Document:

Exhibit
        10.3

    

     

    

      INNOVIVE
        PHARMACEUTICALS, INC.

      

      2004
        Stock Option Plan

      

      1.   Purpose.   The
        purpose of the 2004
        Stock Option Plan (the “Plan”)
        of
        Innovive Pharmaceuticals, Inc. (the “Company”)
        is to
        increase shareholder value and to advance the interests of the Company by
        furnishing a variety of economic incentives (“Incentives”)
        designed to attract, retain and motivate employees, directors, officers and
        consultants. Incentives may consist of opportunities to purchase or receive
        shares of Common Stock, $0.001 par value, of the Company (“Common
        Stock”),
        on
        terms determined under this Plan.

       

      2.   Administration.
        

      

      2.1   The
        Plan
        shall be administered by a committee of the Board of Directors of the Company
        (the “Committee”).
        The
        Committee shall consist of not less than two directors of the Company who
        shall
        be appointed from time to time by the board of directors of the Company.
        Each
        member of the Committee shall be a “non-employee director” within the meaning of
        Rule 16b-3 of the Exchange Act of 1934, as amended (together with the rules
        and
        regulations promulgated thereunder, the “Exchange
        Act”),
        and
        an “outside director” as defined in Section 162(m) of the Internal Revenue Code
        of 1986, as amended (the “Code”).
        The
        Committee shall have complete authority to determine all provisions of all
        Incentives awarded under the Plan (as consistent with the terms of the Plan),
        to
        interpret the Plan, and to make any other determination which it believes
        necessary and advisable for the proper administration of the Plan. The
        Committee’s decisions and matters relating to the Plan shall be final and
        conclusive on the Company and its participants. No member of the Committee
        will
        be liable for any action or determination made in good faith with respect
        to the
        Plan or any Incentives granted under the Plan. The Committee will also have
        the
        authority under the Plan to amend or modify the terms of any outstanding
        Incentives in any manner; provided, however, that the amended or modified
        terms
        are permitted by the Plan as then in effect and that any recipient of an
        Incentive adversely affected by such amended or modified terms has consented
        to
        such amendment or modification. No amendment or modification to an Incentive,
        however, whether pursuant to this Section 2 or any other provisions of the
        Plan,
        will be deemed to be a re-grant of such Incentive for purposes of this Plan.
        If
        at any time there is no Committee, then for purposes of the Plan the term
        “Committee” shall mean the Company’s Board of Directors.

      

      2.2   In
        the
        event of (i) any reorganization, merger, consolidation, recapitalization,
        liquidation, reclassification, stock dividend, stock split, combination of
        shares, divestiture (including a spin-off) or any other similar change in
        corporate structure or capitalization, (ii) any purchase, acquisition,
        sale
        or disposition of all or substantially all of the assets or a substantial
        business or (iii) any other similar occurrence, in each case with respect
        to the
        Company or any other affiliate of the Company whose performance is relevant
        to
        the grant or vesting of an Incentive, the Committee (or, if the Company is
        not
        the surviving corporation in any such transaction, the board of directors
        of the
        surviving corporation) may, without the consent of any affected participant,
        amend or modify the vesting criteria of any outstanding Incentive that is
        based
        in whole or in part on the financial performance of the Company (or any
        subsidiary or division thereof) or such other entity so as equitably to reflect
        such event, with the desired result that the criteria for evaluating such
        financial performance of the Company or such other entity will be substantially
        the same (in the sole discretion of the Committee or the board of directors
        of
        the surviving corporation) following such event as prior to such event;
        provided, however, that the amended or modified terms are permitted by the
        Plan
        as then in effect.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      3.   Eligible
        Participants.   Employees
        of the Company
        or its subsidiaries (including officers and employees of the Company or its
        subsidiaries), directors and consultants, advisors or other independent
        contractors who provide services to the Company or its subsidiaries (including
        members of the Company’s scientific advisory board) shall become eligible to
        receive Incentives under the Plan when designated by the Committee. Participants
        may be designated individually or by groups or categories (for example, by
        pay
        grade) as the Committee deems appropriate. Participation by officers of the
        Company or its subsidiaries and any performance objectives relating to such
        officers must be approved by the Committee. Participation by others and any
        performance objectives relating to others may be approved by groups or
        categories (for example, by pay grade) and authority to designate participants
        who are not officers and to set or modify such targets may be delegated.
        

      4.   Types
        of Incentives.   Incentives
        under the Plan
        may be granted in any one or a combination of the following forms: (a) Incentive
        Stock Options and Nonstatutory Stock Options (Section 6); (b) stock appreciation
        rights (“SARs”)
        (Section 7); (c) stock awards (Section 8); (d) restricted stock (Section
        8); and
        (e) performance shares (Section 9). Incentive Stock Options may only be granted
        to employees of the Company. Officers and directors who are not also employees
        of the Company may not be granted Incentive Stock Options.

      

      5.   Shares
        Subject to the Plan.

      

      5.1.   Number
        of Shares.   Subject
        to adjustment as
        provided in Section 11.6, the number of shares of Common Stock which may
        be
        issued under the Plan shall not exceed 925,000 shares of Common Stock. Of
        such
        aggregate number of shares of Common Stock that may be issued under the Plan,
        the maximum number of shares that may be issued as Incentive Stock Options
        under
        Section 422 of the Code is 925,000. Any shares of Common Stock available
        for
        issuance as Incentive Stock Options may be alternatively issued as other
        types
        of Incentives under the Plan. Shares of Common Stock that are issued under
        the
        Plan or that are subject to outstanding Incentives will be applied to reduce
        the
        maximum number of shares of Common Stock remaining available for issuance
        under
        the Plan. 

