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                                                                   EXHIBIT 10.31

[Portions  herein  identified by *** have been omitted pursuant to a request for
confidential  treatment  and have  been  filed  separately  with the  Commission
pursuant to Rule 24b-2 of the Secureities Exchange Act of 1934, as amended.]

                        LICENSE AND DEVELOPMENT AGREEMENT

                  THIS LICENSE AND  DEVELOPMENT  AGREEMENT  (this  "Agreement"),
effective  as of April 4, 2003 (the  "Effective  Date"),  is entered into by and
between NOVADEL PHARMA INC., a Delaware corporation  ("NovaDel"),  and MANHATTAN
PHARMACEUTICALS,  INC., a Delaware  corporation  (the  "Licensee").  NovaDel and
Licensee  each  may  be  referred  to  herein  individually  as  a  "Party,"  or
collectively as the "Parties."

                  WHEREAS,   NovaDel   has   certain   proprietary   rights  and
intellectual  property  (including  to certain  patents) with respect to lingual
sprays for the metered delivery of pharmaceutical  products (the  "Technology");
and

                  WHEREAS,  Licensee desires to obtain from NovaDel, and NovaDel
desires  to  grant to  Licensee,  a  license  to  develop  and  commercialize  a
pharmaceutical  product  containing  propofol as active  ingredient that will be
administered  using the Technology on the terms and conditions set forth herein;
and

                  WHEREAS,  Licensee desires that NovaDel  provide,  and NovaDel
desires to  provide,  certain  services  in respect of the  development  of such
pharmaceutical product containing propofol as active ingredient on the terms and
conditions set forth herein.

                  NOW,  THEREFORE,  in consideration of the foregoing  premises,
the mutual  promises and covenants of the Parties  contained  herein,  and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound, do hereby agree
as follows:

                                    ARTICLE 1
                                   DEFINITIONS

                  For the purposes of this  Agreement,  the following  words and
phrases  shall  have  the  following  meanings,  unless  otherwise  specifically
provided herein:

                  1.1 "AFFILIATE"  shall mean,  with respect to any Entity,  any
other Entity that  directly or  indirectly  through one or more  intermediaries,
controls,  is  controlled  by or is under common  control with such Entity.  For
purposes of this Section 1.1 only, "control" and, with correlative meanings, the
terms  "controlled  by" and  "under  common  control  with"  shall  mean (a) the
possession,  directly or  indirectly,  of the power to direct the  management or
policies of an Entity,  whether through the ownership of voting  securities,  by
contract or otherwise, or (b) the ownership, directly or indirectly, of at least
fifty percent (50%) of the voting  securities or other ownership  interest of an
Entity.

                  1.2 "APPLICABLE  LAW" shall mean the applicable  laws,  rules,
regulations,  guidelines and requirements of the Regulatory Authorities,  in the
Territory.

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                  1.3   "COMBINATION   PRODUCT"   shall   mean   a   combination
pharmaceutical product containing one or more therapeutically active ingredients
in addition to a Designated Compound.

                  1.4 "COMMERCIALLY REASONABLE EFFORTS" shall mean, with respect
to the  development  or  commercialization  of a Licensed  Product,  efforts and
resources  commonly  used in the  research-based  pharmaceutical  industry for a
product of similar  commercial  potential at a similar  stage in its  lifecycle,
taking into  consideration  its safety and  efficacy,  its cost to develop,  the
competitiveness  of  alternative  products,   its  proprietary   position,   the
likelihood of regulatory  approval,  its  profitability,  and all other relevant
factors.   Commercially   Reasonable   Efforts   shall   be   determined   on  a
market-by-market   basis  for  each  Licensed  Product  without  regard  to  the
particular  circumstances of a Party,  including any other product opportunities
of such Party.

                  1.5  "CONFIDENTIAL  INFORMATION"  shall have the  meaning  set
forth in Article 15.

                  1.6  "CONTROL"  shall  mean,  with  respect  to  any  item  of
Information  and  Inventions,  Patents  or other  intellectual  property  right,
possession  of the  ability,  whether  directly  or  indirectly,  and whether by
ownership,  license or otherwise,  to assign, or grant a license,  sublicense or
other  right to or under,  such  item,  Patent or right as  provided  for herein
without violating the terms of any agreement or other arrangement with any Third
Party.

                  1.7 "DESIGNATED COMPOUND" shall mean initially, propofol.

                  1.8  "DEVELOPMENT   ACTIVITIES"   shall  mean  the  activities
performed by the Parties under the Development Plan pursuant to Article 3.

                  1.9  "DEVELOPMENT  BUDGET" shall have the meaning set forth in
Section 3.3.

                  1.10 "DEVELOPMENT  COMMITTEE" shall have the meaning set forth
in Section 3.4.1.

                  1.11  "DEVELOPMENT  PLAN"  shall have the meaning set forth in
Section 3.3.

                  1.12 "EFFECTIVE  DATE" shall have the meaning set forth in the
preamble.

                  1.13 "ENTITY" shall mean any individual,  sole proprietorship,
corporation, limited liability company, association, joint venture, partnership,
limited partnership, limited liability partnership, trust, university, business,
government or political  subdivision thereof,  including an agency, or any other
organization that possesses independent legal standing.

                  1.14 "EXPLOIT"  shall mean to make,  have made,  import,  use,
sell,  or offer for sale,  including to  research,  develop,  register,  modify,
improve,  manufacture,  have manufactured,  store, have used, export, transport,
distribute,  promote,  market or have sold or  otherwise  dispose  of a licensed
product or process.

                  1.15  "EXPLOITATION"  shall  mean  the  making,  having  made,
importation,  use,  sale,  offering  for sale of a licensed  product or process,
including the research, development,

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registration,  modification,  improvement,  manufacture,  storage, optimization,
import, export,  transport,  distribution,  promotion,  marketing, sale or other
disposition of a licensed product or process.

                  1.16  "FDA"  shall  mean  the  United  States  Food  and  Drug
Administration,  or any successor  agency  responsible  for the  evaluation  and
approval of pharmaceutical products.

                  1.17 "FIRST COMMERCIAL SALE" shall mean the first sale for use
or consumption by the general public of the Licensed  Product in a country after
Regulatory  Approval   (including  pricing  and  reimbursement   approval  where
applicable) for the marketing and sale of the Licensed Product has been obtained
in such country.

                  1.18 "IMPROVEMENT"  shall mean any modification,  variation or
revision to an  apparatus,  method,  product or  technology,  or any  discovery,
technology,  device,  process or  formulation  related to an apparatus,  method,
product or  technology,  whether or not patented or  patentable,  including  any
enhancement  in the  manufacture  or steps or  processes  thereof,  ingredients,
preparation,  presentation,  formulation, means of delivery, packaging or dosage
of an apparatus,  method, product or technology, any discovery or development of
any new or expanded indications for an apparatus, method, product or technology,
or any discovery or development that improves the stability,  safety or efficacy
of an apparatus, method, product or technology.

                  1.19 "IND" shall mean an investigational  new drug application
filed with the FDA for  approval  to commence  human  clinical  trials,  and its
equivalent in other countries or regulatory jurisdictions in the Territory.

                  1.20 "INDEMNIFICATION CLAIM NOTICE" shall have the meaning set
forth in Section 10.3.1.

                  1.21  "INDEMNIFIED  PARTY" shall have the meaning set forth in
Section 10.3.1.

                  1.22  "INFRINGEMENT  SUIT" shall have the meaning set forth in
Section 6.8.2.

                  1.23  "INFORMATION  AND INVENTIONS"  shall mean all technical,
scientific  and  other  know-how  and  information,  trade  secrets,  knowledge,
technology,  means,  methods,  processes,  practices,  formulas,   instructions,
skills,  techniques,  procedures,   experiences,  ideas,  technical  assistance,
designs,  drawings,   assembly  procedures,   computer  programs,   apparatuses,
specifications,  data,  results and other material,  including  pre-clinical and
clinical  trial  results,  manufacturing  procedures  and  test  procedures  and
techniques, (whether or not confidential,  proprietary,  patented or patentable)
in written,  electronic or any other form now known or hereafter developed,  and
all Improvements,  whether to the foregoing or otherwise, and other discoveries,
developments,  inventions,  and  other  intellectual  property  (whether  or not
confidential, proprietary, patented or patentable).

                  1.24  "KNOWLEDGE"  shall mean the good faith  understanding of
the  vice  presidents,  senior  vice  presidents,   executive  vice  presidents,
president or chief  executive  officer of the respective  party of the facts and
information  then  in  their   possession   without  any  duty  to  conduct  any
investigation with respect to such facts and information.

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                  1.25  "LICENSED  PROCESS" shall mean the  proprietary  lingual
spray  technology  for the  delivery  of  pharmaceutical  compounds  through the
mucosal  membrane  of the mouth  using an aerosol or pump spray  device  that is
under the  Control  of  NovaDel as of the  Effective  Date and any  Improvements
thereto that are  conceived  and reduced to practice by NovaDel in the course of
performing the Development Activities.

                  1.26   "LICENSED   PRODUCT(S)"   shall   mean  any  dosage  of
pharmaceutical  composition or preparation in finished form labeled and packaged
for  sale by  prescription,  over-the-counter  or any  other  method  for  human
applications that contains propofol delivered by means of the Licensed Process.

                  1.27 "LICENSED TECHNOLOGY" shall mean the NovaDel Patents, the
NovaDel Know-How and the Drug Master File,  collectively,  but only with respect
to the Exploitation of the Licensed Product.

                  1.28  "LICENSED  TRADEMARK"  shall mean those  Trademarks  set
forth  on  Exhibit  A  attached  hereto  and  such  other  Trademarks  as may be
designated by NovaDel in writing from time to time, and any registrations of the
foregoing and pending applications relating thereto.

                  1.29 "LICENSEE" shall mean Manhattan Pharmaceuticals,  Inc., a
Delaware corporation.

                  1.30  "LOSSES"  shall  have the  meaning  set forth in Section
10.1.

                  1.31 "MAJOR  MARKET  COUNTRY"  shall mean the United States of
America and the European Union.

                  1.32 "NDA" shall mean a New Drug Application filed pursuant to
the requirements of the FDA, as more fully defined in 21 C.F.R.ss.314.5 et seq.,
and any  equivalent  application  required by any  Regulatory  Authority for the
marketing, sale or use of the Licensed Product in the Territory.

                  1.33 "NET PROFITS" shall mean for any period, the gross amount
invoiced  by Licensee  and its  Affiliates  for the sale of Licensed  Product by
Licensee or any of its Affiliates to Third  Parties,  less  deductions  for: (a)
normal and customary  trade,  quantity and cash  discounts and sales returns and
allowances, including (i) those granted on account of price adjustments, billing
errors,  rejected goods, damaged goods, returns and rebates, (ii) administrative
and other fees and  reimbursements and similar payments to wholesalers and other
distributors,  buying groups, pharmacy benefit management organizations,  health
care insurance carriers and other  institutions,  (iii) allowances,  rebates and
fees paid to distributors and (iv) chargebacks;  (b) freight,  postage, shipping
and  insurance  expenses to the extent that such items are included in the gross
amount  invoiced;  (c) customs and excise duties and other duties related to the
sales to the extent that such items are included in the gross  amount  invoiced;
(d)  rebates  and similar  payments  made with  respect to sales paid for by any
governmental or regulatory  authority such as, by way of illustration and not in
limitation of the Parties' rights hereunder, Federal or state Medicaid, Medicare
or similar state program or equivalent foreign  governmental  program; (e) sales
and other  taxes and  duties  directly  related to the sale or  delivery  of the
Licensed  Product (but not including  taxes assessed  against the income derived
from such  sale);  (f)  distribution

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expenses  to the  extent  that such  items  are  included  in the  gross  amount
invoiced;  (g) any other similar and customary  deductions  that are  consistent
with United States generally accepted accounting  principles,  or in the case of
non-United States sales, other applicable  accounting  standards;  (h) insurance
costs; (i) employee salaries and other consultant and employee compensation; (j)
research and development  costs;  (k)  manufacturing  costs;  (l) sales expenses
(including  sales  commissions);  (m)  storage  of  Licensed  Product;  and  (n)
royalties  payable to third  parties.  Any of the  deductions  listed above that
involves a payment by Licensee or its  Affiliates  shall be taken as a deduction
in the  calendar  quarter in which the payment is accrued by such  eentity.  For
purposes of determining Net Sales, a Licensed Product shall be deemed to be sold
when invoiced and a "sale" shall not include transfers, uses or dispositions for
charitable,  promotional,  pre-clinical,  clinical,  regulatory or  governmental
purposes.  For  purposes of  calculating  Net  Profits,  sales  between or among
Licensee  or its  Affiliates  shall  be  excluded  from the  computation  of Net
Profits,  but sales by  Licensee or its  Affiliates  to Third  Parties  shall be
included in the computation of Net Profits.

                  1.34 "NET SALES" shall mean, for any period,  the gross amount
invoiced  by Licensee  and its  Affiliates  for the sale of Licensed  Product by
Licensee  or any  of its  Affiliates  to  Third  Parties,  less  deductions  for
chargebacks,  billing errors,  rejected goods, damaged goods and returns. Any of
the  deductions  listed  above  that  involves  a  payment  by  Licensee  or its
Affiliates  shall be taken as a deduction in the  calendar  quarter in which the
payment is accrued by such entity.  For  purposes of  determining  Net Sales,  a
Licensed Product shall be deemed to be sold when invoiced and a "sale" shall not
include transfers, uses or dispositions for promotional, pre-clinical, clinical,
regulatory or  governmental  purposes.  For purposes of  calculating  Net Sales,
sales  between or among  Licensee or its  Affiliates  shall be excluded from the
computation  of Net Sales,  but sales by  Licensee  or its  Affiliates  to Third
Parties shall be included in the computation of Net Sales.

                  1.35  "NOVADEL"  shall  have  the  meaning  set  forth  in the
preamble.

                  1.36  "NOVADEL   KNOW-HOW"  shall  mean  all  Information  and
Inventions  Controlled by NovaDel or an Affiliate of NovaDel as of the Effective
Date or, from time to time,  during the Term that (a) (i) are  necessary for the
use of the Licensed  Process to Exploit the  Licensed  Product or (ii) relate to
Improvements to the Licensed  Product that are conceived and reduced to practice
in the  course  of  performing  the  Development  Activities,  and  (b)  are not
generally  known,  but excluding any  Information  and  Inventions to the extent
claimed by any NovaDel Patents.

                  1.37  "NOVADEL  PATENTS"  shall mean the Patents  that NovaDel
Controls  (a) as of the  Effective  Date that are listed on Exhibit A hereto and
(b) from time to time during the Term that claim (i) the  Licensed  Process,  or
(b) any  Improvements to the Licensed  Product that are conceived and reduced to
practice in the course of performing the Development Activities.

                  1.38   "PATENTS"   shall  mean  (a)  all  patents  and  patent
applications;     (b)    any    substitutions,     divisions,     continuations,
continuations-in-part,   reissues,   renewals,   registrations,   confirmations,
re-examinations, extensions, supplementary protection certificates and the like,
and any provisional  applications,  of any such patents or patent  applications;
and (c) any international equivalent of any of the foregoing.

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                  1.39  "REGULATORY  APPROVAL"  shall mean any and all approvals
(including  pricing and  reimbursement  approvals),  licenses,  registrations or
authorizations  of any Regulatory  Authority,  necessary for the Exploitation of
the Licensed  Product in a country in the Territory,  including (a) any approval
of any Licensed Product (including any INDs, NDAs, and supplements or amendments
thereto);  (b) pre- and post-approval  marketing  authorizations  for a Licensed
Product  (including any  prerequisite  manufacturing  approval or  authorization
related  thereto);  (c)  labeling  approval  for a  Licensed  Product;  and  (d)
technical, medical and scientific licenses.

                  1.40   "REGULATORY   AUTHORITY"   shall  mean  any  applicable
supra-national,   federal,  national,   regional,  state,  provincial  or  local
regulatory  agencies,  departments,  bureaus,  commissions,  councils  or  other
government entities regulating or otherwise exercising authority with respect to
the Licensed Technology or the Licensed Product in the Territory.

                  1.41 "REGULATORY  DOCUMENTATION"  shall mean all applications,
registrations,  licenses, authorizations and approvals (including all Regulatory
Approvals),   all  correspondence  submitted  to  or  received  from  Regulatory
Authorities  (including  minutes and official  contact  reports  relating to any
communications with any Regulatory Authority),  all supporting documents and all
clinical  studies and tests,  relating  to any  Licensed  Product,  and all data
contained  in  any  of the  foregoing,  including  all  regulatory  drug  lists,
advertising and promotion documents, adverse event files and complaint files.

                  1.42 "SECONDARY  MARKET  COUNTRIES" shall mean Japan,  Canada,
Australia and South Africa.

                  1.43  "SUBLICENSEE"  shall  mean  any  Third  Party  to  which
Licensee grants a sublicense  pursuant to Section 2.5 under the licenses granted
to Licensee by NovaDel under Section 2.1.

                  1.44   "SUBLICENSING   FEES"   shall   mean  all   non-royalty
consideration  of any kind,  including any fees,  milestones  or other  payments
(whether  cash or  non-cash  (which  shall be  valued  at fair  market  value)),
received by Licensee or any of its Affiliates  from any  Sublicensee as a direct
or  indirect  result of the grant by Licensee  or any of its  Affiliates  to any
Sublicensee of a license under,  or the use by any such  Sublicensee  of, any of
the Licensed Technology or Licensed Trademarks,  in excess of the payments to be
paid pursuant to sections 4.4 and 4.5.

                  1.45  "TECHNOLOGY"  shall  have the  meaning  set forth in the
preamble.

                  1.46 "TERM" shall have the meaning set forth in Section 7.1.

                  1.47 "TERRITORY" shall mean the entire world.

                  1.48 "THIRD  PARTY" shall mean any Entity other than  NovaDel,
Licensee and their respective Affiliates.

                  1.49 "THIRD  PARTY  CLAIM" shall have the meaning set forth in
Section 10.3.2.

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                  1.50 "TRADEMARK" shall include any word, name, symbol,  color,
designation or device or any combination thereof, including any trademark, trade
dress, brand mark, trade name, brand name, logo or business symbol.

                  1.51 "VALID  CLAIM"  shall mean,  with respect to a particular
country,  a claim of a Patent in such  country  that (a) has not been revoked or
held unenforceable or invalid by a decision of a court or governmental agency of
competent  jurisdiction  from  which no  appeal  can be taken or has been  taken
within the time allowed for appeal, and (b) has not been abandoned,  disclaimed,
denied or admitted to be invalid or unenforceable  through reissue or disclaimer
or otherwise in such country.

                                    ARTICLE 2
                                 GRANT OF RIGHTS

                  2.1 LICENSE GRANTS TO LICENSEE.

                       2.1.1  Subject  to  Section  2.3 and the other  terms and
conditions  of this  Agreement,  NovaDel  hereby grants to Licensee and Licensee
accepts,  a non-transferable  (except as provided in Article 12),  sublicensable
(only as provided in Section 2.5), royalty-bearing,  worldwide,  exclusive right
and license under the Licensed Technology to Exploit the Licensed Product in the
Territory,  to the full end of the Term for which  the  Licensed  Technology  is
licensed, unless sooner terminated as herein after provided.

                       2.1.2  Subject  to  Section  2.3 and the other  terms and
conditions  of this  Agreement,  NovaDel  hereby grants to Licensee and Licensee
accepts,  a non-transferable  (except as provided in Article 13),  sublicensable
(only as  provided in Section  2.4),  royalty-bearing,  non-exclusive  right and
license  under  the  Licensed  Trademarks  for the sole  purpose  of using  such
Licensed Trademarks to market, distribute and sell the Licensed Product licensed
under Section 2.1.1 in the Territory,  to the full end of the Term for which the
Licensed Product are licensed, unless sooner terminated as hereinafter provided.

