Document:

Exhibit  10.8

                            Dated September 30, 1998

                        ELAN PHARMA INTERNATIONAL LIMITED

                                       AND

                            ELECTROPHARMACOLOGY, INC.

                              LICENSE AGREEMENT /*/

 /*/     Confidential portions of this Exhibit have been omitted and filed
         separately with the Securities and Exchange Commission pursuant to Rule
         24b-2 under the Securities Exchange Act of 1934 as amended.

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                                    CONTENTS

CLAUSE 1                        PRELIMINARY

CLAUSE 2                        THE LICENSE

CLAUSE 3                        INTELLECTUAL PROPERTY

CLAUSE 4                        DEVELOPMENT OF THE PRODUCT

CLAUSE 5                        REGISTRATION OF THE PRODUCT

CLAUSE 6                        MARKETING AND PROMOTION OF THE PRODUCT

CLAUSE 7                        FINANCIAL PROVISIONS

CLAUSE 8                        PAYMENTS, REPORTS AND AUDITS

CLAUSE 9                        DURATION AND TERMINATION

CLAUSE 10                       CONSEQUENCES OF TERMINATION

CLAUSE 11                       REPRESENTATION, WARRANTY AND INDEMNITY

CLAUSE 12                       CUTOMER COMPLAINTS AND PRODUCT RECALL

CLAUSE 13                       MISCELLANEOUS PROVISIONS

SCHEDULE 1                      ELAN PATENT RIGHTS

SCHEDULE 2                      EXCLUDED TECHNOLOGY

SCHEDULE 3                      TECHNOLOGICAL COMPETITORS

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THIS AGREEMENT is made on September 30, 1998.

BETWEEN:
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(1)      Elan PHARMA INTERNATIONAL LIMITED, a company incorporated in Ireland
         having its registered office at WIL House, Shannon Business Park,
         Shannon, County Clare, Ireland ("ELAN"); and

(2)      ELECTROPHARMACOLOGY, INC., a company organised and existing under the
         laws of the State of Delaware, having an office at 2301 NW 33rd Court,
         Suite 102, Pompano Beach, Florida 33069, United States of America
         (which intends shortly to change its name to Gemini Health

         Technologies, Inc., "GEMINI").

RECITALS:
---------

A.       ELAN is beneficially entitled to the use of various patents, included
         in the ELAN TECHNOLOGY, which have been granted or are pending under
         the International Convention in relation to the development and
         production of iontophoretic transdermal devices, and

B.       ELAN is knowledgeable in the development of iontophoretic transdermal
         devices and has developed a unique range of device and delivery systems
         designed to provide improved devices, and

C.       GEMINI is desirous of entering into a licensing agreement with ELAN to
         allow GEMINI develop, manufacture and have manufactured in accordance
         with the terms of this Agreement and to market, sell and distribute
         PRODUCTS in the TERRITORY without infringing any of the intellectual
         property rights in the ELAN TECHNOLOGY held by ELAN, and

D.       ELAN is prepared to license the ELAN TECHNOLOGY in the TERRITORY to
         GEMINI for PHARMACEUTICAL USE in the FIELD.

NOW IT IS HEREBY AGREED AS FOLLOWS:

                             CLAUSE 1 - PRELIMINARY

1.1 Definitions: In this Agreement unless the context otherwise requires:

         AFFILIATE shall mean any corporation or entity controlling or
         controlled or under common control with ELAN or GEMINI, as the case may
         be. For the purposes of

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         this Agreement, "control" shall mean the direct or indirect ownership
         of more than 50% of the issued voting shares or other voting rights of
         the subject entity to elect directors, or if not meeting the preceding
         criteria, any entity owned or controlled by or owning or controlling at
         the maximum control or ownership right permitted in the country where
         such entity exists.

         CFR shall mean the US Code of Federal Regulations 21, as amended from
         time to time.

         cGP shall mean current Good Clinical Practice, current Good
         Manufacturing Practice and current Good Laboratory Practice as defined
         in the FFDCA, (or applicable foreign law).

         COSMETIC USE shall mean an application of the DEVICE which does not
         require regulatory approval to market either (a) the DEVICE, (b) a
         PRODUCT, or (c) GEMINI TECHNOLOGY, for such application in the
         TERRITORY.

         DERMATOLOGY shall mean the treatment of skin disorders including but
         not limited to acne, alopecia, dermatitis, eczema, hyperhydrosis,
         keratinisation disorders, pigmentation disorders, pruritus, psorasis,
         rosacea and warts.

         DEVICE shall mean any device, system, method or use which, in the
         course of manufacture, use, offer for sale or sale of any such device,
         or practice of any such method, in the absence of this Agreement, would
         infringe the ELAN PATENTS, or constitute an unauthorised use of the
         ELAN KNOW-HOW.

         EFFECTIVE DATE shall mean 30th September, 1998.

         ELAN shall mean Elan Pharma International Limited and any of its
         AFFILIATES.

         ELAN EXCLUDED TECHNOLOGY shall mean all intellectual property
         including, without limitation, any inventions, discoveries, material
         and data whether or not protectable by patents, trade secrets,
         trademarks or copyrights in relation to (i) the iontophoretic
         technology as set out in Schedule 2 which has been licensed by ELAN to
         Iomed, Inc. ("IOMED") pursuant to agreements dated 14th April 1997
         and/or developed pursuant to such agreements, (ii) ELAN's MEDIPAD(TM)
         Drug Delivery System ambulatory pump infusion technology as described
         in Schedule 2 and any improvements thereto, and (iii) the know-how as
         set out in Schedule 2 which has been licensed by Asulab S.A. and/or SMH
         Swiss Corporation for Microelectronics and Watchmaking Industries Ltd.
         to ELAN pursuant to an agreement dated 7th March 1990.

         ELAN IMPROVEMENTS shall mean any improvement or enhancement to the ELAN
         TECHNOLOGY or DEVICE including its design, structure, manufacture and
         use whether developed pursuant to this Agreement or otherwise.

         ELAN KNOW-HOW shall mean all knowledge, information, trade secrets,
         data and expertise relating to the DEVICE, and which is not generally
         known to the public, and

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         that are owned or licensed by ELAN as of the EFFECTIVE DATE and which
         permit(s) disclosure of same to GEMINI, whether or not covered by or
         subject to protection by any patent, copyright, design patent,
         trademark, trade secret or other industrial or any intellectual
         property rights.

         ELAN PATENTS shall mean all patents and patent applications listed in
         Schedule 1, including all continuations, continuations-in-part,
         divisionals, and any patents issuing thereon, and re-issues or
         re-examinations of such patents and extensions of any patents licensed
         hereunder. ELAN PATENTS shall also include all patent applications
         directed to ELAN IMPROVEMENTS and any patents issuing thereon. subject
         to the terms of this Agreement. Extensions of patents shall include:

         (a) extensions under the U.S. Patent Term Restoration Act;

         (b) extension of patents under Japanese Patent Law;

         (c) Supplementary Protection Certificates for members of the European
             Patent Convention and other countries in the EEA and Switzerland.

         ELAN TECHNOLOGY shall mean the ELAN PATENTS, and ELAN KNOW-HOW for (i)
         the iontophoretic delivery of a substance to or through the skin in a
         controlled manner, (ii) ELECTROMAGNETIC THERAPY and (iii) a combination
         of iontophoretic delivery and ELECTROMAGNETIC THERAPY, but shall not
         include the ELAN EXCLUDED TECHNOLOGY.

         ELECTROMAGNETIC THERAPY shall mean the treatment of the body via
         non-invasive delivery of electromagnetic pulses.

         ENFORCEMENT PROCEEDINGS shall mean the proceedings referred to in
         Clause 3.4.2.

         EU shall mean the Member States of the European Union, as same may
         change from time to time in terms of Member States.

         FFDCA shall mean the US Federal Food, Drug and Cosmetic Act of 1934,
         and the regulations promulgated thereunder, as may be amended from time
         to time.

         FIELD shall mean (i) DERMATOLOGY, (ii) WOUND CARE and (iii)
         ELECTROMAGNETIC THERAPY.

         FINANCIAL INVESTOR shall mean any company, individual or other entity
         whose main activity is making investments in the common or preferred
         stock of companies for long-term capital appreciation.

         FULLY ALLOCATED COST shall include direct labour, direct materials and
         supplies, variable labour, overhead and attributable administration,
         quality control, quality assurance and other costs, whether incurred by
         a Party, or any sub-contractor of a Party;

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         such costs to be calculated in accordance with the generally accepted
         accounting principles applicable to such Party.

         GEMINI shall mean Electropharmacology, Inc. and any of its AFFILIATES.

         GEMINI IMPROVEMENTS shall mean any improvements which can be usefully
         applied to the GEMINI TECHNOLOGY including its formulation, design,
         structure, manufacture or use.

         GEMINI TECHNOLOGY shall mean any (i) drug, (ii) marker, or (iii)
         mechanism, instrumentality or feature relating exclusively to
         electromagnetic technology, owned by or licensed to GEMINI from a third
         party or which GEMINI may use without infringing any intellectual
         property right of any third party.

         GEMINI TRADEMARK shall mean the trademark(s) of GEMINI to be applied to
         the PRODUCT.

         INITIAL PERIOD shall mean the initial period of this Agreement, as more
         fully described in Clause 9.

         INDEPENDENT THIRD PARTY(IES) shall mean any party(ies) other than ELAN
         or GEMINI and their AFFILIATES.

         IN MARKET shall mean the sale of the PRODUCT by GEMINI or its
         AFFILIATES, or where applicable by a permitted sub-licensee, to an
         INDEPENDENT THIRD PARTY such as a wholesaler, distributor, managed care
         organisation, hospital or pharmacy and shall exclude the transfer
         pricing of the PRODUCT by GEMINI to an AFFILIATE or a permitted
         sub-licensee.

         JOINT IMPROVEMENTS shall mean any improvement in the area of
         electromagnetic technology to the GEMINI TECHNOLOGY and the ELAN
         TECHNOLOGY and which was developed, created, conceived or otherwise
         invented during the TERM jointly by at least one ELAN employee or agent
         and at least one GEMINI employee or agent pursuant to this Agreement.

         MAJOR MARKETS shall mean the United States of America, the EU and Japan
         and such additional countries as may be agreed in writing by the
         Parties from time to time.

         NET INCOME shall mean the monetary amount or non cash consideration
         payable by an INDEPENDENT THIRD PARTY to GEMINI:-

         (i)      for the granting of rights, whether by license, sublicense or
                  otherwise, by GEMINI to any INDEPENDENT THIRD PARTY relating
                  to the development or commercialisation of one or more of the
                  PRODUCTS and/or to exploit the ELAN TECHNOLOGY within the
                  FIELD, including license fees, royalties on sales and other
                  ongoing fees, and

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         (ii)     where GEMINI is not selling a PRODUCT IN MARKET, the gross
                  amount billed for the supply of such PRODUCT to an INDEPENDENT
                  THIRD PARTY for IN MARKET sale, and

         (iii)    where GEMINI is selling a PRODUCT IN MARKET, the NET SALES
                  PRICE of such PRODUCT;

         but excluding in the case of each of the above:

         (i)      any bona fide research or development fees and payments
                  charged at cost by GEMINI for the ELAN TECHNOLOGY and/or a
                  PRODUCT to an INDEPENDENT THIRD PARTY which is a sublicensee
                  of the ELAN TECHNOLOGY; and

         (ii)     the FULLY ALLOCATED COST of manufacturing, packaging and
                  supplying the PRODUCT.