      

      5.2.   Cancellation.   To
        the extent that cash
        in lieu of shares of Common Stock is delivered upon the exercise of an SAR
        pursuant to Section 7.4, the Company shall be deemed, for purposes of applying
        the limitation on the number of shares, to have issued the greater of the
        number
        of shares of Common Stock which it was entitled to issue upon such exercise
        or
        on the exercise of any related option. In the event that a stock option or
        SAR
        granted hereunder expires or is terminated or canceled unexercised or unvested
        as to any shares of Common Stock, such shares may again be issued under the
        Plan
        either pursuant to stock options, SARs or otherwise. In the event that shares
        of
        Common Stock are issued as restricted stock or pursuant to a stock award
        and
        thereafter are forfeited or reacquired by the Company pursuant to rights
        reserved upon issuance thereof, such forfeited and reacquired shares may
        again
        be issued under the Plan, either as restricted stock, pursuant to stock awards
        or otherwise. The Committee may also determine to cancel, and agree to the
        cancellation of, stock options in order to make a participant eligible for
        the
        grant of a stock option at a lower price than the option to be
        canceled.

      

      
        
          
          

        

        
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      6.   Stock
        Options.   A
        stock option is a right
        to purchase shares of Common Stock from the Company. The Committee may designate
        whether an option is to be considered an Incentive Stock Option or a
        Nonstatutory Stock Option. To the extent that any Incentive Stock Option
        granted
        under the Plan ceases for any reason to qualify as an “Incentive Stock Option”
        for purposes of Section 422 of the Code, such Incentive Stock Option will
        continue to be outstanding for purposes of the Plan but will thereafter be
        deemed to be a Nonstatutory Stock Option. Each stock option granted by the
        Committee under this Plan shall be subject to the following terms and
        conditions:

      

      6.1.   Price.   The
        option price per
        share shall be determined by the Committee, subject to adjustment under Section
        11.6.

      

      6.2.   Number.   The
        number of shares of
        Common Stock subject to the option shall be determined by the Committee,
        subject
        to adjustment as provided in Section 11.6. The number of shares of Common
        Stock
        subject to a stock option shall be reduced in the same proportion that the
        holder thereof exercises a SAR if any SAR is granted in conjunction with
        or
        related to the stock option. No individual may receive options to purchase
        more
        than 300,000 shares in any year. 

       

      6.3.   Duration
        and Time for Exercise.   Subject
        to earlier
        termination as provided in Section 11.4, the term of each stock option shall
        be
        determined by the Committee but shall not exceed ten years and one day from
        the
        date of grant. Each stock option shall become exercisable at such time or
        times
        during its term as shall be determined by the Committee at the time of grant.
        The Committee may accelerate the exercisability of any stock
        option.

      

      6.4.   Manner
        of Exercise.   Subject
        to the conditions
        contained in this Plan and in the agreement with the recipient evidencing
        such
        option, a stock option may be exercised, in whole or in part, by giving written
        notice to the Company, specifying the number of shares of Common Stock to
        be
        purchased and accompanied by the full purchase price for such shares. The
        exercise price shall be payable (a) in United States dollars upon exercise
        of
        the option and may be paid by cash; uncertified or certified check; bank
        draft;
        or (b) at the discretion of the Committee, by delivery of shares of Common
        Stock
        that are already owned by the participant in payment of all or any part of
        the
        exercise price, which shares shall be valued for this purpose at the Fair
        Market
        Value on the date such option is exercised. The shares of Common Stock delivered
        by the participant pursuant to Section 6.4(b) must have been held by the
        participant for a period of not less than six months prior to the exercise
        of
        the option, unless otherwise determined by the Committee. Prior to the issuance
        of shares of Common Stock upon the exercise of a stock option, a participant
        shall have no rights as a shareholder. Except as otherwise provided in the
        Plan,
        no adjustment will be made for dividends or distributions with respect to
        such
        stock options as to which there is a record date preceding the date the
        participant becomes the holder of record of such shares, except as the Committee
        may determine in its discretion.

      

      
        
          
          

        

        
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      6.5.   Incentive
        Stock Options.   Notwithstanding
        anything
        in the Plan to the contrary, the following additional provisions shall apply
        to
        the grant of stock options which are intended to qualify as Incentive Stock
        Options (as such term is defined in Section 422 of the Code):

      

      (a)   The
        aggregate Fair Market Value (determined as of the time the option is granted)
        of
        the shares of Common Stock with respect to which Incentive Stock Options
        are
        exercisable for the first time by any participant during any calendar year
        (under the Plan and any other incentive stock option plans of the Company
        or any
        subsidiary or parent corporation of the Company) shall not exceed $100,000.
        The
        determination will be made by taking incentive stock options into account
        in the
        order in which they were granted. 

      

      (b)   Any
        Incentive Stock Option certificate authorized under the Plan shall contain
        such
        other provisions as the Committee shall deem advisable, but shall in all
        events
        be consistent with and contain all provisions required in order to qualify
        the
        options as Incentive Stock Options.

      (c)   All
        Incentive Stock Options must be granted within ten years from the earlier
        of the
        date on which this Plan was adopted by board of directors or the date this
        Plan
        was approved by the Company’s shareholders. 

      

      (d)   Unless
        sooner exercised, all Incentive Stock Options shall expire no later than
        10
        years after the date of grant. No Incentive Stock Option may be exercisable
        after ten (10) years from its date of grant (five (5) years from its date
        of
        grant if, at the time the Incentive Stock Option is granted, the Participant
        owns, directly or indirectly, more than 10% of the total combined voting
        power
        of all classes of stock of the Company or any parent or subsidiary corporation
        of the Company).