                  2.2  LICENSE  GRANT TO  NOVADEL.  Licensee  hereby  grants  to
NovaDel  a  limited,  royalty-free,  non-exclusive  right  and  license  in  the
Territory in and to the Licensed  Technology to the extent  necessary to perform
its Development Activities under Article 3.

                  2.3  RETAINED  RIGHTS.  NovaDel  retains all right,  title and
interest,  including the right to grant licenses to Third Parties, in and to the
Licensed Technology (other than for delivery of the Designated Compounds only as
expressly provided in Section 2.1.1) and the Licensed Trademarks (other than for
the  Exploitation  of Licensed  Product  only as  expressly  provided in Section
2.1.2).  Licensee shall have no rights,  express or implied, with respect to the
Licensed Technology or the Licensed Trademarks, except as expressly set forth in
Section  2.1, and  Licensee  covenants  to NovaDel  that none of  Licensee,  its
Affiliates  or  Sublicensees  shall use the  Licensed  Technology,  directly  or
indirectly,  for any purpose  other than for  administration  of the  Designated
Compounds  in  connection  with the  Exploitation  of Licensed  Product,  or the
Licensed  Trademarks,  directly or  indirectly,  for any purpose  other than the
marketing,  distribution and sale of Licensed Product hereunder.  Licensee shall
have  no  right  to  develop   Combination   Product   under   this   Agreement.
Notwithstanding anything in this Agreement to the

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contrary,  NovaDel does hereby retain the right to (a) enter into collaborations
or other  agreements  with,  and to grant  licenses  and other  rights under the
NovaDel  Patents  and  NovaDel  Know-How  to Third  Parties to Exploit  products
containing compounds other than the Designated Compounds and to use the Licensed
Process  in  connection  therewith,   and  (b)  independently  Exploit  products
containing compounds other than the Designated Compounds and to use the Licensed
Process in connection  therewith.  Notwithstanding any other provision contained
in this Agreement, NovaDel retains an irrevocable,  non-exclusive,  royalty-free
right to use the  Licensed  Technology  (including  the Licensed  Process)  with
respect to the Designated Compounds,  for its internal,  non-commercial research
and development activities.

                  2.4  SUBLICENSES.  Licensee  shall  have  the  right  to grant
sublicenses  under the  grants in Section  2.1 to Third  Parties  pursuant  to a
separate  written   agreement,   subject  to  the  following   requirements  and
conditions:

                       2.4.1  Licensee  must  obtain   NovaDel's  prior  written
consent in respect of each such sublicense,  such consent not to be unreasonably
withheld,  and any sublicense  agreement must be fully consistent with the terms
and conditions of this Agreement,  including Articles 3.10, 5, 6, 10, 11, 13 and
16, and provide that  Sublicensee  will indemnify  NovaDel and its Affiliates to
the extent provided in Article 10.

                       2.4.2  Within  five (5) days after  execution  or receipt
thereof, as applicable,  Licensee shall provide NovaDel with a full and complete
copy of each sublicense granted here

                       2.4.3  .under  and shall  deliver  copies of all  reports
(including  relating to royalties and other payments)  received by Licensee from
such Sublicensees.

                       2.4.4  Termination of this Agreement by NovaDel  pursuant
to Section  8.3 with  respect to Licensee  shall not  terminate  any  sublicense
granted by Licensee  pursuant to this Section 2.5 with respect to a Sublicensee,
provided  that (a) such  Sublicensee  is not in breach of any  provision of this
Agreement or the applicable  sublicense  agreement,  (b) such Sublicensee  shall
perform all obligations of Licensee under this Agreement, (c) NovaDel shall have
all rights with respect to any and all  Sublicensees  as it had  hereunder  with
respect to Licensee  prior to  termination  of this  Agreement  with  respect to
Licensee, (d) Licensee shall include in any sublicense a provision in which said
Sublicensee  acknowledges its obligations to NovaDel hereunder and the rights of
NovaDel to terminate this Agreement with respect to any Sublicensee for breaches
of this Agreement by such  Sublicensee.  The failure of Licensee to include in a
sublicense  the  provisions  referenced  in clause (d) shall render the affected
sublicense void ab initio.

                                   ARTICLE 3
                  DEVELOPMENT AND COMMERCIALIZATION ACTIVITIES

                  3.1 DEVELOPMENT AND COMMERCIALIZATION. Licensee shall have the
sole right and obligation to develop and  commercialize  the Licensed Product in
the  Territory.  NovaDel shall  perform or cause to be  performed,  on behalf of
Licensee,  certain  Development  Activities in  accordance  with this Article 3.
Except as set forth herein,  Licensee shall be solely  responsible

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for  all  costs  and   expenses  in   connection   with  all   development   and
commercialization activities,  including the Development Activities performed by
NovaDel on behalf of Licensee.

                  3.2 DEVELOPMENT  ACTIVITIES.  NovaDel shall not be required to
commence any Development Activities until Licensee has paid at least twenty-five
percent (25%) of the non-refundable License Fee described in Section 4.4.

                       3.2.1 GENERAL. Under the direction and supervision of the
Development  Committee,  NovaDel and Licensee each shall perform, or cause to be
performed,   its  respective  Development  Activities  in  accordance  with  the
Development  Plan and Development  Budget.  Notwithstanding  the foregoing,  the
Parties  acknowledge  and  agree  that  there  can  be no  assurances  that  the
objectives of the  Development  Activities can be achieved,  or that they can be
achieved  in the  manner  or in the time  set  forth  in the  Development  Plan.
Although  outcomes  cannot be  guaranteed,  each  Party  shall use  Commercially
Reasonable   Efforts  to  perform  or  cause  to  be  performed  its  respective
Development  Activities in good scientific  manner,  and in material  compliance
with Applicable Law.

                       3.2.2  REPORTS.  Within thirty (30) days after the end of
each calendar quarter in which Development Activities are performed,  each Party
shall provide to the  Development  Committee a written  progress  report,  which
shall  describe the  Development  Activities  it has  performed,  or cause to be
performed, during such calendar quarter, evaluate the work performed in relation
to the goals of the Development Plan and in relation to the Development  Budget,
and provide such other information as may be required by the Development Plan or
reasonably   requested  by  the  Development   Committee  with  respect  to  the
Development Activities.

                  3.3 DEVELOPMENT  PLAN AND BUDGET.  The  development  plan (the
"Development  Plan") and the development  budget (the "Development  Budget") for
the Development Activities relating to propofol are attached hereto as Exhibit B
and  Exhibit  C,  respectively.  The  Development  Committee  shall  review  the
Development  Plans and the  Development  Budgets at least monthly and shall have
the right to make such  modifications  or  updates to the  Development  Plans or
Development Budgets that it deems appropriate. The Parties acknowledge and agree
that the amounts set forth in the  Development  Budgets are estimates and, given
the unpredictability of the Development  Activities,  there can be no assurances
that the Development Activities can be completed within the Development Budgets,
provided,  however, that the Parties agree to use their Commercially  Reasonable
Efforts to adhere to the Development Budgets.

                  3.4 DEVELOPMENT COMMITTEE.

                       3.4.1  FORMATION AND AUTHORITY OF DEVELOPMENT  COMMITTEE.
NovaDel and Licensee shall establish a development  committee (the  "Development
Committee"),  which shall oversee the  Development  Activities  performed by the
Parties,  review and approve the  Development  Budget and approve any changes to
the Development Plan and Development  Budget.  Each Party shall appoint an equal
number of representatives  with the requisite experience and seniority to enable
them to make decisions on behalf of the Parties with

                                     Page 9
<PAGE>

respect  to the  Development  Activities.  From  time to time,  each  Party  may
substitute its representatives on written notice to the other Party.

                       3.4.2  PROCEDURAL  RULES OF  DEVELOPMENT  COMMITTEE.  The
Development  Committee  shall meet  monthly,  or as  otherwise  agreed to by the
Parties.  The Development  Committee shall adopt such standing rules as shall be
necessary  for its  work.  A quorum of the  Development  Committee  shall  exist
whenever there is present at a meeting at least one representative  appointed by
each Party. Members of the Development  Committee may attend a meeting either in
person  or by  telephone,  video  conference  or  similar  means in  which  each
participant can hear what is said by the other  participants.  Representation by
proxy  shall not be  allowed.  The  Development  Committee  shall take action by
unanimous consent of NovaDel and Licensee,  with each such Party having a single
vote, irrespective of the number of representatives  actually in attendance at a
meeting, or by a written resolution signed by the designated  representatives of
each of NovaDel and Licensee.

                       3.4.3 DISPUTE  RESOLUTION.  If the Development  Committee
cannot,  or does not, reach agreement on an issue,  then either Party shall have
the right to refer such issue to the Chief Executive Officers of the Parties who
shall confer on the resolution of the issue. Any final decision  mutually agreed
to by the Chief Executive  Officers of the Parties shall be in writing and shall
be conclusive and binding on the Parties. If such officers are not able to agree
on the resolution of an issue within twenty (20) days after such issue was first
referred to them,  either  Party  shall have the right to refer such  dispute to
arbitration pursuant to Article 9.

                       3.4.4 LIMITATIONS ON AUTHORITY OF DEVELOPMENT  COMMITTEE.
Each Party to this  Agreement  shall retain the rights,  powers,  and discretion
granted to it under this Agreement,  and no such rights,  powers,  or discretion
shall be  delegated  to or  vested  in the  Development  Committee  unless  such
delegation or vesting of rights is expressly  provided for in this  Agreement or
the Parties expressly so agree in writing.  The Development  Committee shall not
have the power to amend or modify this  Agreement,  which may only be amended or
modified as provided in Section 16.4.

                  3.5 REGULATORY  APPROVALS.  All INDs,  NDAs and other filings,
applications  or  requests  pursuant  to or in  connection  with the  Regulatory
Approvals  required  under  the  Development  Plan  shall be made in the name of
Licensee or its  designee,  unless  Applicable  Law  requires  that a Regulatory
Approval be solely or jointly in the name of NovaDel or its Affiliates, in which
case  NovaDel  hereby  assigns  and shall  cause its  Affiliates  to assign,  as
applicable,  such  Regulatory  Approval to Licensee to the extent  permitted  by
Applicable  Law;  provided,  however,  that  NovaDel  shall  have  a  perpetual,
irrevocable,  worldwide right to use and reference the Regulatory  Documentation
with respect to the Licensed Product and any data included or referenced therein
for all purposes.  NovaDel,  with prior notice to the  Licensee,  shall have the
right  to  communicate  with  the  Regulatory  Authorities  with  regard  to the
Development Activities.  Licensee agrees that the Drug Master File ("DMF") shall
be owned by NovaDel,  provided that Licensee shall have unlimited  access to the
DMF for purposes of any Regulatory  Filings  relating to each Licensed  Product.
Licencee  agrees to request  that the DMF be treated  as  confidential.  NovaDel
agrees to keep the Licensee  reasonably  informed as to the  communications,  if
any, between NovaDel and the Regulatory Authorities.

                                    Page 10
<PAGE>

                  3.6  REGULATORY  RECORDS.  NovaDel  and  Licensee  each  shall
maintain,  or cause to be  maintained,  records  of its  respective  Development
Activities in sufficient  detail and in good scientific  manner  appropriate for
patent and regulatory  purposes,  which shall be complete and accurate and shall
fully and properly reflect all work done and results achieved in the performance
of its respective  Development  Activities,  and which shall be retained by such
Party for at least five (5) years after the  termination of this  Agreement,  or
for such longer  period as may be required by  Applicable  Law. Each Party shall
have the right,  during normal  business hours and upon  reasonable  notice,  to
inspect and copy any such records.

                  3.7 DEVELOPMENT EXPENSES.

                       3.7.1   LICENSEE'S   OBLIGATION.   In   consideration  of
NovaDel's  performance of its Development  Activities,  Licensee shall reimburse
NovaDel for the reasonable and documented costs and expenses incurred by NovaDel
in performing such activities in accordance with the Development  Budget (as may
be amended in accordance  with Section 3.3).  Licensee  shall bear all costs and
expenses incurred by or on behalf of Licensee in connection with the performance
of its Development Activities.

                       3.7.2  INVOICES  AND  PAYMENTS.  Within  thirty (30) days
after  the end of each  month in which  Development  Activities  are  performed,
NovaDel shall invoice Licensee for any costs and expenses incurred by NovaDel or
its  Affiliates in such month.  Each invoice shall be payable to NovaDel  within
thirty (30) days after receipt by Licensee of such invoice.

                       3.7.3  BOOKS  AND  RECORDS.  Each  party  shall  maintain
complete and accurate  books,  records and accounts that, in reasonable  detail,
fairly  reflect  any  reimbursable  costs  and  expenses  incurred  by it or its
Affiliates in  performance  of the  Development  Activities  in conformity  with
Generally Accepted Accounting Principles ("GAAP").  Each party shall retain such
books, records and accounts until the later of (a) three (3) years after the end
of the period to which such books,  records and  accounts  pertain,  and (b) the
expiration  of the  applicable  tax statute of  limitations  (or any  extensions
thereof),  or for such longer period as may be required by Applicable  Law. Each
party shall have the right to have its certified public accountant, who shall be
reasonably  acceptable to NovaDel,  audit the books and financial records of the
other  party  and  their  respective  Affiliates  relating  to  its  Development
Activities  during  one or  more  calendar  quarters;  provided,  however,  that
Licensee shall not have the right to audit a calendar  quarter more than two (2)
years after the end of such quarter,  to conduct more than one such audit in any
twelve-month  period,  or to audit any  calendar  quarter  more than  once;  and
provided  further  that each party shall bear the cost of such audit  unless the
audit  reveals  a  variance  of more than five  percent  (5%) from the  reported
results,  in which case  audited  party  shall  bear the cost of the audit.  The
results of such accounting firm shall be final, absent manifest error.

                  3.8  COOPERATION.  Each Party shall cooperate with any and all
reasonable  requests  for  assistance  from the other Party with  respect to the
Development Activities, including by making its employees, consultants and other
scientific  staff available upon reasonable  notice during normal business hours
at their  respective  places of  employment  to consult with such other Party on
issues  arising  in  connection  with  the   performance  of  such   Development
Activities.

                                    Page 11
<PAGE>

                  3.9 DEVELOPMENT AND USE OF TRADEMARKS. Licensee shall have the
sole  right  to  determine  the  Trademarks  to be  used  with  respect  to  the
Exploitation  of the Licensed  Product on a worldwide  basis,  provided that the
product  labeling and promotional  materials  disclose that the Licensed Product
are delivered using the Licensed Process and include the Licensed Trademarks.

                  3.10 DILIGENCE  OBLIGATIONS.  Licensee shall use  Commercially
Reasonable  Efforts to (a) develop and commercialize the Licensed Product in the
entire  Territory in accordance with the terms and conditions of this Agreement;
(b) obtain  Regulatory  Approval(s)  with respect to the Licensed Product in the
Territory;  and (c) thereafter  diligently and aggressively Exploit the Licensed
Product in the  Territory  to maximize  sales.  Licensee  shall  ensure that any
Sublicense  be  terminable  at the  option of the  Licensee  in the event that a
Sublicensee  fails to maintain active,  diligent  marketing efforts for Licensed
Product.

                  3.11 MANUFACTURING.

                       3.11.1   Subject  to  section   3.11.4,   NovaDel   shall
manufacture and supply Licensee with Licensed Product on commercially reasonable
terms  for  clinical   development  of  the  Licensed   Product  pursuant  to  a
manufacturing  agreement  (the  "Manufacturing  Agreement")  to be entered  into
following execution of this Agreement.

                       3.11.2 Subject to section  3.11.4,  following  receipt of
Regulatory Approval, NovaDel shall manufacture and supply Licensee with Licensed
Product  on  commercially   reasonable  terms  pursuant  to  the   Manufacturing
Agreement.

                       3.11.3  NovaDel  agrees  that,  at all times  during  the
performance of the  Development  Activities,  it will act in accordance with GMP
and all applicable laws, rules and regulations.

                       3.11.4 The  manufacturing  agreement  will provide  among
other  things that in the event that  Licensee  enters into a  Sublicense  for a
Licensed  Product and such  Sublicensee  desires to obtain rights to manufacture
such Licensed Product,  then NovaDel will not unreasonably  withhold its consent
to transfer the manufacturing rights to such Sublicensee, provided that measures
are incorporated  into the  sublicensing  agreement to continue to safeguard the
confidentiality  of NovaDel Know-how and technology with respect to the Licensed
Product as set forth in section 3.11.5

                       3.11.5 It is the intent of the  Parties  that  NovaDel be
the exclusive  manufacturer of the Licensed Product pursuant to the terms of the
Manufacturing  Agreement;  provided,  however, that in the event that NovaDel is
unable or unwilling to provide clinical or commercial supply of Licensed Product
within a reasonable  period of time upon  commercially  reasonable  terms,  then
Licensee  shall be  entitled to seek  alternate  manufacturing  source.  In such
event,  Licensee shall use  commercially  reasonable  efforts to ensure that any
such  alternate   manufacturing  source  agree  (a)  to  maintain  in  strictest
confidence all information  relating to the manufacture of the
Licensed Product and the Licensed  Technology,  (b) not to file any intellectual
property  protection  relating to inventions that may arise from the manufacture
of the

                                    Page 12
<PAGE>

Licensed Product and Licensed  Technology,  and (c) that any intellectual
property  that does arise out of the  manufacture  of the  Licensed  Product and
Licensed Technology belong to NovaDel.

                                    ARTICLE 4
                        ROYALTIES AND OTHER CONSIDERATION

                  4.1  ROYALTIES.  As  partial  consideration  for  the  rights,
privileges  and  licenses  granted  hereunder  and  the  Development  Activities
performed by Licensor  pursuant to Article 3, Licensee  shall make the following
payments to NovaDel:

                       4.1.1  Licensee  shall  pay to  NovaDel  royalties  in an
amount equal to the greater of (i) *** percent (***%) of worldwide aggregate Net
Sales by Licensee or any Affiliate of Licensee of each Licensed  Product  during
each calendar year and (ii) *** percent (***%) of worldwide aggregate Net Profit
by Licensee or any  Affiliate of Licensee of each Licensed  Product  during each
calendar year.

                       4.1.2  Licensee  shall  pay to  NovaDel  (1) ***  percent
(***%) of all royalties  received by Licensee or its Affiliate from sales by any
Sublicensee of Licensed Product until such time as Licensee has recovered all of
its out-of-pocket costs incurred directly in connection with the development and
commercialization of the Licensed Product, and thereafter (2) *** percent (***%)
of all  royalties  received  by  Licensee  or its  Affiliate  from  sales by any
Sublicensee of Licensed Product;

                       4.1.3  Licensee  shall  pay to  NovaDel  (1) ***  percent
(***%) of all Sublicensing Fees until such time as Licensee has recovered all of
its out-of-pocket costs incurred directly in connection with the development and
commercialization of the Licensed Product, and thereafter (2) *** percent (***%)
of all Sublicensing Fees.

                  4.2 ROYALTY TERM. Licensee's royalty obligations under Section
4.1  shall  terminate,  on a  country-by-country  basis,  with  respect  to each
Licensed  Product upon the expiration date in such country of the last to expire
of any issued NovaDel Patent that includes at least one Valid Claim covering the
sale of such Licensed  Product in such country.  Upon termination of the royalty
obligations under this Section 4.2 in a country,  the license grants to Licensee
in Section 2.1 shall be reduced in accordance with terms in Section 4.6.