         NET SALES PRICE shall, subject to the provision of Clause 7.2.5 of this
         Agreement, mean in the case of PRODUCT sold by GEMINI or an AFFILIATE,
         that sum determined by deducting from the aggregate gross IN MARKET
         sales proceeds billed for the PRODUCT by GEMINI or, its AFFILIATE, as
         the case may be, in accordance with generally accepted accounting
         principles, the following deductions:-

         (a)      customs duties or other taxes (excluding income or corporation
                  tax), directly related to the sale of PRODUCT which are paid
                  by GEMINI or its AFFILIATE as the case may be;

         (b)      a discount from the gross sales proceeds to cover such normal
                  costs as are incurred by GEMINI or its AFFILIATE, as the case
                  may be, in respect of transport, shipping insurance, returns
                  or discounts directly related to the sale of PRODUCT, subject
                  to a cap of [omitted] of the sum of the aggregate gross IN
                  MARKET sales proceeds less the deductible items at (a) above.

         Party shall mean GEMINI or ELAN, as the case may be. Parties shall mean
         ELAN and GEMINI.

         PHARMACEUTICAL USE shall mean an application of the DEVICE which
         requires regulatory approval to market either (a) the DEVICE (b) the
         PRODUCT, or (c) GEMINI TECHNOLOGY, for such application in the
         TERRITORY. For the avoidance of doubt, PHARMACEUTICAL USE shall not
         include, and GEMINI shall have no rights to, any application of the
         DEVICE and/or PRODUCT for COSMETIC USE.

         PRODUCT shall mean the DEVICE either on its own, or in combination with
         GEMINI TECHNOLOGY.

         REGULATORY APPLICATION shall mean any regulatory application or any
         other

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         application for marketing approval, which a Party, or any INDEPENDENT
         THIRD PARTY on behalf of such Party, will file, including any
         supplements or amendments thereto, for a PRODUCT with the RHA.

         REGULATORY APPROVAL shall mean the final approval to market a PRODUCT
         in any country of the TERRITORY.

         RHA shall mean any relevant government health authority (or successor
         agency thereof) in any country of the TERRITORY whose approval is
         necessary to market a PRODUCT in the relevant country of the TERRITORY.

         TECHNOLOGICAL COMPETITOR shall mean a company or corporation having a
         substantial part of its business in the research, development and
         manufacturing of drug delivery technologies and/or products including
         but not limited to the companies listed in Schedule 3.

         TERM shall mean the term of this Agreement, as set out in Clause 9.

         TERRITORY shall mean all of the countries of the world.

         WOUND CARE shall mean the treatment of diseases and/or bodily injuries
         caused by the disruption of the normal continuity of structures of the
         skin.

         $ shall mean United States Dollars.

         "US" or "USA" shall mean the United States of America.

1.2      Interpretation:  In this Agreement:

         1.2.1    the singular includes the plural and vice versa, the masculine
                  includes the feminine and vice versa and references to natural
                  persons include corporate bodies, partnerships and vice versa.

         1.2.2    any reference to a Clause or Schedule, unless otherwise
                  specifically provided, shall be respectively to a Clause or
                  Schedule of this Agreement.

         1.2.3    the headings of this Agreement are for ease of reference only
                  and shall not affect its construction or interpretation.

                             CLAUSE 2 - THE LICENSE

2.1      License to GEMINI:

         2.1.1    Subject to the terms of this Agreement, ELAN hereby grants to
                  GEMINI and GEMINI hereby accepts for the TERM, a non-exclusive
                  license to the ELAN

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                  TECHNOLOGY to develop, manufacture, use, offer for sale and
                  sell PRODUCTS for PHARMACEUTICAL USE in the FIELD in the
                  TERRITORY. For the avoidance of doubt, the license granted
                  herein for PHARMACEUTICAL USE shall only entitle GEMINI to
                  develop, manufacture, use, offer for sale and sell PRODUCTS
                  which require REGULATORY APPROVAL to be marketed in the
                  TERRITORY.

         2.1.2    For the avoidance of doubt:-

                  (1)      GEMINI shall have no rights to the ELAN TECHNOLOGY
                           for (i) the systemic delivery of a pharmaceutical
                           compound having a therapeutic use, or (ii) the
                           development of any water-soluble corticosteroid
                           product for treating local acute inflammatory
                           conditions or any local anaesthesia product
                           incorporating lidocaine or lidocaine analogues with
                           or without epinephrine; and

                  (2)      it is agreed that ELAN shall not be obliged to
                           license technology acquired or licensed by ELAN after
                           the EFFECTIVE DATE to GEMINI except as provided in
                           Clause 3.2.3 of this Agreement.

         2.1.3.   ELAN agrees that it will from time to time discuss with GEMINI
                  other technology licensing opportunities in the FIELD and
                  otherwise, but only if and to the extent that ELAN decides, in
                  its sole discretion, that it is desirable and appropriate to
                  do so.

2.2      Sub-licensing by GEMINI:
         ------------------------

         2.2.1    GEMINI shall be entitled, subject to the prior written consent
                  of ELAN which shall not be unreasonably withheld or delayed,
                  to grant sub-licenses to package, import, use, offer for sale
                  and sell PRODUCTS in one or more countries of the TERRITORY,
                  provided that GEMINI shall grant one sub-license only per
                  country and GEMINI shall not grant a sub-license to a
                  TECHNOLOGICAL COMPETITOR of ELAN.

         2.2.2    Any sub-license granted hereunder shall be in the same terms
                  mutatis mutandis as the terms of this Agreement insofar as
                  they are applicable, but excluding the right to grant a
                  sub-license.

         2.2.3    GEMINI shall be liable to ELAN for all acts and omissions of
                  any sub-licensee as though such acts and omissions were by
                  GEMINI and GEMINI shall provide the indemnity to ELAN outlined
                  in Clause 11.7.

         2.2.4    Where a sub-license has been granted under Clause 2.2.1, such
                  sub-license shall automatically terminate if this Agreement
                  terminates for the country or countries covered by the
                  sub-license.

         2.2.5    GEMINI shall undertake to protect the confidentiality of the

<PAGE>

                  ELAN TECHNOLOGY in its dealings with permitted sub-licensees.

         2.2.6    For the avoidance of doubt:-

                  (1)      the Parties agree that any sub-license granted
                           pursuant to this Clause 2.2 shall not be capable of
                           surviving the termination of this Agreement; and

                  (2)      GEMINI shall pay a royalty on NET INCOME on sales of
                           PRODUCT by permitted sub-licensees in accordance with
                           Clause 7 of this Agreement.

                                           CLAUSE 3 - INTELLECTUAL PROPERTY

3.1. Ownership of ELAN Patent Rights/Know-how:
     -----------------------------------------

         3.1.1    ELAN shall remain the sole owner of the ELAN PATENTS and ELAN
                  KNOW-HOW.

         3.1.2    ELAN shall be entitled to use the ELAN PATENTS, ELAN
                  IMPROVEMENTS, JOINT IMPROVEMENTS and ELAN KNOW-HOW, and all
                  technical and clinical data, generated by either Party
                  pursuant to this Agreement in connection with ELAN's
                  commercial arrangements outside of the FIELD or for COSMETIC
                  USE in the FIELD.

3.2      Ownership of ELAN IMPROVEMENTS, GEMINI IMPROVEMENTS and
         --------------------------------------------------------
         JOINT IMPROVEMENTS:
         -------------------

         3.2.1    The Parties agree that:

         (1)      ELAN IMPROVEMENTS will be owned by ELAN.

         (2)      GEMINI IMPROVEMENTS will be owned by GEMINI.

         3.2.2    If GEMINI shall develop, or have developed, any ELAN
                  IMPROVEMENTS during the TERM, ELAN shall grant GEMINI the
                  right to use any such ELAN IMPROVEMENTS for PHARMACEUTICAL USE
                  in the FIELD for the TERM.

         3.2.3    If ELAN shall develop, or have developed, any ELAN
                  IMPROVEMENTS during the TERM, ELAN shall, subject to any
                  contractual restrictions, grant GEMINI the right to use any
                  such ELAN IMPROVEMENTS for PHARMACEUTICAL USE in the FIELD for
                  the TERM. In the event that ELAN is obliged to pay a royalty
                  or any other consideration to a third party in connection with
                  any such ELAN IMPROVEMENTS, any such cost to ELAN

<PAGE>

                  shall be discharged by GEMINI as a condition of use thereof.
                  If GEMINI is unwilling to pay any such royalty or other
                  consideration, GEMINI shall have no right to use any such ELAN
                  IMPROVEMENTS.

         3.2.4    JOINT IMPROVEMENTS will be jointly owned by GEMINI and ELAN.
                  GEMINI shall obtain exclusive rights to exploit the JOINT
                  IMPROVEMENTS for PHARMACEUTICAL USE in the FIELD for the TERM.
                  ELAN reserves the right to exploit the JOINT IMPROVEMENTS
                  outside the FIELD or for COSMETIC USE within the FIELD.

3.3      Filing and maintenance of patents:
         ----------------------------------

         3.3.1    ELAN will be entitled, at its own expense, to file and
                  prosecute ELAN PATENTS and ELAN IMPROVEMENTS; to determine the
                  patent filing strategy in relation to same at its sole
                  discretion; and upon grant of any letters patent of the ELAN
                  PATENTS or the ELAN IMPROVEMENTS, to maintain such letters
                  patent in force.

                  ELAN shall notify GEMINI in writing of any patent applications
                  filed by ELAN for any ELAN IMPROVEMENTS.

         3.3.2    ELAN will be entitled, at GEMINI's reasonable expense, to file
                  and prosecute all patent applications directed to PRODUCTS or
                  JOINT IMPROVEMENTS; to determine the patent filing strategy in
                  relation to same subject to timely notice given to GEMINI for
                  its input on matters relating to GEMINI TECHNOLOGY; and upon
                  grant of any letters patent directed to PRODUCTS or JOINT
                  IMPROVEMENTS, to maintain such letters patent in force. Should
                  it however be reasonably doubtful whether a patent may be
                  obtained, then ELAN may at its sole discretion decide not to
                  apply for a patent in one or more countries of the TERRITORY.

                  ELAN shall promptly notify GEMINI in writing of any patent
                  applications filed by ELAN for PRODUCTS or JOINT IMPROVEMENTS.

         3.3.3    GEMINI will be entitled, at its own expense, to file and
                  prosecute any patent applications for the GEMINI TECHNOLOGY
                  and GEMINI IMPROVEMENTS; to determine the patent filing
                  strategy in relation to same at its sole discretion; and upon
                  grant of any letters patent for the GEMINI TECHNOLOGY or the
                  GEMINI IMPROVEMENTS, to maintain such letters patent in force.

         3.3.4    All patent prosecution to be performed by ELAN shall be
                  carried out in accordance with ELAN's standard practice.

3.4      Enforcement
         -----------

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         3.4.1    GEMINI and ELAN shall promptly inform the other in writing of
                  any alleged infringement of which it shall become aware by a
                  third party of any patents within the ELAN PATENTS and provide
                  such other with any available evidence of infringement.

         3.4.2    ELAN, at its option, shall be entitled to institute
                  enforcement proceedings ("ENFORCEMENT PROCEEDINGS") in respect
                  of any infringement or unauthorised use of the ELAN PATENTS,
                  the ELAN KNOW-HOW, the ELAN IMPROVEMENTS, the Joint
                  IMPROVEMENTS or any patents for PRODUCTS. GEMINI agrees to
                  provide all reasonable co-operation and assistance to ELAN in
                  relation to any such ENFORCEMENT PROCEEDINGS and agrees to be
                  named as a party in any ENFORCEMENT PROCEEDINGS instituted by
                  ELAN hereunder. GEMINI shall share equally in the costs of the
                  ENFORCEMENT PROCEEDINGS provided that ELAN reasonably believes
                  that the chances of succeeding in the cause of action are
                  greater than fifty (50%) percent. Any recovery remaining after
                  the deduction of reasonable expenses (including attorney's
                  fees and expenses) incurred in relation to such ENFORCEMENT
                  PROCEEDINGS shall be shared equally between ELAN and GEMINI.