      

      (e)   The
        exercise price for Incentive Stock Options shall be not less than 100% of
        the
        Fair Market Value of one share of Common Stock on the date of grant; provided
        that the exercise price shall be 110% of the Fair Market Value if, at the
        time
        the Incentive Stock Option is granted, the participant owns, directly or
        indirectly, more than 10% of the total combined voting power of all classes
        of
        stock of the Company or any parent or subsidiary corporation of the
        Company.

      

      
        
          
          

        

        
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      7.   Stock
        Appreciation Rights.   An
        SAR is a right to
        receive, without payment to the Company, a number of shares of Common Stock,
        cash or any combination thereof, the amount of which is determined pursuant
        to
        the formula set forth in Section 7.4. An SAR may be granted (a) with respect
        to
        any stock option granted under this Plan, either concurrently with the grant
        of
        such stock option or at such later time as determined by the Committee (as
        to
        all or any portion of the shares of Common Stock subject to the stock option),
        or (b) alone, without reference to any related stock option. Each SAR granted
        by
        the Committee under this Plan shall be subject to the following terms and
        conditions:

      

      7.1.   Number;
        Exercise Price.   Each
        SAR granted to any
        participant shall relate to such number of shares of Common Stock as shall
        be
        determined by the Committee, subject to adjustment as provided in Section
        11.6.
        In the case of an SAR granted with respect to a stock option, the number
        of
        shares of Common Stock to which the SAR pertains shall be reduced in the
        same
        proportion that the holder of the option exercises the related stock option.
        The
        exercise price of an SAR will be determined by the Committee, in its discretion,
        at the date of grant but may not be less than 100% of the Fair Market Value
        of
        one share of Common Stock on the date of grant.

      

      7.2.   Duration.   Subject to
        earlier
        termination as provided in Section 11.4, the term of each SAR shall be
        determined by the Committee but shall not exceed ten years and one day from
        the
        date of grant. Unless otherwise provided by the Committee, each SAR shall
        become
        exercisable at such time or times, to such extent and upon such conditions
        as
        the stock option, if any, to which it relates is exercisable. The Committee
        may
        in its discretion accelerate the exercisability of any SAR.

      

      7.3.   Exercise.   An
        SAR may be exercised,
        in whole or in part, by giving written notice to the Company, specifying
        the
        number of SARs which the holder wishes to exercise. Upon receipt of such
        written
        notice, the Company shall, within 90 days thereafter, deliver to the exercising
        holder certificates for the shares of Common Stock or cash or both, as
        determined by the Committee, to which the holder is entitled pursuant to
        Section
        7.4.

       

      7.4.   Payment.   Subject
        to the right of
        the Committee to deliver cash in lieu of shares of Common Stock (which, as
        it
        pertains to officers and directors of the Company, shall comply with all
        requirements of the Exchange Act), the number of shares of Common Stock which
        shall be issuable upon the exercise of an SAR shall be determined by
        dividing:

      

      (a)   the
        number of shares of Common Stock as to which the SAR is exercised multiplied
        by
        the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares
        of Common Stock subject to the SAR on the exercise date exceeds (1) in the
        case
        of an SAR related to a stock option, the exercise price of the shares of
        Common
        Stock under the stock option or (2) in the case of an SAR granted alone,
        without
        reference to a related stock option, an amount which shall be determined
        by the
        Committee at the time of grant, subject to adjustment under Section 11.6);
        by

      

      (b)   the
        Fair
        Market Value of a share of Common Stock on the exercise date.

      

      
        
          
          

        

        
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      In
        lieu
        of issuing shares of Common Stock upon the exercise of a SAR, the Committee
        may
        elect to pay the holder of the SAR cash equal to the Fair Market Value on
        the
        exercise date of any or all of the shares which would otherwise be issuable.
        No
        fractional shares of Common Stock shall be issued upon the exercise of an
        SAR;
        instead, the holder of the SAR shall be entitled to receive a cash adjustment
        equal to the same fraction of the Fair Market Value of a share of Common
        Stock
        on the exercise date or to purchase the portion necessary to make a whole
        share
        at its Fair Market Value on the date of exercise.

      

      8.   Stock
        Awards and Restricted Stock.   A
        stock award consists of
        the transfer by the Company to a participant of shares of Common Stock, without
        other payment therefor, as additional compensation for services to the Company.
        The participant receiving a stock award will have all voting, dividend,
        liquidation and other rights with respect to the shares of Common Stock issued
        to a participant as a stock award under this Section 8 upon the participant
        becoming the holder of record of such shares. A share of restricted stock
        consists of shares of Common Stock which are sold or transferred by the Company
        to a participant at a price determined by the Committee (which price shall
        be at
        least equal to the minimum price required by applicable law for the issuance
        of
        a share of Common Stock) and subject to restrictions on their sale or other
        transfer by the participant, which restrictions and conditions may be determined
        by the Committee as long as such restrictions and conditions are not
        inconsistent with the terms of the Plan. The transfer of Common Stock pursuant
        to stock awards and the transfer and sale of restricted stock shall be subject
        to the following terms and conditions:

      

      8.1.   Number
        of Shares.   The
        number of shares to
        be transferred or sold by the Company to a participant pursuant to a stock
        award
        or as restricted stock shall be determined by the Committee.

