Document:

Unassociated Document

    

      Exhibit
        10.4

    

     

    
      EMPLOYMENT
        AGREEMENT

       

      This
        Agreement (this “Agreement”),
        dated
        as of June 2, 2004 (sometimes the “Effective Date”), by and between BROADWAY
        THERAPEUTICS, INC., a Delaware corporation with principal executive offices
        at
        787 Seventh Avenue, 48th
        Floor,
        New York, NY 10019 (the “Company”),
        and
        STEVEN KELLY.,
        residing at 83 Mercer Street, Apt. #3, New York, NY 10012
        (the
“Executive”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Company desires to employ the Executive as President and Chief Executive
        Officer of the Company, and the Executive desires to serve the Company in
        those
        capacities, upon the terms and subject to the conditions contained in this
        Agreement;

       

      NOW,
        THEREFORE, in consideration of the mutual covenants and agreements herein
        contained, the parties hereto hereby agree as follows:

       

      1.  Employment.

       

      (a)  Services.
        The
        Executive will be employed by the Company as its President and Chief Executive
        Officer. The Executive will report to the Board of Directors of the Company
        (the
        "Board") and shall perform such duties as are consistent with your position
        as
        President and Chief Executive Officer (the
        “Services”).
        The
        Executive agrees to perform such duties faithfully, to devote all of his
        working
        time, attention and energies to the business of the Company, and while he
        remains employed, not to engage in any other business activity that is in
        conflict with your duties and obligations to the Company. 

       

      (b)  Acceptance.
        Executive hereby accepts such employment and agrees to render the
        Services.

       

      2.  Term.

       

      The
        Executive's employment under this Agreement (the "Term") shall commence as
        of
        the Effective Date and shall continue for a term of three (3) years, unless
        sooner terminated pursuant to Section 9 of this Agreement. Notwithstanding
        anything to the contrary contained herein, the provisions of this Agreement
        governing protection of Confidential Information shall continue in effect
        as
        specified in Section 6 hereof and survive the expiration or termination hereof.
        This Agreement may be renewed for additional one year terms if the Company
        and
        the Executive agree in writing prior to the expiration or other termination
        of
        the Term.

       

      3.  Best
        Efforts; Place of Performance.

       

      (a)  The
        Executive shall devote substantially all of his business time, attention
        and
        energies to the business and affairs of the Company and shall use his best
        efforts to advance the best interests of the Company and shall not during
        the
        Term be actively engaged in any other business activity, whether or not such
        business activity is pursued for gain, profit or other pecuniary advantage,
        that
        will interfere with the performance by the Executive of his duties hereunder
        or
        the Executive’s availability to perform such duties or that will adversely
        affect, or negatively reflect upon, the Company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b)  The
        duties to be performed by the Executive hereunder shall be performed primarily
        at the office of the Company in New York, New York, subject to reasonable
        travel
        requirements on behalf of the Company, or
        such
        other place as the Board may reasonably designate. Notwithstanding the
        foregoing, the Company may be relocated to another city within the United
        States
        with consent of the Board.

       

      4.  Directorship.
        The
        Company shall use its best efforts to cause the Executive to be elected as
        a
        member of its Board of Directors throughout the Term and shall include him
        in
        the management slate for election as a director at every stockholders meeting
        during the Term at which his term as a director would otherwise expire. The
        Executive agrees to accept election, and to serve during the Term, as director
        of the Company, without any compensation therefor other than as specified
        in
        this Agreement.

       

      5.  Compensation.
        As full compensation for the performance by the Executive of his duties under
        this Agreement, the Company shall pay the Executive as follows:

       

      (a)  Base
        Salary.
        The
        Company shall pay Executive a salary (the “Base Salary”) equal to Two Hundred
        Forty Thousand Dollars ($240,000.00) per year. Payment shall be made in
        accordance with the Company’s normal payroll practices.

       

      (b)  Guaranteed
        Bonus.
        The
        Company will pay Executive $22,000.00 upon execution of this Agreement. In
        addition, the Company shall pay the Executive a bonus (the “Guaranteed Bonus”)
        of Fifty Thousand ($50,000.00) Dollars within 30 days following each anniversary
        of the date of the Effective Date during the Term, provided that the Executive
        is employed hereunder on such anniversary date. 

       

      (c)  Discretionary
        Bonus. At the sole discretion of the Board of Directors of the Company, the
        Executive shall receive an additional annual bonus (the “Discretionary
        Bonus”) in an amount equal to up to 50% of his Base Salary, based upon
        his performance on behalf of the Company during the prior year. The
        Discretionary Bonus shall be payable either as a lump-sum payment or in
        installments as determined by the Board of Directors of the Company in its
        sole
        discretion. In addition, the Board of Directors of the Company shall annually
        review the Bonus to determine whether an increase in the amount thereof is
        warranted.

       

      (d)  Withholding.
        The
        Company shall withhold all applicable federal, state and local taxes and
        social
        security and such other amounts as may be required by law from all amounts
        payable to the Executive under this Section 5. 

       

      (e)  Equity.
        

       

      (i)  Restricted
        Shares.
        As
        additional compensation for the services to be rendered by the Executive
        pursuant to this Agreement, the Company shall grant the Executive 158,000
        shares
        of Common Stock of the Company (the "Restricted Shares") representing five
        percent (5%) of the outstanding Common Stock of the Company. The Restricted
        Shares shall be held in escrow at Paramount BioCapital Investments, LLC.
        On each
        of the first two (2) anniversaries of this Agreement, Fifty-Two Thousand
        Six
        Hundred Sixty-Six (52,666) Restricted Shares shall vest, subject to the terms
        of
        this Agreement, and all vested shares will be released from the escrow account
        to the Executive. On the third anniversary of this Agreement the remaining
        Fifty-Two Thousand Six Hundred Sixty-Eight (52,668) Restricted Shares shall
        vest, subject to the terms of this Agreement, and all vested shares will
        be
        released from the escrow account to the Executive. No Restricted Shares shall
        vest until the first anniversary of this Agreement. In connection with such
        grant, the Executive shall enter into the Company’s standard restricted stock
        agreement and the escrow agreement and stock powers attached hereto as Exhibit
        “A” which will incorporate the foregoing provisions regarding the lapsing of
        the
        risk of forfeiture with respect to such shares and the relevant provisions
        contained in Section 10 below. No Restricted Shares granted hereunder shall
        vest
        unless the Executive is a current employee of the Company, unless specifically
        stated herein.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (ii) 
          Anti-dilution protection. Until such time as the Company has
        raised gross proceeds equal to Ten Million Dollars ($10,000,000) from the
        issuance and sale of Equity Securities (as defined below), the Company shall
        issue to the Executive a number of additional employee stock options (the
“Stock
        Options”) sufficient to maintain Executive’s ownership percentage (if such
        options were exercised) at least equal to five percent (5%) of the outstanding
        Common Stock of the Company on a fully diluted basis. Once the Company has
        raised Ten Million Dollars ($10,000,000) through the sale of its Equity
        Securities, Executive shall be diluted pro rata along with all other holders
        of
        securities of the Company. As used herein “Equity Securities” shall mean shares
        of Common Stock, preferred stock, options, warrants or other rights to purchase
        Common Stock or securities or evidences of indebtedness convertible into
        or
        exchangeable for shares of Common Stock. The Stock Options shall be governed
        by
        the Company’s Employee Stock Option Plan and shall vest, if at all, in equal
        proportions on each anniversary of this Agreement at the time of grant remaining
        in the Term, subject in each case to the provisions of Section 10 below.
        The
        Stock Options shall be exerciseable for 10 years and shall have an exercise
        price equal to the fair market value of the Common Stock upon the date of
        each
        applicable grant as determined by the Board in good faith. In connection
        with
        such grant, the Executive shall enter into the Company’s standard stock option
        agreement which will incorporate the foregoing vesting schedule and the Stock
        Option related provisions contained in Section 10
        below.  

       

      (iii) 
          Equity Bonus. During the Term, if (i) the Executive is an
        employee of the Company; (ii) the Company is traded on a recognized national
        exchange or NASDAQ; and the market capitalization of the Company is in excess
        of
        Five Hundred Million Dollars ($500,000,000) for 3 consecutive trading days,
        the
        Company shall grant the Executive additional Stock Options in an amount equal
        to
        two percent (2%) of the then outstanding Common Stock of the Company at an
        exercise price equal to the then current market price as determined in good
        faith by the Board. 