         3.4.3    GEMINI, at its option, shall be entitled to institute
                  ENFORCEMENT PROCEEDINGS in respect of any infringements of any
                  patents for the GEMINI TECHNOLOGY or the GEMINI IMPROVEMENTS
                  at its own expense and for its own benefit.

         3.4.4    In the event that the intellectual property owner does not
                  want to institute ENFORCEMENT PROCEEDINGS, then the other
                  Party may enforce such rights at its own expense. The
                  intellectual property owner shall cooperate with the enforcing
                  Party and provide all reasonable assistance in relation to any
                  such ENFORCEMENT PROCEEDINGS. The enforcing Party must seek
                  written approval from the intellectual property owner, which
                  may not be unreasonably withheld, prior to taking action and
                  must keep intellectual property owner informed of the action
                  and may not enter into any settlement agreement without the
                  intellectual property owner's consent, which may not be
                  unreasonably withheld. Any reasonable fees and costs borne by
                  the intellectual property owner shall be reimbursed by the
                  enforcing Party. In the event that GEMINI decides to enforce
                  ELAN PATENTS, the ELAN KNOW-HOW, the ELAN IMPROVEMENTS, the
                  Joint IMPROVEMENTS or any patents for PRODUCTS in accordance
                  with this paragraph, any recovery remaining after the
                  deduction of reasonable expenses (including attorney's fees
                  and expenses) incurred in relation to such ENFORCEMENT
                  PROCEEDINGS shall constitute NET INCOME for the purpose of
                  this Agreement.

         3.4.5    GEMINI undertakes that during the TERM, GEMINI shall not cite
                  or otherwise rely upon the ELAN PATENTS, the ELAN KNOW-HOW,
                  the ELAN IMPROVEMENTS, the Joint IMPROVEMENTS or any patents
                  for

<PAGE>

                  PRODUCTS licensed by GEMINI from ELAN pursuant to this
                  Agreement, against the iontophoretic technology specified in
                  Schedule 2 which has been licensed by ELAN to IOMED.

3.5      Defence
         -------

         3.5.1    In the event that a claim or proceeding is brought against
                  GEMINI by a third party alleging that the sale, manufacture,
                  use or offer for sale of devices and or methods as exclusively
                  claimed in the ELAN PATENTS infringes the patent rights of
                  such a third party in the TERRITORY, GEMINI shall promptly
                  advise ELAN of such threat or suit.

         3.5.2.   ELAN shall indemnify GEMINI against such a claim to the extent
                  set out in Clause 3.5.4; provided that that ELAN should have
                  reasonably been aware of such third party patent rights as a
                  result of ELAN's efforts in the preparation and prosecution of
                  ELAN PATENTS as of the date of execution of this Agreement.
                  GEMINI shall not acknowledge to the third party or to any
                  other person the validity of any claims of such a third party,
                  and shall not compromise or settle any claim or proceedings
                  relating thereto without the prior written consent of ELAN,
                  not to be unreasonably withheld or delayed. At its option,
                  ELAN may elect to take over the conduct of such proceedings
                  from GEMINI and ELAN shall indemnify GEMINI against the third
                  party claim subject to the provisions of this paragraph. Both
                  parties recognise that where ELAN should not reasonably have
                  had knowledge of such third party patent rights as a result of
                  ELAN's efforts in the preparation and prosecution of ELAN
                  PATENTS as of the date of execution of the Agreement, ELAN
                  shall not indemnify GEMINI against any such claim.

         3.5.3    In the event that a claim or proceeding is brought against
                  GEMINI by a third party alleging that the sale, manufacture,
                  offer for sale or use of any device or method as exclusively
                  claimed in the ELAN PATENTS infringes the patent rights of
                  such a third party and ELAN should not reasonably have had
                  knowledge of such third party intellectual property rights as
                  a result of ELAN's efforts in the preparation and prosecution
                  of ELAN PATENTS as of the date of the execution of the
                  Agreement, GEMINI and ELAN shall meet to discuss in what
                  manner the said proceedings should be defended.

         3.5.4    ELAN's maximum liability pursuant to Clauses 3.5.2, and 11.8
                  for damages and costs in relation to all third party claims
                  shall be a reduction by up to [omitted] of the royalty payable
                  by GEMINI to ELAN pursuant to Clause 7.2 of this Agreement. In
                  accordance with its obligations pursuant to Clause 11.9.5,
                  GEMINI shall favourably consider taking such action as is
                  reasonable, such as to cease selling the PRODUCT, to
                  re-engineer or modify the applicable PRODUCT so as to avoid
                  infringing the patent rights of a third party, or entering
                  into a license agreement with such third party after due
                  consultation with ELAN.

<PAGE>

         3.5.5    ELAN shall have no liability to GEMINI whatsoever or howsoever
                  arising for any losses incurred by GEMINI as a result of
                  having to cease selling PRODUCT or having to defer the launch
                  of selling PRODUCT, whether as a result of a court order or
                  otherwise.

         3.5.6    Subject to Clause 3.5.2, GEMINI shall indemnify ELAN for any
                  claim brought against ELAN by a third party alleging that the
                  manufacture, use, sale or offer for sale of the DEVICE or
                  PRODUCT constitutes an infringement or unauthorised use of any
                  such third party intellectual property right.

         3.5.7    In the event that a claim or proceeding is brought against
                  ELAN by a third party alleging that the manufacture, offer for
                  sale, sale, distribution or use of PRODUCTS (excluding the
                  DEVICE where same is marketed on its own without any GEMINI
                  TECHNOLOGY), JOINT IMPROVEMENTS, GEMINI TECHNOLOGY or GEMINI
                  IMPROVEMENTS in the TERRITORY infringes any adversely held
                  patent or involves the unauthorised use of any other
                  intellectual property, ELAN shall promptly advise GEMINI of
                  such threat or suit. Subject to ELAN's obligations pursuant to
                  the provisions of Clause 11.8 and Clause 3.5.2, GEMINI shall
                  indemnify ELAN against such a claim; provided that ELAN shall
                  not acknowledge to the third party or to any other person the
                  validity of the patent rights of such a third party and shall
                  not compromise or settle any claim or proceedings relating
                  thereto without the written consent of GEMINI, which shall not
                  be unreasonably withheld or delayed. At its option, GEMINI may
                  elect to take over the conduct of such proceedings from ELAN
                  with counsel of GEMINI's choice. In such event GEMINI shall
                  keep ELAN advised of all material developments in the said
                  proceedings and shall not settle or compromise such
                  proceedings without the consent of ELAN which shall not be
                  unreasonably withheld or delayed.

3.6      Trademarks
         ----------

         3.6.1    GEMINI shall market the PRODUCT in the TERRITORY under the
                  GEMINI TRADEMARK.

         3.6.2    Any Party using the mark of the other Party must seek prior
                  written approval for all such uses, including but not limited
                  to advertising, marketing and promotional material.

                       CLAUSE 4 - DEVELOPMENT OF PRODUCTS

4.1      GEMINI shall be responsible for all activities and costs associated
         with the further research, development, manufacture, marketing and
         commercialisation of PRODUCTS utilising the ELAN TECHNOLOGY.

4.2      ELAN agrees to provide, at no cost to GEMINI, up to 100 hours of
         technical support

<PAGE>

         and assistance to GEMINI in connection with implementing the transfer
         of the ELAN TECHNOLOGY to GEMINI and commencing further development of
         the DEVICE. The Parties shall each negotiate in good faith the extent,
         if any, to which ELAN shall provide further research and development
         services to GEMINI in addition to such 100 hours of technical support.
         In the event that ELAN provides such additional services, ELAN's
         charges for this work shall be on the basis set out in Clause 7.3.

4.3      GEMINI, alone or in partnership with a permitted sub-licensee, shall
         commit to performing the following activities with regard to the
         development and commercialisation of PRODUCTS utilising the ELAN
         TECHNOLOGY:

         4.3.1.   [omitted];

         4.3.2.   [omitted].

         4.3.3.   [omitted];

         4.3.4.   [omitted];

         4.3.5.   [omitted];

         4.3.6.   Thereafter for the term of the Agreement, GEMINI shall in good
                  faith use all reasonable endeavours to commercialise PRODUCTS
                  and shall expend a minimum of [omitted] annually in
                  development costs, calculated on a FULLY ALLOCATED COST basis.

         4.3.7.   GEMINI warrants that all REGULTORY APPLICATIONS and IDEs to be
                  submitted pursuant to this Clause 4.3 shall be made in good
                  faith and in a form and content reasonably likely to be
                  acceptable to the RHA in the relevant country of the MAJOR
                  MARKET.

4.4.     Should GEMINI fail to submit any of the REGULATORY APPLICATIONS in
         accordance with its obligations pursuant to Clause 4.3. within the
         relevant time periods, ELAN shall be entitled, at its sole discretion
         at any time thereafter, to terminate the Agreement on 30 days prior
         written notice to GEMINI; provided however, that ELAN shall not be
         entitled to so terminate this Agreement if (i) GEMINI's failure to file
         any such REGULATORY APPLICATIONS was due to regulatory difficulties
         which could not have been reasonably foreseen and which cannot be
         remedied without incurring expenditure which is commercially
         unreasonable, and (ii) GEMINI has expended a minimum of [omitted] in
         development costs on a FULLY ALLOCATED COST basis during the relevant
         time period.

<PAGE>

                     CLAUSE 5 - REGISTRATION OF THE PRODUCT

5.1      ELAN shall be responsible, at GEMINI's expense, for performing the
         following regulatory activities:

         5.1.1    compilation, filing and maintaining the REGULATORY
                  APPLICATIONS for the DEVICE with the RHA in the MAJOR MARKETS;
                  and

         5.1.2    providing regulatory support to ensure timely review of the
                  DEVICE dossier and resolution of questions by the RHA in the
                  MAJOR MARKETS.

5.2      ELAN shall perform the regulatory activities described in Clause 5.1
         for GEMINI in a manner as would be deemed commensurate with the
         achievement of its own business aims for a similar mechanism or product
         of its own. ELAN's charges for this work shall be on the basis set out
         in Clause 7.3.

5.3      In the event that GEMINI or any reputable third party (which is
         acceptable to ELAN and which agrees to be bound by an obligation of
         confidentiality), can perform the regulatory activities as described in
         Clause 5.1 to the same quality standard as ELAN but at a cost which is
         at least [omitted] less than ELAN's charges and which is supported by
         documentary evidence from GEMINI or such third party, and provided that
         ELAN is not agreeable to matching such reduced cost, GEMINI shall be
         entitled to perform itself, or have said third party perform, such
         regulatory activities at the reduced cost.

5.4      GEMINI shall be responsible, at GEMINI's expense, for performing the
         following regulatory activities:

         5.4.1    compilation, filing and maintaining the REGULATORY
                  APPLICATIONS with the RHA in the TERRITORY for the GEMINI
                  TECHNOLOGY;

         5.4.2    compilation, filing and maintaining the REGULATORY
                  APPLICATIONS for the PRODUCTS with the RHA in the TERRITORY;

         5.4.3    compilation, filing and maintaining the REGULATORY
                  APPLICATIONS for the DEVICE with the RHA in all of the
                  countries of the TERRITORY outside of the MAJOR MARKETS; and

         5.4.4    providing regulatory support to ensure timely review of the
                  DEVICE dossier and resolution of all questions by the RHA
                  pursuant to this Agreement.