      

      8.2.   Sale
        Price.   The
        Committee shall
        determine the price, if any, at which shares of restricted stock shall be
        sold
        or granted to a participant, which may vary from time to time and among
        participants and which may be below the Fair Market Value of such shares
        of
        Common Stock at the date of sale.

       

      8.3.   Restrictions.   All
        shares of restricted
        stock transferred or sold hereunder shall be subject to such restrictions
        as the
        Committee may determine, including, without limitation any or all of the
        following:

      

      (a)   a
        prohibition against the sale, transfer, pledge or other encumbrance of the
        shares of restricted stock, such prohibition to lapse at such time or times
        as
        the Committee shall determine (whether in annual or more frequent installments,
        at the time of the death, disability or retirement of the holder of such
        shares,
        or otherwise);

      

      (b)   a
        requirement that the holder of shares of restricted stock forfeit, or (in
        the
        case of shares sold to a participant) resell back to the Company at his or
        her
        cost, all or a part of such shares in the event of termination of his or
        her
        employment or consulting engagement during any period in which such shares
        are
        subject to restrictions; or

      

      
        
          
          

        

        
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      (c)   such
        other conditions or restrictions as the Committee may deem
        advisable.

      

      8.4.   Escrow.   In
        order to enforce the
        restrictions imposed by the Committee pursuant to Section 8.3, the participant
        receiving restricted stock shall enter into an agreement with the Company
        setting forth the conditions of the grant. Shares of restricted stock shall
        be
        registered in the name of the participant and deposited, together with a
        stock
        power endorsed in blank, with the Company. Each such certificate shall bear
        a
        legend in substantially the following form:

      

      The
        transferability of this certificate and the shares of Common Stock represented
        by it are subject to the terms and conditions (including conditions of
        forfeiture) contained in the 2004 Stock Option Plan of Innovive Pharmaceuticals,
        Inc., (the “Company”), and an agreement entered into between the registered
        owner and the Company. A copy of the 2004 Stock Option Plan and the agreement
        is
        on file in the office of the secretary of the Company.

      

      8.5.   End
        of
        Restrictions.   Subject
        to Section 11.5,
        at the end of any time period during which the shares of restricted stock
        are
        subject to forfeiture and restrictions on transfer, such shares will be
        delivered free of all restrictions to the participant or to the participant’s
        legal representative, beneficiary or heir.

       

      8.6.   Shareholder.   Subject
        to the terms and
        conditions of the Plan, each participant receiving restricted stock shall
        have
        all the rights of a shareholder with respect to shares of stock during any
        period in which such shares are subject to forfeiture and restrictions on
        transfer, including without limitation, the right to vote such shares. Dividends
        paid in cash or property other than Common Stock with respect to shares of
        restricted stock shall be paid to the participant currently. Unless the
        Committee determines otherwise in its sole discretion, any dividends or
        distributions (including regular quarterly cash dividends) paid with respect
        to
        shares of Common Stock subject to the restrictions set forth above will be
        subject to the same restrictions as the shares to which such dividends or
        distributions relate. In the event the Committee determines not to pay dividends
        or distributions, the Committee will determine in its sole discretion whether
        any interest will be paid on such dividends or distributions. In addition,
        the
        Committee in its sole discretion may require such dividends and distributions
        to
        be reinvested (and in such case the participant consents to such reinvestment)
        in shares of Common Stock that will be subject to the same restrictions as
        the
        shares to which such dividends or distributions relate.

      

      9.   Performance
        Shares.   A
        performance share
        consists of an award which shall be paid in shares of Common Stock, as described
        below. The grant of a performance share shall be subject to such terms and
        conditions as the Committee deems appropriate, including the
        following:

      

      
        
          
          

        

        
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      9.1.   Performance
        Objectives.   Each
        performance share
        will be subject to performance objectives for the Company or one of its
        operating units to be achieved by the participant before the end of a specified
        period. The number of performance shares granted shall be determined by the
        Committee and may be subject to such terms and conditions, as the Committee
        shall determine. If the performance objectives are achieved, each participant
        will be paid in shares of Common Stock or cash as determined by the Committee.
        If such objectives are not met, each grant of performance shares may provide
        for
        lesser payments in accordance with formulas established in the
        award.

      

      9.2.   Not
        Shareholder.   The
        grant of performance
        shares to a participant shall not create any rights in such participant as
        a
        shareholder of the Company, until the payment of shares of Common Stock with
        respect to an award.

      

      9.3.   No
        Adjustments.   No
        adjustment shall be
        made in performance shares granted on account of cash dividends which may
        be
        paid or other rights which may be issued to the holders of Common Stock prior
        to
        the end of any period for which performance objectives were
        established.

      

      9.4.   Expiration
        of Performance Share.   If
        any participant’s
        employment or consulting engagement with the Company is terminated for any
        reason other than normal retirement, death or disability prior to the
        achievement of the participant’s stated performance objectives, all the
        participant’s rights on the performance shares shall expire and terminate unless
        otherwise determined by the Committee. In the event of termination of employment
        or consulting by reason of death, disability, or normal retirement, the
        Committee, in its own discretion may determine what portions, if any, of
        the
        performance shares should be paid to the participant.