       

      (f)  Expenses.
        The
        Company shall reimburse the Executive for all normal, usual and necessary
        expenses incurred by the Executive in furtherance of the business and affairs
        of
        the Company, including reasonable travel and entertainment, upon timely receipt
        by the Company of appropriate vouchers or other proof of the Executive’s
        expenditures and otherwise in accordance with any expense reimbursement policy
        as may from time to time be adopted by the Company.

       

      (g)  Other
        Benefits.
        The
        Executive shall be entitled to all rights and benefits for which he shall
        be
        eligible under any benefit or other plans (including, without limitation,
        dental, medical, medical reimbursement and hospital plans, pension plans,
        employee stock purchase plans, profit sharing plans, bonus plans and other
        so-called "fringe" benefits) as the Company shall make available to its senior
        executives from time to time. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (h)   
         Vacation. The Executive shall, during the Term, be entitled to a
        vacation of three (3) weeks per annum, in addition to holidays observed by
        the
        Company. The Executive shall not be entitled to carry any vacation forward
        to
        the next year of employment and shall not receive any compensation for unused
        vacation days.

       

      6.  Confidential
        Information and Inventions.

       

      (a)  The
        Executive recognizes and acknowledges that in the course of his duties he
        is
        likely to receive confidential or proprietary information owned by the Company,
        its affiliates or third parties with whom the Company or any such affiliates
        has
        an obligation of confidentiality. Accordingly, during and after the Term,
        the
        Executive agrees to keep confidential and not disclose or make accessible
        to any
        other person or use for any other purpose other than in connection with the
        fulfillment of his duties under this Agreement, any Confidential and Proprietary
        Information (as defined below) owned by, or received by or on behalf of,
        the
        Company or any of its affiliates. “Confidential and Proprietary Information”
        shall include, but shall not be limited to, confidential or proprietary
        scientific or technical information, data, formulas and related concepts,
        business plans (both current and under development), client lists, promotion
        and
        marketing programs, trade secrets, or any other confidential or proprietary
        business information relating to development programs, costs, revenues,
        marketing, investments, sales activities, promotions, credit and financial
        data,
        manufacturing processes, financing methods, plans or the business and affairs
        of
        the Company or of any affiliate or client of the Company. The Executive
        expressly acknowledges the trade secret status of the Confidential and
        Proprietary Information and that the Confidential and Proprietary Information
        constitutes a protectable business interest of the Company. The Executive
        agrees: (i) not to use any such Confidential and Proprietary Information
        for
        himself or others; and (ii) not to take any Company material or reproductions
        (including but not limited to writings, correspondence, notes, drafts, records,
        invoices, technical and business policies, computer programs or disks) thereof
        from the Company’s offices at any time during his employment by the Company,
        except as required in the execution of the Executive’s duties to the Company.
        The Executive agrees to return immediately all Company material and
        reproductions (including but not limited, to writings, correspondence, notes,
        drafts, records, invoices, technical and business policies, computer programs
        or
        disks) thereof in his possession to the Company upon request and in any event
        immediately upon termination of employment.

       

      (b)  Except
        with prior written authorization by the Company, the Executive agrees not
        to
        disclose or publish any of the Confidential and Proprietary Information,
        or any
        confidential, scientific, technical or business information of any other
        party
        to whom the Company or any of its affiliates owes an obligation of confidence,
        at any time during or after his employment with the Company.

       

      (c)  The
        Executive agrees that all inventions, discoveries, improvements and patentable
        or copyrightable works (“Inventions”)
        initiated, conceived or made by him, either alone or in conjunction with
        others,
        during the Term shall be the sole property of the Company to the maximum
        extent
        permitted by applicable law and, to the extent permitted by law, shall be
“works
        made for hire” as that term is defined in the United States Copyright Act (17
        U.S.C.A., Section 101). The Company shall be the sole owner of all patents,
        copyrights, trade secret rights, and other intellectual property or other
        rights
        in connection therewith. The Executive hereby assigns to the Company all
        right,
        title and interest he may have or acquire in all such Inventions; provided,
        however, that the Board of Directors of the Company may in its sole discretion
        agree to waive the Company’s rights pursuant to this Section 6(c) with respect
        to any Invention that is not directly or indirectly related to the Company’s
        business. The Executive further agrees to assist the Company in every proper
        way
        (but at the Company’s expense) to obtain and from time to time enforce patents,
        copyrights or other rights on such Inventions in any and all countries, and
        to
        that end the Executive will execute all documents necessary:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (i)  to
        apply
        for, obtain and vest in the name of the Company alone (unless the Company
        otherwise directs) letters patent, copyrights or other analogous protection
        in
        any country throughout the world and when so obtained or vested to renew
        and
        restore the same; and

       

      (ii)  to
        defend
        any opposition proceedings in respect of such applications and any opposition
        proceedings or petitions or applications for revocation of such letters patent,
        copyright or other analogous protection.

       

      (d)  The
        Executive acknowledges that while performing the services under this Agreement
        the Executive may locate, identify and/or evaluate patented or patentable
        inventions having commercial potential in the fields of pharmacy,
        pharmaceutical, biotechnology, healthcare, technology and other fields which
        may
        be of potential interest to the Company or one of its affiliates (the “Third
        Party Inventions”). The Executive understands, acknowledges and agrees that all
        rights to, interests in or opportunities regarding, all Third-Party Inventions
        identified by the Company, any of its affiliates or either of the foregoing
        persons’ officers, directors, employees (including the Executive), agents or
        consultants during the Employment Term shall be and remain the sole and
        exclusive property of the Company or such affiliate and the Executive shall
        have
        no rights whatsoever to such Third-Party Inventions and will not pursue for
        himself or for others any transaction relating to the Third-Party Inventions
        which is not on behalf of the Company.

       

      (e)  Executive
        agrees that he will promptly disclose to the Company, or any persons designated
        by the Company, all improvements, Inventions made or conceived or reduced
        to
        practice or learned by him, either alone or jointly with others, during the
        Term.

       

      (f)  The
        provisions of this Section 6 shall survive any termination of this
        Agreement.

       

      7.  Non-Competition,
        Non-Solicitation and Non-Disparagement.

       

      (a)  The
        Executive understands and recognizes that his services to the Company are
        special and unique and that in the course of performing such services the
        Executive will have access to and knowledge of Confidential and Proprietary
        Information (as defined in Section 6) and the Executive agrees that, during
        the
        Term and for a period of twelve (12) months thereafter, he shall not
        in any
        manner, directly or indirectly, on behalf of himself or any person, firm,
        partnership, joint venture, corporation or other business entity
        (“Person”), enter into or engage in any business which is
        engaged in any business directly or indirectly competitive with the business
        of
        the Company, either as an individual for his own account, or as a partner,
        joint
        venturer, owner, executive, employee, independent contractor, principal,
        agent,
        consultant, salesperson, officer, director or shareholder of a Person in
        a
        business competitive with the Company within the geographic area of the
        Company’s business, which is deemed by the parties hereto to be worldwide. The
        Executive acknowledges that, due to the unique nature of the Company’s business,
        the loss of any of its clients or business flow or the improper use of its
        Confidential and Proprietary Information could create significant instability
        and cause substantial damage to the Company and its affiliates and therefore
        the
        Company has a strong legitimate business interest in protecting the continuity
        of its business interests and the restriction herein agreed to by the Executive
        narrowly and fairly serves such an important and critical business interest
        of
        the Company. For purposes of this Agreement, the Company shall be deemed
        to be
        actively engaged on the date hereof in the development and commercialization
        of
        drugs, including therapeutics and vaccines for the treatment of humans.
        Notwithstanding the foregoing, nothing contained in this Section 7(a) shall
        be
        deemed to prohibit the Executive from (i) acquiring or holding, solely for
        investment, publicly traded securities of any corporation, some or all of
        the
        activities of which are competitive with the business of the Company so long
        as
        such securities do not, in the aggregate, constitute more than four percent
        (4%)
        of any class or series of outstanding securities of such
        corporation.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b)  During
        the Term and for a period of 12 months thereafter, the Executive shall not,
        directly or indirectly, without the prior written consent of the
        Company:

       

      (i)  solicit
        or induce any employee of the Company or any of its affiliates to leave the
        employ of the Company or any such affiliate; or hire for any purpose any
        employee of the Company or any affiliate or any employee who has left the
        employment of the Company or any affiliate within one year of the termination
        of
        such employee’s employment with the Company or any such affiliate or at any time
        in violation of such employee’s non-competition agreement with the Company or
        any such affiliate; or

       

      (ii)  solicit
        or accept employment or be retained by any Person who, at any time during
        the
        term of this Agreement, was an agent, client or customer of the Company or
        any
        of its affiliates where his position will be related to the business of the
        Company or any such affiliate; or

       

      (iii)  solicit
        or accept the business of any agent, client or customer of the Company or
        any of
        its affiliates with respect to products, services or investments similar
        to
        those provided or supplied by the Company or any of its affiliates.