5.5      ELAN shall notify GEMINI of the date of submission of any REGULATORY
         APPLICATION for the DEVICE in the MAJOR MARKETS and shall also notify
         GEMINI of any REGULATORY APPROVAL of such applications as soon as is
         reasonably possible following said REGULATORY APPROVAL. GEMINI shall
         notify ELAN of the date of submission of any REGULATORY APPLICATION for

<PAGE>

         the DEVICE in any country of the TERRITORY outside of the MAJOR MARKETS
         and of any REGULATORY APPLICATION for the PRODUCT in the TERRITORY and
         shall also notify ELAN of any REGULATORY APPROVAL as soon as is
         reasonably possible following said REGULATORY APPROVAL. GEMINI shall
         notify ELAN as soon as possible of any notification received by GEMINI
         from an RHA to conduct an inspection of its manufacturing or other
         facilities used in the development, manufacturing, packaging, storage
         or handling of a PRODUCT. Copies of all correspondence with the RHA
         will be provided to ELAN.

5.6      Upon request, ELAN shall submit to GEMINI a report outlining the
         regulatory status of the DEVICE in the MAJOR MARKETS. Upon request,
         GEMINI shall submit to ELAN a report fully outlining the regulatory
         status of (i) the DEVICE in the countries of the TERRITORY outside of
         the MAJOR MARKETS and (ii) PRODUCTS in each country of the TERRITORY.

5.7      ELAN will be the holder of the REGULATORY APPROVAL for the DEVICE in
         the MAJOR MARKETS. GEMINI will be the holder of the REGULATORY APPROVAL
         (a) for the DEVICE in all of the countries of the TERRITORY outside of
         the MAJOR MARKETS, and (b) for PRODUCTS in the TERRITORY.

5.8      GEMINI will permit ELAN, or ELAN's licensees, without charge, to have
         access to, to photocopy and to cross reference all REGULATORY APPROVALS
         or REGULATORY APPLICATIONS for the DEVICE and/or PRODUCTS for the
         purpose of obtaining REGULATORY APPROVALS for the DEVICE for use
         outside of the FIELD.

5.9      GEMINI shall indemnify and hold harmless ELAN from and against all
         claims, damages, losses, liabilities and expenses to which ELAN may
         become liable relating to or arising out of GEMINI's bad faith,
         negligence or intentional misconduct in connection with the filing or
         maintenance of the REGULATORY APPLICATIONS and REGULATORY APPROVALS for
         (a) the DEVICE in all of the countries of the TERRITORY outside of the
         MAJOR MARKETS, and (b) for PRODUCTS in the TERRITORY.

5.10     It is hereby acknowledged that there are inherent uncertainties
         involved in the registration of pharmaceutical products with an RHA in
         relation to obtaining the REGULATORY APPROVAL and such uncertainties
         form part of the business risk involved in undertaking the form of
         commercial collaboration outlined in this Agreement. Accordingly, ELAN
         and GEMINI shall have no liability to the other as a result of any
         failure of a DEVICE and/or a PRODUCT to successfully achieve REGULATORY
         APPROVAL of an RHA.

                CLAUSE 6 - MARKETING AND PROMOTION OF THE PRODUCT

6.1      Within 90 days after the filing of the REGULATORY APPLICATION for a
         PRODUCT in each country of the TERRITORY, GEMINI will outline to ELAN
         the

<PAGE>

         structure of the promotional activities to be carried out by GEMINI for
         the period up to the first launch of such PRODUCT and for a period of 1
         year thereafter. GEMINI shall both prior to and subsequent to the
         launch of a PRODUCT communicate with ELAN regarding its objectives for
         and performance of such PRODUCT in each country of the TERRITORY.

6.2      GEMINI shall use all commercially reasonable efforts to market and
         promote PRODUCTS throughout the TERRITORY and, in doing so, shall use
         the same level of effort as with other similar products of similar
         sales potential which it markets.

6.3      If requested by ELAN and to the extent permitted by law, GEMINI's
         promotional materials for a PRODUCT shall include due acknowledgement
         that the ELAN TECHNOLOGY is licensed from ELAN and is included in the
         PRODUCT.

6.4      GEMINI shall mark or have marked all patent number(s) in respect of the
         ELAN PATENTS on all PRODUCTS, or otherwise reasonably communicate to
         the trade the existence of any ELAN PATENTS for the countries within
         the TERRITORY in such a manner as to ensure compliance with, and
         enforceability under, applicable laws.

6.5      GEMINI shall effect the first full scale national commercial launch of
         a PRODUCT in each country of the TERRITORY within 90 days of the
         REGULATORY APPROVAL being granted for such PRODUCT in such country.
         ELAN shall not unreasonably withhold its agreement to a request by
         GEMINI for an extension of the said 90 day period if there are
         legitimate commercial reasons for such an extension.

6.6      The Parties shall meet to discuss the sales performance of a PRODUCT on
         a quarterly basis for the first year following the initial launch of
         such PRODUCT, on a semi-annual basis for the second and third years and
         on an annual basis thereafter. At such meetings, GEMINI shall report on
         the ongoing sales performance of PRODUCTS in the TERRITORY, including
         marketing approaches, educational campaigns, promotional and
         advertising materials and campaigns, sales plans and results,
         performance against competitors, its objectives for the PRODUCTS and
         its plans for the next year of the Agreement.

                         CLAUSE 7 - FINANCIAL PROVISIONS

7.1      License Royalties:
         ------------------

         7.1.1    In consideration of the license of the ELAN PATENTS granted to
                  GEMINI under this Agreement, GEMINI shall pay to ELAN

                  (i)      the sum of $7,500,000 due upon execution of this
                           Agreement and payable within 2 business days of the
                           EFFECTIVE DATE; and

                  (ii)     a license royalty fee of [omitted] of NET INCOME
                           until the aggregate of such royalty fee equals
                           [omitted].

<PAGE>

         7.1.2    Payment of the license fee royalty pursuant to Clause
                  7.1.1(ii) shall be made once in each calendar quarter within
                  45 days after the expiry of the relevant calendar quarter.

         7.1.3    All payments due hereunder shall be made in US Dollars.

         7.1.4    For the avoidance of doubt, the Parties confirm that the
                  additional license fee payable by GEMINI to ELAN in accordance
                  with Clause 7.2.1 (ii) shall be payable in addition to the
                  royalty payments to be made by GEMINI in accordance with
                  Clause 7.2.

7.2      Royalties:

         7.2.1    In consideration of the license of the ELAN PATENTS granted to
                  GEMINI under this Agreement, GEMINI shall make the following
                  royalty payments to ELAN:

                  (i)      a royalty of [omitted] of the NET SALES PRICE of
                           PRODUCTS which are sold IN MARKET by GEMINI or its
                           AFFILIATES, and

                  (ii)     a royalty of [omitted] of NET INCOME on PRODUCTS
                           which are sold IN MARKET by INDEPENDENT THIRD
                           PARTIES.

         7.2.2    Within 45 days of the end of each calendar quarter of this
                  Agreement, GEMINI shall notify ELAN of the NET SALES PRICE of
                  PRODUCT for that previous calendar quarter. Payments shown by
                  each calendar quarter report to have accrued but which have
                  not yet been paid shall be included in calculating the NET
                  SALES PRICE for that quarter.

         7.2.3    Payment of the royalties on NET SALES PRICE and NET INCOME
                  shall be made once in each calendar quarter within 45 days
                  after the expiry of the relevant calendar quarter.

         7.2.4    All payments due hereunder shall be made in U.S. Dollars.

         7.2.5    In the event that GEMINI or any AFFILIATE of GEMINI shall sell
                  a PRODUCT together with other products of GEMINI to third
                  parties (by the method commonly known in the pharmaceutical
                  industry as "bundling") and the price attributable to such
                  PRODUCT is less than the average price of "arms length" sales
                  to similar customers for the reporting period in which sales
                  occur (such sales to be excluded from the calculation of the
                  average price of "arms length" sales), NET SALES PRICE for any
                  such sales shall be the average price of "arms length" sales
                  by GEMINI or an AFFILIATE of GEMINI or a permitted
                  sub-licensee to similar customers in the country where such
                  bundling occurs during the reporting period in which such
                  sales occur.

<PAGE>

7.3      Additional Assistance and Work:
         -------------------------------

         In the event that work or technical assistance beyond that contemplated
         in Clause 4.2 ("ADDITIONAL WORK") is requested by GEMINI, GEMINI shall
         reimburse ELAN in respect of the cost of such ADDITIONAL WORK requested
         by GEMINI or required pursuant to the terms of this Agreement provided
         that:-

         7.3.1    ELAN's charges for such work shall be ELAN's FULLY ALLOCATED
                  COST plus [omitted]; and

         7.3.2    payment for all ADDITIONAL WORK carried out by ELAN hereunder
                  shall be effected in U.S. Dollars within 30 days of the date
                  of receipt of the relevant invoice.

7.4      Method of calculation of royalties and fees:
         --------------------------------------------

         The Parties acknowledge and agree that the methods for calculating the
         royalties and fees hereunder are for the purposes of the convenience of
         the Parties, are freely chosen and not coerced.

                     CLAUSE 8 - PAYMENTS, REPORTS AND AUDITS

8.1      GEMINI shall keep true and accurate records of gross sales of each of
         the PRODUCTS, the items deducted from the gross amount in calculating
         the NET SALES PRICE and the NET INCOME, the NET SALES PRICE and the
         royalties payable to ELAN under Clause 7. GEMINI shall deliver to ELAN
         a written statement ("the STATEMENT") thereof within 45 days following
         the end of each calendar quarter, (or any part thereof in the first or
         last calendar quarter of this Agreement) for such calendar quarter. The
         STATEMENT shall outline, on a country-by-country basis, the calculation
         of the NET SALES PRICE and the NET INCOME from gross revenues during
         that calendar quarter, the applicable percentage rate, and a
         computation of the sums due to ELAN. The Parties' financial officers
         shall agree upon the precise format of the STATEMENT.

8.2      Payments due on NET INCOME and NET SALES PRICE of the PRODUCT based on
         sales amounts in a currency other than US Dollars shall first be
         calculated in the foreign currency and then converted to US Dollars on
         the basis of the exchange rate in effect for the purchase of US Dollars
         with such foreign currency quoted in The Wall Street Journal (or
         comparable publication if not quoted in The Wall Street Journal) with
         respect to the sale of currency of the country of origin of such
         payment for the day prior to the date on which the payment by GEMINI is
         being made.

8.3      Any income or other taxes which GEMINI is required by law to pay or
         withhold on

<PAGE>

         behalf of ELAN with respect to royalties and any other monies payable
         to ELAN under this Agreement shall be deducted from the amount of such
         NET INCOME and/or NET SALES PRICE payments, royalties and other monies
         due. GEMINI shall furnish ELAN with proof of such payments. Any such
         tax required to be paid or withheld shall be an expense of and borne
         solely by ELAN. GEMINI shall promptly provide ELAN with a certificate
         or other documentary evidence to enable ELAN to support a claim for a
         refund or a foreign tax credit with respect to any such tax so withheld
         or deducted by GEMINI. The Parties will reasonably cooperate in
         completing and filing documents required under the provisions of any
         applicable tax treaty or under any other applicable law, in order to
         enable GEMINI to make such payments to ELAN without any deduction or
         withholding.