      

      10.   Change
        of Control.

      

      10.1   Change
        in Control.   For
        purposes of this
        Section 10, a “Change
        in Control”
        of the
        Company will mean the following:

       

      (a)   the
        sale,
        lease, exchange or other transfer, directly or indirectly, of substantially
        all
        of the assets of the Company (in one transaction or in a series of related
        transactions) to a person or entity that is not controlled by the Company;
        

       

      (b)   the
        approval by the shareholders of the Company of any plan or proposal for the
        liquidation or dissolution of the Company;

       

      (c)   if
        any
        person becomes after the effective date of the Plan the “beneficial owner” (as
        defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
        (i)
        20% or more, but not 50% or more, of the combined voting power of the Company’s
        outstanding securities ordinarily having the right to vote at elections of
        directors, unless the transaction resulting in such ownership has been approved
        in advance by the Continuing Directors (as defined below), or (ii) 50% or
        more
        of the combined voting power of the Company’s outstanding securities ordinarily
        having the right to vote at elections of directors (regardless of any approval
        by the Continuing Directors); provided that a traditional institutional or
        venture capital financing transaction shall be excluded from this
        definition;

       

      
        
          
          

        

        
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      (d)   a
        merger
        or consolidation to which the Company is a party if the shareholders of the
        Company immediately prior to effective date of such merger or consolidation
        have
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act),
        immediately following the effective date of such merger or consolidation,
        of
        securities of the surviving corporation representing (i) 50% or more, but
        less
        than 80%, of the combined voting power of the surviving corporation’s then
        outstanding securities ordinarily having the right to vote at elections of
        directors, unless such merger or consolidation has been approved in advance
        by
        the Continuing Directors, or (ii) less than 50% of the combined voting
        power of the surviving corporation’s then outstanding securities ordinarily
        having the right to vote at elections of directors (regardless of any approval
        by the Continuing Directors); or

       

      (e)   after
        the
        date the Company’s securities are first sold in a registered public offering,
        the Continuing Directors cease for any reason to constitute at least a majority
        of the Board. 

       

      10.2   Continuing
        Directors.   For
        purposes of this
        Section 10, “Continuing
        Directors”
        of the
        Company will mean any individuals who are members of the Board on the effective
        date of the Plan and any individual who subsequently becomes a member of
        the
        Board whose election, or nomination for election by the Company’s shareholders,
        was approved by a vote of at least a majority of the Continuing Directors
        (either by specific vote or by approval of the Company’s proxy statement in
        which such individual is named as a nominee for director without objection
        to
        such nomination).

       

      10.3   Acceleration
        of Incentives.   Without
        limiting the
        authority of the Committee under the Plan, if a Change in Control of the
        Company
        occurs whereby the acquiring entity or successor to the Company does not
        assume
        the Incentives or replace them with substantially equivalent incentive awards
        (as determined by the Committee in its reasonable discretion), unless otherwise
        provided by the Committee in its sole discretion in the agreement evidencing
        an
        Incentive at the time of grant, then, as of the date of the Change of Control
        (a) all outstanding options and SARs will vest and will become immediately
        exercisable in full and will remain exercisable for the remainder of their
        terms, regardless of whether the participant to whom such options or SARs
        have
        been granted remains in the employ or service of the Company or any subsidiary
        of the Company or any acquiring entity or successor to the Company; (b) the
        restrictions on all shares of restricted stock awards shall lapse immediately;
        and (c) all performance shares shall be deemed to be met and payment made
        immediately.

       

      10.4   Cash
        Payment for Options.   If
        a Change in Control of
        the Company occurs, then the Committee, if approved by the Committee in its
        sole
        discretion either in an agreement evidencing an option at the time of grant
        or
        at any time after the grant of an option, and without the consent of any
        participant affected thereby, may determine that:

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

      

      (a)   some
        or
        all participants holding outstanding options will receive, with respect to
        some
        or all of the shares of Common Stock subject to such options, as of the
        effective date of any such Change in Control of the Company, cash in an amount
        equal to the excess of the Fair Market Value of such shares immediately prior
        to
        the effective date of such Change in Control of the Company over the exercise
        price per share of such options; and

       

      (b)   any
        options as to which, as of the effective date of any such Change in Control,
        the
        Fair Market Value of the shares of Common Stock subject to such options is
        less
        than or equal to the exercise price per share of such options, shall terminate
        as of the effective date of any such Change in Control.

       

      
        	 	
                If
                  the Committee makes a determination as set forth in subparagraph
                  (a) of
                  this Section 10.4, then as of the effective date of any such Change
                  in
                  Control of the Company such options will terminate as to such shares
                  and
                  the participants formerly holding such options will only have the
                  right to
                  receive such cash payment(s). If the Committee makes a determination
                  as
                  set forth in subparagraph (b) of this Section 10.4, then as of
                  the
                  effective date of any such Change in Control of the Company such
                  options
                  will terminate, become void and expire as to all unexercised shares
                  of
                  Common Stock subject to such options on such date, and the participants
                  formerly holding such options will have no further rights with
                  respect to
                  such options.

              

      

      

      11.   General.

      

      11.1.   Effective
        Date.   The
        Plan will become
        effective upon approval by the Company’s board of directors. 

      

      11.2.   Duration.   The
        Plan shall remain in
        effect until all Incentives granted under the Plan have either been satisfied
        by
        the issuance of shares of Common Stock or the payment of cash or been terminated
        under the terms of the Plan and all restrictions imposed on shares of Common
        Stock in connection with their issuance under the Plan have lapsed. No
        Incentives may be granted under the Plan after the tenth anniversary of the
        date
        the Plan is approved by the shareholders of the Company.

      

      11.3.   Non-transferability
        of Incentives.   Except,
        in the event of
        the holder’s death, by will or the laws of descent and distribution to the
        limited extent provided in the Plan or the Incentive, unless approved by
        the
        Committee, no stock option, SAR, restricted stock or performance award may
        be
        transferred, pledged or assigned by the holder thereof, either voluntarily
        or
        involuntarily, directly or indirectly, by operation of law or otherwise,
        and the
        Company shall not be required to recognize any attempted assignment of such
        rights by any participant. During a participant’s lifetime, an Incentive may be
        exercised only by him or her or by his or her guardian or legal
        representative.