       

      (c)  The
        Company and the Executive each agree that both during the Term and at all
        times
        thereafter, neither party shall directly or indirectly disparage, whether
        or not
        true, the name or reputation of the other party or any of its affiliates,
        including but not limited to, any officer, director, employee or shareholder
        of
        the Company or any of its affiliates.

       

      (d)  In
        the
        event that the Executive breaches any provisions of Section 6 or this Section
        7
        or there is a threatened breach, then, in addition to any other rights which
        the
        Company may have, the Company shall (i) be entitled, without the posting
        of a
        bond or other security, to injunctive relief to enforce the restrictions
        contained in such Sections and (ii) have the right to require the Executive
        to
        account for and pay over to the Company all compensation, profits, monies,
        accruals, increments and other benefits (collectively “Benefits”)
        derived or received by the Executive as a result of any transaction constituting
        a breach of any of the provisions of Sections 6 or 7 and the Executive hereby
        agrees to account for and pay over such Benefits to the Company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (e)  Each
        of
        the rights and remedies enumerated in Section 7(d) shall be independent of
        the
        others and shall be in addition to and not in lieu of any other rights and
        remedies available to the Company at law or in equity. If any of the covenants
        contained in this Section 7, or any part of any of them, is hereafter construed
        or adjudicated to be invalid or unenforceable, the same shall not affect
        the
        remainder of the covenant or covenants or rights or remedies which shall
        be
        given full effect without regard to the invalid portions. If any of the
        covenants contained in this Section 7 is held to be invalid or unenforceable
        because of the duration of such provision or the area covered thereby, the
        parties agree that the court making such determination shall have the power
        to
        reduce the duration and/or area of such provision and in its reduced form
        such
        provision shall then be enforceable. No such holding of invalidity or
        unenforceability in one jurisdiction shall bar or in any way affect the
        Company’s right to the relief provided in this Section 7 or otherwise in the
        courts of any other state or jurisdiction within the geographical scope of
        such
        covenants as to breaches of such covenants in such other respective states
        or
        jurisdictions, such covenants being, for this purpose, severable into diverse
        and independent covenants.

       

      (f)  In
        the
        event that an actual proceeding is brought in equity to enforce the provisions
        of Section 6 or this Section 7, the Executive shall not urge as a defense
        that
        there is an adequate remedy at law nor shall the Company be prevented from
        seeking any other remedies which may be available. The Executive agrees that
        he
        shall not raise in any proceeding brought to enforce the provisions of Section
        6
        or this Section 7 that the covenants contained in such Sections limit his
        ability to earn a living.

       

      (g)  The
        provisions of this Section 7 shall survive any termination of this
        Agreement.

       

      8.  Representations
        and Warranties by the Executive.

       

      The
        Executive hereby represents and warrants to the Company as follows:

       

      (i)  Neither
        the execution or delivery of this Agreement nor the performance by the Executive
        of his duties and other obligations hereunder violate or will violate any
        statute, law, determination or award, or conflict with or constitute a default
        or breach of any covenant or obligation under (whether immediately, upon
        the
        giving of notice or lapse of time or both) any prior employment agreement,
        contract, or other instrument to which the Executive is a party or by which
        he
        is bound.

       

      (ii)  The
        Executive has the full right, power and legal capacity to enter and deliver
        this
        Agreement and to perform his duties and other obligations hereunder. This
        Agreement constitutes the legal, valid and binding obligation of the Executive
        enforceable against him in accordance with its terms. No approvals or consents
        of any persons or entities are required for the Executive to execute and
        deliver
        this Agreement or perform his duties and other obligations
        hereunder.

       

      9.  Termination.
        The
        Executive’s employment hereunder shall be terminated upon the Executive’s death
        and may be terminated as follows:

       

      (a)  The
        Executive’s employment hereunder may be terminated by the Board of Directors of
        the Company for Cause. Any of the following actions by the Executive shall
        constitute “Cause”:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (i)  The
        willful failure, disregard or refusal by the Executive to perform his duties
        hereunder;

       

      (ii)  Any
        willful, intentional or grossly negligent act by the Executive having the
        effect
        of injuring, in a material way (whether financial or otherwise and as determined
        in good-faith by a majority of the Board of Directors of the Company), the
        business or reputation of the Company or any of its affiliates, including
        but
        not limited to, any officer, director, executive or shareholder of the Company
        or any of its affiliates; 

       

      (iii)  Willful
        misconduct by the
        Executive in respect of the duties or obligations of the Executive under
        this
        Agreement, including, without limitation, insubordination with respect to
        directions received by the Executive from the Board of Directors of the
        Company;

       

      (iv)  The
        Executive’s indictment of any felony or a misdemeanor involving moral turpitude
        (including entry of a nolo contendere plea);

       

      (v)  The
        determination by the
        Company, after a reasonable and good-faith investigation by the Company
        following a written allegation by another employee of the Company, that the
        Executive engaged in some form of harassment prohibited by law (including,
        without limitation, age, sex or race discrimination), unless the Executive’s
        actions were specifically directed by the Board of Directors of the
        Company;

       

      (vi)  Any
        misappropriation or embezzlement of the property of the Company or its
        affiliates (whether or not a misdemeanor or felony);

       

      (vii)  Breach
        by the Executive
        of any of the provisions of Sections 6, 7 or 8 of this Agreement;
        and

       

      (viii)  Breach
        by the Executive
        of any provision of this Agreement other than those contained in Sections
        6, 7
        or 8 which is not cured by the Executive within thirty (30) days after notice
        thereof is given to the Executive by the Company.

       

      (b)  The
        Executive’s employment hereunder may be terminated by the Board of Directors of
        the Company due to the Executive’s Disability. For purposes of this Agreement, a
        termination for “Disability”
        shall
        occur (i) when the Board of Directors of the Company has provided a written
        termination notice to the Executive supported by a written statement from
        a
        reputable independent physician to the effect that the Executive shall have
        become so physically or mentally incapacitated as to be unable to resume,
        within
        the ensuing twelve (12) months, his employment hereunder by reason of physical
        or mental illness or injury, or (ii) upon rendering of a written termination
        notice by the Board of Directors of the Company after the Executive has been
        unable to substantially perform his duties hereunder for 90 or more consecutive
        days, or more than 120 days in any consecutive twelve month period, by reason
        of
        any physical or mental illness or injury. For purposes of this Section 9(b),
        the
        Executive agrees to make himself available and to cooperate in any reasonable
        examination by a reputable independent physician retained by the
        Company.

       

      (c)  The
        Executive’s employment hereunder may be terminated by the Board of Directors of
        the Company (or its successor) upon the occurrence of a Change of Control.
        For
        purposes of this Agreement, “Change
        of Control”
        means
        (i) the acquisition, directly or indirectly, following the date hereof by
        any
        person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
        Exchange Act of 1934, as amended), in one transaction or a series of related
        transactions, of securities of the Company representing in excess of fifty
        percent (50%) or more of the combined voting power of the Company’s then
        outstanding securities if such person or his or its affiliate(s) do not own
        in
        excess of 50% of such voting power on the date of this Agreement, or (ii)
        the
        future disposition by the Company (whether direct or indirect, by sale of
        assets
        or stock, merger, consolidation or otherwise) of all or substantially all
        of its
        business and/or assets in one transaction or series of related transactions
        (other than a merger effected exclusively for the purpose of changing the
        domicile of the Company).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (d)  The
        Executive’s employment hereunder may be terminated by the Executive for Good
        Reason. For purposes of this Agreement, “Good
        Reason”
        shall
        mean any material breach of Section 5 of this Agreement that is not cured
        by the
        Company within 30 days after receipt of written notice by Executive to the
        Company of such material breach.