8.4      All payments due hereunder shall be made to the designated bank account
         of ELAN in accordance with such timely written instructions as ELAN
         shall from time to time provide to GEMINI.

8.5      GEMINI shall pay interest to ELAN at either the Prime Rate publicly
         announced by Morgan Guaranty Trust Company of New York at its principal
         office on the date (or next to occur business day, if such date is not
         a business day) on which payment should have been made pursuant to the
         applicable provisions of this Agreement plus 5%, or the highest
         interest rate permissible under applicable law, on all late payments
         under this Agreement applicable from the date on which payment should
         have been made pursuant to the applicable provisions of this Agreement
         until the date of payment.

8.6      Where ELAN so requests to supplement the information available to ELAN
         at the meetings of the Parties under Clause 8.9, GEMINI shall provide
         ELAN with annual sales reports outlining the status of each of the
         PRODUCTS in the TERRITORY, including a report on the competitive
         position of such PRODUCT in its relevant market segment(s).

8.7      At any time and from time to time, GEMINI shall permit ELAN or its duly
         authorised representatives (reasonably acceptable to GEMINI) upon
         reasonable notice and at any reasonable time during normal business
         hours and subject to the confidentiality provisions as contained in
         this Agreement, to have access to inspect and audit the accounts and
         records of GEMINI and any other book, record, voucher, receipt or
         invoice relating to the calculation of the royalty payments on NET
         SALES PRICE and NET INCOME submitted to ELAN during the preceding 2
         year period.

8.8      Not more than once per item of cost or expense, ELAN shall permit
         GEMINI or its duly authorised representatives (reasonably acceptable to
         ELAN) upon reasonable notice and at any reasonable time during normal
         business hours and subject to the confidentiality provisions as
         contained in this Agreement, to have access to inspect and audit the
         accounts and records of ELAN, solely for the purpose of verifying the
         accuracy and reasonable composition of the costs and expenses paid or
         reimbursed by GEMINI to ELAN in accordance with the terms of this
         Agreement during the preceding 2 year period.

<PAGE>

8.9      In the event of a discovery of a discrepancy which exceeds 5% of the
         amount due or charged by a Party for any period, the reasonable cost of
         such discovery (including, without limitation, audit and accounting
         cost) shall be borne by the audited Party; otherwise, such cost shall
         be borne by the auditing Party.

                       CLAUSE 9 - DURATION AND TERMINATION

9.1      This Agreement shall be deemed to have come into force on the EFFECTIVE
         DATE and, subject to the rights of termination outlined in this Clauses
         9, will expire on a PRODUCT by PRODUCT basis and on a country by
         country basis:-

         9.1.1    on the 15th anniversary of the date of the commercial launch
                  of the PRODUCT in the country concerned; or

         9.1.2    in any country upon the expiration of the life of the last to
                  expire patent included in the ELAN PATENTS in such PRODUCT in
                  that country;

         whichever date is later to occur ("the INITIAL PERIOD").

9.2      At the end of the INITIAL PERIOD, the Agreement shall continue
         automatically for rolling 3 year periods thereafter, unless the
         Agreement has been terminated by either of the Parties by serving 2
         years written notice on the other immediately prior to the end of the
         INITIAL PERIOD or any additional 3 year period provided for herein.

9.3      In addition to the rights of termination provided for elsewhere in this
         Agreement, either Party will be entitled forthwith to terminate this
         Agreement by written notice to the other Party if:

         9.3.1    that other Party commits any material breach of any of the
                  provisions of this Agreement, and in the case of a breach
                  capable of remedy, fails to remedy the same within 60 days
                  after receipt of a written notice giving full particulars of
                  the breach and requiring it to be remedied;

         9.3.2    that other Party goes into liquidation (except for the
                  purposes of amalgamation or reconstruction and in such manner
                  that the company resulting therefrom effectively agrees to be
                  bound by or assume the obligations imposed on that other Party
                  under this Agreement);

         9.3.3    an encumbrancer takes possession or a receiver is appointed
                  over any of the property or assets of that other Party; or

         9.3.4    any proceedings are filed or commenced by that other Party
                  under bankruptcy, insolvency or debtor relief laws or anything
                  analogous to any of the foregoing under the laws of any
                  jurisdiction occurs in relation to that other Party;

<PAGE>

9.4      For the purposes of Clause 9.3.1, a breach will be considered capable
         of remedy if the Party in breach can comply with the provision in
         question in all respects other than as to the time of performance
         (provided that time of performance is not of the essence).

9.5      In further addition to the rights and termination provided for
         elsewhere in this Agreement, ELAN shall be entitled to terminate (i)
         the license granted to GEMINI under this Agreement on a PRODUCT by
         PRODUCT basis for any country or countries of the TERRITORY in
         accordance with Clause 9.5.1 or 9.5.2 (in which event the definition of
         TERRITORY shall be amended accordingly); or (ii) this Agreement for the
         ELAN TECHNOLOGY for all of the TERRITORY in accordance with Clause
         9.5.3, 9.5.4, 9.5.5, 9.5.6 or 9.5.7; in the event that:-

         9.5.1    GEMINI fails to file a REGULATORY APPLICATION for a PRODUCT in
                  any country of the MAJOR MARKETS within 18 months from filing
                  the REGULATORY APPLICATION for such PRODUCT in the first
                  country of the MAJOR MARKETS;

         9.5.2    GEMINI fails to effect any one of the commercial launches
                  required by Clause 6 in accordance with the provisions
                  thereof; or

         9.5.3    GEMINI fails to pay any monies due to ELAN in accordance with
                  this Agreement; or

         9.5.4    GEMINI notifies ELAN that it does not wish to commercialise
                  the PRODUCT in any country of the TERRITORY; or

         9.5.5    a TECHNOLOGICAL COMPETITOR of ELAN acquires more than 20% of
                  GEMINI's voting stock or where more than 20% of such company's
                  voting stock is acquired by GEMINI; or

         9.5.6    a FINANCIAL INVESTOR acquires ownership or control of more
                  than 40% of the voting rights in GEMINI in any one transaction
                  or a series of related transactions and which results
                  immediately or at any subsequent stage in a change of
                  one-third or more of the board of directors of GEMINI; or

         9.5.7    any company other than a TECHNOLOGICAL COMPETITOR or FINANCIAL
                  INVESTOR acquires ownership or control of more than 40% of the
                  voting rights in GEMINI in any one transaction or a series of
                  related transactions.

                     CLAUSE 10 - CONSEQUENCES OF TERMINATION

10.1     Upon exercise of those rights of termination specified in Clauses 9 or
         elsewhere in this Agreement, this Agreement shall, subject to the
         provisions of the Agreement which survive the termination of the
         Agreement, automatically terminate forthwith

<PAGE>

         and be of no further legal force or effect.

10.2     Upon termination of the Agreement by either Party, or upon termination
         by ELAN of a license for the TERRITORY, or for a particular country of
         the TERRITORY, under Clause 9.5, the following shall be the
         consequences relating to the termination of the Agreement or the
         termination of the Agreement with respect to the TERRITORY or the
         particular country, as applicable:-

         10.2.1   any sums that were due from GEMINI to ELAN under the
                  provisions of Clause 7 or otherwise howsoever prior to the
                  exercise of the right to terminate this Agreement as set forth
                  herein shall be paid in full within 30 days of termination of
                  this Agreement and ELAN shall not be liable to repay to GEMINI
                  any amount of money paid or payable by GEMINI to ELAN up to
                  the date of the termination of this Agreement except for any
                  monies that may be due from ELAN under any audit performed
                  pursuant to Section 8.8. within the time period specified in
                  Section 10.2.4;

         10.2.2   all confidentiality provisions set out herein shall remain in
                  full force and effect for a period of 5 years from the date of
                  such termination;

         10.2.3   all responsibilities and warranties shall insofar as are
                  appropriate remain in full force and effect;

         10.2.4   the rights of inspection and audit shall continue in force for
                  a period of 12 months from the date of termination of this
                  Agreement;

         10.2.5   ELAN shall be entitled to research, develop and commercialise
                  the ELAN TECHNOLOGY for its own benefit in the TERRITORY or in
                  the relevant country or countries of the TERRITORY;

         10.2.6   each of the Parties shall be entitled to on a royalty free
                  basis to have access to and to separately exploit any JOINT
                  IMPROVEMENTS;

         10.2.7   GEMINI shall transfer to ELAN or ELAN's designee without
                  charge, and/or permit ELAN or ELAN's designee without charge
                  to conduct sufficient cross-referencing to, and have
                  sufficient access to, any and all pending REGULATORY
                  APPLICATIONS or granted REGULATORY APPROVALS for the DEVICE or
                  any PRODUCTS for the relevant country or countries of the
                  TERRITORY.

         10.2.8   GEMINI shall promptly make an accounting to ELAN of the
                  inventory of the PRODUCT which it has in the TERRITORY or for
                  such particular country or countries in the TERRITORY (as the
                  case may be), if any, as of the date of such termination and
                  GEMINI shall thereafter have the right for a period of six (6)
                  months after said expiration or termination to sell such
                  inventory of the PRODUCT in the TERRITORY or in such
                  particular country or countries in the TERRITORY (as the case
                  may be) or, if appropriate and legally permissible, to

<PAGE>

                  transport such inventory of PRODUCT for sale in another
                  country or countries in the TERRITORY within such six month
                  period; provided that such sale shall be subject to the
                  royalty provisions of Clause 7 and the other applicable terms
                  of this Agreement. Thereafter, any remaining inventory of
                  PRODUCT shall be disposed of by GEMINI, at GEMINI's cost, in
                  accordance with regulatory requirements.

              CLAUSE 11 - REPRESENTATIONS, WARRANTIES AND INDEMNITY

11.1 ELAN represents to GEMINI the following:

         11.1.1   ELAN is duly and validly existing in the jurisdiction of its
                  incorporation and each other jurisdiction in which the conduct
                  of its business requires such qualification, and is in
                  compliance with all applicable laws, rules, regulations or
                  orders relating to its business and assets;

         11.1.2   ELAN has full corporate authority to execute and deliver this
                  Agreement and to consummate the transactions contemplated
                  hereby; this Agreement has been duly executed and delivered by
                  ELAN and constitutes the legal and valid obligations of ELAN
                  and is enforceable against ELAN in accordance with its terms;
                  and the execution, delivery and performance of this Agreement
                  and the transactions contemplated hereby will not violate or
                  result in a default under or creation of lien or encumbrance
                  under ELAN's memorandum and articles of association or other
                  organic documents, any material agreement or instrument
                  binding upon or affecting ELAN or its properties or assets or
                  any applicable laws, rules, regulations or orders affecting
                  ELAN or its properties or assets;

         11.1.3   ELAN is not in material default of its memorandum and articles
                  of association or similar organic documents, any applicable
                  material laws or regulations or any material contract or
                  agreement binding upon or affecting it or its properties or
                  assets and the execution, delivery and performance of this
                  Agreement and the transactions contemplated hereby will not
                  result in any such violation;

         11.1.4   ELAN represents and warrants that ELAN is the sole and
                  exclusive owner or licensee of, or controls all right, title
                  and interest to the ELAN PATENTS and, to the best of ELAN's
                  knowledge, as of the date of this Agreement, the sole and
                  exclusive owner of the ELAN KNOW-HOW; ELAN has the right to
                  grant the licenses granted herein, and the ELAN TECHNOLOGY is
                  free and clear of any lien, encumbrances, security interest or
                  restriction on the license granted herein; and

         11.1.5   ELAN represents and warrants that the execution of this
                  Agreement and the full performance and enjoyment of the rights
                  of GEMINI under this Agreement will not breach or in any way
                  be inconsistent with the terms and conditions of any

<PAGE>

                  license, contract, understanding or agreement, whether
                  express, implied, written or oral between ELAN and any third
                  party.