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

         

      

      11.4.   Effect
        of Termination or Death.   In
        the event that a
        participant ceases to be an employee of or consultant to the Company, or
        the
        participants other service with the Company is terminated, for any reason,
        including death, any Incentives may be exercised or shall expire at such
        times
        as may be determined by the Committee in its sole discretion in the agreement
        evidencing an Incentive. Notwithstanding the other provisions of this
        Section 11.4, except as may be set forth in an agreement evidencing
        an
        Incentive, upon a participant’s termination of employment or other service with
        the Company and all subsidiaries, the Committee may, in its sole discretion
        (which may be exercised at any time on or after the date of grant, including
        following such termination), cause options and SARs (or any part thereof)
        then
        held by such participant to become or continue to become exercisable and/or
        remain exercisable following such termination of employment or service and
        Restricted Stock Awards, Performance Shares and Stock Awards then held by
        such
        participant to vest and/or continue to vest or become free of transfer
        restrictions, as the case may be, following such termination of employment
        or
        service, in each case in the manner determined by the Committee; provided,
        however, that no Incentive may remain exercisable or continue to vest beyond
        its
        expiration date. Any Incentive Stock Option that remains unexercised more
        than
        one (1) year following termination of employment by reason of death or
        disability or more than three (3) months following termination for any reason
        other than death or disability will thereafter be deemed to be a Nonstatutory
        Stock Option. 

       

      11.5.   Additional
        Conditions.   Notwithstanding
        anything
        in this Plan to the contrary: (a) the Company may, if it shall determine
        it
        necessary or desirable for any reason, at the time of award of any Incentive
        or
        the issuance of any shares of Common Stock pursuant to any Incentive, require
        the recipient of the Incentive, as a condition to the receipt thereof or
        to the
        receipt of shares of Common Stock issued pursuant thereto, to deliver to
        the
        Company a written representation of present intention to acquire the Incentive
        or the shares of Common Stock issued pursuant thereto for his or her own
        account
        for investment and not for distribution; and (b) if at any time the Company
        further determines, in its sole discretion, that the listing, registration
        or
        qualification (or any updating of any such document) of any Incentive or
        the
        shares of Common Stock issuable pursuant thereto is necessary on any securities
        exchange or under any federal or state securities or blue sky law, or that
        the
        consent or approval of any governmental regulatory body is necessary or
        desirable as a condition of, or in connection with the award of any Incentive,
        the issuance of shares of Common Stock pursuant thereto, or the removal of
        any
        restrictions imposed on such shares, such Incentive shall not be awarded
        or such
        shares of Common Stock shall not be issued or such restrictions shall not
        be
        removed, as the case may be, in whole or in part, unless such listing,
        registration, qualification, consent or approval shall have been effected
        or
        obtained free of any conditions not acceptable to the Company. Notwithstanding
        any other provision of the Plan or any agreements entered into pursuant to
        the
        Plan, the Company will not be required to issue any shares of Common Stock
        under
        this Plan, and a participant may not sell, assign, transfer or otherwise
        dispose
        of shares of Common Stock issued pursuant to any Incentives granted under
        the
        Plan, unless (a) there is in effect with respect to such shares a
        registration statement under the Securities Act of 1933, as amended (the
        “Securities
        Act”),
        and
        any applicable state or foreign securities laws or an exemption from such
        registration under the Securities Act and applicable state or foreign securities
        laws, and (b) there has been obtained any other consent, approval
        or permit
        from any other regulatory body which the Committee, in its sole discretion,
        deems necessary or advisable. The Company may condition such issuance, sale
        or
        transfer upon the receipt of any representations or agreements from the parties
        involved, and the placement of any legends on certificates representing shares
        of Common Stock, as may be deemed necessary or advisable by the Company in
        order
        to comply with such securities law or other restrictions. The Committee may
        restrict the rights of participants to the extent necessary to comply with
        Section 16(b) of the Exchange Act, the Internal Revenue Code or any other
        applicable law or regulation. The grant of an Incentive award pursuant to
        the
        Plan shall not limit in any way the right or power of the Company to make
        adjustments, reclassifications, reorganizations or changes of its capital
        or
        business structure or to merge, exchange or consolidate or to dissolve,
        liquidate, sell or transfer all or any part of its business or
        assets.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

         

      

      11.6.   Adjustment.   In
        the event of any
        merger, consolidation or reorganization of the Company with any other
        corporation or corporations, there shall be substituted for each of the shares
        of Common Stock then subject to the Plan, including shares subject to
        restrictions, options, or achievement of performance share objectives, the
        number and kind of shares of stock or other securities to which the holders
        of
        the shares of Common Stock will be entitled pursuant to the transaction.
        In the
        event of any recapitalization, reclassification, stock dividend, stock split,
        combination of shares or other similar change in the corporate structure
        of the
        Company or capitalization of the Company, the exercise price of an outstanding
        Incentive and the number of shares of Common Stock then subject to the Plan,
        including shares subject to restrictions, options or achievements of performance
        shares, shall be adjusted in proportion to the change in outstanding shares
        of
        Common Stock in order to prevent dilution or enlargement of the rights of
        the
        participants. In the event of any such adjustments, the purchase price of
        any
        option, the performance objectives of any Incentive, and the shares of Common
        Stock issuable pursuant to any Incentive shall be adjusted as and to the
        extent
        appropriate, in the discretion of the Committee, to provide participants
        with
        the same relative rights before and after such adjustment.