       

      (e)  The
        Executive’s employment may be terminated by the Company for any reason or no
        reason.

       

      10.  Compensation
        upon Termination.

       

      (a)  If
        the Executive’s
        employment is terminated as a result of his death or Disability, the Company
        shall pay to the Executive or to the Executive’s estate, as applicable, his
        Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts
        through the date of his Death or Disability. All Restricted Shares and Stock
        Options that are scheduled to vest on the next succeeding anniversary of
        the
        Effective Date shall be accelerated and deemed to have vested as of the
        termination date. All Restricted Shares and Stock Options that have not vested
        (or been deemed pursuant to the immediately preceding sentence to have vested)
        as of the date of termination shall be forfeited to the Company as of such
        date.
        Stock Options that have vested as of the Executive’s termination shall remain
        exercisable for 90 days following such termination.

       

      (b)  If
        the Executive’s
        employment is terminated by the Board of Directors of the Company for Cause,
        then the Company shall pay to the Executive his Base Salary through the date
        of
        his termination and the Executive shall have no further entitlement to any
        other
        compensation or benefits from the Company. All Restricted Shares and Stock
        Options that have not vested as of the date of termination shall be forfeited
        to
        the Company as of such date. Stock Options that have vested as of the
        Executive’s termination shall remain exercisable for 90 days following such
        termination.

       

      (c)  If
        the Executive’s
        employment is terminated by the Company (or its successor) upon the occurrence
        of a Change of Control and on the date of termination pursuant to this Section
        10(c) the fair market value of the Company’s Common Stock, in the aggregate, as
        determined in good faith by the Board on the date of such Change of Control,
        is
        less than $40,000,000, then the Company (or its successor, as applicable)
        shall
        continue to pay to the Executive his Base Salary and benefits for a period
        of
        six months following such termination as well as any expense reimbursement
        amounts owed through the date of termination All Restricted Shares and Stock
        Options that are scheduled to vest by the end of the calendar year in which
        such
        termination occurs shall be accelerated and deemed to have vested as of the
        termination date. All Restricted Shares and Stock Options that have not vested
        (or been deemed pursuant to the immediately preceding sentence to have vested)
        as of the date of termination shall be forfeited to the Company as of such
        date.
        Stock Options that have vested as of the Executive’s termination shall remain
        exercisable for 90 days following such termination. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (d)  If
        the Executive’s
        employment is terminated by the Company other than as a result of the
        Executive’s death or Disability and other than for reasons specified in Sections
        10(b) or (c), then the Company shall (i) continue to pay to the Executive
        his
        Base Salary for a period of twelve months following such termination, (ii)
        pay
        the Executive any expense reimbursement amounts owed through the date of
        termination, and (iii) ) all Restricted Shares and Stock Options that are
        scheduled to vest during the Term shall be accelerated and deemed to have
        vested
        as of the termination date. The Company’s obligation under clauses (i) and (ii)
        in the preceding sentence shall be subject to offset by any amounts otherwise
        received by the Executive from any employment during the one year period
        following the termination of his employment. All Stock Options that are
        scheduled to vest during the Term shall be accelerated and deemed to have
        vested
        as of the termination date. Any Stock Options that have vested as of the
        date of
        the Executive’s termination shall remain exercisable for a period of 90
        days.

       

      (e)  This
        Section 10 sets forth the only obligations of the Company with respect to
        the
        termination of the Executive’s employment with the Company, and the Executive
        acknowledges that, upon the termination of his employment, he shall not be
        entitled to any payments or benefits which are not explicitly provided in
        Section 10.

       

      (f)  Upon
        termination of the Executive’s employment hereunder for any reason, the
        Executive shall be deemed to have resigned as director of the Company, effective
        as of the date of such termination.

       

      (g)  The
        provisions of this Section 10 shall survive any termination of this
        Agreement.

       

      11.  Miscellaneous.

       

      (a)  This
        Agreement shall be governed by, and construed and interpreted in accordance
        with, the laws of the State of New York, without giving effect to its principles
        of conflicts of laws.

       

      (b)  Any
        dispute arising out of, or relating to, this Agreement or the breach thereof
        (other than Sections 6 or 7 hereof), or regarding the interpretation thereof,
        shall be finally settled by arbitration conducted in New York City in accordance
        with the rules of the American Arbitration Association then in effect before
        a
        single arbitrator appointed in accordance with such rules. Judgment upon
        any
        award rendered therein may be entered and enforcement obtained thereon in
        any
        court having jurisdiction. The arbitrator shall have authority to grant any
        form
        of appropriate relief, whether legal or equitable in nature, including specific
        performance. For the purpose of any judicial proceeding to enforce such award
        or
        incidental to such arbitration or to compel arbitration and for purposes
        of
        Sections 6 and 7 hereof, the parties hereby submit to the non-exclusive
        jurisdiction of the Supreme Court of the State of New York, New York County,
        or
        the United States District Court for the Southern District of New York, and
        agree that service of process in such arbitration or court proceedings shall
        be
        satisfactorily made upon it if sent by registered mail addressed to it at
        the
        address referred to in paragraph (g) below. The
        costs
        of such arbitration shall be borne proportionate to the finding of fault
        as
        determined by the arbitrator. Judgment on the arbitration award may be entered
        by any court of competent jurisdiction.

       

      (c)  This
        Agreement shall be binding upon and inure to the benefit of the parties hereto,
        and their respective heirs, legal representatives, successors and
        assigns.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (d)  This
        Agreement, and the Executive’s rights and obligations hereunder, may not be
        assigned by the Executive. The Company may assign its rights, together with
        its
        obligations, hereunder in connection with any sale, transfer or other
        disposition of all or substantially all of its business or assets.

       

      (e)  This
        Agreement cannot be amended orally, or by any course of conduct or dealing,
        but
        only by a written agreement signed by the parties hereto.

       

      (f)  The
        failure of either party to insist upon the strict performance of any of the
        terms, conditions and provisions of this Agreement shall not be construed
        as a
        waiver or relinquishment of future compliance therewith, and such terms,
        conditions and provisions shall remain in full force and effect. No waiver
        of
        any term or condition of this Agreement on the part of either party shall
        be
        effective for any purpose whatsoever unless such waiver is in writing and
        signed
        by such party.

       

      (g)  All
        notices, requests, consents and other communications, required or permitted
        to
        be given hereunder, shall be in writing and shall be delivered personally
        or by
        an overnight courier service or sent by registered or certified mail, postage
        prepaid, return receipt requested, to the parties at the addresses set forth
        on
        the first page of this Agreement, and shall be deemed given when so delivered
        personally or by overnight courier, or, if mailed, five days after the date
        of
        deposit in the United States mails. Either party may designate another address,
        for receipt of notices hereunder by giving notice to the other party in
        accordance with this paragraph (g).

       

      (h)  This
        Agreement sets forth the entire agreement and understanding of the parties
        relating to the subject matter hereof, and supersedes all prior agreements,
        arrangements and understandings, written or oral, relating to the subject
        matter
        hereof, including the Employment Agreement dated June 1, 2004 between the
        Parties. No representation, promise or inducement has been made by either
        party
        that is not embodied in this Agreement, and neither party shall be bound
        by or
        liable for any alleged representation, promise or inducement not so set
        forth.

       

      (i)  As
        used
        in this Agreement, “affiliate” of a specified Person shall mean and include any
        Person controlling, controlled by or under common control with the specified
        Person.

       

      (j)  The
        section headings contained herein are for reference purposes only and shall
        not
        in any way affect the meaning or interpretation of this Agreement.

       

      (k)  This
        Agreement may be executed in any number of counterparts, each of which shall
        constitute an original, but all of which together shall constitute one and
        the
        same instrument.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        date
        first above written.