11.2     GEMINI represents to ELAN the following:

         11.2.1   GEMINI is duly and validly existing in good standing in the
                  jurisdiction of its incorporation and each other jurisdiction
                  in which the conduct of its business requires such
                  qualification, and GEMINI is in compliance with all applicable
                  laws, rules, regulations or orders relating to its business
                  and assets;

         11.2.2   GEMINI has full corporate authority to execute and deliver
                  this Agreement and to consummate the transactions contemplated
                  hereby; this Agreement has been duly executed and delivered by
                  GEMINI and constitutes the legal and valid obligations of
                  GEMINI and is enforceable against GEMINI in accordance with
                  its terms; and the execution, delivery and performance of this
                  Agreement and the transactions contemplated hereby will not
                  violate or result in a default under or creation of lien or
                  encumbrance under GEMINI's certificate of incorporation,
                  by-laws or other organic documents, any material agreement or
                  instrument binding upon or affecting GEMINI or its properties
                  or assets or any applicable laws, rules, regulations or orders
                  affecting GEMINI or its properties or assets;

         11.2.3   GEMINI is not in material default of its charter or by-laws,
                  any applicable laws or regulations or any material contract or
                  agreement binding upon or affecting it or its properties or
                  assets and the execution, delivery and performance of this
                  letter agreement and the transactions contemplated hereby will
                  not result in any such violation; and

         11.2.4   GEMINI represents and warrants that it has not granted any
                  option, license, right or interest to any third party which
                  would conflict with the terms of this Agreement.

11.3     GEMINI represents and warrants that the PRODUCTS shall be manufactured,
         packaged, distributed and sold in accordance with all applicable
         regulations and requirements of the RHAs in the TERRITORY, including,
         without limitation, the cGP regulations which apply to the manufacture,
         storage, packaging and supply of PRODUCT. GEMINI represents and
         warrants that the PRODUCTS shall not be adulterated or mis-branded as
         defined by the FFDCA (or applicable foreign law) and shall not be a
         product which would violate any section of such Act if introduced in
         interstate commerce.

11.4     GEMINI represents and warrants that it will fully comply with all
         applicable statutes, ordinances and regulations in the TERRITORY with
         respect to the manufacture of the PRODUCTS including, but not limited
         to, the FFDCA and regulations thereunder and cGP. GEMINI shall
         manufacture or procure the manufacture of the PRODUCTS in conformity
         with the REGULATORY APPROVALS and in a manner which fully complies with
         all applicable United States of America and foreign statutes,
         ordinances,

<PAGE>

         regulations and practices.

11.5     Each of the Parties shall indemnify, defend and hold harmless the other
         Party and its officers, directors, employees and agents from all
         actions, losses, claims, demands, damages, costs and liabilities
         (including reasonable attorneys' fees) to which the other Party is or
         may become liable insofar as they arise out of any breach by the first
         Party of any of its obligations or warranties under this Agreement.

11.6     GEMINI shall indemnify, defend and hold harmless ELAN and its officers,
         directors, employees and agents from all actions, losses, claims,
         demands, damages, costs and liabilities (including reasonable
         attorneys' fees) due to third party claims to which ELAN is or may
         become subject insofar as they arise out of or are alleged or claimed
         to arise out of activities conducted by GEMINI in the development,
         manufacture, transport, packaging, storage, handling, distribution,
         promotion, marketing, offer for sale or sale of the PRODUCT, including
         any product liability claim or any claim relating to a recall of a
         PRODUCT.

11.7     With reference to Clause 2.2.3, GEMINI shall indemnify and hold
         harmless ELAN Party and its officers, directors, employees and agents
         to the extent that any claims, damages, liabilities, claims, costs or
         expenses arise out of any such acts or omissions of any sub-licensee.

11.8     ELAN represents and warrants that, as of the date of this Agreement, no
         third party has filed any action against ELAN alleging that the
         exploitation of the ELAN PATENTS infringes any INDEPENDENT THIRD PARTY
         patent in the TERRITORY.

11.9     As a condition of obtaining an indemnity in the circumstances set out
         in Clauses 11.5, 11.6 and 11.7, the Party seeking an indemnity shall:

         11.9.1   fully and promptly notify the other Party of any claim or
                  proceedings, or threatened claim or proceedings for which an
                  indemnity will be sought;

         11.9.2   permit the indemnifying Party to take full control of such
                  claim or proceedings;

         11.9.3   assist in the investigation and defence of such claim or
                  proceedings;

         11.9.4   not compromise or otherwise settle any such claim or
                  proceedings without the prior written consent of the other
                  Party, which consent shall not be unreasonably withheld; and

         11.9.5   take all reasonable steps to mitigate any loss or liability in
                  respect of any such claim or proceedings.

11.10    Subject to the provisions of Clause 9.5(1), ELAN agrees that during the
         TERM, ELAN shall not directly or indirectly, utilise itself, or licence
         to any third party, the ELAN TECHNOLOGY for PHARMACEUTICAL USE in the
         FIELD in the TERRITORY without the prior written consent of GEMINI.

<PAGE>

11.11    Notwithstanding anything to the contrary in this Agreement, ELAN and
         GEMINI shall not be liable to the other by reason of any representation
         or warranty, condition or other term or any duty of common law, or
         under the express terms of this Agreement, for any consequential or
         incidental or punitive loss or damage (whether for loss of profits or
         otherwise) and whether occasioned by the negligence of the respective
         Parties, their employees or agents or otherwise.

               CLAUSE 12 - CUSTOMER COMPLAINTS AND PRODUCT RECALL

12.1.    GEMINI or its permitted sub-licensees shall have sole responsible for
         the reporting and handling of any adverse events associated with
         PRODUCTS with the RHA in each country of the TERRITORY. Furthermore, in
         the event of any recall of any PRODUCT, as suggested or requested by
         any governmental authority, GEMINI shall perform the recall and all
         associated costs and liabilities shall be borne by GEMINI.

12.2.    GEMINI shall notify ELAN promptly of any complaints from third parties
         reported to GEMINI involving any serious and unexpected adverse
         reactions resulting from the use any PRODUCT in the TERRITORY. ELAN
         shall notify GEMINI promptly of any complaints from third parties
         reported to ELAN involving any serious and unexpected adverse reactions
         resulting from the use the DEVICE in the TERRITORY.

                      CLAUSE 13 - MISCELLANEOUS PROVISIONS

13.1     Secrecy:
         --------

         13.1.1   Any information, whether written or oral (oral information
                  shall be reduced to writing within one month by the Party
                  giving the oral information and the written form shall be
                  furnished to the other Party) pertaining to the PRODUCT that
                  has been or will be communicated or delivered by ELAN to
                  GEMINI or any of its AFFILIATES, or by GEMINI to ELAN or any
                  of its AFFILIATES, including, without limitation, trade
                  secrets, business methods, and cost, supplier, manufacturing
                  and customer information, shall be treated by GEMINI and ELAN,
                  respectively, as confidential information, and shall not be
                  disclosed or revealed to any INDEPENDENT THIRD PARTY
                  whatsoever or used in any manner except as expressly provided
                  for herein; provided, however, that such confidential
                  information shall not be subject to the restrictions and
                  prohibitions set forth herein to the extent that such
                  confidential information:-

                  (1)      is available to the public in public literature or
                           otherwise, or after disclosure by one Party to the
                           other becomes public knowledge through no default of
                           the Party receiving such confidential information; or

<PAGE>

                  (2)      was known to the Party receiving such confidential
                           information prior to the receipt of such confidential
                           information by such Party, whether received before or
                           after the date of this Agreement; or

                  (3)      is obtained by the Party receiving such confidential
                           information from a third party not subject to a
                           requirement of confidentiality with respect to such
                           confidential information; or

                  (4)      is required to be disclosed pursuant to: (A) any
                           order of a court having jurisdiction and power to
                           order such information to be released or made public;
                           or (B) any lawful action of a governmental or
                           regulatory agency provided that each Party shall
                           notify the other in writing of any disclosure of
                           information required hereunder prior to such
                           disclosure.

         13.1.2   Each Party shall take in relation to the confidential
                  information of the other Party all such precautions as it
                  normally takes with its own confidential information to
                  prevent any improper disclosure of such confidential
                  information to any INDEPENDENT THIRD PARTY; provided, however,
                  that such confidential information may be disclosed within the
                  limits required to obtain any authorisation from the
                  applicable RHA or any governmental or regulatory agency
                  (including the patents and trademark office in any country of
                  the TERRITORY) or with the prior written consent of the other
                  Party, which shall not be unreasonably withheld, or as may
                  otherwise be required in connection with the purposes of this
                  Agreement.

         13.1.3   Each of the Parties agrees that it will not use, directly or
                  indirectly, any know-how of the other Party (ELAN KNOW-HOW or
                  GEMINI KNOW-HOW, as the case may be), or other confidential
                  information disclosed to it by the other Party or obtained by
                  it from the other Party pursuant to this Agreement, other than
                  as expressly provided herein.

         13.1.4   Neither Party will publicise the existence of this Agreement
                  in any way without the prior written consent of the other
                  Party, except as required pursuant to the disclosure
                  requirements of applicable laws and regulations. Excluding any
                  such required disclosures, in the event that either Party
                  wishes to make an announcement concerning the Agreement, that
                  Party will seek the consent of the other Party. The terms of
                  any such announcement shall be agreed in good faith.

13.2     Assignments/ Sub-contracting:
         -----------------------------

13.2.1   This Agreement may not be assigned by either Party without the prior
         written consent of the other Party, save that either Party may assign
         this Agreement in whole or in part and delegate its duties hereunder to
         its AFFILIATE or AFFILIATES without such consent provided that such
         assignment or delegation has no material adverse tax implications for
         the other Party.

<PAGE>

13.2.2   Either Party shall also have the right to subcontract all or any
         portion of its development, manufacturing or regulatory work under this
         Agreement to an INDEPENDENT THIRD PARTY; save that GEMINI may not
         assign any such activities to a TECHNOLOGICAL COMPETITOR. Each Party
         shall be liable to the other Party for all acts and omissions of any
         sub-contractor as though such acts and omissions were by such Party.

13.3     Parties bound:
         --------------

         This Agreement shall be binding upon and enure for the benefit of
         Parties hereto, their successors and permitted assigns.

13.4     Severability:
         -------------

         If any provision in this Agreement is agreed by the Parties to be, or
         is deemed to be, or becomes invalid, illegal, void or unenforceable
         under any law that is applicable hereto:-

         13.4.1   such provision will be deemed amended to conform to applicable
                  laws so as to be valid and enforceable or, if it cannot be so
                  amended without materially altering the intention of the
                  Parties, it will be deleted, with effect from the date of such
                  agreement or deletion or such earlier date as the Parties may
                  agree; and

         13.4.2   the validity, legality and enforceability of the remaining
                  provisions of this Agreement shall not be impaired or affected
                  in any way.

13.5     Force Majeure:
         --------------

         Neither Party to this Agreement shall be liable for delay in the
         performance of any of its obligations hereunder if such delay results
         from causes beyond its reasonable control, including, without
         limitation, acts of God, fires, strikes, acts of war, intervention of a
         government authority, or non-availability of raw materials, but any
         such delay or failure shall be remedied by such Party as soon as
         practicable.