                  4.3 ROYALTY PAYMENTS.  Royalties under Section 4.1.1 and Other
Income under 4.1.2(a) shall be payable to NovaDel on a quarterly  basis,  within
forty-five (45) days after the end of each calendar quarter; provided,  however,
at the end of a calendar year Licensee  shall  determine the actual amounts owed
to NovaDel under Section  4.1.2 and any  additional  amounts owed to NovaDel for
the first three  calendar  quarters of such calendar year shall be paid with the
royalty  payment  for the last  calendar  quarter  of such  calendar  year,  and
provided  further  in the  event  that  Licensee's  payments  for such  calendar
quarters exceed the actual royalties owed for such calendar  quarters,  Licensee
shall have the right to offset such excess payments  against the royalty payment
for the last calendar  quarter of such calendar year.  Only one royalty  payment
will be due on Net Sales of the Licensed  Product  even though the  manufacture,
sale  or  use of  such  Licensed  Product  may  be  covered  by  more  than  one
intellectual property right in a country.

                                    Page 13
<PAGE>

                  4.4 LICENSEE  FEE.  Licensee  shall pay to NovaDel $ *** as an
up-front licensing fee for the Designated Compound, payable in cash as follows:

                       4.4.1 $ *** within 10 Business  Days of the first date on
which the Licensee has  received an  aggregate of  $5,000,000  through an equity
financing or otherwise  (including  receipt of any  milestone  payments or other
revenues); and

                       4.4.2 $ *** within 10 Business  Days of the first date on
which the Licensee has  received an aggregate of  $10,000,000  through an equity
financing or otherwise  (including  receipt of any  milestone  payments or other
revenues).

                  4.5 MILESTONE PAYMENTS. Licensee shall also pay to NovaDel the
following Milestone Payments:

                       4.5.1 $ *** within five (5)  Business  Days from the date
on which the  Company's  first filed NDA is accepted for review by the FDA for a
Licensed Product; and

                       4.5.2 $ *** within five (5)  Business  Days from the date
on which the Company's first filed European Marketing Application for a Licensed
Product in any country  within the European  Union is accepted for review by the
appropriate Regulatory Authority; and

                       4.5.3 $ *** within five (5)  Business  Days from the date
on which the Company's first filed NDA for a Licensed Product is approved by the
FDA; and

                       4.5.4 $ *** within five (5)  Business  Days from the date
on which the Company's first filed European Marketing Application for a Licensed
Product in any country  within the European  Union is accepted for review by the
appropriate Regulatory Authority; and

                       4.5.5 $ *** within five (5)  Business  Days from the date
on which the application for commercial  approval for the Licensed  Product with
the  appropriate  Regulatory  Authority  is  approved in each  Secondary  Market
Country

                       4.5.6 $ *** within five (5)  Business  Days from the date
on which the Company's application for regulatory approval of a Licensed Product
is approved by the  appropriate  Regulatory  Authority in any country other than
Major Market Countries or Secondary Market Countries.

                  4.6  REDUCTION  OF  PAYMENTS.  In the event that,  or from and
after  the date on which,  (a) no Valid  Claim of a NovaDel  Patent  covering  a
Licensed  Product  exists in a country and (b) no  regulatory  exclusivity  with
respect to such Licensed  Product exists in such country (whether as a result of
expiration of the exclusivity  period or otherwise),  (i) the milestone payments
set forth in Section 4.5 with respect to such Licensed Product, if any, and (ii)
the royalty rate payable to NovaDel by Licensee  under  Section 4.1 with respect
to sales of such  Licensed  Product  in such  country,  each shall be reduced by
seventy-five percent (75%).

                  4.7 MODE OF  PAYMENT.  All  payments  to  NovaDel  under  this
Agreement shall be paid in United States Dollars to a bank account in the United
States  as  NovaDel  may  reasonably  designate.  Any  withholding  taxes  which
Licensee, its Affiliates or any Sublicensee

                                    Page 14
<PAGE>

shall be required by  applicable  law to withhold on  remittance of the payments
shall be deducted  from such payment to NovaDel and remitted to the  appropriate
Regulatory Authority. Licensee shall furnish NovaDel with the original copies of
all  official  receipts  for such taxes.  If any  currency  conversion  shall be
required in connection with the payments  hereunder,  such  conversion  shall be
made by using the average of the exchange rates prevailing at Citibank,  N.A. in
New York,  New York on the first  business  day of each  month in the  reporting
period to which such payments relate.

                  4.8  NON-REFUNDABLE,   NON-CREDITABLE.  The  amounts  paid  or
payable under this Article 4 shall be non-refundable and non-creditable  against
any other amounts due NovaDel under this Agreement.

                                    ARTICLE 5
                               REPORTS AND RECORDS

                  5.1  RECORD  RETENTION.  Licensee  shall  maintain  (and shall
ensure  that its  Affiliates  and  Sublicensees  shall  maintain)  complete  and
accurate  books,  records and accounts that fairly reflect their  respective Net
Sales,  Other Income and any milestones payable with respect to Licensed Product
in sufficient detail to confirm the accuracy of any payments required  hereunder
and in accordance with GAAP, which books, records and accounts shall be retained
by  Licensee  until the later of (a) three (3) years after the end of the period
to which such books, records and accounts pertain, and (b) the expiration of the
applicable tax statute of limitations (or any extensions  thereof),  or for such
longer period as may be required by Applicable Law.

                  5.2 AUDIT. NovaDel shall have the right to have an independent
certified public accounting firm of nationally  recognized standing,  reasonably
acceptable to Licensee,  to have access during normal business  hours,  and upon
reasonable  prior  written  notice,  to such of the records of Licensee (and its
Affiliates  and  Sublicensees)  as may be  reasonably  necessary  to verify  the
accuracy  of such Net Sales,  Milestone  Payments or  Sublicense  Income for any
calendar  quarter ending not more than  thirty-six (36) months prior to the date
of such  request;  provided,  however,  that NovaDel shall not have the right to
conduct more than one such audit in any twelve (12)-month period. The accounting
firm shall  disclose  to each Party  whether  such Net  Sales,  Other  Income or
milestone  payments are correct or incorrect and the specific details concerning
any  discrepancies.  NovaDel  shall bear the cost of such audit unless the audit
reveals  an  under-reporting  or  underpayment  in excess of the  greater of one
hundred thousand dollars ($100,000) or two percent (2%) of royalties,  Milestone
Payments or Sublicense  Income  payable for such period,  in which case Licensee
shall bear the cost of the audit,  rectify  such  underpayment  and pay  NovaDel
applicable interest as required by Section 5.5. All payments required under this
Section 5.2 shall be due within  thirty (30) days of the date  NovaDel  provides
Licensee notice of the payment due. The results of such accounting firm shall be
final, absent manifest error.

                  5.3  REPORTS.  Within  thirty  (30)  days  of the  end of each
quarter of each calendar year,  Licensee  shall deliver to NovaDel  complete and
accurate reports,  giving such particulars of the business conducted by Licensee
during the preceding  quarter  under this

                                    Page 15
<PAGE>

Agreement  as shall be  pertinent  to an  accounting  for  royalties,  milestone
payments and Other Income hereunder. These shall include at least the following:

                       5.3.1 All Licensed  Product  used,  leased or sold, by or
for Licensee or its Affiliates.

                       5.3.2 Total amounts  invoiced for Licensed  Product used,
leased or sold, by or for Licensee or its Affiliates.

                       5.3.3  Deductions  applicable  in computed "Net Sales" as
defined in Section 1.33.

                       5.3.4 Total  milestone  payments due based on achievement
of milestones.

                       5.3.5 Total Sublicensing  Income owed by License from its
Sublicensees.

                       5.3.6  Total  royalties  due based on Net Sales by or for
Licensee or its Affiliates  and  Sublicensing  Income owed by its  Sublicensees,
including any adjustments pursuant to Section 4.3.

                       5.3.7  Names  and  addresses  of  all   Sublicensees  and
Affiliates of Licensee.

                  5.4 FINANCIAL STATEMENTS. Within one hundred twenty (120) days
of the end of each fiscal year of Licensee,  Licensee shall provide NovaDel with
a copy of Licensee's audited financial statements for such year to NovaDel.

                  5.5  INTEREST.  Amounts  which are not paid when due and which
are not the subject of a bona fide dispute  shall accrue  interest  from the due
date until paid, at a rate equal to the then prevailing  prime rate of Citibank,
N.A., plus six percent (6%), but in no event  exceeding the amount  permitted by
applicable law.

                  5.6 CONFIDENTIALITY.  Each report received by NovaDel shall be
treated by NovaDel as if it were "Confidential Information" subject to the terms
of Article 16.

                                    ARTICLE 6
                              PATENT AND TRADEMARK
                           PROSECUTION AND MAINTENANCE

                  6.1  OWNERSHIP  OF  INFORMATION  AND  INVENTIONS.  Subject  to
Section 6.2 and the license grants under Article 2, as between the Parties, each
Party shall own and retain all right,  title and interest in and to any and all:
(a)  Information  and Inventions  that are conceived,  discovered,  developed or
otherwise  made  by or on  behalf  of  such  Party  (or  its  Affiliates  or its
Sublicensees  (other than the other Party and its  Affiliates)),  whether or not
patented or patentable,  and any and all Patent and other intellectual  property
rights with respect  thereto;  and (b) other  Information  and  Inventions,  and
Patent and other  intellectual  property rights that are Controlled  (other than
pursuant  to the  license  grants  set forth in Article  2) by such  Party,  its

                                    Page 16
<PAGE>

Affiliates  or  Sublicensees  (other than the other  Party and its  Affiliates).
Subject to the  license  grants to  Licensee  under  Article  2, as between  the
Parties,  NovaDel  shall own and retain all right,  title and interest in and to
all Licensed Technology.

                  6.2 OWNERSHIP OF THE LICENSED PROCESS.  Subject to the license
grants to Licensee  under  Article 2, as between the Parties,  NovaDel shall own
and  retain  all  right,  title and  interest  in and to the  Licensed  Process,
including any and all  Information  and Inventions  with respect to the Licensed
Process  (including any  Improvements  thereto) that are conceived,  discovered,
developed or otherwise  made,  by or on behalf of Licensee,  its  Affiliates  or
Sublicensees (other than NovaDel and its Affiliates), whether or not patented or
patentable,  and any and all Patent and other intellectual  property rights with
respect thereto.  Licensee acknowledges and agrees that (a) the licenses granted
to it pursuant to Section 2.1 permit Licensee to use the Licensed Process solely
for the  Exploitation  of Licensed  Product as provided in this  Agreement,  (b)
Licensee  has no right to use the Licensed  Process or to  discover,  develop or
otherwise  make  Improvements  with respect to the Licensed  Process  under such
grants,  and (c) neither it, nor any of its  Affiliates  or  Sublicensees,  will
engage,  directly  or  indirectly,  in  activities  designed  to,  or  otherwise
undertake  or  attempt,  either on behalf of  itself or  another,  to  discover,
develop or make any  Information  and  Inventions  that  relate to the  Licensed
Process.  Accordingly,  Licensee shall promptly  disclose to NovaDel in writing,
the conception or reduction to practice, or the discovery, development or making
of any such  Information and Inventions that relate to the Licensed  Process and
shall, and does hereby,  assign, and shall cause its Affiliates and Sublicensees
to so  assign,  to  NovaDel,  without  additional  compensation,  all  of  their
respective  rights,  titles and  interests  in and to any such  Information  and
Inventions.

                  6.3 OWNERSHIP OF JOINT TECHNOLOGY.  Subject to Section 6.2 and
the  license  grants  under  Article  2, the  Parties  shall  each own an equal,
undivided  interest  in and to any  and  all  (a)  Information  and  Inventions,
conceived,  discovered,  developed or otherwise made, jointly by or on behalf of
NovaDel (or its Affiliates or its  sublicensees),  on the one hand, and Licensee
(or its Affiliates or  Sublicensees),  on the other hand, in connection with the
work  conducted  under or in  connection  with this  Agreement,  whether  or not
patented  or  patentable;  and (b)  Patents  (the  "Joint  Patents")  and  other
intellectual  property  rights with respect  thereto  (collectively,  the "Joint
Technology").  Each Party shall promptly disclose to the other Party in writing,
and shall cause its Affiliates,  licensees and sublicensees to so disclose,  the
development,   making,   conception  or  reduction  to  practice  of  any  Joint
Technology.

                  6.4 OWNERSHIP OF LICENSED  TRADEMARKS.  Subject to the license
grants under Article 2, as between the Parties, NovaDel shall own and retain all
right,  title and interest in and to the Licensed  Trademarks.  Licensee  hereby
acknowledges  and affirms (a) that to the best of its  knowledge,  the  Licensed
Trademarks and the  registrations  thereof are valid and (b) that NovaDel or its
Affiliates,  as the case may be,  are the  owners  of all right and title to and
interest in the Licensed Trademarks and the registrations thereof, including any
form or embodiment thereof,  and the goodwill now and hereafter  associated with
the  Licensed  Trademarks.  Licensee  (on its own  behalf  and on  behalf of its
Affiliates)  expressly  disclaims  any  right  or title  to or  interest  in the
Licensed  Trademarks  and the  registrations  thereof,  except  for the  license
granted in Section 2.1.2.  Licensee  hereby agrees and  undertakes  that it will
not, and it will cause its  Affiliates  not to,  contest or dispute the validity
of, or the rights of NovaDel and its Affiliates,  as the case may be, in and to,
the Licensed Trademarks,  or any part thereof, or the registrations thereof, nor

                                    Page 17
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knowingly  impair or endanger  the  validity of any of the  foregoing.  Licensee
acknowledges that all use of the Licensed Trademarks by or on behalf of Licensee
or its Affiliates shall inure to the benefit of NovaDel and its Affiliates. Upon
termination of the license granted in Section 2.1.2, Licensee and its Affiliates
shall not be entitled to any  compensation  for any increase in the value of the
Licensed Trademarks or for any goodwill associated  therewith.  If so requested,
Licensee  shall,  and shall  cause its  Affiliates  to,  assist  NovaDel and its
Affiliates  to  safeguard  their full  right,  title and  interest in and to the
Licensed Trademarks and the registrations thereof.

                  6.5  UNITED   STATES  LAW.   The   determination   of  whether
Information  and Inventions are  conceived,  discovered,  developed or otherwise
made by a Party for the  purpose of  allocating  proprietary  rights  (including
Patent,  copyright or other  intellectual  property rights) therein,  shall, for
purposes of this Agreement,  be made in accordance with applicable United States
law.

                  6.6 PROSECUTION OF PATENTS AND TRADEMARKS.

                       6.6.1  PROSECUTION OF NOVADEL PATENTS AND TRADEMARKS.  As
between the Parties, NovaDel shall have the sole right, at its cost and expense,
to obtain,  prosecute and maintain  throughout the world the NovaDel Patents and
Licensed Trademarks;  provided,  however,  that Licensee shall reimburse NovaDel
for one hundred percent (100%) of the reasonable out-of-pocket costs incurred by
NovaDel for filing,  prosecuting  and  maintaining  such NovaDel  Patents to the
extent that they claim or cover solely the Exploitation of the Licensed Product.
Licensee shall, and shall cause its Affiliates and Sublicensees,  as applicable,
to, cooperate fully with NovaDel in the preparation,  filing,  prosecution,  and
maintenance  of  NovaDel's  Patents.  Such  cooperation  includes  (a)  promptly
executing all papers and  instruments  and  requiring  employees to execute such
papers and  instruments as reasonable and appropriate so as to enable NovaDel to
file,  prosecute,  and  maintain  its Patents in any  country;  and (b) promptly
informing   NovaDel  of  matters  that  may  affect  the  preparation,   filing,
prosecution,  or maintenance of any such Patents. NovaDel shall provide Licensee
with drafts of all patent  applications  and other  material  submissions to and
correspondence  with any patent  authorities to the extent such  applications or
submissions relate to the Licensed Technology (other than the Licensed Process),
in sufficient time, but in any event not less than thirty (30) days prior to the
date a reply is required by the relevant patent authorities, to allow for review
and comment by Licensee.  In addition,  NovaDel shall  provide  Licensee with an
opportunity  to consult  with NovaDel  regarding  the filing and contents of any
such application,  submission or correspondence. If Licensee provides to NovaDel
comments with respect to any such application,  submission or correspondence, to
the extent  such  comments  relate to any  Licensed  Technology  (other than the
Licensed Process), NovaDel agrees to reasonably consider such comments, it being
understood that NovaDel retains the right to determine whether to comply with or
incorporate  such  comments,  if at all. If (x) NovaDel elects not to pursue the
filing,  prosecution or maintenance of a NovaDel Patent in a particular country,
or to take any other  action with  respect to a NovaDel  Patent in a  particular
country that is necessary or useful to establish or preserve rights with respect
to the  Licensed  Product,  and (y)  such  Patent  does not  claim or cover  the
Licensed Process,  then NovaDel shall so notify Licensee promptly in writing and
in good time to enable Licensee to meet any deadlines by which an action must be
taken to establish  or preserve  any such rights in such NovaDel  Patent in such
country.  Upon receipt of any such notice by NovaDel or if, at any time, NovaDel
fails to  initiate  any such action  within

                                    Page 18
<PAGE>

thirty  (30) days  after a request  by  Licensee  that it do so (and  thereafter
diligently  pursue  such  action),  Licensee  shall have the right,  but not the
obligation,  to pursue the filing or  registration,  or  support  the  continued
prosecution  or  maintenance,  of such  NovaDel  Patent at its  expense  in such
country.  If Licensee elects to pursue such filing or registration,  as the case
may be, or continue such support,  then  Licensee  shall notify  NovaDel of such
election and NovaDel  shall,  and shall cause its  Affiliates to, (x) reasonably
cooperate  with  Licensee in this regard,  and (y)  promptly  grant to Licensee,
without  additional  consideration,   an  exclusive,   perpetual,   irrevocable,
royalty-free license in such country under such NovaDel Patent.

                       6.6.2 JOINT  PATENTS.  The Parties shall  cooperate,  and
shall cause their  respective  Affiliates and  Sublicensees,  as applicable,  to
cooperate,  with  one  another  with  respect  to the  filing,  prosecution  and
maintenance  of all Joint  Patents,  including  by  selecting  outside  counsel,
reasonably  acceptable to the Parties,  to handle such filing,  prosecution  and
maintenance. The Parties shall share equally in the expenses associated with the
filing,  prosecution  (including  any  interferences,  reissue  proceedings  and
reexaminations)  and maintenance of all Joint Patents.  If a Party elects not to
pursue the filing,  prosecution or maintenance of a Joint Patent in a particular
country,  or to take any other  action  with  respect to Joint  Technology  in a
particular  country  that is  necessary  or  reasonably  useful to  establish or
preserve rights  thereto,  then in each such case such Party shall so notify the
other  Party  promptly in writing and in good time to enable such other Party to
meet any deadlines by which an action must be taken to establish or preserve any
such rights in such Joint Technology in such country.  Upon receipt of each such
notice by such other Party or if, at any time,  such Party fails to initiate any
such action  within thirty (30) days after a request by such other Party that it
do so (or thereafter diligently pursue such action), such other Party shall have
the right,  but not the  obligation,  to pursue the filing or  registration,  or
support the continued prosecution or maintenance,  of such Patent at its expense
in  such  country.  If  such  other  Party  elects  to  pursue  such  filing  or
registration,  as the case may be, or  continue  such  support,  then such other
Party shall notify such Party of such  election and such Party shall,  and shall
cause its  Affiliates,  licensees  and  sublicensees,  as  applicable,  to,  (x)
reasonably  cooperate  with such other Party in this  regard,  and (y)  promptly
release or assign to such other Party,  without  compensation,  all right, title
and interest in and to such Patent in such country.