       

      
        	 	 	 
	 	BROADWAY
                THERAPEUTICS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
                Michael Weiser, M.D., Ph.D.
	 	Title:
                President

      

      
        	 	 	 
	 	 	 
	 	EXECUTIVE
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name: Steven
                KellyExhibit
        10.5

    

    
       

      EMPLOYMENT
        AGREEMENT

       

      This
        Agreement (this “Agreement”),
        dated as of April 7, 2005 (sometimes the “Effective Date”), by and between
        INNOVIVE PHARMACEUTICALS, INC., a Delaware corporation with principal executive
        offices at 787 Seventh Avenue, 48th
        Floor, New York, NY 10019 (the “Company”),
        and Adam R. Craig, residing at 10 Allen Circle, Boxford, MA 01921 (the
“Executive”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Company desires to employ the Executive as Vice President and Chief Medical
        Officer of the Company, and the Executive desires to serve the Company in
        those
        capacities, upon the terms and subject to the conditions contained in this
        Agreement;

       

      NOW,
        THEREFORE, in consideration of the mutual covenants and agreements herein
        contained, the parties hereto hereby agree as follows:

       

      1.   Employment.

       

      (a)   Services.   The
        Executive will be
        employed by the Company as its Vice President and Chief Medical Officer.
        The
        Executive will report to the Chief Executive Officer of the Company and shall
        perform such duties as are consistent with his position as Vice President
        and
        Chief Medical Officer (the “Services”). The Executive agrees to perform such
        duties faithfully, to devote substantially all of his working time, attention
        and energies to the business of the Company, and while he remains employed,
        not
        to engage in any other business activity that is in conflict with his duties
        and
        obligations to the Company without the prior written consent of the Chief
        Executive Officer of the Company.

       

      (b)   Acceptance.   Executive
        hereby accepts
        such employment and agrees to render the Services.

       

      2.   Term.

       

      The
        Executive’s employment under this Agreement (the “Term”) shall commence as of
        the Effective Date and shall continue for a term of three (3) years, unless
        sooner terminated pursuant to Section 8 of this Agreement. Notwithstanding
        anything to the contrary contained herein, the provisions of this Agreement
        governing protection of Confidential Information shall continue in effect
        as
        specified in Section 5 hereof and survive the expiration or termination hereof.
        This Agreement may be renewed for additional one-year terms if the Company
        and
        the Executive agree in writing prior to the expiration or other termination
        of
        the Term. The Company shall notify the Executive no less than three (3) months
        before the expiration of the Term whether it desires to extend this Agreement.
        If the Company provides the Executive with such notice and the Executive
        is
        willing to extend this Agreement, the Parties shall negotiate in good-faith
        towards a mutually agreed upon extension of this Agreement.

       

      3.   Best
        Efforts; Place of Performance.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (a)   The
        Executive shall devote substantially all of his business time, attention
        and
        energies to the business and affairs of the Company and shall use his best
        efforts to advance the best interests of the Company and shall not during
        the
        Term be actively engaged in any other business activity, whether or not such
        business activity is pursued for gain, profit or other pecuniary advantage,
        that
        will interfere with the performance by the Executive of his duties hereunder
        or
        the Executive’s availability to perform such duties or that will adversely
        affect, or negatively reflect upon, the Company.

       

      (b)   The
        duties to be performed by the Executive hereunder shall be performed primarily
        at the office of the Company in New York, New York, subject to reasonable
        travel
        requirements on behalf of the Company, or such other place as the Board of
        Directors of the Company may reasonably designate. Notwithstanding the
        foregoing, the Company may be relocated to another city within the United
        States
        with consent of the Board of Directors of the Company.

       

      4.   Compensation.   As
        full compensation for
        the performance by the Executive of his duties under this Agreement, the
        Company
        shall pay the Executive as follows:

       

      (a)   Base
        Salary.   The
        Company, shall pay
        Executive a salary (the “Base Salary”) equal to Two Hundred Forty Thousand
        Dollars ($240,000.00) per year. Payment shall be made in accordance with
        the
        Company’s normal payroll practices and subject to annual review and adjustment
        by the Chief Executive Officer in his discretion.

       

      (b)   Signing
        Bonus.   Within
        thirty (30) days
        of the commencement of the. Executive’s employment pursuant to this Agreement,
        the Company shall pay the Executive a onetime bonus equal to Fifty Thousand
        Dollars ($50,000).

       

      (c)   Discretionary
        Bonus.   At
        the sole discretion of
        the Chief Executive Officer of the Company, the Executive shall receive an
        additional annual bonus (the “Discretionary
        Bonus”)
        in an amount equal to up to fifty percent (50%) of his Base Salary, based
        upon
        his performance on behalf of the Company during the prior year. The
        Discretionary Bonus shall be payable either as a lump-sum payment or in
        installments as determined by the Chief Executive Officer of the Company
        in its
        sole discretion. In addition, the Chief Executive Officer of the Company
        shall
        annually review the Bonus to determine whether an increase in the amount
        thereof
        is warranted.

       

      (d)   Withholding.   The
        Company shall
        withhold all applicable federal, state and local taxes and social security
        and
        such other amounts as may be required by law from all amounts payable to
        the
        Executive under this Section 4.

       

      (e)   Restricted
        Shares.   As
        additional
        compensation for the services to be rendered by the Executive pursuant to
        this
        Agreement, the Company shall grant the Executive Ninety-Four Thousand Seven
        Hundred Forty (94,740) shares of Common Stock of the Company (the “Restricted
        Shares”) representing three percent (3%) of the outstanding Common Stock of the
        Company. The Restricted Shares shall be held in escrow at Paramount BioCapital
        Investments, LLC. On the first anniversary and each subsequent anniversary
        of
        this Agreement, Thirty-One Thousand Five Hundred Eighty (31,580) Restricted
        Shares shall vest, subject to the terms of this Agreement, and all vested
        shares
        will be released from the escrow account to the Executive. No Restricted
        Shares
        shall vest until the first anniversary of this Agreement. In connection with
        such grant, the Executive shall enter into the Company’s standard restricted
        stock agreement and the escrow agreement and stock powers attached hereto
        as
        Exhibit “A” which will incorporate the foregoing provisions regarding the
        lapsing of the risk of forfeiture with respect to such shares in accordance
        with
        the vesting schedule set forth above and the relevant provisions contained
        in
        Section 9 below. No Restricted Shares granted hereunder shall vest unless
        the
        Executive is a current employee of the Company, unless specifically stated
        herein.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      (f)   Expenses.

       

      (i)   General
        Expenses.   The
        Company shall
        reimburse the Executive for all normal, usual and necessary expenses incurred
        by
        the Executive in furtherance of the business and affairs of the Company,
        including reasonable travel and entertainment, upon timely receipt by the
        Company of appropriate vouchers or other proof of the Executive’s expenditures
        and otherwise in accordance with any expense reimbursement policy as may
        from
        time to time be adopted by the Company.

       

      (ii)   Relocation
        Expenses.   The
        Company will also
        reimburse the Executive for his relocation expenses, including any closing
        costs, moving expenses, and temporary housing expenses, up to an amount of
        Seventy Thousand Dollars ($70,000), provided, however, that (A) should the
        Executive’s employment with the Company be terminated prior to the first
        anniversary date hereof, the Executive agrees to return any amount received
        from
        the Company as reimbursement for such relocation; and (B) should the Executive’s
        employment with the Company be terminated after the first anniversary, but
        prior
        to the second anniversary, hereof, the Executive agrees to return fifty percent
        (50%) of the Relocation Expense to the Company.

       

      (iii)   Expenses
        Associated with Immigration Services.   In
        addition to the
        General and Relocation expenses, the Company, continuing the practice of
        the
        Executive’s previous employer, shall pay up to Three Thousand Dollars ($3,000)
        for immigration services costs incurred by the Executive, provided however,
        that
        should the Executive’s employment with the Company be terminated prior to the
        first anniversary date hereof, the Executive agrees to return any amount
        received from the Company as reimbursement for such immigration
        services.

       

      (g)   Other
        Benefits.   The
        Executive shall be
        entitled to all rights and benefits for which he shall be eligible under
        any
        benefit or other plans (including, without limitation, dental, medical, medical
        reimbursement and hospital plans, pension plans, employee stock purchase
        plans,
        profit sharing plans, bonus plans and other so-called “fringe” benefits) as the
        Company shall make available to its senior executives from time to
        time.

