Products Repository, Collaborator agrees, as
                  a condition for obtaining the license or assignment, that it
                  will negotiate in good faith and enter into an agreement with
                  the appropriate SCG agency and/or SCO which will address
                  concerns on the part of the SGC or SCO that pertinent
                  agencies, institutions, and/or persons in the Source Country
                  receive royalties and other forms of compensation, as
                  appropriate. If NIH in consultation with SCG/SCO deem it
                  appropriate, Collaborator's obligation to negotiate such an
                  agreement may be suspended until Collaborator is prepared to
                  commercialize the invention or to (sub)license its rights in
                  the invention to a third party that will pursue final
                  development and commercialization. In this latter case, NIH
                  may, at its discretion, transfer the obligation to conclude
                  such an agreement from Collaborator to Collaborator's
                  (sub)licensee. However, Collaborator agrees that, in any
                  event, negotiations between either Collaborator or
                  Collaborator's (sub)licensee and the SCG/SCO must commence
                  prior to the start of any human clinical trials using
                  inventions derived from material from the Natural Products
                  Repository. Negotiations must be completed and an agreement
                  executed prior to the commercial sale of any product or
                  process derived from such Natural Product Compound. This
                  agreement must be binding upon the SCG/SCO, Collaborator and
                  any licensee(s) or assignees of Collaborator with respect to
                  any intellectual property rights relating to inventions
                  derived from the Natural Product Compound.

                  (C)      Similarly, Collaborator agrees that, should an
                  invention by Collaborator employees derived from material from
                  the Natural Products Repository eventually be developed and
                  marketed by Collaborator, or licensed or assigned by
                  Collaborator to a third party for development and
                  commercialization, Collaborator or Collaborator's
                  licensee/assignee will negotiate in good faith and enter into
                  an agreement with the appropriate SCG agency or SCO. This
                  agreement will address concerns on the part of the SCG or SCO
                  that pertinent agencies, institutions, and/or persons in the
                  Source Country receive royalties and other forms of
                  compensation, as appropriate. Collaborator agrees that
                  negotiations between either Collaborator or Collaborator's
                  licensee/assignee and the SCG/SCO must commence prior to the
                  start of any human clinical trials using inventions derived
                  from material from the Natural Products Repository.
                  Negotiations must be completed and an agreement executed prior
                  to the commercial sale of any product or process derived from
                  such Natural Product Compound. This agreement must be binding
                  upon the SCG/SCO, Collaborator and any licensees) or assignees
                  of Collaborator with respect to any intellectual property
                  rights relating to inventions derived from the Natural Product
                  Compound.


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                  (D)      The provisions of Subsections (B) and (C) above will
                  apply equally to instances where an invention is directed to a
                  direct isolate from a Natural Product Compound, a product
                  structurally based upon an isolate from the Natural Product
                  Compound, a synthetic material for which the Natural Product
                  Compound provided a key development lead, or a method of
                  synthesis or use of any aforementioned isolate, product or
                  material; although the percentage of royalties or the type and
                  amount of other appropriate negotiated compensation may vary
                  depending upon the relationship of the final commercial
                  product to the Natural Product Compound originally obtained
                  from the Source Country. It is understood that the eventual
                  development of a drug to the stage of marketing is a long term
                  process which may require 10-15 years.

                  (E) In obtaining additional sources of a material from the
                  Natural Products Repository (or extracts thereof),
                  Collaborator agrees to seek as its first source of supply
                  natural products from the Source Country and to require any
                  licensee or assignee of Collaborator's interests in inventions
                  derived from the Natural Product Compound to do the same. If
                  Collaborator or Collaborator's licensee/assignee, after a
                  good-faith attempt or inquiry, decides it cannot use the
                  Natural Product Compounds available from the Source Country,
                  or if the SCG or SCO cannot provide adequate amounts of raw
                  materials at a mutually agreeable fair price, then
                  Collaborator agrees (a) to pay the appropriate SCG agency or
                  SCO an amount of money (to be negotiated) to be used for
                  expenses associated with the cultivation of medicinal plant
                  species that are endangered by deforestation, or for other
                  appropriate conservation measures, or (b) to require its
                  licensee/assignee to do the same. These provisions will also
                  apply in the event that Collaborator or a licensee/assignee of
                  Collaborator begins to market a synthetic material for which a
                  material from the Natural Product Repository provided a key
                  development lead.