                  6.7 ENFORCEMENT OF PATENTS AND TRADEMARKS.

                       6.7.1  TECHNOLOGY  AND  TRADEMARKS OF NOVADEL.  If either
Party  determines  that any  Technology  or  Trademark  of  NovaDel or any Joint
Technology  is being  infringed  by a Third  Party's  activities  and that  such
infringement could affect the exercise by the Parties of their respective rights
and obligations under this Agreement,  it shall promptly notify such other Party
in writing and provide such other Party with any  evidence of such  infringement
that is reasonably available. Promptly after the receipt of such written notice,
the  Parties  shall  meet  and  discuss  in  good  faith  the  removal  of  such
infringement.  NovaDel  shall  consider in good faith any comments from Licensee
and shall keep  Licensee  reasonably  informed of any steps taken to remove such
infringement.  NovaDel shall have the first right,  but not the  obligation,  to
remove such infringement at its sole cost and expense;  provided,  however, that
Licensee  shall  reimburse  NovaDel  for  one  hundred  percent  (100%)  of  the
reasonable  out-of-pocket  costs incurred by NovaDel with respect to the removal
of any such infringement to the extent that such infringement  adversely affects
the Exploitation of the Licensed Product. In the

                                    Page 19
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event that  NovaDel  fails  within  ninety  (90) days  following  notice of such
infringement, or earlier notifies Licensee in writing of its intent not, to take
commercially appropriate steps to remove any infringement of any NovaDel Patent,
Joint  Patent or Licensed  Trademark  that is likely to have a material  adverse
effect on the sale of a Licensed Product, Licensee shall have the right to do so
at  Licensee's  expense;  provided,  however,  that  if  NovaDel  has  commenced
negotiations with an alleged  infringer for  discontinuance of such infringement
within such ninety (90) day period, NovaDel shall have an additional ninety (90)
days to  conclude  its  negotiations  before  Licensee  may bring  suit for such
infringement,  and  provided  further  that  Licensee  shall not enter  into any
settlement or  compromise  with respect to any NovaDel  Patent,  Joint Patent or
Licensed  Trademark without NovaDel's prior consent,  which consent shall not be
unreasonably  withheld.  Each Party shall provide  reasonable  assistance to the
other  Party,  including  providing  access  to  relevant  documents  and  other
evidence,  making its employees  available at  reasonable  business  hours,  and
joining  the  action to the extent  necessary  to allow the  enforcing  Party to
maintain the action.  Any amounts recovered by a Party pursuant to this Section,
whether by  settlement  or judgment,  shall be used to reimburse the Parties for
their reasonable costs and expenses in making such recovery (which amounts shall
be allocated pro rata if  insufficient  to cover the totality of such expenses),
with any  remainder  being  retained by the Party that  brought the  enforcement
action; provided,  however, that to the extent that any award is attributable to
the loss of sales of Licensed Product, such amount shall be paid to Licensee and
shall be treated as Net Sales on which royalties shall be due under Article 4.

                  6.8 POTENTIAL THIRD PARTY RIGHTS.

                       6.8.1  THIRD-PARTY  LICENSES.  If (a) in the  opinion  of
outside  patent  counsel to  Licensee,  Licensee,  or any of its  Affiliates  or
Sublicensees,  cannot  Exploit a Licensed  Product in a country in the Territory
without infringing one or more Patents that have issued to a Third Party in such
country,  or (b) as a result of any claim  made  against a Party,  or any of its
Affiliates or Sublicensees, alleging that the Exploitation of a Licensed Product
infringes or misappropriates any Patent or any other intellectual property right
of a Third Party in a country in the Territory, a judgment is entered by a court
of  competent  jurisdiction  from  which  no  appeal  is taken  within  the time
permitted for appeal, such that Licensee cannot Exploit such Licensed Product in
such country without  infringing the Patent or other proprietary  rights of such
Third Party, then, in either case,  Licensee shall have the first right, but not
the  obligation  to  negotiate  and to obtain a license from such Third Party as
necessary  for  the  Exploitation  of any  Licensed  Product  hereunder  in such
country;  provided,  however, that NovaDel shall have the sole right to seek any
such license with  respect to the  Licensed  Process and shall use  commercially
reasonable  efforts  to obtain  such a license  in its own name from such  Third
Party in such country,  under which  NovaDel  shall,  to the extent  permissible
under such  license,  grant a sublicense  to Licensee as necessary for Licensee,
and any of its Affiliates and  Sublicensees,  to Exploit the Licensed Product as
provided hereunder in such country. Licensee shall be solely responsible for one
hundred percent (100%) of all royalty and other  obligations with respect to the
Exploitation of the Licensed  Product;  provided,  however,  that Licensee shall
have the right to credit fifty percent (50%) any royalties paid by Licensee, its
Affiliates  or  Sublicensees  under such  license  with  respect to such country
against the royalty  payments to be paid by Licensee to NovaDel  with respect to
the sale of the Licensed Product(s) under Section 4.1; provided,  however,  that
no  royalty  payment  when due,  regardless  of the  amount or number of credits
available to Licensee in  accordance  with this  Agreement,  shall be reduced by
more than fifty

                                    Page 20
<PAGE>

percent  (50%) of the  amounts  otherwise  owed  pursuant  to Section 4.1 in any
calendar  quarter.  Credits not exhausted in any calendar quarter may be carried
into future calendar quarters.

                       6.8.2 THIRD PARTY  LITIGATION.  In the event that a Third
Party institutes a patent,  trademark or other  infringement suit (including any
suit alleging the  invalidity or  unenforceability  of the Patents of a Party or
its  Affiliates,  or claiming  confusion,  deception or dilution of a Trademark)
against either Party or its  respective  Affiliates,  licensees or  Sublicensees
during the Term, alleging use of the Licensed Technology, Licensed Trademarks or
any other activities hereunder, infringes one or more patent, trademark or other
intellectual  property rights held by such Third Party (an "Infringement Suit"),
the Parties shall  cooperate  with one another in defending  such suit.  NovaDel
shall have the first right to direct and control  any  Infringement  Suit to the
extent  that it  relates to the use of the  Licensed  Technology,  the  Licensed
Trademarks  or the  Licensed  Process;  provided  that  Licensee  shall bear one
hundred  percent  (100%)  of the  costs and  expenses  associated  with any such
Infringement  Suit to the  extent  that it relates  to the  Exploitation  of the
Licensed Product.

                       6.8.3 RETAINED RIGHTS.  Nothing in this Section 6.8 shall
prevent Licensee, at its own expense, from obtaining any license or other rights
from  Third  Parties  it  deems  appropriate  in order  to  permit  the full and
unhindered exercise of its rights under this Agreement.

                                    ARTICLE 7
                              TERM OF THE AGREEMENT

                  7.1 TERM. Unless otherwise  terminated  pursuant to Article 8,
this Agreement shall enter into effect on the Effective Date and shall remain in
full force and effect on a  country-by-country  basis until the later of (a) the
expiration date of the last to expire of any issued NovaDel Patent that includes
at least  one  Valid  Claim  and (b) the  twentieth  (20th)  anniversary  of the
Effective Date.

                                    ARTICLE 8
                                   TERMINATION

                  8.1  TERMINATION  UPON  INSOLVENCY.  If Licensee  shall become
bankrupt,  or  shall  file  a  petition  in  bankruptcy  or  insolvency  or  for
reorganization  or for an  arrangement  or for the  appointment of a receiver or
trustee or of its assets, or if an involuntary petition for any of the foregoing
shall be filed with  respect to Licensee  and not  dismissed  within  sixty (60)
days, or if the business of Licensee shall be placed in the hands of a receiver,
assignee or trustee for the benefit of  creditors,  whether by the voluntary act
of Licensee or otherwise, this Agreement shall automatically terminate.

                  8.2 TERMINATION FOR PAYMENT  DEFAULT.  Should Licensee fail to
make payment to NovaDel of royalties or other amounts due in accordance with the
terms of this  Agreement,  NovaDel  shall  have  the  right  to  terminate  this
Agreement  within ten (10) days after giving said notice of  termination  unless
Licensee shall pay to NovaDel,  within the 10-day  period,  all such amounts due
and payable.  Upon the  expiration of the 10-day  period,  if Licensee shall

                                    Page 21
<PAGE>

not have paid all such  amounts  due and  payable,  the rights,  privileges  and
licenses  granted  hereunder  shall,  at  the  option  of  NovaDel,  immediately
terminate.  In the event a payment is the subject of a bona fide dispute between
NovaDel and Licensee  that is being  pursued by a Party  pursuant to the dispute
resolution  mechanism in Article 9, then Licensee  shall make such payment,  but
shall  provide  NovaDel  with  written  notice  that such  payment is being made
subject to the outcome of such pending dispute  resolution  procedure and in the
event such  dispute is finally and  conclusively  resolved in favor of Licensee,
NovaDel shall refund such payment to Licensee with interest  calculated pursuant
to Section 5.5 from the date of such payment.

                  8.3 TERMINATION FOR MATERIAL BREACH.  Upon any material breach
or  default  of this  Agreement  by  either  Party,  other  than as set forth in
Sections 8.1 or 8.2 above,  and subject to Section 2.4.3,  the other Party shall
have the right to  terminate  this  Agreement  and the  rights,  privileges  and
licenses granted  hereunder upon giving thirty (30) days notice to the breaching
Party.  Such  termination  shall become  effective  upon the  expiration of such
thirty  (30)-day  period  unless the  breaching  Party shall have cured any such
breach or default prior to the expiration of such thirty (30) day period.

                  8.4 FAILURE TO OBTAIN FINANCING.  Notwithstanding  anything to
the contrary  herein,  should Licensee fail to obtain financing in the amount of
Five Million Dollars (US$5,000,000) (the "Minimum Financing") by March 31, 2004,
NovaDel  shall have the right,  which  right shall  continue  until such time as
Licensee obtains the Minimum Financing,  but not the obligation,  to immediately
terminate this Agreement upon written notice to Licensee.

                  8.5  TERMINATION BY THE LICENSEE.  The Licensee shall have the
right at any time to  terminate  this  Agreement  in whole or as to any Licensed
Product by giving 90 days notice thereof in writing to NovaDel.

                  8.6 SURVIVAL.  Any expiration or termination of this Agreement
shall not affect the rights and obligations of the Parties accrued prior to such
expiration or termination.  Without limiting the foregoing, Articles 4, 5, 6, 9,
10, 11, 14, 15 and 16 and Sections 8.6, 8.7, 8.8, 16.1,  16.7 and this 8.6 shall
survive the termination or expiration of this Agreement for any reason.

                  8.7 WORK-IN-PROGRESS.  Licensee and/or any Sublicensee thereof
may, however,  after the effective date of such termination and continuing for a
period not to exceed  six (6) months  thereafter,  sell all  completed  Licensed
Product,  and any Licensed  Product in the process of manufacture at the time of
such termination,  and sell the same,  provided that Licensee shall pay or cause
to be paid to NovaDel  the  royalties  thereon as  required by Article 4 of this
Agreement and shall submit the reports required by Article 5 hereof on the sales
of Licensed Product.

                  8.8 RETURN OF INFORMATION; ASSIGNMENT AND LICENSE.

                       8.8.1 Upon termination of this Agreement, Licensee shall,
and shall cause its Affiliates  and  Sublicensees,  as applicable,  to return to
NovaDel any and all data,  files,  records and other materials in its possession
or control  that  relate to the  Licensed  Technology  or  contain  or  comprise
NovaDel's  Information and Inventions or other Confidential  Information (except
one copy of each that may be retained for archival purposes).

                                    Page 22
<PAGE>

                       8.8.2 Upon the  termination of this  Agreement,  Licensee
(a) shall,  and shall  cause its  Affiliates  and,  subject  to  Section  8.8.3,
Sublicensees  to,  promptly  disclose to NovaDel,  in whatever  form NovaDel may
request,  all Regulatory  Documentation and all other Information and Inventions
in the possession or Control of Licensee,  its Affiliates or  Sublicensees  that
relate to the Exploitation of such Licensed Product, (b) shall, and does hereby,
assign,   and  shall  cause  its  Affiliates  and,  subject  to  Section  8.8.3,
Sublicensees to assign,  to NovaDel,  without  additional  compensation,  all of
their respective rights,  titles and interests in and to any and all (i) patent,
trademark,  copyright or other  intellectual  property  rights,  (ii) Regulatory
Documentation  and all data  included  or  referenced  therein,  and (iii) other
Information  and  Inventions  in the  possession  or  Control of  Licensee,  its
Affiliates or Sublicensees, in each case that relate to the Exploitation of such
Licensed  Product  (the  "Agreement-Related  Assets")  and are  permitted  to be
assigned,  and (c) to the extent  that the  Agreement-Related  Assets may not be
assigned,  shall,  and does hereby,  grant,  and shall cause its Affiliates and,
subject to Section 8.8.3,  Sublicensees to grant, to NovaDel, without additional
compensation, a perpetual, irrevocable,  royalty-free, exclusive, sublicenseable
through  multiple  tiers of  sublicensees,  right and  license to  Exploit  such
Licensed Product in the Territory.

                       8.8.3 Notwithstanding anything contained in Section 8.8.1
or 8.8.2, in the event that any sublicense granted by Licensee survives pursuant
to Section 2.4.3,  the  Sublicensee may retain (a) the information and materials
identified  in  Section  8.8.1 that are  rightfully  in its  possession  and (b)
Agreement-Related Assets, in each case until the termination of such sublicense,
whereupon such Sublicensee shall return such materials to NovaDel,.

                  8.9 CUMULATIVE REMEDIES.  The rights and remedies set forth in
this  Article 8 are  cumulative  and in addition to any other rights that may be
available to the Parties.

                  8.10  NON-REFUNDABILITY  OF MILESTONES AND DEVELOPMENT  COSTS.
Any and all Milestone  Payments made to NovaDel by Licensee under Article 4.5 of
this  Agreement  shall be  non-refundable  in the event of  termination  of this
Agreement  by either party under any of the  provisions  of Article 8 other than
Article 8.5.

                                    ARTICLE 9
                                   ARBITRATION

                  9.1  PROCEDURES.  Any dispute arising from or relating to this
Agreement  shall be  determined  before a tribunal of three  arbitrators  in New
York,  New York in  accordance  with  the  Commercial  Arbitration  Rules of the
American  Arbitration  Association (the "AAA"). One arbitrator shall be selected
by  NovaDel,  one  arbitrator  shall  be  selected  by  Licensee  and the  third
arbitrator shall be selected by mutual agreement of the first two arbitrators or
by the AAA, if the  arbitrators  appointed by the Parties are unable to select a
third arbitrator within thirty (30) days.

                  9.2  PATENT  DISPUTES.  Any  claim,  dispute,  or  controversy
concerning the validity, enforceability, or infringement of any patent contained
in the NovaDel Patents licensed  hereunder shall be resolved in any court having
jurisdiction  thereof.  In the event that, in any  arbitration  proceeding,  any
issue shall arise  concerning the validity,  enforceability,  or infringement of
any patent contained in the NovaDel Patents licensed hereunder,  the arbitrators

                                    Page 23
<PAGE>

shall,  to  the  extent  possible,  resolve  all  issues  other  than  validity,
enforceability,  and infringement; in any event, the arbitrators shall not delay
the  arbitration  proceeding  for the purpose of obtaining or permitting  either
Party to obtain judicial resolution of such issues,  unless an order staying the
arbitration  proceeding  shall be entered by a court of competent  jurisdiction.
Neither Party shall raise any issue concerning the validity,  enforceability, or
infringement of any patent contained in the NovaDel Patents licensed  hereunder,
in  any  proceeding  to  enforce  any  arbitration  award  hereunder,  or in any
proceeding otherwise arising out of any such arbitration award.

                  9.3  COSTS.  The  costs  of such  arbitration  shall  be borne
proportionate  to the finding of fault as determined by the  arbitration  panel.
Judgment  on the  arbitration  award may be  entered  by any court of  competent
jurisdiction.

                                   ARTICLE 10
                          INDEMNIFICATION AND INSURANCE

                  10.1  INDEMNIFICATION  OF  NOVADEL.   Licensee  shall  defend,
indemnify and hold NovaDel,  its  Affiliates,  and their  respective  directors,
officers, employees and agents harmless from and against all liability, demands,
damages,  including expenses or losses including death, personal injury, illness
or property damage  (collectively,  "Losses") arising directly or indirectly out
of any: (a) breach of this Agreement by Licensee,  its Affiliates,  Sublicensees
or  permitted  assigns or  transferees;  (b) actual or  asserted  violations  of
Applicable Law by Licensee, its Affiliates,  Sublicensees or permitted assignees
or transferees;  (c) use by Licensee, its Affiliates,  Sublicensees or permitted
assignees or transferees of the Licensed  Technology or (d)  Exploitation of the
Licensed  Product  by  Licensee,  its  Affiliates,   Sublicensees  or  permitted
assignees  or  transferees,  except for those  Losses for which  NovaDel  has an
obligation to indemnify Licensee and its Affiliates pursuant to Section 10.2, as
to which  Losses  each Party  shall  indemnify  the other to the extent of their
respective  liability  for the Losses  and other  than as a result of  NovaDel's
gross negligence, recklessness or willful misconduct.

                  10.2  INDEMNIFICATION  OF  LICENSEE.   NovaDel  shall  defend,
indemnify and hold Licensee,  its Affiliates,  and their  respective  directors,
officers,  employees  and agents  harmless  from and against all Losses  arising
directly or  indirectly  out of any: (a) breach of this  Agreement by NovaDel or
its  Affiliates;  or (b) actual or  asserted  violations  of  Applicable  Law by
NovaDel or its  Affiliates,  except for those  Losses for which  Licensee has an
obligation to indemnify NovaDel and its Affiliates  pursuant to Section 10.1, as
to which  Losses  each Party  shall  indemnify  the other to the extent of their
respective liability for the Losses.

                  10.3 INDEMNIFICATION PROCEDURE.

                       10.3.1 NOTICE OF CLAIM. The indemnified  Party shall give
the indemnifying Party prompt written notice (an "Indemnification Claim Notice")
of any Losses or discovery of fact upon which such indemnified  Party intends to
base a request for indemnification under Section 10.1 or Section 10.2, but in no
event shall the indemnifying Party be liable for any Losses that result from any
delay in providing such notice. Each Indemnification Claim Notice must contain a
description  of the claim and the  nature and amount

                                    Page 24
<PAGE>

of such Loss (to the extent  that the nature and amount of such Loss is known at
such time).  The indemnified  Party shall furnish  promptly to the  indemnifying
Party  copies of all papers and  official  documents  received in respect of any
Losses.  All  indemnification  claims in respect of a Party,  its  Affiliates or
their respective directors,  officers, employees and agents shall be made solely
by such Party to this Agreement (the "Indemnified Party").