       

      (h)   Vacation.   The
        Executive shall,
        during the Term, be entitled to a vacation of four (4) weeks per annum, in
        addition to holidays observed by the Company. The Executive shall not be
        entitled to carry any vacation forward to the next year of employment and
        shall
        not receive any compensation for unused vacation days.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      5.   Confidential
        Information and Inventions.

       

      (a)   The
        Executive recognizes and acknowledges that in the course of his duties he
        is
        likely to receive confidential or proprietary information owned by the Company,
        its affiliates or third parties with whom the Company or any such affiliates
        has
        an obligation of confidentiality. Accordingly, during and for a period of
        fifteen (15) years after the Term, the Executive agrees to keep confidential
        and
        not disclose or make accessible to any other person or use for any other
        purpose
        other than in connection with the fulfillment of his duties under this
        Agreement, any Confidential and Proprietary Information (as defined below)
        owned
        by, or received by or on behalf of, the Company or any of its affiliates.
        “Confidential and Proprietary Information” shall include, but shall not be
        limited to, confidential or proprietary scientific or technical information,
        data, formulas and related concepts, business plans (both current and under
        development), client lists, promotion and marketing programs, trade secrets,
        or
        any other confidential or proprietary business information relating to
        development programs, casts, revenues, marketing, investments, sales activities,
        promotions, credit and financial data, manufacturing processes, financing
        methods, plans or the business and affairs of the Company or of any affiliate
        or
        client of the Company. The Executive expressly acknowledges the trade secret
        status of the Confidential and Proprietary Information and that the Confidential
        and Proprietary Information constitutes a protectable business interest of
        the
        Company. The Executive agrees (i) not to use any such Confidential and
        Proprietary Information for himself or others; and (ii) not to take any Company
        material or reproductions (including but not limited to writings,
        correspondence, notes, drafts, records, invoices, technical and business
        policies, computer programs or disks) thereof from the Company’s offices at any
        time during his employment by the Company, except as required in the execution
        of the Executive’s duties to the Company. The Executive agrees to return
        immediately all Company material and reproductions (including but not limited,
        to writings, correspondence, notes, drafts, records, invoices, technical
        and
        business policies, computer programs or disks) thereof in his possession
        to the
        Company upon request and in any event immediately upon termination of
        employment.

       

      (b)   Except
        with prior written authorization by the Company, the Executive agrees not
        to
        disclose or publish any of the Confidential and Proprietary Information,
        or any
        confidential, scientific, technical or business information of any other
        party
        to whom the Company or any of its affiliates owes an obligation of confidence,
        at any time during or after his employment with the Company.

       

      (c)   Notwithstanding
        the foregoing, Confidential and Proprietary Information shall not include
        any
        information or material which the Executive can establish through competent
        proof: (i) is or becomes generally available to the public other than as
        a
        result of disclosure thereof by the Executive; (ii) is lawfully received
        by the
        Executive on a non-confidential basis from a third party that is not itself
        under an obligation of confidentiality or non-disclosure to the Company with
        respect to such information; (iii) is independently developed by Executive;
        (iv)
        was in the Executive’s possession at the time of disclosure by the Company and
        was not acquired, directly or indirectly from the Company; or (v) is required
        to
        be publicly disclosed by law or by regulation; provided, however, that in
        such
        event Executive shall provide the Company with prompt advance notice of such
        disclosure so that the Company has the opportunity if it so desires to seek
        a
        protective order or other

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

      

      (d)   The
        Executive agrees that all inventions, discoveries, improvements and patentable
        or copyrightable works (“Inventions”)
        initiated, conceived or made by him, either alone or in conjunction with
        others,
        during the Term shall be the sole property of the Company to the maximum
        extent
        permitted by applicable law and, to the extent permitted by law, shall be
“works
        made for hire” as that term is defined in the United States Copyright Act (17
        U.S.C.A., Section 101). The Company shall be the sole owner of all patents,
        copyrights, trade secret rights, and other intellectual property or other
        rights
        in connection therewith. The Executive hereby assigns to the Company all
        right,
        title and interest he may have or acquire in all such Inventions; provided,
        however, that the Board of Directors of the Company may in its sole discretion
        agree to waive the Company’s rights pursuant to this Section 6(c) with respect
        to any Invention that is not directly or indirectly related to the Company’s
        business. The Executive further agrees to assist the Company in every proper
        way
        (but at the Company’s expense) to obtain and from time to time enforce patents,
        copyrights or other rights on such Inventions in any and all countries, and
        to
        that end the Executive will execute all documents necessary:

       

      (i)   to
        apply for, obtain and vest in the name of the Company alone (unless the Company
        otherwise directs) letters patent, copyrights or other analogous protection
        in
        any country throughout the world and when so obtained or vested to renew
        and
        restore the same; and

       

      (ii)   to
        defend any opposition proceedings in respect of such applications and any
        opposition proceedings or petitions or applications for revocation of such
        letters patent, copyright or other analogous protection.

       

      (e)   The
        Executive acknowledges that while performing the Services under this Agreement
        the Executive may locate, identify and/or evaluate patented or patentable
        inventions having commercial potential in the fields of pharmacy,
        pharmaceutical, biotechnology, healthcare, technology and other fields which
        may
        be of potential interest to the Company or one of its affiliates (the “Third
        Party Inventions”). The Executive understands, acknowledges and agrees that all
        rights to, interests in or opportunities regarding, all Third-Party Inventions
        identified by the Company, any of its affiliates or either of the Foregoing
        persons, officers, directors, employees (including the Executive), agents
        or
        consultants during the Term shall be and remain the sole and exclusive property
        of the Company or such affiliate and the Executive shall have no rights
        whatsoever to such Third-Party Inventions and will not pursue for himself
        or for
        others any transaction relating to the Third-Party Inventions which is not
        on
        behalf of the Company.

       

      (f)   Executive
        agrees that he will promptly disclose to the Company, or any persons designated
        by the Company, all improvements, Inventions made or conceived or reduced
        to
        practice or learned by him, either alone or jointly with others, during the
        Term.

       

      (g)   The
        provisions of this Section 5 shall survive any termination of this
        Agreement.

       

      6.   Non-Competition,
        Non-Solicitation and Non-Disparagement.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

      (a)   The
        Executive understands and recognizes that his services to the Company are
        special and unique and that in the course of performing such services the
        Executive will have access to and knowledge of Confidential and Proprietary
        Information (as defined in Section 6) and the Executive agrees that, during
        the
        Term and for a period of twelve (12) months thereafter, he shall not in any
        manner, directly or indirectly, on behalf of himself or any person, firm,
        partnership, joint venture, corporation or other business entity (“Person”),
        enter into or engage in any business which is engaged in any business directly
        or indirectly competitive with the business of the Company, either as an
        individual for his own account, or as a partner, joint venturer, owner,
        executive, employee, independent contractor, principal, agent, consultant,
        salesperson, officer, director or shareholder of a Person in a business
        competitive with the Company within the geographic area of the Company’s
        business, which is deemed by the parties hereto to be worldwide. The Executive
        acknowledges that, due to the unique nature of the Company’s business, the loss
        of any of its clients or business flow or the improper use of its Confidential
        and Proprietary Information could create significant instability and cause
        substantial damage to the Company and its affiliates and therefore the Company
        has a strong legitimate business interest in protecting the continuity of
        its
        business interests and the restriction herein agreed to by the Executive
        narrowly and fairly serves such an important and critical business interest
        of
        the Company. For purposes of this Agreement, the Company shall be deemed
        to be
        actively engaged on the date hereof in the development and commercialization
        of
        drugs, including therapeutics and vaccines in the medical fields that are
        directly related to Opiod Growth Factor, Zebularine, or any other products
        acquired by the Company. Notwithstanding the foregoing, nothing contained
        in
        this Section 6(a) shall be deemed to prohibit the Executive from (i) acquiring
        or holding, solely for investment, publicly traded securities of any
        corporation, some or all of the activities of which are competitive with
        the
        business of the Company so long as such securities do not, in the aggregate,
        constitute more than four percent (4%) of any class or series of outstanding
        securities of such corporation.