                  (F) Subsection E will not apply to Natural Product Compounds
                  which are freely available from different countries (i.e.,
                  common weeds, agricultural crops, ornamental plants, fouling
                  organisms) unless information indicating a particular use of
                  the Natural Product Compound (e.g., medicinal, pesticidal) was
                  provided by local residents to guide the collection of such an
                  organism from the Source Country, or unless other
                  justification acceptable to the SCG or SCO and the NCI is
                  provided. In the case where a Natural Product Compound is
                  freely available from different countries, but a genotype
                  producing an active agent is found only in the Source Country,
                  Section E will apply.

                  (G) Collaborator will not transfer materials from the Natural
                  Products Repository to any third party

         ARTICLE 8. PROPRIETARY RIGHTS AND PUBLICATION

         Add to the end of Article 8.1 the following sentence:


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                  In the event that the NCI elects that it has no further
                  interest in the development of a Targaceutical(TM) Conjugate
                  at any stage of development, Protarga will be provided copies
                  of all data, within NCI's possession and control, generated
                  under the CRADA with the Targaceutical(TM) Conjugates and will
                  be free to pursue development of that Targaceutical(TM)
                  Conjugates with its own resources.

         Add to the end of Article 8.7 the following sentence:

                  In any written scientific publication concerning the research
                  findings from the CRADA, the publishing party will acknowledge
                  the contributions of the non-publishing party where
                  appropriate.

         ARTICLE 10. TERMINATION

         Add as a new 10.6

                  10.6     DISPOSITION OF RESEARCH MATERIALS. NCI shall use any
                           and all compounds, materials and data that are
                           supplied to NCI by the Collaborator pursuant to this
                           CRADA, only for work conducted under this CRADA and
                           shall return unused compounds, materials and data
                           supplied by the Collaboratortor to the Collaborator
                           within 30 days of expiration or termination of this
                           CRADA. Notwithstanding the previous sentence, if a
                           Targaceutical Compound supplied to NCI by the
                           Collaborator pursuant to this CRADA constitutes a
                           joint Subject Invention, NCI shall have the right to
                           retain such a compound which is in its possession at
                           the time of termination or expiration of this CRADA
                           and NCI shall retain all its rights to such a
                           compound subject to the terms and conditions of this
                           CRADA.

         ARTICLE 13.  MISCELLANEOUS

         Add to the end of 13.6 the following sentence:

                  If Collaborator elects to perform any portion of the Research
                  Plan through a contractor or consultant, Collaborator agrees
                  to incorporate into such contracts all provisions necessary to
                  ensure that the work of such contractors or consultants is
                  governed by the terms of the CRADA, including, but not limited
                  to a provision for the assignment of inventions of the
                  contractor or consultant to Collaborator.


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                                   APPENDIX D

                                MODEL OF THE NCI
                              LETTER OF COLLECTION


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                              LETTER OF COLLECTION
                                Agreement Between
                          [Source Country Institution]
                      and/or [Source Country Organization]
                                     and the
                       Developmental Therapeutics Program
                   Division of Cancer Treatment and Diagnosis
                            National Cancer Institute

                  The Developmental Therapeutics Program (DTP), Division of
         Cancer Treatment and Diagnosis (DCTD), National Cancer Institute (NCI)
         is currently investigating plants, microbes, and marine macro-organisms
         as potential sources of novel anticancer and AIDS-antiviral drugs. The
         DTP is the drug discovery program of the NCI which is an Institute of
         the National Institutes of Health (NIH), an arm of the Department of
         Health and Human Services of the United States Government. While
         investigating the potential of natural products in drug discovery and
         development, NCI wishes to promote the conservation of biological
         diversity, and recognizes the need to compensate [Source Country]
         organizations and peoples in the event of commercialization of a drug
         developed from an organism collected within their borders.

                  As part of the drug discovery program, DTP has contracts with
         various organizations for the collection of plants, microbes and marine
         macro-organisms worldwide. DTP has an interest in investigating plants,
         microbes and marine macro-organisms from [Source Country], and wishes
         to collaborate with the [Source Country Government ("SCG") or Source
         Country Organization(s) (SGO) as appropriate in this investigation. The
         collection of plants, microbes, and marine macro-organisms will be
         within the framework of the collection contract between the NCI and the
         NCI Contractor (Contractor) which will collaborate with the appropriate
         agency in the [SCG or SCO]. The NCI will make sincere efforts to
         transfer knowledge, expertise, and technology related to drug discovery
         and development to the [appropriate Source Country Institution ("SCI")]
         in [Source Country] as the agent appointed by the [SCG or SCO], subject
         to the provision of mutually acceptable guarantees for the protection
         of intellectual property associated with any patented technology. The
         [SCG or SCO], in turn, desires to collaborate closely with the DTP/NCI
         in pursuit of the investigation of its plants, microbes and marine
         macro-organisms, subject to the conditions and stipulations of this
         agreement.