                       10.3.2  THIRD  PARTY  CLAIMS.   The   obligations  of  an
indemnifying  Party under this  Article 10 with  respect to Losses  arising from
claims of any Third Party that are subject to indemnification as provided for in
Sections  10.1 or 10.2 (a  "Third  Party  Claim")  shall be  governed  by and be
contingent upon the following additional terms and conditions:

                            (A)   CONTROL  OF  DEFENSE.   At  its  option,   the
indemnifying  Party may assume the  defense of any Third  Party  Claim by giving
written  notice to the  Indemnified  Party  within  thirty  (30) days  after the
indemnifying Party's receipt of an Indemnification  Claim Notice. The assumption
of the  defense of a Third Party  Claim by the  indemnifying  Party shall not be
construed  as an  acknowledgment  that  the  indemnifying  Party  is  liable  to
indemnify any indemnified  Party in respect of the Third Party Claim,  nor shall
it constitute a waiver by the  indemnifying  Party of any defenses it may assert
against any  indemnified  Party's claim for  indemnification.  Upon assuming the
defense of a Third  Party  Claim,  the  indemnifying  Party may  appoint as lead
counsel in the defense of the Third Party  Claim any legal  counsel  selected by
the indemnifying  Party. In the event the indemnifying Party assumes the defense
of a Third Party Claim, the Indemnified Party shall  immediately  deliver to the
indemnifying  Party all original notices and documents  (including court papers)
received by any  indemnified  Party in  connection  with the Third Party  Claim.
Should the  indemnifying  Party assume the defense of a Third Party  Claim,  the
indemnifying  Party  shall not be liable to the  Indemnified  Party or any other
indemnified  Party  for  any  legal  expenses   subsequently  incurred  by  such
indemnified Party in connection with the analysis,  defense or settlement of the
Third  Party  Claim.  In the event  that it is  ultimately  determined  that the
indemnifying  Party is not  obligated to  indemnify,  defend or hold harmless an
Indemnified  Party from and against the Third Party Claim, the Indemnified Party
shall  reimburse  the  indemnifying  Party for any and all  costs  and  expenses
(including  attorneys'  fees and costs of suit) and any Losses  incurred  by the
indemnifying  Party in its defense of the Third Party Claim with respect to such
Indemnified Party.

                            (B)  RIGHT  TO  PARTICIPATE   IN  DEFENSE.   Without
limiting  Section  10.3.2(a),   any  Indemnified  Party  shall  be  entitled  to
participate  in, but not  control,  the defense of such Third Party Claim and to
employ  counsel of its choice for such  purpose;  provided,  however,  that such
employment  shall be at the  Indemnified  Party's  own  expense  unless  (i) the
employment thereof has been specifically authorized by the indemnifying Party in
writing or (ii) the  indemnifying  Party has failed to assume  the  defense  and
employ  counsel  in  accordance  with  Section  10.3.2(a)  (in  which  case  the
Indemnified Party shall control the defense).

                            (C) SETTLEMENT.  With respect to any Losses relating
solely to the payment of money  damages in  connection  with a Third Party Claim
and that  will  not  result  in the  Indemnified  Party's  becoming  subject  to
injunctive  or other  relief or otherwise  adversely  affect the business of the
Indemnified  Party in any manner,  and as to which the indemnifying  Party shall
have  acknowledged in writing the obligation to indemnify the Indemnified  Party
hereunder,  the  indemnifying  Party shall have the sole right to consent to the
entry of any

                                    Page 25
<PAGE>

judgment,  enter into any settlement or otherwise  dispose of such Loss, on such
terms as the indemnifying Party, in its sole discretion, shall deem appropriate.
With respect to all other Losses in connection  with Third Party  Claims,  where
the  indemnifying  Party has  assumed  the  defense of the Third  Party Claim in
accordance with Section  10.3.2(a),  the indemnifying Party shall have authority
to consent to the entry of any judgment,  enter into any settlement or otherwise
dispose  of such Loss  provided  it  obtains  the prior  written  consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed).
The  indemnifying  Party  shall  not be  liable  for  any  settlement  or  other
disposition  of a Loss by an  indemnified  Party  that is  reached  without  the
written  consent  of  the   indemnifying   Party.   Regardless  of  whether  the
indemnifying  Party  chooses to defend or prosecute  any Third Party  Claim,  no
indemnified  Party  shall  admit any  liability  with  respect  to,  or  settle,
compromise or discharge, any Third Party Claim without the prior written consent
of the indemnifying Party.

                            (D)   COOPERATION.   Regardless   of   whether   the
indemnifying  Party  chooses to defend or prosecute  any Third Party Claim,  the
Indemnified  Party  shall,  and shall  cause  each other  indemnified  Party to,
cooperate in the defense or prosecution  thereof and shall furnish such records,
information and testimony,  provide such witnesses and attend such  conferences,
discovery  proceedings,  hearings,  trials  and  appeals  as may  be  reasonably
requested in connection therewith.  Such cooperation shall include access during
normal  business  hours  afforded  to  indemnifying  Party  to,  and  reasonable
retention  by the  Indemnified  Party  of,  records  and  information  that  are
reasonably  relevant to such Third Party Claim, and making  indemnified  Parties
and other  employees  and agents  available  on a mutually  convenient  basis to
provide  additional   information  and  explanation  of  any  material  provided
hereunder,  and the indemnifying Party shall reimburse the Indemnified Party for
all its reasonable out-of-pocket expenses in connection therewith.

                            (E) EXPENSES.  Except as provided  above,  the costs
and  expenses,  including  fees and  disbursements  of counsel,  incurred by the
Indemnified Party in connection with any claim shall be reimbursed on a calendar
quarter basis by the indemnifying  Party,  without prejudice to the indemnifying
Party's right to contest the Indemnified  Party's right to  indemnification  and
subject to refund in the event the indemnifying  Party is ultimately held not to
be obligated to indemnify the Indemnified Party.

                  10.4 INSURANCE.

                       10.4.1 Prior to entering human clinical trials,  Licensee
shall have and maintain  such type and amounts of liability  insurance  covering
the manufacture,  supply,  use and sale of the Licensed Product as is normal and
customary  in  the  pharmaceutical  industry  generally  for  parties  similarly
situated,  and shall upon request provide NovaDel with a copy of its policies of
insurance in that regard, along with any amendments and revisions thereto.

                       10.4.2 At all times  during the  Development  Activities,
NovaDel  shall have and maintain  such type and amounts of  liability  insurance
covering the  manufacture,  supply,  use and sale of the Licensed  Product as is
normal and  customary  in the  pharmaceutical  industry  generally  for  parties
similarly  situated,  and shall upon request provide the Licensee with

                                    Page 26
<PAGE>

a copy of its policies of insurance  in that regard,  along with any  amendments
and revisions thereto.

                                   ARTICLE 11
                         REPRESENTATIONS AND WARRANTIES;
                             LIMITATION OF LIABILITY

                  11.1  REPRESENTATIONS,  WARRANTIES AND  COVENANTS.  Each Party
hereby  represents  and warrants to the other Party as of the Effective  Date as
follows:

                       11.1.1 DULY ORGANIZED.  Such Party is a corporation  duly
organized,  validly existing and in good standing under the laws of the state in
which it is  incorporated,  and has full  corporate  power and authority and the
legal  right to own and  operate  its  property  and  assets and to carry on its
business as it is now being  conducted and as is contemplated to be conducted by
this Agreement.

                       11.1.2 CORPORATE AUTHORITY.  Such Party (a) has the power
and authority  and the legal right to enter into this  Agreement and perform its
obligations  hereunder,  and (b) has  taken  all  necessary  action  on its part
required to  authorize  the  execution  and delivery of this  Agreement  and the
performance of its obligations  hereunder.  The Agreement has been duly executed
and  delivered  on  behalf  of  such  Party  and is  enforceable  against  it in
accordance with its terms,  subject to the effects of bankruptcy,  insolvency or
other laws of general  application  affecting the enforcement of creditor rights
and judicial principles  affecting the availability of specific  performance and
general  principles  of  equity,  whether  enforceability  is  considered  in  a
proceeding at law or in equity.

                       11.1.3 LITIGATION. Such Party is not aware of any pending
or threatened  litigation (and has not received any communication)  that alleges
that such Party's activities related to this Agreement have violated, or that by
conducting the activities as contemplated  herein such Party would violate,  any
of the intellectual property rights of any other Person.

                       11.1.4 CONSENTS,  APPROVALS, ETC. All necessary consents,
approvals and authorizations of all regulatory and governmental  authorities and
other  Persons  required  to be obtained  by such Party in  connection  with the
execution and delivery of this Agreement and the  performance of its obligations
hereunder have been obtained.

                       11.1.5  CONFLICTS.  The  execution  and  delivery of this
Agreement and the performance of such Party's  obligations  hereunder (a) do not
conflict with or violate any  requirement of applicable law or regulation or any
provision of the articles of incorporation,  bylaws, or any similar constitutive
document of such Party,  as  applicable,  in any  material  way,  and (b) do not
conflict with, violate, or breach or constitute a default or require any consent
under, any contractual obligation or court or administrative order by which such
Party is bound.

                  11.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF NOVADEL.

                       11.2.1 NovaDel  represents and warrants to Licensee that,
to  its  Knowledge,   as  of  the  Effective  Date,  NovaDel  is  the  owner  or
(sub)licensee  (with the right to

                                    Page 27
<PAGE>

grant  sublicenses  to Licensee as  contemplated  under this  Agreement)  of the
NovaDel  Patents,  and has all right,  title, and interest in and to the NovaDel
Patents,  including exclusive,  absolute,  irrevocable right, title and interest
thereto,  free  and  clear  of  all  liens,   charges,   encumbrances  or  other
restrictions  or  limitations  of any  kind  whatsoever  and  to  the  NovaDel's
knowledge and belief there are no licenses, options, restrictions, liens, rights
of third parties, disputes, royalty obligations,  proceedings or claims relating
to,  affecting,  or limiting its rights or the rights of the Licensee under this
Agreement  with  respect  to,  or which may lead to a claim of  infringement  or
invalidity  regarding,  any part or all of the Licensed Technology and their use
as contemplated in the underlying patent applications as presently drafted.  The
NovaDel  Patents  have not, as of the  Effective  Date,  been held by a court of
competent jurisdiction to be invalid or unenforceable, in whole or in part.

                       11.2.2 To  NovaDel's  knowledge  and  belief  there is no
claim,  pending or  threatened,  of  infringement,  interference  or  invalidity
regarding,  any  part  or  all of  the  Licensed  Technology  and  their  use as
contemplated in the underlying patent applications as presently drafted.

                  11.3 ADDITIONAL  COVENANTS OF LICENSEE.  Licensee on behalf of
itself and its  Affiliates  agrees and  covenants  to the  extent  permitted  by
applicable law, never, in any country,  region or jurisdiction in the Territory,
to institute or prosecute any claim,  action or suit at law or in equity seeking
to have  any  claim in a  NovaDel  Patent  declared  invalid  or  unenforceable;
provided, however, that nothing contained herein shall prohibit Licensee and its
Affiliates  and  Sublicensees  from either (a)  asserting  any and all  defenses
available to it, including assertions relating to the validity or enforceability
of the NovaDel Patents,  in any suit or proceeding brought against them alleging
the  infringement  of any of the NovaDel  Patents,  or (b) asserting any and all
defenses, evidence and arguments, including lack of patentability of the subject
matter of a count or claim  and lack of  support  for a count or  claim,  in any
interference  involving a patent or patent  application owned by Licensee or its
Affiliates or Sublicensees  and a patent or patent  application  included within
the  definition  of the  NovaDel  Patents.  In its  agreements  with each of its
Sublicensees, Licensee shall include provisions requiring a covenant, materially
identical to that  Licensee is making in this Section  11.3,  on the part of the
Sublicensee,  and shall provide that NovaDel  shall have march-in  right to seek
termination  of  such  agreement  in the  event  the  Sublicensee  breaches  the
covenant.  NovaDel's  right  to seek  termination  of such  agreement  with  the
Sublicensee shall be subject to notice, cure and dispute resolutions  provisions
materially identical to the provision set forth in Section 7.2. Licensee and its
Affiliates  will  take  all  reasonable  action   (including   signing  required
documents) and offer full  cooperation to allow NovaDel to exercise the march-in
rights provided herein, to the extent permitted by law.

                  11.4 DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES
SET FORTH IN SECTIONS 11.1 AND 11.2, NOVADEL MAKES NO REPRESENTATIONS AND GRANTS
NO  WARRANTIES,  EXPRESS OR IMPLIED,  EITHER IN FACT OR BY  OPERATION OF LAW, BY
STATUTE OR OTHERWISE,  UNDER THIS AGREEMENT,  AND NOVADEL SPECIFICALLY DISCLAIMS
ANY OTHER WARRANTIES,  WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING
ANY  WARRANTY OF QUALITY,  MERCHANTABILITY  OR FITNESS FOR A  PARTICULAR  USE OR
PURPOSE  OR  ANY   WARRANTY   AS  TO

                                    Page 28
<PAGE>

THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY
RIGHTS OF THIRD PARTIES UNDER THIS AGREEMENT.

                  11.5  LIMITATION OF  LIABILITY.  NONE OF NOVADEL OR ANY OF ITS
AFFILIATES  SHALL BE LIABLE FOR SPECIAL,  INDIRECT,  INCIDENTAL OR CONSEQUENTIAL
DAMAGES (INCLUDING FOR LOST PROFITS), WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE,
TORT, STRICT LIABILITY OR OTHERWISE,  ARISING OUT OF (A) THE USE OF THE LICENSED
TECHNOLOGY OR LICENSED TRADEMARKS OR (B) ANY BREACH OF OR FAILURE TO PERFORM ANY
OF THE PROVISIONS OF THIS AGREEMENT.

                                   ARTICLE 12
                                   ASSIGNMENT

                  This Agreement and the rights and duties  appertaining  hereto
may not be assigned by either party without first  obtaining the written consent
of the  other  which  consent  shall  not be  unreasonably  withheld.  Any  such
purported  assignment,  without the written consent of the other party, shall be
null and of no effect.  Notwithstanding  the  foregoing,  the Company may assign
this  Agreement (i) to a purchaser,  merging or  consolidating  corporation,  or
acquiror  of  substantially  all of the  Company's  assets  or  business  and/or
pursuant to any  reorganization  qualifying  under  section 368 of the  Internal
Revenue Code of 1986 as amended, as may be in effect at such time, or (ii) to an
Affiliate of the Company  subject to the consent of the Licensors  which consent
shall not be unreasonably withheld.
ARTICLE 13
                          USE OF NAMES AND PUBLICATION

                  13.1 USE OF NAME. Nothing contained in this Agreement shall be
construed as granting any right to Licensee,  its Affiliates or  Sublicensees to
use in  advertising,  publicity,  or other  promotional  activities  the name of
NovaDel or any of its units (including  contraction,  abbreviation or simulation
of any of  the  foregoing)  without  the  prior,  written  consent  of  NovaDel;
provided,  however,  that NovaDel  acknowledges and agrees that Licensee may use
the names of NovaDel in various  documents used by Licensee for capital  raising
and financing without such prior written consent to the limited extent that such
use may be required by law,  and  provided  further  that all such uses shall be
factually accurate and not misleading.

                  13.2  RELATIONSHIP  OF THE  PARTIES.  Nothing  herein shall be
deemed to establish a  relationship  of principal and agent between  NovaDel and
Licensee, nor any of their agents or employees for any purpose whatsoever.  This
Agreement  shall not be construed as creating a partnership  between NovaDel and
Licensee,  or as creating  any other form of legal  association  or  arrangement
which would impose liability upon one Party for the act or failure to act of the
other Party.

                  13.3  PUBLICATIONS.  In the event that either party desires to
publish or disclose, by written, oral or other presentation, Licensed Technology
or any material  information  related

                                    Page 29
<PAGE>

thereto,  then such party shall notify the other in writing of its  intention at
least  sixty (60) days prior to any speech,  lecture or other oral  presentation
and at least  sixty  (60)  days  before  any  written  or other  publication  or
disclosure,  and shall  include with such notice a  description  of any proposed
oral  presentation or, with respect to any proposed written or other disclosure,
a current  draft of such proposed  disclosure  or abstract.  NovaDel may request
that  Licensee,  no later than  thirty (30) days  following  the receipt of such
notice,  delay such  presentation,  publication or disclosure in order to enable
NovaDel to file, or have filed on its behalf or jointly, as applicable, a patent
application,  copyright  or  other  appropriate  form of  intellectual  property
protection  related to the  information to be disclosed or request that Licensee
do so. Upon receipt of such request to delay such  presentation,  publication or
disclosure, Licensee shall arrange for a delay of such presentation, publication
or disclosure  until such time as Licensee or NovaDel has filed, or had filed on
its behalf,  such patent  application,  copyright or other  appropriate  form of
intellectual   property   protection   in  form  and  in  substance   reasonably
satisfactory  to NovaDel.  If Licensee  does not receive any such  request  from
NovaDel to delay such  presentation,  publication  or  disclosure,  Licensee may
submit such material for presentation,  publication or other form of disclosure.
Notwithstanding  the  foregoing,  in no event shall  Licensee  have any right to
publish or disclose  the  Licensed  Process or any  information  or data related
thereto without the prior written consent of NovaDel,  which consent NovaDel may
withhold in its sole discretion.

                                   ARTICLE 14
                   PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

                  All  notices  or other  communications  that are  required  or
permitted  hereunder  shall be in  writing  and  delivered  personally,  sent by
telecopier (and promptly confirmed by personal delivery, registered or certified
mail or overnight  courier as provided  herein),  sent by  nationally-recognized
overnight  courier or sent by registered  or certified  mail,  postage  prepaid,
return receipt requested, addressed as follows:

If to NovaDel to:

         NovaDel Pharma Inc.
         31 State Highway 12
         NovaDel, NJ  08822
         Attention:  President
         908.782.3431 (fax)

         with a copy (not constituting notice) to:

         Covington & Burling
         1201 Pennsylvania Avenue, NW
         Washington, DC  20004
         Attention:  John A. Hurvitz, Esq.
         202.662.6291 (fax)

                                    Page 30
<PAGE>

If to Licensee to:

         Manhattan Pharmaceuticals, Inc.
         787 Seventh Avenue, 48th Floor
         New York, NY 10019
         Attention: President
         212.554.4355 (fax)

         with a copy (not constituting notice) to:

or to such  other  address  as the Party to whom  notice is to be given may have
furnished  to the  other  Party in  writing  in  accordance  herewith.  Any such
communication  shall  be  deemed  to have  been  given  (a) when  delivered,  if
personally  delivered  or sent  by  telecopier  on a  business  day,  (b) on the
business day after dispatch, if sent by nationally-recognized overnight courier,
and (c) on the third  business  day  following  the date of mailing,  if sent by
mail. It is understood and agreed that this Article 16 is not intended to govern
the  day-to-day  business  communications   necessary  between  the  Parties  in
performing their duties, in due course, under the terms of this Agreement.

                                   ARTICLE 15
                                 CONFIDENTIALITY

                  15.1 DEFINITION.  "Confidential  Information" of a Party shall
mean all information and know-how and any tangible  embodiments thereof provided
by or on behalf of such Party to the other Party either in  connection  with the
discussions and negotiations pertaining to, or in the course of performing, this
Agreement,  including the terms of this  Agreement;  the  Designated  Compounds;
data;  knowledge;  practices;  processes;  ideas;  research  plans;  engineering
designs and drawings;  research data;  manufacturing  processes and  techniques;
scientific,  manufacturing,  marketing  and business  plans;  and  financial and
personnel  matters  relating to the disclosing Party or to its present or future
products,  sales, suppliers,  customers,  employees,  investors or business. For
purposes  of this  Agreement,  notwithstanding  the Party  that  disclosed  such
information or know-how, all NovaDel Know-How and all Information and Inventions
with  respect to the  Licensed  Process  shall be  Confidential  Information  of
NovaDel.