       

      (b)   During
        the Term and for a period of 12 months thereafter, the Executive shall not,
        directly or indirectly, without the prior written consent of the
        Company:

       

      (i)   solicit
        or induce any employee of the Company or any of its affiliates to leave the
        employ of the Company or any such affiliate; or hire for any purpose any
        employee of the Company or any affiliate or any employee who has left the
        employment of the Company or any affiliate within one year of the termination
        of
        such employee’s employment with the Company or any such affiliate or at any time
        in violation of such employee’s non-competition agreement with the Company or
        any such affiliate; or

       

      (ii)   solicit
        or accept employment or be retained by any Person who, at any time during
        the
        term of this Agreement, was an agent, client or customer of the Company or
        any
        of its affiliates where his position will be related to the business of the
        Company or any such affiliate; or

       

      (iii)   solicit
        or accept the business of any agent, client or customer of the Company or
        any of
        its affiliates with respect to products, services or investments similar
        to
        those provided or supplied by the Company or any of its affiliates.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

      (c)   The
        Company and the Executive each agree that both during the Term and at all
        times
        thereafter, neither party shall directly or indirectly disparage, whether
        or not
        true, the name or reputation of the other party or any of its affiliates,
        including but not limited to, any officer, director, employee or shareholder
        of
        the Company or any of its affiliates.

       

      (d)   In
        the event that the Executive breaches any provisions of Section 5 or this
        Section 6 or there is a threatened breach, then, in addition to any other
        rights
        which the Company may have, the Company shall (i) be entitled, without the
        posting of a bond or other security, to injunctive relief to enforce the
        restrictions contained in such Sections and (ii) have the right to require
        the
        Executive to account for and pay over to the Company all compensation, profits,
        monies, accruals, increments and other benefits (collectively “Benefits”)
        derived or received by the Executive as a result of any transaction constituting
        a breach of any of the provisions of Sections 5 or 6 and the Executive hereby
        agrees to account for and pay over such Benefits to the Company. The Executive
        agrees that in an action pursuant to clause 6(d)(i), that if the Company
        makes a
        prima facie showing that the Executive has violated or apparently intends
        to
        violate any of the provisions of this Section 6, the Company need not prove
        either damage or irreparable injury in order to obtain injunctive relief.
        The
        Company and the Executive agree that any such action for injunctive or equitable
        relief shall be heard in a state or federal court situated in the County
        and
        State of New York and each of the parties hereto agrees to accept service
        of
        process by registered or certified mail and to otherwise consent to the
        jurisdiction of such courts.

       

      (e)   Each
        of the rights and remedies enumerated in Section 6(d) shall be independent
        of
        the others and shall be in addition to and not in lieu of any other rights
        and
        remedies available to the Company at law or in equity. If any of the covenants
        contained in this Section 6, or any part of any of them, is hereafter construed
        or adjudicated to be invalid or unenforceable, the same shall not affect
        the
        remainder of the covenant or covenants or rights or remedies which shall
        be
        given full effect without regard to the invalid portions. If any of the
        covenants contained in this Section 6 is held to be invalid or unenforceable
        because of the duration of such provision or the area covered thereby, the
        parties agree that the court making such determination shall have the power
        to
        reduce the duration and/or area of such provision and in its reduced form
        such
        provision shall then be enforceable. No such holding of invalidity or
        unenforceability in one jurisdiction shall bar or in any way affect the
        Company’s right to the relief provided in this Section 6 or otherwise in the
        courts of any other state or jurisdiction within the geographical scope of
        such
        covenants as to breaches of such covenants in such other respective states
        or
        jurisdictions, such covenants being, for this purpose, severable into diverse
        and independent covenants.

       

      (f)   In
        the event that an actual proceeding is brought in equity to enforce the
        provisions of Section 5 or this Section 6, the Executive shall not urge as
        a
        defense that there is an adequate remedy at law nor shall the Company be
        prevented from seeking any other remedies which may be available.

       

      (g)   The
        provisions of this Section 6 shall survive any termination of this
        Agreement.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      7.   Representations
        and Warranties by the Executive.

       

      The
        Executive hereby represents and warrants to the Company as follows:

       

      (i)   Neither
        the execution or delivery of this Agreement nor the performance by the Executive
        of his duties and other obligations hereunder violate or will violate any
        statute, law, determination or award, or conflict with or constitute a default
        or breach of any covenant or obligation under (whether immediately, upon
        the
        giving of notice or lapse of tune or both) any prior employment agreement,
        contract, or other instrument to which the Executive is a party or by which
        he
        is bound.

       

      (ii)   The
        Executive has the full right, power and legal capacity to enter and deliver
        this
        Agreement and to perform his duties and other obligations hereunder. This
        Agreement constitutes the legal, valid and binding obligation of the Executive
        enforceable against him in accordance with its terms. No approvals or consents
        of any persons or entities are required for the Executive to execute and
        deliver
        this Agreement or perform his duties and other obligations
        hereunder.

       

      8.   Termination.   The
        Executive’s
        employment hereunder shall be terminated upon the Executive’s death and may be
        terminated as follows:

       

      (a)   The
        Executive’s employment hereunder may be terminated by the Chief Executive
        Officer of the Company for Cause. Any of the following actions by the Executive
        shall constitute “Cause”:

       

      (i)   The
        willful failure, disregard or refusal by the Executive to perform his duties
        hereunder;

       

      (ii)   Any
        willful, intentional or grossly negligent act by the Executive having the
        effect
        of injuring, in a material way (whether financial or otherwise and as determined
        in good-faith by the Chief Executive Officer of the Company), the business
        or
        reputation of the Company or any of its affiliates, including but not limited
        to, any officer, director, executive or shareholder of the Company or any
        of its
        affiliates;

       

      (iii)   Willful
        misconduct by the Executive in respect of the duties or obligations of the
        Executive under this Agreement, including, without limitation, insubordination
        with respect to directions received by the Executive from the Chief Executive
        Officer of the Company;

       

      (iv)   The
        Executive’s indictment of any felony or a misdemeanor involving moral turpitude
        (including entry of a nolo contendere plea);

       

      (v)   The
        determination by the Company, after a reasonable and good-faith investigation
        by
        the Company following a written allegation by another employee of the Company,
        that the Executive engaged in some form of harassment prohibited by law
        (including, without limitation, age, sex or race discrimination), unless
        the
        Executive’s actions were specifically directed by the Chief Executive Officer of
        the Company;

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

      

      (vi)   Any
        misappropriation or embezzlement of the property of the Company or its
        affiliates (whether or not a misdemeanor or felony);

       

      (vii)   Breach
        by the Executive of any of the provisions of Sections 5, 6 or 7 of this
        Agreement; and

       

      (viii)   Breach
        by the Executive of any provision of this Agreement other than those contained
        in Sections 5, 6, or 7 which is not cured by the Executive, within thirty
        (30)
        days after notice thereof is given to the Executive by the Company.

       

      (b)   The
        Executive’s employment hereunder may be terminated by the Chief Executive
        Officer of the Company due to the Executive’s Disability. For purposes of this
        Agreement, a termination for “Disability”
        shall occur (i) when the Chief Executive Officer of the Company has provided
        a
        written termination notice to the Executive supported by a written statement
        from a reputable independent physician to the effect that the Executive shall
        have become so physically or mentally incapacitated as to be unable to resume,
        within the ensuing twelve (12) months, his employment hereunder by reason
        of
        physical or mental illness or injury, or (ii) upon rendering of a written
        termination notice by the Chief Executive Officer of the Company after the
        Executive has been unable to substantially perform his duties hereunder for
        90
        or more consecutive days, or more than 120 days in any consecutive twelve
        month
        period, by reason of any physical or mental illness or injury. For purposes
        of
        this Section 8(b), the Executive agrees to make himself available and to
        cooperate in any reasonable examination
        by
        a reputable independent physician retained by the Company.

       

      (c)   The
        Executive’s employment hereunder may be terminated by the Chief Executive
        Officer of the Company (or its successor) upon the occurrence of a Change
        of
        Control. For purposes of this Agreement, “Change
        of Control”
        means (i) the acquisition, directly or indirectly, following the date hereof
        by
        any person (as such term is defined in Section 13(d) and 14(d)(2) of the
        Securities Exchange Act of 1934, as amended), in one transaction or a series
        of
        related transactions, of securities of the Company representing in excess
        of
        fifty percent (50%) or more of the combined voting power of the Company’s then
        outstanding securities if such person or his or its affiliate(s) do not own
        in
        excess of 50% of such voting power on the date of this Agreement, or (ii)
        the
        future disposition by the Company (whether direct or indirect, by sale of
        assets
        or stock, merger, consolidation or otherwise) of all or substantially all
        of its
        business and/or assets in one transaction or series of related transactions
        (other than a merger effected exclusively for the purpose of changing the
        domicile of the Company).