         THE ROLE OF DTP, DCTD, NCI IN THE COLLABORATION WILL INCLUDE THE
FOLLOWING:

                  1) DTP/NCI will screen the extracts of all plants, microbes
                  and marine macro-organisms provided from [Source Country] for
                  anticancer and AIDS-antiviral activity, and will provide the
                  test results to [SCI] on a quarterly basis. Such results will
                  be channeled via Contractor.

                  2) The test results will be kept confidential by all parties,
                  with any publication delayed until DTP/NCI has an opportunity
                  to file a patent application in the


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                  United States of America on any active agents isolated. Such
                  application will be made according to the terms stated in
                  Article 6.

                  3) Any extracts exhibiting significant activity will be
                  further studied by bioassay-guided fractionation in order to
                  isolate the pure compounds(s) responsible for the observed
                  activity. Since the relevant bioassays are only available at
                  DTP/NCI, such fractionation will be carried out in DTP/NCI
                  laboratories. A suitably qualified scientist designated by
                  [SCI] may participate in this process subject to the terms
                  stated in Article 4. In addition, in the course of the
                  contract period, DTP/NCI will assist the [SCG or SCO], in
                  conjunction with [SCI], to develop the capacity to undertake
                  drug discovery and development, including capabilities for the
                  screening and isolation of active compounds from plants,
                  microbes and marine organisms.

                  4) Subject to the provision that suitable laboratory space and
                  other necessary resources are available, DTP/NCI agrees to
                  invite a senior technician or scientist designated by [SCI] to
                  work in the laboratories of DTP/NCI or, if the parties agree,
                  in laboratories using technology which would be useful in
                  furthering work under this agreement. The duration of such a
                  visit would not exceed one year except by prior agreement
                  between [SCI] and DTP/NCI. The designated Guest Researcher
                  will be subject to provisions usually governing Guest
                  Researchers at NIH, except when carrying out research on
                  materials provided through collections in [Source Country].
                  Salary and other conditions of exchange will be negotiated in
                  good faith.

                  5) In the event of the isolation of a promising agent from a
                  plant, microbe or marine macro-organism collected in [Source
                  Country], further development of the agent will be undertaken
                  by DTP/NCI in collaboration with [SCI]. Once an active agent
                  is approved by the DTP/NCI for preclinical development, [SCI]
                  and the DTP/NCI will discuss participation by SCI scientists
                  in the development of the specific agent.

                  The DTP/NCI will make a sincere effort to transfer any
                  knowledge, expertise, and technology developed during such
                  collaboration in the discovery and development process to
                  [SCI], subject to the provision of mutually acceptable
                  guarantees for the protection of intellectual property
                  associated with any patented technology.

                  6) DTP/NCI will, as appropriate, seek patent protection on all
                  inventions developed under this agreement by DTP/NCI employees
                  alone or by DTP/NCI and [SCG or SCO] employees jointly, and
                  will seek appropriate protection abroad, including in [Source
                  Country], if appropriate.

                  7) All licenses granted on any patents arising from this
                  collaboration shall contain a clause referring to this
                  agreement and shall indicate that the licensee has been
                  apprized of this agreement.


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                  8) Should the agent eventually be licensed to a pharmaceutical
                  company for production and marketing, DTP/NCI, will require
                  the successful licensee to negotiate and enter into
                  agreement(s) with the [SCG] agency(ies) or [SCO] as
                  appropriate. This agreement(s) will address the concern on the
                  part of the [SCG or SCO] that pertinent agencies, institutions
                  and/or persons receive royalties and other forms of
                  compensation, as appropriate.

                  9) Such terms shall apply equally to instances where an
                  invention is directed to a direct isolate from a natural
                  product material, a product structurally based upon an isolate
                  from the natural product material, a synthetic material for
                  which the natural product material provided a key development
                  lead, or a method of synthesis or use of any aforementioned
                  isolate, product or material; though the percentage of
                  royalties negotiated as payment might vary depending upon the
                  relationship of the marketed drug to the originally isolated
                  product. It is understood that the eventual development of a
                  drug to the stage of marketing is a long term process which
                  may require 10- 15 years.