      

      11.7.   Incentive
        Plans and Agreements.   Except
        in the case of
        stock awards, the terms of each Incentive shall be stated in a plan or agreement
        approved by the Committee. The Committee may also determine to enter into
        agreements with holders of options to reclassify or convert certain outstanding
        options, within the terms of the Plan, as Incentive Stock Options or as
        Nonstatutory Stock Options and in order to eliminate SARs with respect to
        all or
        part of such options and any other previously issued options.

      

      11.8.   Withholding.

      

      (a)   The
        Company shall have the right to (i) withhold and deduct from any payments
        made
        under the Plan or from future wages of the participant (or from other amounts
        that may be due and owing to the participant from the Company or a subsidiary
        of
        the Company), or make other arrangements for the collection of, all legally
        required amounts necessary to satisfy any and all foreign, federal, state
        and
        local withholding and employment-related tax requirements attributable to
        an
        Incentive, or (ii) require the participant promptly to remit the amount of
        such
        withholding to the Company before taking any action, including issuing any
        shares of Common Stock, with respect to an Incentive. At any time when a
        participant is required to pay to the Company an amount required to be withheld
        under applicable income tax laws in connection with a distribution of Common
        Stock or upon exercise of an option or SAR, the participant may satisfy this
        obligation in whole or in part by electing (the “Election”)
        to
        have the Company withhold from the distribution shares of Common Stock having
        a
        value up to the amount required to be withheld. The value of the shares to
        be
        withheld shall be based on the Fair Market Value of the Common Stock on the
        date
        that the amount of tax to be withheld shall be determined (“Tax
        Date”).

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

         

      

      (b)   Each
        Election must be made prior to the Tax Date. The Committee may disapprove
        of any
        Election, may suspend or terminate the right to make Elections, or may provide
        with respect to any Incentive that the right to make Elections shall not
        apply
        to such Incentive. An Election is irrevocable.

       

      (c)   If
        a
        participant is an officer or director of the Company within the meaning of
        Section 16 of the Exchange Act, then an Election is subject to the following
        additional restrictions:

      

      (1)   No
        Election shall be effective for a Tax Date which occurs within six months
        of the
        grant or exercise of the award, except that this limitation shall not apply
        in
        the event death or disability of the participant occurs prior to the expiration
        of the six-month period.

      

      (2)   The
        Election must be made either six months prior to the Tax Date or must be
        made
        during a period beginning on the third business day following the date of
        release for publication of the Company’s quarterly or annual summary statements
        of sales and earnings and ending on the twelfth business day following such
        date.

      

      (d)   If
        the
        option granted to a participant hereunder is an Incentive Stock Option, and
        if
        the participant sells or otherwise disposes of any of the shares of Common
        Stock
        acquired pursuant to the Incentive Stock Option on or before the later of
        (1) the date two years after the date of grant, or (2) the
        date one
        year after the date of exercise, the participant shall immediately notify
        the
        Company in writing of such disposition. The participant agrees that the
        participant may be subject to income tax withholding by the Company on the
        compensation income recognized by the participant from the early disposition
        by
        payment in cash or out of the current earnings paid to the
        participant.

      

      11.9.   No
        Continued Employment, Engagement or Right to Corporate Assets.   No
        participant under the
        Plan shall have any right, because of his or her participation, to continue
        in
        the employ of the Company for any period of time or to any right to continue
        his
        or her present or any other rate of compensation. Nothing contained in the
        Plan
        shall be construed as giving an employee, a consultant, such persons’
        beneficiaries or any other person any equity or interests of any kind in
        the
        assets of the Company or creating a trust of any kind or a fiduciary
        relationship of any kind between the Company and any such person.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

         

      

      11.10.   Deferral
        Permitted.   Payment
        of cash or
        distribution of any shares of Common Stock to which a participant is entitled
        under any Incentive shall be made as provided in the Incentive. Payment may
        be
        deferred at the option of the participant if provided in the
        Incentive.

      

      11.11.   Amendment
        of the Plan.   The
        Board may amend,
        suspend or discontinue the Plan at any time; provided, however, that no
        amendments to the Plan will be effective without approval of the shareholders
        of
        the Company if shareholder approval of the amendment is then required pursuant
        to Section 422 of the Code, the regulations promulgated thereunder or the
        rules
        of any stock exchange or Nasdaq or similar regulatory body. No termination,
        suspension or amendment of the Plan may adversely affect any outstanding
        Incentive without the consent of the affected participant; provided, however,
        that this sentence will not impair the right of the Committee to take whatever
        action it deems appropriate under the Plan. 

      

      11.12.   Definition
        of Fair Market Value.   For
        purposes of this
        Plan, the “Fair
        Market Value”
        of a
        share of Common Stock at a specified date shall, unless otherwise expressly
        provided in this Plan, be the amount which the Committee or the board of
        directors of the Company determines in good faith in the exercise of its
        reasonable discretion to be 100% of the fair market value of such a share
        as of
        the date in question; provided, however, that notwithstanding the foregoing,
        if
        such shares are listed on a U.S. securities exchange or are quoted on the
        Nasdaq
        National Market System or Nasdaq SmallCap Stock Market (“Nasdaq”),
        then
        Fair Market Value shall be determined by reference to the last sale price
        of a
        share of Common Stock on such U.S. securities exchange or Nasdaq on the
        applicable date. If such U.S. securities exchange or Nasdaq is closed for
        trading on such date, or if the Common Stock does not trade on such date,
        then
        the last sale price used shall be the one on the date the Common Stock last
        traded on such U.S. securities exchange or Nasdaq.