       

      (d)   The
        Executive’s employment hereunder may be terminated by the Executive for Good
        Reason. For purposes of this Agreement, “Good
        Reason”
        shall mean (i) any material breach of Section 4 of this Agreement that is
        not
        cured by the Company within 30 days after receipt of written notice by Executive
        to the Company of such material breach or (ii) upon a decision by the Company
        to
        relocate its corporate operations to a city other than a city located North
        Carolina, Virginia, Maryland, Delaware, New Jersey, New York, Connecticut,
        or
        Massachusetts without the consent of the Executive, whose consent shall not
        be
        unreasonably withheld.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

      

      (e)   The
        Executive’s employment may be terminated by the Company for any reason or no
        reason.

       

      9.   Compensation
        upon Termination.

       

      (a)   If
        the Executive’s employment is terminated as a result of his death or Disability,
        the Company shall pay to the Executive or to the Executive’s estate, as
        applicable, his Base Salary and any accrued but unpaid Bonus and expense
        reimbursement amounts through the date of his Death or Disability. All
        Restricted Shares that are scheduled to vest on the next succeeding anniversary
        of the Effective Date shall be accelerated and deemed to have vested as of
        the
        termination date. All Restricted Shares that have not vested (or been deemed
        pursuant to the immediately preceding sentence to have vested) as of the
        date of
        termination shall be forfeited to the Company as of such date.

       

      (b)   If
        the Executive’s employment is terminated by the Chief Executive Officer of the
        Company for Cause, then the Company shall pay to the Executive his Base Salary
        through the date of his termination and the Executive shall have no further
        entitlement to any other compensation or benefits from the Company. All
        Restricted Shares that have not vested as of the date of termination shall
        be
        forfeited to the Company as of such date.

       

      (c)   If
        the Executive’s employment is terminated by the Company (or its successor) upon
        the occurrence of a Change of Control and on the date of termination pursuant
        to
        Section 8(c) the fair market value of the Company’s Common Stock, in the
        aggregate, as determined in good faith by the Board of Directors on the date
        of
        such Change of Control, is less than $50,000,000, then the Company (or its
        successor, as applicable) shall continue to pay to the Executive his Base
        Salary
        and benefits for a period of six months following such termination as well
        as
        any expense reimbursement amounts owed through the date of termination. All
        Restricted Shares that are scheduled to vest by the end of the calendar year
        in
        which such termination occurs shall be accelerated and deemed to have vested
        as
        of the termination date. All Restricted Shares that have not vested (or been
        deemed pursuant to the immediately preceding sentence to have vested) as
        of the
        date of termination shall be forfeited to the Company as of such
        date.

       

      (d)   If
        the Executive’s employment is terminated by the Company other than as a result
        of the Executive’s death or Disability and other than for reasons specified in
        Sections 9(b) or (c), then the Company shall (i) continue to pay to the
        Executive his Base Salary and benefits for a period of twelve months following
        such termination, (ii) pay the Executive any expense reimbursement amounts
        owed
        through the date of termination, and (iii) all Restricted Shares that are
        scheduled to vest during the Term shall be accelerated and deemed.
        to
        have vested as of the termination date

       

      (e)   This
        Section 9 sets forth the only obligations of the Company with respect to
        the
        termination of the Executive’s employment with the Company, and the Executive
        acknowledges that, upon the termination of his employment, he shall not be
        entitled to any payments or benefits which are not explicitly provided in
        Section 9.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

         

      

      (f)   The
        provisions of this Section 9 shall survive any termination of this
        Agreement.

       

      10.   Miscellaneous.

       

      (a)   This
        Agreement shall be governed by, and construed and interpreted in accordance
        with, the laws of the State of New York, without giving effect to its principles
        of conflicts of laws.

       

      (b)   Any
        dispute arising out of, or relating to, this Agreement or the breach thereof
        (other than Sections 5 or 6 hereof), or regarding the interpretation thereof,
        shall be finally settled by arbitration conducted in New York City in accordance
        with the rules of the American Arbitration Association then in effect before
        a
        single arbitrator appointed in accordance with such rules. Judgment upon
        any
        award rendered therein may be entered and enforcement obtained thereon in
        any
        court having jurisdiction. The arbitrator shall have authority to grant any
        form
        of appropriate relief, whether legal or equitable in nature, including specific
        performance. For the purpose of any judicial proceeding to enforce such award
        or
        incidental to such arbitration or to compel arbitration and for purposes
        of
        Sections 5 and 6 hereof, the parties hereby submit to the non-exclusive
        jurisdiction of the Supreme Court of the State of New York, New York County,
        or
        the United States District Court for the Southern District of New York, and
        agree that service of process in such arbitration or court proceedings shall
        be
        satisfactorily made upon it if sent by registered mail addressed to it at
        the
        address referred to in paragraph (g) below. The -costs of such arbitration
        shall
        be borne proportionate to the finding of fault as determined by the arbitrator.
        Judgment on the arbitration award may be entered by any court of competent
        jurisdiction.

       

      (c)   This
        Agreement shall be binding upon and inure to the benefit of the parties hereto,
        and their respective heirs, legal representatives, successors and
        assigns.

       

      (d)   This
        Agreement, and the Executive’s rights and obligations hereunder, may not be
        assigned by the Executive. The Company may assign its rights, together with
        its
        obligations, hereunder in connection with any sale, transfer or other
        disposition of all or substantially all of its business or assets.

       

      (e)   This
        Agreement cannot be amended orally, or by any course of conduct or dealing,
        but
        only by a written agreement signed by the parties hereto.

       

      (f)   The
        failure of either party to insist upon the strict performance of any of the
        terms, conditions and provisions of this Agreement shall not be construed
        as a
        waiver or relinquishment of future compliance therewith, and such terms,
        conditions and provisions shall remain in full force and effect. No waiver
        of
        any term or condition of this Agreement on the part of either party shall
        be
        effective for any purpose whatsoever unless such waiver is in writing and
        signed
        by such party.

       

      (g)   All
        notices, requests, consents and other communications, required or permitted
        to
        be given hereunder, shall be in writing and shall be delivered personally
        or by
        an overnight courier service or sent by registered or certified mail, postage
        prepaid, return receipt requested, to the parties at the addresses set forth
        on
        the first page of this Agreement, and shall be deemed given when so delivered
        personally or by overnight courier, or, if mailed, five days after the date
        of
        deposit in the United States mail. Either party may designate another address,
        for receipt of notices hereunder by giving notice to the other party in
        accordance with this paragraph (g).

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

         

      

      (h)   This
        Agreement sets forth the entire agreement and understanding of the parties
        relating to the subject matter hereof, and supersedes all prior agreements,
        arrangements and understandings, written or oral, relating to the subject
        matter
        hereof. No representation, promise or inducement has been made by either
        party
        that is not embodied in this Agreement, and neither party shall be bound
        by or
        liable for any alleged representation, promise or inducement not so set
        forth.

       

      (i)   As
        used in this Agreement, “affiliate” of a specified Person shall mean and include
        any Person controlling, controlled by or under common control with the specified
        Person.

       

      (j)   The
        section headings contained herein are for reference purposes only and shall
        not
        in any way affect the meaning or interpretation of this Agreement.

       

      (k)   This
        Agreement may be executed in any number of counterparts, each of which shall
        constitute an original, but all of which together shall constitute one and
        the
        same instrument.

       

      [Remainder
        of Page Intentionally Left Blank-Signature Page Follows]

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WITEREOF, the parties hereto have executed this Agreement as of the
        date
        first above written.

       

      
        	 	 	 
	 	INNOVIVE
                PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
                Steven Kelly
	 	Title:
                President and Chief Executive Officer

      

      

      
        	 	 	 
	 	EXECUTIVE
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
                Adam R. Craig
	 	 

      

       

      
        
          
          

        

        
          13

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