                  10) In obtaining licensees, the DTP/NCI will require the
                  license applicant to seek as its first source of supply the
                  natural products from [Source Country]. If no appropriate
                  licensee is found that will use natural products available
                  from [Source Country], or if the [SCG] or [SCO] as
                  appropriate, or its suppliers cannot provide adequate amounts
                  of raw materials at a mutually agreeable fair price, the
                  licensee will be required to pay the [SCG] or [SCO] as
                  appropriate, an amount of money (to be negotiated) to be used
                  for expenses associated with cultivation of medicinal plant,
                  microbe or marine macro-organism species that are endangered
                  by deforestation, or for other appropriate conservation
                  measures. These terms will also apply in the event that the
                  licensee begins to market a synthetic material for which a
                  material from [Source Country] provided a key development
                  lead.

                  11) Section 10 shall not apply to organisms which are freely
                  available from different countries (i.e., common weeds,
                  agricultural crops, ornamental plants, fouling organisms)
                  unless information indicating a particular use of the organism
                  (e.g., medicinal, pesticidal) was provided by local residents
                  to guide the collection of such an organism from [Source
                  Country], or unless other justification acceptable to both the
                  [SCG or SCO] and the DTP/NCI is provided. In the case where an
                  organism is freely available from different countries, but a
                  phenotype producing an active agent is found only in [Source
                  Country], Article 10 shall apply.

                  12) DTP/NCI will test any pure compounds submitted by the [SCG
                  or SCO] and [SCI] scientists for antitumor and anti HIV/AIDS
                  activity, provided such compounds have not been tested
                  previously in the DTP/NCI screens. If significant antitumor or
                  anti HIV/AlDS activity is detected, further development of the
                  compound and investigation of patent rights will, as
                  appropriate, be undertaken by DTP/NCI in consultation with
                  [SCI] and the [SCG or SCO].


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                  Should an agent derived from the compound eventually be
                  licensed to a pharmaceutical company for production and
                  marketing, DTP/NCI will require the successful licensee to
                  negotiate and enter into agreement(s) with the appropriate
                  [SCG agency(ies) or SCO]. This agreement will address the
                  concern on the part of the [SCG or SCO] that pertinent
                  agencies, institutions and/or persons receive royalties and
                  other forms of compensation, as appropriate.

                  13) DTP/NCI may send selected samples to other organizations
                  for investigation of their anti-cancer, anti-HIV or other
                  therapeutic potential. Such samples will be restricted to
                  those collected by NCI contractors unless specifically
                  authorized by the [SCG or SCO]. Any organization receiving
                  samples must agree to compensate the [SCG or SCO] and
                  individuals, as appropriate, in the same fashion as described
                  in Articles 8-10 above, notwithstanding anything to the
                  contrary in Section 11.

         THE ROLE OF THE SOURCE COUNTRY GOVERNMENT ("SCG") OR SOURCE COUNTRY
         ORGANIZATION(S) ("SCO") IN THE COLLABORATION WILL INCLUDE THE
         FOLLOWING:

                  1) The appropriate agency in [SCG or SCO] will collaborate
                  with Contractor in the collection of plants, microbes and
                  marine macro-organisms, and will work with Contractor to
                  arrange the necessary permits to ensure the timely collection
                  and export of materials to DTP/NCI.

                  2) Should the appropriate agency in [SCG or SCO] have any
                  knowledge of the medicinal use of any plants, microbes and
                  marine macro-organisms by the local population or traditional
                  healers, this information will be used to guide the collection
                  of plants, microbes or marine macro-organisms on a priority
                  basis where possible. Details of the methods of administration
                  (e.g., hot fusion, etc.) used by the traditional healers will
                  be provided where applicable to enable suitable extracts to be
                  made. All such information will be kept confidential by
                  DTP/NCI until both parties agree to publication.

                  The permission of the traditional healer or community will be
                  sought before publication of their information, and proper
                  acknowledgment will be made of their contribution.

                  3) The appropriate agency in [SCG or SCO] and Contractor will
                  collaborate in the provision of further quantities of active
                  raw material if required for development studies.

                  4) In the event of large amounts of raw material being
                  required for production, the appropriate agency of the [SCG or
                  SCO] and Contractor


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                  will investigate the mass propagation of the material in
                  [Source Country]. Consideration should also be given to
                  sustainable harvest of the material while conserving the
                  biological diversity of the region, and involvement of the
                  local population in the planning and implementation stages.