                  15.2 EXCLUSIONS. Notwithstanding the foregoing, information or
know-how of a Party shall not be deemed Confidential Information with respect to
a receiving  Party for purposes of this  Agreement if such  receiving  party can
affirmatively  demonstrate through the production of written  documentation that
such information or know-how:

                       15.2.1 was already  known to the  receiving  Party or its
Affiliates, other than under an obligation of confidentiality or non-use, at the
time of disclosure to such receiving Party;

                       15.2.2  was  generally  available  or  known  to  parties
reasonably  skilled in the field to which such information or know-how pertains,
or was otherwise  part of the public  domain,  at the time of its  disclosure to
such receiving Party;

                                    Page 31
<PAGE>

                       15.2.3  became  generally  available  or known to parties
reasonably  skilled in the field to which such information or know-how pertains,
or otherwise  became part of the public  domain,  after its  disclosure  to such
receiving  Party  through no fault of a Party other than the Party that Controls
such information and know-how;

                       15.2.4  was  disclosed  to such  receiving  Party  or its
Affiliates,  other than under an obligation of confidentiality or non-use,  by a
Third Party who had no obligation  to the Party that  Controls such  information
and know-how not to disclose such information or know-how to others; or

                       15.2.5 was independently  discovered or developed by such
receiving  Party or its  Affiliates,  as  evidenced  by their  written  records,
without the use of Confidential Information belonging to the Party that Controls
such information and know-how,  except with respect to the NovaDel Know-How with
respect  to  the  Licensed  Process,  which  shall  be and  remain  Confidential
Information of NovaDel.

Specific aspects or details of Confidential  Information  shall not be deemed to
be within the public domain or in the  possession of a Party merely  because the
Confidential  Information is embraced by more general  information in the public
domain  or in  the  possession  of  such  Party.  Further,  any  combination  of
Confidential  Information shall not be considered in the public domain or in the
possession of a Party merely because  individual  elements of such  Confidential
Information  are in the public domain or in the  possession of such Party unless
the combination and its principles are in the public domain or in the possession
of such Party.

                  15.3  DISCLOSURE  AND USE  RESTRICTION.  Except  as  expressly
provided herein,  the Parties agree that during the Term of this Agreement,  and
for five (5) years  thereafter,  each Party and its Affiliates and  sublicensees
shall keep completely  confidential and shall not publish or otherwise  disclose
and shall not use for any purpose except for the purposes  contemplated  by this
Agreement any  Confidential  Information  of the other Party,  its Affiliates or
Sublicensees.

                  15.4   AUTHORIZED   DISCLOSURE.   Each   Party  may   disclose
Confidential  Information of the other Party to the extent that such  disclosure
is:

                       15.4.1 REQUIRED BY GOVERNMENTAL  ORDER.  Made in response
to a valid order of a court of competent  jurisdiction or other  supra-national,
federal,  national,   regional,  state,  provincial  or  local  governmental  or
regulatory body of competent  jurisdiction;  provided,  however, that such Party
shall  first have given  notice to such other Party and given such other Party a
reasonable  opportunity  to quash  such order and to obtain a  protective  order
requiring that the  Confidential  Information and documents that are the subject
of such order be held in confidence by such court or agency or, if disclosed, be
used only for the purposes for which the order was issued;  and provided further
that if a disclosure order is not quashed or a protective order is not obtained,
the Confidential Information disclosed in response to such court or governmental
order  shall be limited to that  information  which is  legally  required  to be
disclosed in response to such court or governmental order;

                       15.4.2  REQUIRED  BY  LAW.  Otherwise  required  by  law;
provided,  however,  that the disclosing Party shall (a) provide the other Party
with  reasonable  advance

                                    Page 32
<PAGE>

notice of and an opportunity to comment on any such required disclosure,  (b) if
requested by such other Party, seek  confidential  treatment with respect to any
such  disclosure  to the extent  available,  and (c) use good  faith  efforts to
incorporate  the comments of such other Party in any such  disclosure or request
for confidential treatment;

                       15.4.3  REQUIRED BY  REGULATORY  AUTHORITY.  Made by such
Party to the Regulatory  Authorities as required in connection  with any filing,
application  or  request  for  Regulatory  Approval;   provided,  however,  that
reasonable  measures  shall be taken to assure  confidential  treatment  of such
information; or

                       15.4.4  REQUIRED BY  AGREEMENT.  Made by such  Party,  in
connection with the performance of this Agreement, to Affiliates,  Sublicensees,
research parties,  employees,  consultants,  representatives or agents,  each of
whom prior to disclosure  must be bound by  obligations of  confidentiality  and
non-use at least equivalent in scope to those set forth in this Article 16.

                  15.5 PRESS  RELEASES.  Press  releases or other similar public
communication  by either Party relating to this Agreement,  shall be approved in
advance by the other Party, which approval shall not be unreasonably withheld or
delayed, except for those communications required by Applicable Law (which shall
be  provided  to the other  Party as soon as  practicable  after the  release or
communication  thereof),  disclosures  of  information  for  which  consent  has
previously been obtained,  and information of a similar nature to that which has
been previously disclosed publicly with respect to this Agreement, each of which
shall not require advance approval.

                                   ARTICLE 16
                            MISCELLANEOUS PROVISIONS

                  16.1 GOVERNING  LAW. This  Agreement  shall be governed by and
construed in  accordance  with the laws of the State of New York,  excluding any
conflicts  or  choice  of law  rule or  principle  that  might  otherwise  refer
construction  or  interpretation  of this  Agreement to the  substantive  law of
another jurisdiction.

                  16.2  REGISTRATION.   If  this  Agreement  or  any  associated
transaction  is  required  by the law of any  nation  to be either  approved  or
registered  with any  governmental  agency,  Licensee  shall  assume  all  legal
obligations to do so and the costs in connection therewith.

                  16.3 TRADE REGULATIONS.  Licensee shall observe all applicable
United States and foreign laws with respect to the transfer of Licensed  Product
and related  technical data to foreign  countries,  including the  International
Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.

                  16.4 ENTIRE  AGREEMENT.  The Parties hereto  acknowledge  that
this  Agreement,   including  the  Appendices  and  documents   incorporated  by
reference,  sets forth the entire  agreement  and  understanding  of the Parties
hereto as to the subject matter  hereof,  and shall not be subject to any change
of modification except by the execution of a written instrument subscribed to by
the Parties hereto. This Agreement shall supersede all previous

                                    Page 33
<PAGE>

communications,  representations  or  understandings,  either  oral or  written,
between the Parties relating to the subject matter hereof.

                  16.5 SEVERABILITY.  If any provision of this Agreement is held
to be illegal,  invalid or unenforceable under any present or future law, and if
the rights or  obligations  of either  Party  under this  Agreement  will not be
materially and adversely  affected  thereby,  (a) such provision  shall be fully
severable,  (b)  this  Agreement  shall be  construed  and  enforced  as if such
illegal,  invalid or unenforceable  provision had never comprised a part hereof,
(c) the remaining  provisions of this  Agreement  shall remain in full force and
effect  and shall not be  affected  by the  illegal,  invalid  or  unenforceable
provision or by its severance herefrom, and (d) in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of this
Agreement a legal,  valid and enforceable  provision as similar in terms to such
illegal,  invalid or  unenforceable  provision as may be possible and reasonably
acceptable to the Parties herein.  To the fullest extent permitted by applicable
law,  each Party  hereby  waives  any  provision  of law that  would  render any
provision prohibited or unenforceable in any respect.

                  16.6  WAIVER.  The  failure of either  Party to assert a right
hereunder  or to  insist  upon  compliance  with any term or  condition  of this
Agreement  shall  not  constitute  a waiver  of that  right or  excuse a similar
subsequent failure to perform any such term or condition by the other Party.

                  16.7 EQUITABLE RELIEF. Each Party acknowledges and agrees that
the restrictions set forth in Articles 6 and 16 of this Agreement are reasonable
and  necessary to protect the  legitimate  interests of the other Party and that
such other Party would not have  entered  into this  Agreement in the absence of
such  restrictions,  and that  any  violation  or  threatened  violation  of any
provision  of  Article 6 and 16 may result in  irreparable  injury to such other
Party.  Each Party also acknowledges and agrees that in the event of a violation
or  threatened  violation of any  provision of Article 6 and 16, the other Party
shall be entitled to seek preliminary and permanent  injunctive relief,  without
the necessity of having to post a bond, as well as to an equitable accounting of
all earnings,  profits and other benefits  arising from any such violation.  The
rights provided in the immediately preceding sentence shall be cumulative and in
addition to any other  rights or remedies  that may be  available  to such other
Party.  Nothing in this  Section 16.7 is intended,  or should be  construed,  to
limit such other Party's right to preliminary and permanent injunctive relief or
any other remedy for breach of any other provision of this Agreement.

                  16.8 FORCE  MAJEURE.  Neither  Party  shall be held  liable or
responsible to the other Party or be deemed to have defaulted  under or breached
this Agreement for failure or delay in fulfilling or performing any term of this
Agreement  when such failure or delay is caused by or results from causes beyond
the reasonable control of the  non-performing  Party,  including fires,  floods,
earthquakes,  embargoes,  shortages,  epidemics,  quarantines,  war, acts of war
(whether war be declared or not), acts of terrorism, insurrections, riots, civil
commotion,  strikes, lockouts or other labor disturbances,  acts of God or acts,
omissions or delays in acting by any governmental authority.  The non-performing
Party shall  notify the other Party of such force  majeure  within ten (10) days
after such  occurrence by giving  written  notice to the other Party stating the
nature of the event,  its  anticipated  duration,  and any action being taken to
avoid or minimize  its effect.  The  suspension  of  performance  shall be of no
greater scope and no longer  duration  than is

                                    Page 34
<PAGE>

necessary and the non-performing Party shall use commercially reasonable efforts
to remedy its  inability to perform;  provided,  however,  that in the event the
suspension of performance  continues for one-hundred and eighty (180) days after
the date of the  occurrence,  and such  failure to perform  would  constitute  a
material  breach of this  Agreement  in the absence of such force  majeure,  the
non-performing  Party may terminate this Agreement pursuant by written notice to
the other Party.

                  16.9   CONSTRUCTION.   Except  where  the  context   otherwise
requires,  wherever used, the singular shall include the plural,  the plural the
singular,  the use of any gender shall be applicable to all genders and the word
"or" is used in the inclusive sense (and/or). The captions of this Agreement are
for  convenience  of reference  only and in no way define,  describe,  extend or
limit  the  scope or intent of this  Agreement  or the  intent of any  provision
contained  in this  Agreement.  The term  "including"  as used herein shall mean
including,  without  limiting the generality of any  description  preceding such
term. The language of this Agreement shall be deemed to be the language mutually
chosen  by the  Parties  and no rule of  strict  construction  shall be  applied
against either Party hereto.

                  16.10  FURTHER  ASSURANCE.  Each Party shall duly  execute and
deliver,  or cause to be duly executed and delivered,  such further  instruments
and do and cause to be done such further acts and things,  including  the filing
of such assignments,  agreements, documents and instruments, as may be necessary
or as the other Party may reasonably  request in connection  with this Agreement
or to carry out more  effectively  the  provisions  and  purposes,  or to better
assure and  confirm  unto such other  Party its rights and  remedies  under this
Agreement.

                  16.11  EXPENSES.   Each  of  Licensee  and  NovaDel  shall  be
responsible for their own expenses  relating to the  negotiation,  execution and
performance of this Agreement.

                  16.12  COUNTERPARTS.  This Agreement may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same instrument.

                  16.13 BINDING.  This  Agreement  shall not be binding upon the
Parties until it has been signed below on behalf of each Party,  in which event,
it shall be effective as of the Effective Date.

                                    Page 35
<PAGE>

     IN WITNESS  WHEREOF,  the duly  authorized  officers  of the  Parties  have
executed  this  Agreement  as of the  dates  set forth  below  their  respective
signatures.

<TABLE>
<CAPTION>
<S>                                            <C>
NOVADEL PHARMA INC.                            MANHATTAN PHARMACEUTICALS, INC.

By: /s/  Gary A. Shangold                     By: /s/  Leonard Firestone
   -----------------------------------------    -------------------------------------------
Name: Gary A. Shangold                        Name: Leonard Firestone

Title: President and Chief Executive Officer  Title: President and Chief Executive Officer

Date: April 8, 2003                           Date: April 4, 2003

</TABLE>

     [Pursuant  to  Item 601(b)(2) of Regulation S-K, the exhibits and schedules
     have  been  omitted from this agreement. The Registrant will furnish a copy
     of  any  omitted  schedule  or  exhibit  to  the  Commission upon request.]

                                    Page 36Exhibit 10.15

                       The CORPORATEplan for Retirement(SM)
                                 EXECUTIVE PLAN

                               BASIC PLAN DOCUMENT

                                 IMPORTANT NOTE

This document has not been approved by the Department of Labor, the Internal
Revenue Service or any other governmental entity. An Adopting Employer must
determine whether the plan is subject to the Federal securities laws and the
securities laws of the various states. An Adopting Employer may not rely on this
document to ensure any particular tax consequences or to ensure that the Plan is
"unfunded and maintained primarily for the purpose of providing deferred
compensation to a select group of management or highly compensated employees"
under the Employee Retirement Income Security Act with respect to the Employer's
particular situation. Fidelity Management Trust Company, its affiliates and
employees cannot provide you with legal advice in connection with the execution
of this document. This document should be reviewed by the Employer's attorney
prior to execution.

<PAGE>

                           CORPORATEplan for EXECUTIVE
                               BASIC PLAN DOCUMENT

ARTICLE 1
    ADOPTION AGREEMENT

ARTICLE 2
    DEFINITIONS

    2.01 - Definitions

ARTICLE 3
    PARTICIPATION

    3.01 - Date of Participation
    3.02 - Resumption of Participation Following Re employment
    3.03 - Cessation or Resumption of Participation Following a Change in Status

ARTICLE 4
    CONTRIBUTIONS

    4.01 - Deferral Contributions
    4.02 - Matching Contributions
    4.03 - Employer Contributions
    4.04 - Time of Making Contributions

ARTICLE 5
    PARTICIPANTS' ACCOUNTS

    5.01 - Individual Accounts

ARTICLE 6
    INVESTMENT OF CONTRIBUTIONS

    6.01 - Manner of Investment
    6.02 - Investment Decisions

ARTICLE 7
    RIGHT TO BENEFITS

    7.01 - Normal or Early Retirement
    7.02 - Death
    7.03 - Other Termination of Employment
    7.04 - Separate Account
    7.05 - Forfeitures
    7.06 - Adjustment for Investment Experience
    7.07 - Unforeseeable Emergency Withdrawals
    7.08 - Change in Control

ARTICLE 8
    DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE

    8.01 - Distribution of Benefits to Participants and Beneficiaries
    8.02 - Determination of Method of Distribution
    8.03 - Notice to Trustee
    8.04 - Time of Distribution

                                       i
<PAGE>

ARTICLE 9
    AMENDMENT AND TERMINATION

    9.01 - Amendment by Employer
    9.02 - Retroactive Amendments
    9.03 - Termination
    9.04 - Distribution Upon Termination of the Plan

ARTICLE 10
    MISCELLANEOUS

    10.01 - Communication to Participants
    10.02 - Limitation of Rights
    10.03 - Nonalienability of Benefits
    10.04 - Facility of Payment
    10.05 - Information between Employer and Trustee
    10.06 - Notices
    10.07 - Governing Law

ARTICLE 11
    PLAN ADMINISTRATION

    11.01 - Powers and responsibilities of the Administrator
    11.02 - Nondiscriminatory Exercise of Authority
    11.03 - Claims and Review Procedures
    11.04 - Cost of Administration

                                       ii
<PAGE>

                                    PREAMBLE

It is the intention of the Employer to establish herein an unfunded plan
maintained solely for the purpose of providing deferred compensation for a
select group of management or highly compensated employees as provided in ERISA.

Article 1.  Adoption Agreement.

1.01  PLAN INFORMATION

      (a)   Name of Plan:

            This is the Technitrol, Inc. Supplemental Savings__________________

            __________________________________________________Plan (the "Plan").

      (b)   Name of Plan Administrator, if not the Employer:

            ____________________________________________________________________

            Address: __________________________________________________

            Phone Number:______________________________________________

            The Plan Administrator is the agent for service of legal process for
            the Plan.

      (c)   Plan Year End is December 31.

      (d)   Plan Status (check one):

            (1) |_| Effective Date of new Plan:____________

            (2) |X| Amendment Effective Date: August 1, 2003

                  The original effective date of the Plan: July 1, 2001

                                       1
<PAGE>

1.02 EMPLOYER

      (a)   The Employer is: Technitrol, Inc.

            Address:         1210 Northbrook Drive Suite 385

                             Trevose PA 19053

           Contact's Name:   MaryEllen McKenna

           Telephone Number: 215-355-2900 x 226

            (1)   Employer's Tax Identification Number: 23-1292472

            (2)   Business form of Employer (check one):

                  (A) |X| Corporation (Other than a Subchapter S corporation)

                  (B) |_| Other (e.g., Subchapter S corporation, partnership,
                          sole proprietor)

            (3)   Employer's fiscal year end: 12/31

      (b)   The term "Employer" includes the following Related Employer(s) (as
            defined in Section 2.01(a)(21)):

                  Technitrol, Inc 23-1292472

                  AMI Doduco, Inc. (PA) 25-1200205

                  AMI Doduco, Inc. (PR) 66-0445013

                  AMI Doduco, Inc (NC) 56-1631735

                  Excelsus Technologies, Inc. 33-0803557

                  Pulse Engineering, Inc. 23-2808999

                                       2
<PAGE>

1.03 COVERAGE

      (a)   The following Employees are eligible to participate in the Plan:

            (1) |_| Only those Employees listed in Attachment A will be
                    eligible to participate in the Plan.

            (2) |X| Only those Employees in the eligible class described below
                    will be eligible to participate in the Plan:

                    See Attachment A on page 30
                    ____________________________________________________

            (3) |_| Only those Employees described in the Board of Directors
                    Resolutions attached hereto and hereby made a part hereof
                    will be eligible to participate in the Plan.

      (b)   The Entry Date(s) shall be (check one):

            (1) |_| each January 1.

            (2) |_| each January 1 and each July 1.

            (3) |_| each January 1 and each April 1, July 1 and October 1.

            (4) |_| the first day of each month.

            (5) |X| immediate upon meeting the eligibility requirements
                    specified in Subsection 1.03(a).

1.04 COMPENSATION

      For purposes of determining Contributions under the Plan, Compensation
      shall be as defined (check (a) or (b) below, as appropriate):

      (a) |X| in Section 2.01(a)(6), (check (1) or (2) below, if and as
              appropriate)):

            (1) |X| but excluding (check the appropriate box(es)):

                    (A) |X| Overtime Pay.

                    (B) |X| Bonuses.

                    (C) |X| Commissions.

                                       3
<PAGE>

                    (D) |X| The value of a qualified or a non-qualified stock
                            option granted to an Employee by the Employer to
                            the extent such value is includable in the
                            Employee's taxable income.

                    (E) |X| The following: See Attachment B on page 30
                        ______________________________________________________
                        ______________________________________________________

             (2) |_| except as otherwise provided below:
                 ______________________________________________________
                 ______________________________________________________
                 ______________________________________________________

      (b) |_| in the ________________________Plan maintained by the Employer
              to the extent it is in excess of the limit imposed under Code
              Section 401(a)(17).

1.05 CONTRIBUTIONS

      (a)  Employee contributions (Complete all that apply)

             (1) |X|   Deferral Contributions. The Employer shall make a
                       Deferral Contribution in accordance with, and subject to,
                       Section 4.01 on behalf of each Participant who has an
                       executed salary reduction agreement in effect with the
                       Employer for the calendar year (or portion of the
                       calendar year) in question, not to exceed 20% of
                       Compensation for that calendar year, subject, however, to
                       any election regarding bonuses, as set out in Subsection
                       1.05(a)(2).

             (2) |_|   Bonus Contributions. The Employer may allow Participants
                       upon proper notice and approval to enter into a special
                       salary reduction agreement to make Deferral Contributions
                       in an amount up to 100% of any Employer paid cash bonuses
                       designated by the Employer that are made for such
                       Participants during the calendar year. The Compensation
                       definition elected by the Employer in Section 1.04 must
                       include bonuses if bonus contributions are permitted.