13.6     Relationship of the Parties:
         ----------------------------

         Nothing contained in this Agreement is intended or is to be construed
         to constitute ELAN and GEMINI as partners or members of a joint venture
         or either Party as an employee of the other. Neither Party hereto shall
         have any express or implied right or authority to assume or create any
         obligations on behalf of or in the name of the other Party or to bind
         the other Party to any contract, agreement or undertaking with any
         third party.

13.7     Amendments:
         -----------

<PAGE>

         No amendment, modification or addition hereto shall be effective or
         binding on either Party unless set forth in writing and executed by a
         duly authorised representative of both Parties.

13.8     Waiver:
         -------

         No waiver of any right under this Agreement shall be deemed effective
         unless contained in a written document signed by the Party charged with
         such waiver, and no waiver of any breach or failure to perform shall be
         deemed to be a waiver of any future breach or failure to perform or of
         any other right arising under this Agreement.

13.9     No effect on other agreements:
         ------------------------------

         No provision of this Agreement shall be construed so as to negate,
         modify or affect in any way the provisions of any other agreement
         between the Parties unless specifically referred to, and solely to the
         extent provided, in any such other agreement.

13.10    Governing law and jurisdiction:
         -------------------------------

         This Agreement shall be governed by and construed in accordance with
         the laws of the State of New York, without regard to principles of
         conflicts of laws. For the purposes of this Agreement the Parties
         submit to the non-exclusive jurisdiction of the courts of the State of
         New York.

13.11    Notice:
         -------

         13.11.1  Any notice to be given under this Agreement shall be sent in
                  writing in English by registered airmail or telecopied to:

                  ELAN care of

                  Elan International Services, Ltd.
                  102 St. James's Court
                  Flatts
                  Smiths, FL04
                  Bermuda

                  Attention:  President

                  Telephone: 1 441 292 9169

                  Telefax :  1 441 292 2224

                  GEMINI at

                  Electropharmacology, Inc.
                  2301 NW 33rd Court

<PAGE>

                  Suite 102
                  Pompano Beach
                  Florida 33069
                  United States of America

                  Attention:  Chairman, President and Chief Executive Officer

                  Telephone: 954 975 9818

                  Telefax: 954 975 4021

                  or to such other address(es) and telecopier numbers as may
                  from time to time be notified by either Party to the other
                  hereunder.

         13.11.2  Any notice sent by mail shall be deemed to have been delivered
                  within 7 working days after despatch and any notice sent by
                  telex or telecopy shall be deemed to have been delivered
                  within 24 hours of the time of the despatch. Notice of change
                  of address shall be effective upon receipt.

IN WITNESS of which the Parties have executed this Agreement.

<PAGE>

                                   SCHEDULE 1

                                  ELAN PATENTS

                                    [omitted]

<PAGE>

                                   SCHEDULE 2

                               EXCLUDED TECHNOLOGY

(i)      See attached list of issued patents and pending patent applications.

(ii)     MEDIPAD(TM) Drug Delivery System

MEDIPAD(TM) is a disposable single use, drug delivery device that contains a
         microinfuser and integral probe to deliver drug subcutaneously.
         MEDIPAD(TM) utilises controlled gas generation as the activation
         mechanism for drug delivery. Activation of the MEDIPAD(TM) device
         results in the generation of gas which compresses a membrane and forces
         drug through the probe into the subcutaneous tissue.

(iii) See attached list of issued patents and pending patent applications.

<PAGE>

                                   Schedule 2

             List of Issued Patents and Pending Patent Applications

                               [34 pages omitted]

<PAGE>

                                   SCHEDULE 3

                            TECHNOLOGICAL COMPETITORS

                                   [omitted]

<PAGE>

Executed by GEMINI on September 30, 1998

By:     /s/ Arup Sen
        -------------------
Name:   Arup Sen
Title:  Chairman & CEO

Executed by ELAN on September 30, 1998

By:     /s/ Liam Daniel
       ----------------
Name:  Liam Daniel

Title: DirectorExhibit 10.1

                        STATEWIDE FINANCIAL CORP.
                    1996 INCENTIVE STOCK OPTION PLAN

1.   PURPOSE

     The purpose of the Statewide Financial Corp. (the "Company") 1996
Incentive Stock Option Plan (the "Plan") is to advance the interests  of the
Company and its shareholders by providing those key employees of the Company
and its Affiliates, including Statewide Savings Bank,  S.L.A. (the
"Association"), upon whose judgment, initiative and efforts the successful
conduct of the business of the Company and its affiliates largely depends,
with additional incentive to perform in a superior manner.  A purpose of the
Plan is also to attract people of experience and ability to the service of
the Company and its Affiliates.

2.   DEFINITIONS

     (a) "Affiliate" means (i) a member of a controlled group of corporations
of which the Company is a member, and (ii) an unincorporated trade or
business which is under common control with the Company as determined in
accordance with Section 414(c) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations issued thereunder. For purposes
hereof, a "controlled group of corporations" shall mean a controlled group
of corporations as defined in Section 1563(a) of the Code determined without
regard to Section 1563(a)(4) and (e)(3)(C).

     (b) "Award" means a grant of Non-statutory Stock Options or Incentive
Stock Options under the provisions of this Plan.

     (c) "Board of Directors" or "Board" means the Board of Directors of the
Company.

     (d) "Committee" means a committee consisting of those members of the
Compensation/Benefits Committee of the Company who are non-employee members
of the Board of Directors, all of whom are "disinterested persons" as such
term is defined" under Rule 16b-3 of the Exchange Act, as promulgated by the
Securities and Exchange Commission.

     (e) "Common Stock" means the Common Stock of the Company, no par value
per share.

     (f) "Date of Grant" means the date an Award granted by the Committee is
effective pursuant to the terms hereof.

     (g) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the work
customarily assigned to him. Additionally, a medical doctor selected or
approved by the Board of Directors must advise the Committee that it is
either not possible to determine when such Disability will terminate or
that it appears probable that such Disability will be permanent during the
remainder of said participant's lifetime.

     (h) "Fair Market Value" means, with respect to shares of Common Stock,
the fair market value as determined by the Committee in good faith and in a
manner established by the Committee from time to time; provided, however,
that if the shares of Common Stock are last sale reported over the counter
securities, then the "fair market value" of such shares on any date shall be
the average closing price for such securities for the five (5) trading days
immediately preceding the date in question, as reported on the NASDAQ system.

     (i) "Incentive Stock Option" means an Option granted by the Committee
to a Participant, which Option is designated by the Committee as an
Incentive Stock Option pursuant to Section 8 and is intended to qualify
as an Incentive Stock Option Plan under Section 422 of the Code.

     (j) "Non-statutory Stock Option" means an Option granted by the
Committee to a Participant pursuant to Section 7, which is not designated by
the Committee as an Incentive Stock Option or which is redesignated by the
Committee under Section 8.1(6) as a Non-statutory Stock Option.

     (k) "Option" means Award granted under Section 7 or 8.

     (l) "Participant" means an employee of the Company or its affiliates
chosen by the Committee to participate in the Plan.

     (m) "Plan Year(s)" means a calendar year or years commencing on or
after January 1, 1996.

     (n) "Retirement" means retirement at the normal or early retirement
date as set forth in any tax-qualified or non-tax qualified retirement
plan of the Company or as determined under any retirement policy of the
Company.

     (o) "Section 16" means Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.

     (p) "Termination for Cause" means termination because of participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule regulation (other than traffic violations or
similar offenses) or final cease and desist order.

3.   ADMINISTRATION

     The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to select participants,
to determine the amount of Awards, to establish the terms and conditions of
such Awards, to establish such rules and regulations as it deems necessary
for the proper administration of the Plan, subject to Subsection 8, to
impose a vesting schedule and to make whatever determinations and
interpretations in connection with the Plan it sees as necessary or
advisable. All determinations and interpretations made by the Committee
shall be binding and conclusive on all Participants in the plan and on
their legal representatives and beneficiaries.

                                   2

4.   TYPES OF AWARDS

     Awards under the Plan may be granted in any one or a combination of
Non-statutory Stock Options and/or Incentive Stock Options.

5.   STOCK SUBJECT TO THE PLAN

     Subject to adjustment as provided in Section 14, the maximum number of
shares reserved hereby for purchase pursuant to the exercise of options
granted under the Plan shall not exceed 370,300 shares of Common Stock of
the Company. These shares of Common Stock may be either authorized but
unissued shares or shares previously issued and reacquired by the Company.
To the extent that options granted under the Plan terminate, expire or are
canceled without having been exercised, new awards may be made with respect
to these shares.

6.   ELIGIBILITY

     Officers and other employees of the Company or its affiliates shall be
eligible to receive Awards and Directors who are not employees or officers
of the Company or its affiliates shall not be eligible to receive Awards
under the Plan.

7.   NON-STATUTORY STOCK OPTIONS

     7.1  Grant of Non-statutory Stock Options.

               The Committee may, from time to time, grant Non-statutory
     Stock Options to eligible employees and upon such terms and conditions
     as the Committee may determine, and may grant Non-statutory Stock
     Options in exchange for and upon surrender of previously granted Awards
     under this Plan. Non-statutory Stock Options granted under this Plan
     are subject to the following terms and conditions:

              (a)  Price. The purchase price per share of Common Stock
              deliverable upon the exercise of each Non-statutory Stock
              Option shall be determined by the Committee on the date the
              options granted. Such purchase price shall not be less than
              100% of the Fair Market Value of the Company's Common Stock
              on the Date of Grant. Shares may be purchased only upon full
              payment of the purchase price. Payment of the purchase price
              may be made, in whole or in part, through the surrender of
              shares of the Common Stock of the Company at the Fair Market
              Value of such shares on the date of surrender.

              (b)  Terms of Options. The term during which each Non-
              statutory Stock Option may be exercised shall be determined
              by the Committee, but in no event shall a Non-statutory
              Stock Option be exercisable in whole or in part more than 10
              years from the Date of Grant.

                                          3

             (c)  Termination of Employment. Except as provided in Section
             7.1(d) hereof, unless otherwise determined by the Committee,
             upon the termination of a Participant's service for any reason
             other than Disability, death or Termination for Cause, the
             Participant's Non-statutory Stock Options shall be exercisable
             only as to those shares which were immediately exercisable by
             the participant at the date of termination and only for a
             period of three months following termination. Notwithstanding
             any provision set forth herein nor contained in any Agreement
             relating to the award of an Option, in the event of Termination
             for Cause, all rights under the Participant's Non-statutory
             Stock Options shall expire upon termination. In the event of
             death or termination of service as a result of Disability of
             any Participant, all Non-statutory Stock Options held by the
             Participant, whether or not exercisable at such time, shall be
             exercisable by the Participant or his legal representatives or
             beneficiaries of the Participant for one year or such longer
             period as determined by the Committee following the date of
             the Participant's death or termination of employment due to
             Disability, provided that in no event shall the period extend
             beyond the expiration of the Non-statutory Stock Option term.

             (d)  Exception for Retirement. Notwithstanding the general
             rule contained in Section 7.1(c) above, all options which
             have become fully vested under the terms of Section 9 hereof
             held by a Recipient whose employment with the Company or an
             Affiliate terminates due to Retirement may be exercised for
             the lesser of (i) the remaining term of the option, or (ii)
             12 months. Any Incentive Stock Option exercised more than 3
             months after a Participant's retirement will be treated as a
             Non-statutory Stock Option.