                  5) [SCG or SCG] and SCI scientists and their collaborators may
                  screen additional samples of the same raw materials for other
                  biological activities and develop them for such purposes
                  independently of this agreement.

                  This agreement shall be valid as of the date of the final
         authorized signature below for an initial period of three (3) years,
         after which it can be renewed by mutual agreement. It may be amended at
         any time subject to the written agreement of both parties. Copies of
         such amendments will be kept on file at both of the addresses indicated
         below.


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         FOR THE NATIONAL CANCER INSTITUTE:         For [SCI] or [SCO]:


         -----------------------------
         Richard Klausner, M.D.                     Name: (typed)
         Director, National Cancer Institute        Title: (typed)


         -----------------------------
         Date                                       Date
         Mailing and contact address:               Mailing and contact address:

         Technology Development &
         Commercialization branch
         National Cancer Institute
         Executive Plaza South, Suite 450
         6120 Executive Blvd.
         Rockville, Maryland 20852 U.S.A.

         Telephone: 301-496-0477
         Facsimile: 301-402-2117


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                                   APPENDIX E

                            TERMS OF AWARD ADDITIONS


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                            TERMS OF AWARD ADDITIONS

                  INTELLECTUAL PROPERTY OPTION TO COLLABORATOR

         Contractor agrees to promptly notify the NCI and "Collaborator" in
         writing of any inventions, discoveries or innovations made by the
         Contractor's principal investigator or any other employees or agents of
         Contractor, whether patentable or not, which are conceived and/or first
         actually reduced to practice in the performance of this study using a
         Targaceutical(TM) Conjugate (hereinafter "Contractor Inventions").

         Contractor agrees to grant to Collaborator: (i) a paid-up nonexclusive,
         nontransferable, royalty-free, world-wide license to all Contractor
         Inventions for research purposes only; and (ii) a time-limited first
         option to negotiate an exclusive, world-wide royalty-bearing license
         for all commercial purposes, including the right to grant sub-licenses,
         to all Contractor Inventions on terms to be negotiated in good faith by
         Collaborator and Contractor. Collaborator shall notify Contractor, in
         writing, of its interest in obtaining an exclusive license to any
         Contractor Invention within six (6) months of Collaborator's receipt of
         notice of such Contractor Invention(s). In the event that Collaborator
         fails to so notify Contractor, or elects not to obtain an exclusive
         license, then Collaborator's option shall expire with respect to that
         Contractor Invention, and Contractor will be free to dispose of its
         interests in such Contractor Invention in accordance with Contractor's
         policies. If Contractor and Collaborator fail to reach agreement within
         ninety (90) days, (or such additional period as Collaborator and
         Contractor may agree) on the terms for an exclusive license for a
         particular Contractor Invention, then for a period of six (6) months
         thereafter Contractor shall not offer to license the Contractor
         Invention to any third party on materially better terms than those last
         offered to Collaborator without first offering such terms to
         Collaborator, in which case Collaborator shall have a period of thirty
         (30) days in which to accept or reject the offer.

         Contractor agrees that notwithstanding anything herein to the contrary,
         any inventions, discoveries or innovations, whether patentable or not,
         which are not Subject Inventions as defined in 35 USC 201(e),*
         [footnote] arising out of any unauthorized use of the Collaborator's
         Study drug and/or any modifications to the Study Drug, shall be the
         property of the Collaborator (hereinafter "Collaborator Inventions").
         Contractor will promptly notify the Collaborator in writing of any
         such Collaborator Inventions and, at Collaborator's request and
         expense, Contractor will cause to be assigned to Collaborator all
         right, title and interest in and to any such Collaborator Inventions
         and provide Collaborator with reasonable assistance to obtain patents
         (including causing the execution of any invention assignment or
         other documents).


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         * [footnote] 35 USC(e): (e) The term "subject invention" means any
         invention of the contractor conceived or first actually reduced to
         practice in the performance of work under a funding agreement:
         Provided, That in the case of a variety of plant, the date of
         determination (as defined in section 41(d) (FOOTNOTE 1) of the Plant
         Variety Protection Act (7 U.S.C. 2401(d)) must also occur during the
         period of contract performance.


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                         PROTECTION OF PROPRIETARY DATA

         Data generated using a Targaceutical(TM) Conjugate will be kept
         confidential and shared only with the NCI, the FDA and the
         Collaborator. The Contractor retains the right to publish research
         results subject to the terms of the Collaborator/NCI CRADA.


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