      (b) |_| Matching Contributions (Choose (1) or (2) below, and (3) below, as
              applicable.)

             (1) |_|   The Employer shall make a Matching Contribution on behalf
                       of each Participant in an amount equal to the following
                       percentage of a Participant's Deferral Contributions
                       during the Plan Year (check one):

                     (A) |_| 50%

                     (B) |_| 100%

                                       4
<PAGE>

                     (C) |_| ____%

                     (D) |_| (Tiered Match)_____% of the first_____% of the
                             Participant's Compensation contributed to the Plan,

                             _____% of the next _____% of the Participant's
                             Compensation contributed to the Plan,

                             _____% of the next _____% of the Participant's
                             Compensation contributed to the Plan.

                     (E) |_| The percentage declared for the year, if any,
                             by a Board of Directors' resolution.

                     (F) |_| Other: ________________________________________
                                    ________________________________________
                                    ________________________________________
                                    ________________________________________

             (2) |X| Matching Contribution Offset. For each Participant who has
                     made deferrals of at least the maximum amount allowed
                     pursuant to Section 402(g) of the Code or the maximum
                     allowed under the Employer's plan listed below to such
                     plan, the Employer shall make a Matching Contribution in an
                     amount equal to (A) minus (B) below:

                 See Attachment C on page 30

                     (A)   The Matching Employer Contribution, as defined in
                           the ___________________________ Plan that the
                           Participant would have received under the
                           _________________________Plan on the sum of the
                           Deferral Contributions and the Participant's
                           deferrals hereunder, as defined therein, that the
                           Participant actually made to such Plan, if no
                           limits otherwise imposed by the Code, and
                           regulations issued thereunder, applied to such
                           Matching Employer Contribution and the
                           Participant's Deferral Contributions are deemed to
                           have been made to the Plan;

                 See attached insert C

                     (B)   The Matching Employer Contributions actually made
                           to such Participant under the_____________________
                           Plan for the Plan Year of the determination of the
                           Matching Contribution hereunder.

             (3) |X| Matching Contribution Limits (check the appropriate
                     box(es)):

                                        5
<PAGE>

                     (A) |X| Deferral Contributions in excess of 4% [(6% for
                             Pulse)] of the Participant's Compensation for the
                             period in question shall not be considered for
                             Matching Contributions.

                         Note: If the Employer elects a percentage limit in (A)
                               above and requests the Trustee to account
                               separately for matched and unmatched Deferral
                               Contributions, the Matching Contributions
                               allocated to each Participant must be computed,
                               and the percentage limit applied, based upon each
                               period.

                     (B) |_| Matching Contributions for each Participant
                             for each Plan Year shall be limited to $_________.

            (4)      Eligibility Requirement(s) for Matching Contributions. A
                     Participant who makes Deferral Contributions during the
                     Plan Year under Section 1.05(a) shall be entitled to
                     Matching Contributions for that Plan Year if the
                     Participant satisfies the following requirement(s) (Check
                     the appropriate box(es). Options (B) and (C) may not be
                     elected together):

                     (A) |_| Is employed by the Employer on the last day of the
                             Plan Year.

                     (B) |_| Earns at least 500 Hours of Service during the
                             Plan Year.

                     (C) |_| Earns at least 1,000 Hours of Service during the
                             Plan Year.

                     (D) |_| Other:____________________________________________
                             __________________________________________________.

                     (E) |X| No requirements.

                         Note: If option (A), (B) or (C) above is selected,
                         then Matching Contributions can only be made by the
                         Employer after the Plan Year ends. Any Matching
                         Contribution made before Plan Year end shall not be
                         subject to the eligibility requirements of this
                         Section 1.05(b)(3)).

      (c)   Employer Contributions

            (1) |_|  Fixed Employer Contributions. The Employer shall make an
                     Employer Contribution on behalf of each Participant in an
                     amount determined as described below (check at least one):

                     (A) |_| In an amount equal to __% of each Participant's
                             Compensation each Plan Year.

                     (B) |_| In an amount determined and allocated as described
                             below:

                                       6
<PAGE>

                             ___________________________________________________
                             ___________________________________________________
                             ___________________________________________________
                             ______________________________________________.

                     (C) |_| In an amount equal to (check at least one):

                             (i). |_| Any profit sharing contribution that the
                                  Employer would have made on behalf of the
                                  Participant under the following qualified
                                  defined contribution plan but for the
                                  limitations imposed by Code Section
                                  401(a)(17):
                                  _____________________________________________
                                  _____________________________________________

                             (ii) |_| Any contribution described in Code Section
                                  401(m) that the Employer would have made on
                                  behalf of the Participant under the following
                                  qualified defined contribution plan but for
                                  the limitations imposed by Code Section
                                  401(a)(17):
                                  _____________________________________________
                                  _____________________________________________

            (2) |X|  Discretionary Employer Contributions. The Employer may make
                     Employer Contributions to the accounts of Participants in
                     any amount, as determined by the Employer in its sole
                     discretion from time to time, which amount may be zero.

            (3)      Eligibility Requirement(s) for Employer Contributions. A
                     Participant shall only be entitled to Employer
                     Contributions under Section 1.05(c)(1) for a Plan Year if
                     the Participant satisfies the following requirement(s)
                     (Check the appropriate box(es). Options (B) and (C) may not
                     be elected together):

                     (A) |_| Is employed by the Employer on the last day of the
                             Plan Year.

                     (B) |_| Earns at least 500 Hours of Service during the Plan
                             Year.

                     (C) |_| Earns at least 1,000 Hours of Service during the
                             Plan Year.

                     (D) |_| Other:____________________________________________
                             __________________________________________________

                     (E) |_| No requirements.

1.06 DISTRIBUTION DATES

            Distribution from a Participant's Account pursuant to Section 8.02
            shall begin upon the following date(s) (check either (a) or (b);
            check (c), if desired):

            (a) |X| Non-Class Year Accounting (complete (1) and (2)).

                                       7
<PAGE>

                  (1) The earliest of termination of employment with the
                  Employer and the following event(s) (check appropriate
                  box(es); if none selected, all distributions will be upon
                  termination of employment):

                     (A) |_| Attainment of Normal Retirement Age (as defined in
                             Section 1.07(f)).

                     (B) |_| Attainment of Early Retirement Age (as defined in
                             Section 1.07(g)).

                     (C) |_| The date on which the Participant becomes disabled
                             (as defined in Section 1.07(h)).

                  (2) Timing of distribution (check either (A) or (B)).

                     (A) |X| The Distribution of the Participant's Account will
                             be begin in the month following the event described
                             in (a)(1) above.

                     (B) |_| The Distribution of the Participant's Account will
                             begin as soon as administratively feasible in the
                             calendar year following distribution event
                             described in (a)(1) above.

            (b) |_| Class Year Accounting (complete (1) and (2)).

                  (1) Upon (check at least one; (A) must be selected if plan
                      has contributions pursuant to section 1.05(b) or (c)):

                      (A) |_| Termination of employment with the Employer.

                      (B) |_| The date elected by the Participant, pursuant to
                              Plan Section 8.02, and subject to the restrictions
                              imposed in Plan Section 8.02 with respect to
                              future Deferral Contributions, in which event such
                              date of distribution must be at least one year
                              after the date such Deferral Contribution would
                              have been paid to the Participant in cash in the
                              absence of the election to make the Deferral
                              Contribution.

                                       8
<PAGE>

                 (2) Timing of distribution (check either (A) or (B)).

                       (A) |_| The Distribution of the Participant's Account
                               will begin _______ (specify month and day)
                               following the event described in (b)(1) above.

                       (B) |_| The Distribution of the Participant's Account
                               will begin _______ (specify month and day) of the
                               calendar year following the event described in
                               (b)(1) above.

            (c) |X|  As soon as administratively feasible following a
                     Change of Control (as defined in Section 1.12).

1.07 VESTING SCHEDULE

      (a)   The Participant's vested percentage in Matching Contributions
            elected in Section 1.05(b) shall be based upon the schedule(s)
            selected below.

                  (1) |_| N/A - No Matching Contributions

                  (2) |X| 100% Vesting immediately

                  (3) |_| 3 year cliff (see C below)

                  (4) |_| 5 year cliff (see D below)

                  (5) |_| 6 year graduated (see E below)

                  (6) |_| 7 year graduated (see F below)

                  (7) |_| G below

                  (8) |_| Other (Attachment "B")

                                                 Vesting Schedule
                     Years of                    ----------------
                   Service for
                     Vesting         C       D       E       F       G
                     -------         -       -       -       -       -

                          0          0%      0%      0%      0%     ___
                          1          0%      0%      0%      0%     ___
                          2          0%      0%     20%      0%     ___
                          3        100%      0%     40%     20%     ___
                          4        100%      0%     60%     40%     ___
                          5        100%    100%     80%     60%     ___
                          6        100%    100%    100%     80%     ___
                          7        100%    100%    100%    100%    100%

                                       9
<PAGE>

      (b)   The Participant's vested percentage in Employer Contributions
            elected in Section 1.05(c) shall be based upon the schedule(s)
            selected below.

                  (1) |_| N/A - No Employer Contributions

                  (2) |X| 100% Vesting immediately

                  (3) |_| 3 year cliff (see C below)

                  (4) |_| 5 year cliff (see D below)

                  (5) |_| 6 year graduated (see E below)

                  (6) |_| 7 year graduated (see F below)

                  (7) |_| G below

                  (8) |_| Other (Attachment "B")

                                                  Vesting Schedule
                     Years of                     ----------------
                   Service for
                     Vesting        C        D        E         F        G
                     -------        -        -        -         -        -

                          0         0%       0%       0%        0%      ___
                          1         0%       0%       0%        0%      ___
                          2         0%       0%      20%        0%      ___
                          3       100%       0%      40%       20%      ___
                          4       100%       0%      60%       40%      ___
                          5       100%     100%      80%       60%      ___
                          6       100%     100%     100%       80%      ___
                          7       100%     100%     100%      100%     100%

            (c)  |_| Years of Service for Vesting shall exclude (check one):

                  (1) |_| for new plans, service prior to the Effective Date
                          as defined in Section 1.01(e)(1).

                  (2) |_| for existing plans converting from another plan
                          document, service prior to the original Effective Date
                          as defined in Section 1.01(e)(2).

            (d) |_| A Participant will forfeit his Matching Contributions and
                    Employer Contributions upon the occurrence of the following
                    event (s):

                    See Attachment D on page 30
                    __________________________________________________________

                    __________________________________________________________

                                       10
<PAGE>

            (e)     A Participant will be 100% vested in his Matching
                    Contributions and Employer Contributions upon (check the
                    appropriate box(es), if any; if 1.06(c) is selected,
                    Participants will automatically vest upon Change of Control
                    as defined in Section 1.12):

                    (1) |_| Normal Retirement Age (as defined in Section
                            1.07(e)).

                    (2) |_| Early Retirement Age (as defined in Section
                            1.07(f)).

                    (3) |_| Death.

                    (4) |_| The date on which the Participant becomes disabled,
                            as determined under Section 1.07(h) of the Plan.

            (f)     Normal Retirement Age under the Plan is (check one):

                    (1) |_| age 65.

                    (2) |_| age (specify from 55 through 64).

                    (3) |_| the later of age ___ (cannot exceed 65) or the fifth
                            anniversary of the Participant's Commencement Date.

                    If no box is checked in this Section 1.07(f), then Normal
                    Retirement Age is 65.

            (g) |_| Early Retirement Age is the first day of the month after
                    the Participant attains age ____ (specify 55 or greater) and
                    completes _______ Years of Service for Vesting.

            (h) |_| The date on which a Particpant becomes disabled is
                    determined (check one):

                    (1) |_| under the long-term disability plan maintained by
                            the Employer in which the Participant participates.

                    (2) |_| under Title II or XVI of the Social Security Act.

                    (3) |_| in the sole discretion of the Administrator based on
                            factors applied in a uniform and nondiscriminatory
                            manner.

                                       11
<PAGE>

1.08 PREDECESSOR EMPLOYER SERVICE

      |_|   Service for purposes of vesting in Section 1.07(a) and (b) shall
            include service with the following employer(s):

            (a)  ______________________________________________________________

            (b)  ______________________________________________________________

            (c)  ______________________________________________________________

            (d)  ______________________________________________________________

1.09 UNFORESEEABLE EMERGENCY WITHDRAWALS

      Participant withdrawals for unforeseeable emergency prior to termination
      of employment (check one; (b) must be selected if 1.06(b) has been
      selected):

            (a) |X| will be allowed in accordance with Section 7.07, subject
                    to a $1000.00 minimum amount. (Must be at least $1,000)

            (b) |_| will not be allowed.

1.10 DISTRIBUTIONS

      Subject to Articles 7 and 8 distributions under the Plan are always
      available as a lump sum. Check below to allow distributions in installment
      payments:

      |X|   under a systematic withdrawal plan (installments) not to exceed 10
            years.

1.11 INVESTMENT DECISIONS

      (a)   Investment Directions

            Investments in which the Accounts of Participants shall be treated
            as invested and reinvested shall be directed (check one):

            (1)  |_| by the Employer among the options listed in (b) below.

            (2)  |X| by each Participant among the options listed in (b) below.

            (3)  |_| in accordance with investment directions provided by each
                     Participant for all contribution sources in a Participant's
                     Account except the following sources shall be invested as
                     directed by the Employer (check (A) and/or (B)):

                                       12
<PAGE>

                     (A) |_| Nonelective Employer Contributions

                     (B) |_| Matching Employer Contributions

                     The Employer must direct the applicable sources among
                     the same investment options made available for
                     Participant directed sources listed in the Service
                     Agreement.

      (b)   Plan Investment Options

            Participant Accounts will be treated as invested among the
            Investment Funds listed in the Service Agreement from time to time
            pursuant to Participant and/or Employer directions, as applicable.

            Note: The method and frequency for change of investments will be
                  determined under the rules applicable to the selected funds.
                  Information will be provided regarding expenses, if any, for
                  changes in investment options.

1.12 CHANGE IN CONTROL

      If Section 1.06(c) is selected, then, pursuant to Section 7.08 and
      notwithstanding any other provision of the Plan to the contrary, the
      Account Balances of all Participants shall the become immediately
      nonforfeitable and shall become payable to the Participants as soon as
      practicable upon a change in the control of the Employer, as defined
      below:

             See Attachment E on page 30
             ________________________________________________________________.

Note: Internal Revenue Code Section 280G could impose certain, adverse tax
        consequences on both Participants and the Employer as a result of the
        application of Section 1.12. The Employer should consult with its
        attorney prior to selecting to apply Section 1. 06(c).

1.13 RELIANCE ON PLAN

      An adopting Employer may not rely solely on this Plan to ensure that the
      Plan is "unfunded and maintained primarily for the purpose of providing
      deferred compensation for a select group of management or highly
      compensated employees" with respect to the Employer's particular
      situation. This Agreement must be reviewed by the Employer's attorney
      before it is executed.

      This Adoption Agreement may be used only in conjunction with the
      CORPORATEplan for Retirement Executive Plan Basic Plan Document.

                                       13
<PAGE>

                                 EXECUTION PAGE
                                (Fidelity's Copy)

IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this 16th day of May, 2003.

                          Employer   Technitrol, Inc.

                          By         /s/ David W. Lacey

                          Title      Vice President, Human Resources

                          Employer   _____________________________________

                          By         _____________________________________

                          Title      _____________________________________

                                       14
<PAGE>

                                 EXECUTION PAGE
                                (Employer's Copy)

IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this 16th day of May, 2003.

                          Employer  Technitrol, Inc.

                          By        /s/ David W. Lacey

                          Title     Vice President, Human Resources

                          Employer  _____________________________________

                          By        _____________________________________

                          Title     _____________________________________

                                       15
<PAGE>

                                  Attachment A

Pursuant to Section 1.03(a), the following are the Employees who are eligible to
participate in the Plan:

                                   Employer___________________________________

                                   By      ___________________________________

                                   Title   ___________________________________

                                   Date    ___________________________________

Note: The Employer must revise Attachment A to add Employees as they become
      eligible or delete Employees who are no longer eligible. Attachment A
      should be signed and dated every time a change is made.

                                       16
<PAGE>

                                  Attachment B

(a) |_| The Participant's vested percentage in Matching Contributions elected
        in Section 1.05(b) shall be based upon the following schedule:
         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

(b) |_| The Participant's vested percentage in Employer Contributions elected
        in Section 1.05(c) shall be based upon the following schedule:
         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

         _____________________________________________________________________

                                       17
<PAGE>

Article 2. Definitions.

2.01. Definitions.

      (a) Wherever used herein, the following terms have the meanings set forth
      below, unless a different meaning is clearly required by the context:

            (1) "Account" means an account established on the books of the
            Employer for the purpose of recording amounts credited on behalf of
            a Participant and any income, expenses, gains or losses included
            thereon.

            (2) "Administrator" means the Employer adopting this Plan, or other
            person designated by the Employer in Section 1.01(b).

            (3) "Adoption Agreement" means Article 1, under which the Employer
            establishes and adopts or amends the Plan and designates the
            optional provisions selected by the Employer. The provisions of the
            Adoption Agreement shall be an integral part of the Plan.

            (4) "Beneficiary" means the person or persons entitled under Section
            7.02 to receive benefits under the Plan upon the death of a
            Participant.

            (5) "Code" means the Internal Revenue Code of 1986, as amended from
            time to time.

            (6) "Compensation" means for purposes of Article 4 (Contributions)
            wages as defined in Section 3401(a) of the Code and all other
            payments of compensation to an employee by the Employer (in the
            course of the Employer's trade or business) for which the Employer
            is required to furnish the employee a written statement under
            Section 6041(d) and 6051(a)(3) of the Code, excluding any items
            elected by the Employer in Section 1.04, reimbursements or other
            expense allowances, fringe benefits (cash and non-cash), moving
            expenses, deferred compensation and welfare benefits, but including
            amounts that are not includable in the gross income of the
            Participant under a salary reduction agreement by reason of the
            application of Sections 125, 402(a)(8), or 403(b) of the Code.
            Compensation shall be determined without regard to any rules under
            Section 3401(a) of the Code that limit the remuneration included in
            wages based on the nature or location of the employment or the
            services performed (such as the exception for agricultural labor in
            Section 3401(a)(2) of the Code).

                  Compensation shall also include amounts deferred pursuant to
            an election under Section 4.01.

                  In the case of any Self-Employed Individual or an
            Owner-Employee, Compensation means the Self-Employed Individual's
            Earned Income.

            (7) "Earned Income" means the net earnings of a Self-Employed
            Individual derived from the trade or business with respect to which
            the Plan is established and for which the personal services of such
            individual are a material income-providing factor, excluding any
            items not included in gross income and the deductions allocated to
            such items, except that for taxable years beginning after December
            31, 1989 net earnings shall be determined with regard to the
            deduction allowed under Section 164(f) of the Code, to the extent
            applicable to the Employer. Net earnings shall be reduced by
            contributions of the Employer to any qualified plan, to the extent a
            deduction is allowed to the Employer for such contributions under
            Section 404 of the Code.

                                       18
<PAGE>

            (8) "Employee" means any employee of the Employer, Self-Employed
            Individual or Owner-Employee.

            (9) "Employer" means the employer named in Section 1.02(a) and any
            Related Employers designated in Section 1.02(b).

            (10) "Employment Commencement Date" means the date on which the
            Employee first performs an Hour of Service.

            (11) "Entry Date" means the date(s) designated in Section 1.03(b).

            (12) "ERISA" means the Employee Retirement Income Security Act of
            1974, as from time to time amended.

            (13) "Fund Share" means the share, unit, or other evidence of
            ownership in a Permissible Investment.