8.   INCENTIVE STOCK OPTIONS

        8.1  Grant of Incentive Stock Options.

             The Committee may, from time to time, grant Incentive Stock
        Options to eligible employees. Incentive Stock Options granted
        pursuant to the Plan shall be subject to the following terms and
        conditions:

             (a)  Price. The purchase price per share of Common Stock
             deliverable upon the exercise of each Incentive Stock Option
             shall be not less than 100% of the Fair Market Value of the
             Company's Common Stock on the Date of Grant. However, if a
             Participant owns stock possessing more than 10% of the total
             combined voting power of all classes of Common Stock of the
             Company, the purchase price per share of Common Stock
             deliverable upon the exercise of each Incentive Stock Option
             shall not be less than 110% of the Fair Market Value of the
             Company's Common Stock on the Date of Grant. Shares may be
             purchased only upon payment of the full purchase price.
             Payment of the purchase price may be made, in whole or in
             part, through the

                                         4

             surrender of shares of the Common Stock of the Company at the
             Fair Market Value of such shares on the date of surrender.

             (b)  Amounts of Options. Incentive Stock Options may be
             granted to any eligible employee in such amounts as
             determined by the Committee. In the case of an option
             intended to qualify as an Incentive Stock Option, the
             aggregate Fair Market Value (determined as of the time the
             option is granted) of the Common Stock with respect to which
             Incentive Stock Options granted are exercisable for the
             first time by the Participant during any calendar year shall
             not exceed $100,000. The provisions of this Section 8.1(b)
             shall be construed and applied in accordance with Section
             422(d) of the Code and the regulations, if any, promulgated
             thereunder. To the extent an award is in excess of such
             limit, it shall be deemed a Non-statutory Stock Option. The
             Committee shall have discretion to redesignate options
             granted as Incentive Stock Options as Non-statutory options.

             (c)  Terms of Options. The term during which each Incentive
             Stock Option may be exercised shall be determined by the
             Committee, but in no event shall an Incentive Stock Option be
             exercisable in whole or in part more than 10 years from the
             Date of Grant. If at the time an Incentive Stock Option is
             granted to an employee, the employee owns Common Stock
             representing more than 10% of the total combined voting power
             of the Company (or, under Section 422(d) of the Code, is
             deemed to own Common Stock representing more than 10% of the
             total combined voting power of all such classes of Common
             Stock, by reason of the ownership of such classes of Common
             Stock, directly or indirectly, by or for any brother, sister,
             spouse, ancestor or lineal descendent of such employee, or by
             or for any corporation, partnership, estate or trust of which
             such employee is a shareholder, partner or beneficiary), the
             Incentive Stock Option granted to such employee shall not be
             exercisable after the expiration of five years from the Date
             of Grant. No Incentive Stock Option granted under this Plan is
             transferable except by will or the laws of descent and
             distribution and is exercisable in his lifetime only by the
             Participant to whom it is granted.

             (d)  Termination of Employment. Except as provided in Section
             8.1(e) hereof, upon the termination of a Participant's service
             for any reason other than Disability, death or Termination for
             Cause, the Participant's Incentive Stock Options shall be
             exercisable by the Participant at the date of termination and
             only for a period of three months following termination.
             Notwithstanding any provisions set forth herein nor contained
             in any Agreement relating to an award of an Option, in the
             event of Termination for Cause all rights under the
             Participant's Incentive Stock Options shall expire immediately
             upon termination.

             Unless otherwise determined by the Committee, in the event of
             death or termination of service as a result of Disability of
             any Participant, all Incentive Stock Options held by such
             Participant, whether or not exercisable at such time, shall
             be exercisable by

                                          5

             the Participant or the participant's legal representatives or
             beneficiaries of the Participant for one year following the date
             of the participant's death or termination of employment as a
             result of Disability. In no event shall the exercise period
             extend beyond the expiration of the Incentive Stock Option term.

             (e) Exception for Retirement. Notwithstanding the general rule
             contained in Section 8.1(d) above, all options which have become
             fully vested under the terms of Section 9 hereof held by a
             Participant whose employment with the Company or an Affiliate
             terminates due to Retirement may be exercised for the lesser of
             (i) the remaining term of the option or (ii) 12 months. Any
             Incentive Stock Option exercised more than 3 months after a
             Participant's Retirement will be treated as a Non-statutory
             Stock Option.

             (f) Compliance with Code. The options granted under this
             Section 8 of the Plan are intended to qualify as incentive
             stock options within the meaning of Section 422 of the Code,
             but the Company makes no warranty as to the qualification of
             any option as an incentive stock option within the meaning
             of Section 422 of the Code.

9.   VESTING REQUIREMENTS

     Notwithstanding anything contained in Section 3 hereof, in compliance
with the regulations of the Office of Thrift Supervision, all options
granted hereunder, whether under Section 7 or Section 8, shall be subject
to the following minimum vesting schedule:

     All options shall be subject to a five-year vesting schedule, vesting
20 percent a year, with vesting commencing on the first anniversary of the
date of grant. By the fifth anniversary of the date of grant, all options
shall have vested; provided, however, that in the event of a participant's
disability or death, all options then held by such participant or his estate
shall become immediately exercisable for the terms set forth in Sections 7
and 8 hereof.

     The Committee shall have the authority in its discretion, to impose
greater vesting requirements than those set forth above.

10.  SURRENDER OPTION

     In the event of a Participant's termination of employment as a result
of death, disability or Retirement, the Participant (or the Participant's
personal representative(s), heir(s), or devisee(s)) may, in a form
acceptable to the Committee, make application to surrender all or part of
options held by such Participant in exchange for a cash payment from the
Company of an amount equal to the difference between the Fair Market Value
of the Common Stock on the date of termination of employment and the
exercise price per share of the option on the Date of Grant. Although it
is anticipated that the Committee will not unreasonably object to such
an application, whether the Committee accepts such application or determines
to make payment, in whole or part is within its

                                  6

absolute and sole discretion, it being expressly understood that the
Committee is under no obligation to any Participant whatsoever to make
such payments. In the event that the Committee accepts such application
and the Company determines to make payment, such payment shall be in lieu
of the exercise of the underlying option and such option shall be canceled.

11.  RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY

     No Participant shall have any rights as a shareholder with respect to
any shares covered by a Non-statutory and/or Incentive Stock Option until
the date of issuance of a stock certificate for such shares. Nothing in
this Plan or in any Award granted confers on any person any right to
continue in the employ of the Company or its Affiliates or to continue to
perform services for the Company or its Affiliates or interferes in any
way with the right of the Company or its Affiliates to terminate a
Participant's services as an officer or other employee at any time.

     No Award under the Plan shall be transferable by the Participant other
than by will or the laws of descent and distribution and may only be
exercised during his lifetime by the Participant or by a guardian or legal
representative.

12.  AGREEMENT WITH GRANTEES

     Each Award of Options will be evidenced by a written agreement,
executed by the Participant and the Company which describes the conditions
for receiving the Awards including the date of Award, the exercise price,
applicable vesting and exercise periods, and any other terms and conditions
as may be required by the Board of Directors or applicable securities law.

13.  DILUTION AND OTHER ADJUSTMENTS

     (a)  In the event of any change in the outstanding shares of Common
Stock of the Company by reason of any stock dividend or split,
recapitalization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without
receipt or payment of consideration by the Company, the Committee will
make such adjustments to previously granted Awards, to prevent dilution
or enlargement of the rights of the Participant, including any or all of
the following:

      (i)     adjustments in the aggregate number or kind of shares of
      Common Stock which may be awarded under the Plan;

      (ii)    adjustments in the aggregate number or kind of shares of
      Common Stock covered by Awards already made under the Plan; and/or

      (iii)   adjustments in the purchase price of outstanding Incentive
      and/or Non-statutory Stock Options, or any Limited Rights attached
      to such options.

                                    7

No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award.

     (b)  In the event of a consolidation, reorganization, merger or sale
of all or substantially all of the assets of the Company in which
outstanding shares of Common Stock are exchanged for securities, cash or
other property of any other corporation or business entity or in the event
of a liquidation of the Company, the Committee and the Board of Directors
will take one or more of the following actions, as to outstanding options:

     (i)  provide that such options shall be assumed, or equivalent options
     shall be substituted, by the acquiring or succeeding corporation (or an
     affiliate thereof), provided that any such options substituted for
     Incentive Stock Options shall meet the requirements of Section 424(a) of
     the Code, or

     (ii) in the event of a merger under the terms of which holders of the
     Common Stock of the Company will receive upon consummation thereof a
     cash payment for each share surrendered in the merger (the "Merger
     Price"), make or provide for a cash payment to the Participants equal
     to the difference between (A) the Merger Price times the number of
     shares of Common Stock subject to such outstanding Options (to the
     extent then exercisable at prices not in excess of the Merger Price)
     and (B) the aggregate exercise price of all such outstanding Options
     in exchange for the termination of such Options.

14.  TAX WITHHOLDING

     The Participant shall pay to the Company, or make provision
satisfactory to the Committee for payment of, any taxes required by law
to be withheld in respect of options under the Plan no later than the date
of the event creating the tax liability. In the Committee's sole discretion,
a Participant (other than a Participant subject to Section 16, who shall
be subject to the following sentence) may elect to have such tax obligations
paid, in whole or in part, in shares of Common Stock, including shares
retained from the option creating the tax obligation. With respect to
Participants subject to Section 16, upon the issuance of shares of Common
Stock in respect of an option, such number of shares issuable shall be
reduced by the number of shares necessary to satisfy such Participant's
federal, and where applicable, state withholding tax obligations. For
withholding tax purposes, the value of the shares of Common Stock shall
be the Fair Market Value on the date the withholding obligation is incurred.
The Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Participant.

15.  AMENDMENT OF THE PLAN

     The Committee may at any time, and from time to time, modify or amend
the Plan in any respect; provided that shareholder approval shall be
required for any such modification or amendment which:

                                    8

     (a)  materially increases the maximum number of shares for which
     options may be granted under the Plan (subject, however, to the
     provisions of Section 13 hereof);

     (b) reduces the exercise price at which Awards may be granted (subject,
     however, to the provisions of Section 13 hereof);

     (c) extends the period during which options may be granted or exercised
     beyond the times originally prescribed; or

     (d) changes the persons eligible to participate in the Plan.

Failure to ratify or approve amendments or modifications to subsections
(a)through (d) of this Section by shareholders shall be effective only as
to the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force
and effect.

     No such termination, modification or amendment may affect the rights of
a Participant under an outstanding Award.

16.  APPROVAL AND EFFECTIVE DATE OF PLAN

     Pursuant to OTS regulations, if the Plan is to be implemented on or
before September 29, 1996, the Plan must be approved by a majority of the
shares eligible to be voted at a meeting of the Company's stockholders and
then submitted to the OTS for its review and approval. This Plan will be
effective as of the first day after its approval by the Company's
stockholders and the OTS, assuming it is so approved. If the Plan receives
the approval of less than a majority of the shares eligible to be voted at
such meeting, but receives the approval of a majority of the shares actually
voted at the meeting, the Plan will be effective as of October 1, 1996.

17.  TERMINATION OF THE PLAN

     The right to grant Awards under the Plan will terminate ten (10) years
after the Effective Date of the Plan. The Board of Directors has the right
to suspend or terminate the Plan at any time, provided that no such action
will, without the consent of a Participant, adversely affect his rights
under a previously granted Award.

18.  APPLICABLE LAW

     The Plan will be administered in accordance with the laws of the State
of New Jersey.

                                    9

19.  COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT

     Transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provisions of the Plan or action by the Committee fail to so
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee. Notwithstanding any other provision
of the Plan, in order to qualify for the exemption provided by Rule 16b-3
of the Act, any Common Stock acquired by a Participant subject to Section 16
of the Act (a "Section 16 Participant") upon exercise of an Option the
common stock acquired may not be sold for six (6) months after the date of
grant of the Option.

                                    10

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