      

      11.13   Breach
        of Confidentiality, Assignment of Inventions, or Non-Compete
        Agreements.   Notwithstanding
        anything
        in the Plan to the contrary, in the event that a participant materially breaches
        the terms of any confidentiality, assignment of inventions, or non-compete
        agreement entered into with the Company or any subsidiary of the Company,
        whether such breach occurs before or after termination of such participant’s
        employment or other service with the Company or any subsidiary, the Committee
        in
        its sole discretion may immediately terminate all rights of the participant
        under the Plan and any agreements evidencing an Incentive then held by the
        participant without notice of any kind.

      

      11.13   Governing
        Law.   The
        validity,
        construction, interpretation, administration and effect of the Plan and any
        rules, regulations and actions relating to the Plan will be governed by and
        construed exclusively in accordance with the laws of the State of Minnesota,
        notwithstanding the conflicts of laws principles of any
        jurisdictions.

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

         

      

      11.14   Successors
        and Assigns.   The
        Plan will be binding
        upon and inure to the benefit of the successors and permitted assigns of
        the
        Company and the participants in the Plan.

      

      11.15   Lock-up
        Agreement.   Each
        recipient of
        securities here-under agrees, in connection with the first registration with
        the
        United States Securities and Exchange Commission under the Securities Act
        of
        1933, as amended, of the public sale of the Company's Common Stock, not to
        sell,
        make any short sale of, loan, grant any option for the purchase of or otherwise
        dispose of any securities of the Company (other than those included in the
        registration) without the prior written consent of the Company or such
        underwriters, as the case may be, for such period of time (not to exceed
        180
        days) from the effective date of such registration as the Company or the
        underwriters, as the case may be, shall specify. Each such recipient agrees
        that
        the Company may instruct its transfer agent to place stop-transfer notations
        in
        its records to enforce this Section. Each such recipient agrees to execute
        a
        form of agreement reflecting the foregoing restrictions as requested by the
        underwriters managing such offering.

      

      

      
        
          
          

        

        
          15Exhibit
        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
                Kelly

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        AMENDMENT,
          dated
          June 1, 2005 (this “Amendment”),
          to
          the Employment Agreement dated June 2, 2004 (the “Employment
          Agreement”),
          by
          and between Innovive Pharmaceuticals, Inc. (f/k/a Broadway Therapeutics,
          Inc.),
          a Delaware corporation (the “Company”)
          and
          Steven Kelly (the “Executive”).
          

         

        WHEREAS,
          the
          Executive and the Company desire to amend the Executive’s Employment Agreement
          with respect to (i) the vesting of the Executive’s Restricted Shares (as defined
          in the Employment Agreement) pursuant to Section 5(e)(i) in the Employment
          Agreement and (ii) the Executive’s compensation upon termination pursuant to
          Section 10 of the Employment Agreement, as specifically set forth in this
          Amendment. 

         

        NOW,
          THEREFORE,
          it is
          therefore hereby agreed by and between the parties as follows: 

        

        1. Equity.
          Notwithstanding
          anything to the contrary contained in Section 5(e)(i) of the Employment
          Agreement, all Restricted Shares held by the Executive shall vest as of
          the date
          of the first anniversary of the Employment Agreement. 

         

        2. Compensation
          upon Termination.
          Sections
          10(c) and 10(d) of the Employment Agreement are hereby deleted in their
          entirety. 

         

        3. Acknowledgement
          by the Executive.
          The
          Executive hereby acknowledges that the terms and provisions contained in
          this
          Amendment represent a valuable right being given to the Executive by the
          Company
          and constitute a material portion of the consideration received by the
          Executive
          in exchange for the non-competition, non-solicitation and non-disparagement
          provisions set forth in Section 7 of the Employment Agreement, which remain
          in
          full force and effect. 

        

        4. Effectiveness.
          This
          Amendment shall become effective as of the date hereof. 

        

        5. No
          Other Amendments.
          Except
          as
          expressly set forth herein, the Employment Agreement remains in full force
          and
          effect in accordance with its terms and nothing contained herein shall
          be deemed
          to be a waiver, amendment, modification or other change of any term, condition
          or provision of the Employment Agreement. 

        

        6.  References
          to the Employment Agreement.
          From
          and
          after the date hereof, all references in the Employment Agreement and any
          other
          documents to the Employment Agreement shall be deemed to be references
          to the
          Employment Agreement after giving effect to this Amendment. 

        

        7. Headings.
          The
          headings used herein are for convenience of reference only and shall not
          affect
          the construction of, nor shall they be taken into consideration in interpreting,
          this Amendment. 

        

        8. Counterparts.
          This
          Amendment may be executed in any number of separate counterparts, each
          of which
          shall be an original and all of which taken together shall constitute one
          and
          the same instrument. Facsimile counterpart signatures to this Amendment
          shall be
          acceptable and binding. 

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        9. Applicable
          Law.
          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. 

         

        [SIGNATURE
          PAGE FOLLOWS]

         

         

        *
          *
          *

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        

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

         

        

        
          	
                  INNOVIVE
                    PHARMACEUTICALS, INC.

                   

                  By:
                    /s/
                    Stephen C.
                    Rocamboli                                   
                    

                  Name:
                    Stephen C. Rocamboli

                  Title:
                    Secretary

                	
                  EXECUTIVE

                   

                  By:
                    /s/
                    Steven
                    Kelly                                     
                    

                  Name:
                    Steven Kelly

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