            (14) "Hour of Service" means, with respect to any Employee,

                  (A) Each hour for which the Employee is directly or indirectly
                  paid, or entitled to payment, for the performance of duties
                  for the Employer or a Related Employer, each such hour to be
                  credited to the Employee for the computation period in which
                  the duties were performed;

                  (B) Each hour for which the Employee is directly or indirectly
                  paid, or entitled to payment, by the Employer or Related
                  Employer (including payments made or due from a trust fund or
                  insurer to which the Employer contributes or pays premiums) on
                  account of a period of time during which no duties are
                  performed (irrespective of whether the employ-ment
                  relationship has terminated) due to vacation, holiday,
                  illness, incapacity, disability, layoff, jury duty, military
                  duty, or leave of absence, each such hour to be credited to
                  the Employee for the Eligibility Computation Period in which
                  such period of time occurs, subject to the following rules:

                        (i) No more than 501 Hours of Service shall be credited
                        under this paragraph (B) on account of any single
                        continuous period during which the Employee performs no
                        duties;

                        (ii) Hours of Service shall not be credited under this
                        paragraph (B) for a payment which solely reimburses the
                        Employee for medically-related expenses, or which is
                        made or due under a plan maintained solely for the
                        purpose of complying with applicable workmen's
                        compensation, unemployment compensation or disability
                        insurance laws; and

                        (iii) If the period during which the Employee performs
                        no duties falls within two or more computation periods
                        and if the payment made on account of such period is not
                        calculated on the basis of units of time, the Hours of
                        Service credited with respect to such period shall be
                        allocated between not more than the first two such
                        computation periods on any reasonable basis consistently
                        applied with respect to similarly situated Employees;
                        and

                  (C) Each hour not counted under paragraph (A) or (B) for which
                  back pay, irrespective of mitigation of damages, has been
                  either awarded or agreed to be paid by the Employer or a
                  Related Employer, each such hour to be credited to the
                  Employee for the computation period to which the award or
                  agreement pertains rather than the computation period in which
                  the award agreement or payment is made.

                                       19
<PAGE>

                        For purposes of determining Hours of Service, Employees
                  of the Employer and of all Related Employers will be treated
                  as employed by a single employer. For purposes of paragraphs
                  (B) and (C) above, Hours of Service will be calculated in
                  accordance with the provisions of Section 2530.200b-2(b) of
                  the Department of Labor regulations, which are incorporated
                  herein by reference.

                        Solely for purposes of determining whether a break in
                  service for participation purposes has occurred in a
                  computation period, an individual who is absent from work for
                  maternity or paternity reasons shall receive credit for the
                  hours of service which would otherwise been credited to such
                  individual but for such absence, or in any case in which such
                  hours cannot be determined, 8 hours of service per day of such
                  absence. For purposes of this paragraph, an absence from work
                  for maternity reasons means an absence (1) by reason of the
                  pregnancy of the individual, (2) by reason of a birth of a
                  child of the individual, (3) by reason of the placement of a
                  child with the individual in connection with the adoption of
                  such child by such individual, or (4) for purposes of caring
                  for such child for a period beginning immediately following
                  such birth or placement. The hours of service credited under
                  this paragraph shall be credited (1) in the computation period
                  in which the absence begins if the crediting is necessary to
                  prevent a break in service in that period, or (2) in all other
                  cases, in the following computation period.

            (15) "Normal Retirement Age" means the normal retirement age
            specified in Section 1.07(f) of the Adoption Agreement.

            (16) "Owner-Employee" means, if the Employer is a sole
            proprietorship, the individual who is the sole proprietor, or, if
            the Employer is a partnership, a partner who owns more than 10
            percent of either the capital interest or the profits interest of
            the partnership.

            (17) "Participant" means any Employee who participates in the Plan
            in accordance with Article 3 hereof.

            (18) "Permissible Investment" means the investments specified by the
            Employer as available for investment of assets of the Trust and
            agreed to by the Trustee. The Permissible Investments under the Plan
            shall be listed in the Service Agreement.

            (19) "Plan" means the plan established by the Employer as set forth
            herein as a new plan or as an amendment to an existing plan, by
            executing the Adoption Agreement, together with any and all
            amendments hereto.

            (20) "Plan Year" means the 12-consecutive-month period designated by
            the Employer in Section 1.01(d).

            (21) "Related Employer" means any employer other than the Employer
            named in Section 1.02(a), if the Employer and such other employer
            are members of a controlled group of corporations (as defined in
            Section 414(b) of the Code) or an affiliated service group (as
            defined in Section 414(m)), or are trades or businesses (whether or
            not incorporated) which are under common control (as defined in
            Section 414(c)), or such other employer is required to be aggregated
            with the Employer pursuant to regulations issued under Section
            414(o).

            (22) "Self-Employed Individual" means an individual who has Earned
            Income for the taxable year from the Employer or who would have had
            Earned Income but for the fact that the trade or business had no net
            profits for the taxable year.

            (23) "Service Agreement" means the agreement between the Employer
            and Trustee regarding the arrangement between the parties for
            recordkeeping services with respect to the Plan.

                                       20
<PAGE>

            (24) "Trust" means the trust created by the Employer.

            (25) "Trust Agreement" means the agreement between the Employer and
            the Trustee, as set forth in a separate agreement, under which
            assets are held, administered, and managed subject to the claims of
            the Employer's creditors in the event of the Employer's insolvency,
            until paid to Plan Participants and their Beneficiaries as specified
            in the Plan.

            (26) "Trust Fund" means the property held in the Trust by the
            Trustee.

            (27) "Trustee" means the corporation or individual(s) appointed by
            the Employer to administer the Trust in accordance with the Trust
            Agreement.

            (28) "Years of Service for Vesting" means, with respect to any
            Employee, the number of whole years of his periods of service with
            the Employer or a Related Employer (the elapsed time method to
            compute vesting service), subject to any exclusions elected by the
            Employer in Section 1.07(c). An Employee will receive credit for the
            aggregate of all time period(s) commencing with the Employee's
            Employment Commencement Date and ending on the date a break in
            service begins, unless any such years are excluded by Section
            1.07(c). An Employee will also receive credit for any period of
            severance of less than 12 consecutive months. Fractional periods of
            a year will be expressed in terms of days.

                  In the case of a Participant who has 5 consecutive 1-year
            breaks in service, all years of service after such breaks in service
            will be disregarded for the purpose of vesting the Employer-derived
            account balance that accrued before such breaks, but both pre-break
            and post-break service will count for the purposes of vesting the
            Employer-derived account balance that accrues after such breaks.
            Both accounts will share in the earnings and losses of the fund.

                  In the case of a Participant who does not have 5 consecutive
            1-year breaks in service, both the pre-break and post-break service
            will count in vesting both the pre-break and post-break
            employer-derived account balance.

                  A break in service is a period of severance of at least 12
            consecutive months. Period of severance is a continuous period of
            time during which the Employee is not employed by the Employer. Such
            period begins on the date the Employee retires, quits or is
            discharged, or if earlier, the 12-month anniversary of the date on
            which the Employee was otherwise first absent from service.

                  In the case of an individual who is absent from work for
            maternity or paternity reasons, the 12-consecutive month period
            beginning on the first anniversary of the first date of such absence
            shall not constitute a break in service. For purposes of this
            paragraph, an absence from work for maternity or paternity reasons
            means an absence (1) by reason of the pregnancy of the individual,
            (2) by reason of the birth of a child of the individual, (3) by
            reason of the placement of a child with the individual in connection
            with the adoption of such child by such individual, or (4) for
            purposes of caring for such child for a period beginning immediately
            following such birth or placement.

                  If the Plan maintained by the Employer is the plan of a
            predecessor employer, an Employee's Years of Service for Vesting
            shall include years of service with such predecessor employer. In
            any case in which the Plan maintained by the Employer is not the
            plan maintained by a predecessor employer, service for such
            predecessor shall be treated as service for the Employer to the
            extent provided in Section 1.08.

      (b) Pronouns used in the Plan are in the masculine gender but include the
      feminine gender unless the context clearly indicates otherwise.

                                       21
<PAGE>

Article 3. Participation.

3.01. Date of Participation. An eligible Employee (as set forth in Section
1.03(a)) who has filed an election pursuant to Section 4.01 will become a
Participant in the Plan on the first Entry Date coincident with or following the
date on which such election would otherwise become effective, as determined
under Section 4.01.

3.02. Resumption of Participation Following Reemployment. If a Participant
ceases to be an Employee and thereafter returns to the employ of the Employer he
will again become a Participant as of an Entry Date following the date on which
he completes an Hour of Service for the Employer following his re employment, if
he is an eligible Employee as defined in Section 1.03(a), and has filed an
election pursuant to Section 4.01.

3.03. Cessation or Resumption of Participation Following a Change in Status. If
any Participant continues in the employ of the Employer or Related Employer but
ceases to be an eligible Employee as defined in Section 1.03(a), the individual
shall continue to be a Participant until the entire amount of his benefit is
distributed; however, the individual shall not be entitled to make Deferral
Contributions or receive an allocation of Matching contributions during the
period that he is not an eligible Employee. Such Participant shall continue to
receive credit for service completed during the period for purposes of
determining his vested interest in his Accounts. In the event that the
individual subsequently again becomes an eligible Employee, the individual shall
resume full participation in accordance with Section 3.01.

Article 4. Contributions.

4.01. Deferral Contributions. Each Participant may elect to execute a salary
reduction agreement with the Employer to reduce his Compensation by a specified
percentage, not exceeding the percentage set forth in Section 1.05(a) and equal
to a whole number multiple of one (1) percent, per payroll period, subject to
any election regarding bonuses, as set out in Subsection 1.05(a)(2). Such
agreement shall become effective on the first day of the period as set forth in
the Participant's election. The election will be effective to defer Compensation
relating to all services performed in a calendar year subsequent to the filing
of such an election, subject to any election regarding bonuses, as set out in
Subsection 1.05(a)(2). An election once made will remain in effect until a new
election is made, provided, however that such an election choosing a
distribution date pursuant to 1.06(b)(1)(B) will become ineffective the first
day of the calendar year preceding the calendar year in which the election
requires the distribution to be made. A new election will be effective as of the
first day of the following calendar year and will apply only to Compensation
payable with respect to services rendered after such date. Amounts credited to a
Participant's account prior to the effective date of any new election will not
be affected and will be paid in accordance with that prior election. The
Employer shall credit an amount to the account maintained on behalf of the
Participant corresponding to the amount of said reduction. Under no
circumstances may a salary reduction agreement be adopted retroactively. A
Participant may revoke a salary reduction agreement for a calendar year during
that year, provided, however, that such revocation shall apply only to
Compensation not yet earned. In that event, the Participant shall be precluded
from electing to defer future Compensation hereunder during the calendar year to
which the revocation applies. Notwithstanding the above,

      (a) in the calendar year in which the Plan first becomes effective or in
      the year in which the Participant first becomes eligible to participate,
      an election to defer compensation may be made within 30 days after the
      Participant is first eligible or the Plan is first effective, which
      election shall be effective with respect to Compensation payable with
      respect to services rendered after the date of the election; and

      (b) in the event the Employer has elected to permit the deferral of bonus
      payments hereunder, a salary reduction agreement applicable to such bonus
      deferral must be made in the calendar year immediately preceding the
      calendar year to which the bonus relates.

                                       22
<PAGE>

4.02. Matching Contributions. The Employee shall make a "Matching Contribution"
to be credited to the account maintained on behalf of each Participant as
determined in accordance with Section 1.05(b) of the Adoption Agreement.

4.03. Employer Contributions. If so provided by the Employer in Section
1.05(c)(1), the Employer shall make an "Employer Contribution" to be credited to
the account maintained on behalf of each Participant who meets the requirement,
if any, of Section 1.05(c)(3) in the amount required by Section 1.05(c)(1). If
so provided by the Employer in Section 1.05(c)(2), the Employer may make an
"Employer Contribution" to be credited to the account maintained on behalf of
any Participant in such an amount as the Employer, in its sole discretion, shall
determine. In making "Employer Contributions" pursuant to Section 1.05(c)(2),
the Employer shall not be required to treat all Participants in the same manner
in determining such contributions and may determine the "Employer Contribution"
of any Participant to be zero.

4.04. Time of Making Contributions. The Employer shall remit contributions
deemed made hereunder to the Trust as soon as practicable after such
contributions are deemed made under the terms of the Plan.

Article 5. Participants' Accounts.

5.01. Individual Accounts. The Administrator will establish and maintain an
Account for each Participant, which will reflect Matching and Deferral
Contributions credited to the Account on behalf of the Participant and earnings,
expenses, gains and losses credited thereto, and deemed investments made with
amounts in the Participant's Account. The Administrator will establish and
maintain such other accounts and records as it decides in its discretion to be
reasonably required or appropriate in order to discharge its duties under the
Plan. Participants will be furnished statements of their Account values at least
once each Plan Year. The Administrator shall provide the Trustee with
information on the amount credited to the separate account of each Participant
maintained by the Administrator in its records.

Article 6. Investment of Contributions.

6.01. Manner of Investment. All amounts credited to the Accounts of Participants
shall be treated as though invested and reinvested only in eligible investments
selected by the Employer in the Service Agreement.

6.02. Investment Decisions. Investments in which the Accounts of Participants
shall be treated as invested and reinvested shall be directed by the Employer or
by each Participant, or both, in accordance with the Employer's election in
Section 1.11(a).

      (a) All dividends, interest, gains and distributions of any nature that
      would be earned in respect of Fund Shares in which the Account is treated
      as investing shall be credited to the Account as though reinvested in
      additional shares of that Permissible Investment.

      (b) Expenses that would be attributable to the acquisition of investments
      shall be charged to the Account of the Participant for which such
      investment is treated as having been made.

Article 7. Right to Benefits.

7.01. Normal or Early Retirement. If provided by the Employer in Section
1.07(e), each Participant who attains his Normal Retirement Age or Early
Retirement Age will have a nonforfeitable interest in his Account in accordance
with the vesting schedule(s) elected in Section 1.07. If a Participant retires
on or after attainment of Normal or Early Retirement Age, such retirement is
referred to as a normal retirement. On or after his normal retirement, the
balance of the Participant's Account, plus any amounts thereafter

                                       23
<PAGE>

credited to his Account, subject to the provisions of Section 7.06, will be
distributed to him in accordance with Article 8.

      If provided by the Employer in Section 1.07, a Participant who separates
from service before satisfying the age requirements for early retirement, but
has satisfied the service requirement will be entitled to the distribution of
his Account, subject to the provisions of Section 7.06, in accordance with
Article 8, upon satisfaction of such age requirement.

7.02. Death. If a Participant dies before the distribution of his Account has
commenced, or before such distribution has been completed, his Account shall
become vested in accordance with the vesting schedule(s) elected in Section 1.07
and his designated Beneficiary or Beneficiaries will be entitled to receive the
balance or remaining balance of his Account, plus any amounts thereafter
credited to his Account, subject to the provisions of Section 7.06. Distribution
to the Beneficiary or Beneficiaries will be made in accordance with Article 8.

      A Participant may designate a Beneficiary or Beneficiaries, or change any
prior designation of Beneficiary or Beneficiaries, by giving notice to the
Administrator on a form designated by the Administrator. If more than one person
is designated as the Beneficiary, their respective interests shall be as
indicated on the designation form.

      A copy of the death certificate or other sufficient documentation must be
filed with and approved by the Administrator. If upon the death of the
Participant there is, in the opinion of the Administrator, no designated
Beneficiary for part or all of the Participant's Account, such amount will be
paid to his surviving spouse or, if none, to his estate (such spouse or estate
shall be deemed to be the Beneficiary for purposes of the Plan). If a
Beneficiary dies after benefits to such Beneficiary have commenced, but before
they have been completed, and, in the opinion of the Administrator, no person
has been designated to receive such remaining benefits, then such benefits shall
be paid to the deceased Beneficiary's estate.

7.03. Other Termination of Employment. If provided by the Employer in Section
1.07, if a Participant terminates his employment for any reason other than death
or normal retirement, he will be entitled to a termination benefit equal to (i)
the vested percentage(s) of the value of the Matching Contributions to his
Account, as adjusted for income, expense, gain, or loss, such percentage(s)
determined in accordance with the vesting schedule(s) selected by the Employer
in Section 1.07, and (ii) the value of the Deferral Contributions to his Account
as adjusted for income, expense, gain or loss. The amount payable under this
Section 7.03 will be subject to the provisions of Section 7.06 and will be
distributed in accordance with Article 8.

7.04. Separate Account. If a distribution from a Participant's Account has been
made to him at a time when he has a nonforfeitable right to less than 100
percent of his Account, the vesting schedule in Section 1.07 will thereafter
apply only to amounts in his Account attributable to Matching Contributions
allocated after such distribution. The balance of his Account immediately after
such distribution will be transferred to a separate account that will be
maintained for the purpose of determining his interest therein according to the
following provisions.

      At any relevant time prior to a forfeiture of any portion thereof under
Section 7.05, a Participant's nonforfeitable interest in his Account held in a
separate account described in the preceding paragraph will be equal to P(AB +
(RxD))-(RxD), where P is the nonforfeitable percentage at the relevant time
determined under Section 7.05; AB is the account balance of the separate account
at the relevant time; D is the amount of the distribution; and R is the ratio of
the account balance at the relevant time to the account balance after
distribution. Following a forfeiture of any portion of such separate account
under Section 7.05 below, any balance in the Participant's separate account will
remain fully vested and nonforfeitable.

7.05. Forfeitures. If a Participant terminates his employment, any portion of
his Account (including any amounts credited after his termination of employment)
not payable to him under Section 7.03 will be forfeited by him.

                                       24
<PAGE>

7.06. Adjustment for Investment Experience. If any distribution under this
Article 7 is not made in a single payment, the amount remaining in the Account
after the distribution will be subject to adjustment until distributed to
reflect the income and gain or loss on the investments in which such amount is
treated as invested and any expenses properly charged under the Plan to such
amounts.

7.07. Unforeseeable Emergency Withdrawals. Subject to the provisions of Article
8, a Participant shall not be permitted to withdraw his Account (and earnings
thereon) prior to retirement or termination of employment, except that, to the
extent permitted under Section 1.09, a Participant may apply to the
Administrator to withdraw some or all of his Account if such withdrawal is made
on account of a unforeseeable emergency as determined by the Administrator.

7.08. Change in Control. If the Employer has elected to apply Section 1.06(c),
then, upon a Change in Control, as defined in Section 1.12, notwithstanding any
other provision of the Plan to the contrary, all Participants shall have a
nonforfeitable right to receive the entire amount of their account balances
under the Plan and all such amounts shall be paid out to Participants as soon as
administratively practicable.

Article 8. Distribution of Benefits.

8.01. Form of Distribution of Benefits to Participants and Beneficiaries. The
Plan provides for distribution as a lump sum to be paid in cash on the date
specified by the Employer in Section 1.06 pursuant to the method provided in
Section 8.02. If elected by the Employer in Section 1.10 and specified in the
Participant's deferral election, the distribution will be paid through a
systematic withdrawal plan (installments) for a time period not exceeding 10
years beginning on the date specified by the Employer in Section 1.06.

8.02. Events Requiring Distribution of Benefits to Participants and
Beneficiaries.

      (a) If elected by the Employer in Section 1.06(a), the Participant will
      receive a distribution upon the earliest of the events specified by the
      Employer in Section 1.06(a), subject to the provisions of Section 7.08,
      and at the time indicated in Section 1.06(a)(2). If the Participant dies
      before any event in Section 1.06(a) occurs, the Participant shall be
      considered to have terminated employment and the Participant's benefit
      will be paid to the Participant's Beneficiary in the same form and at the
      same time as it would have been paid to the Participant pursuant to this
      Article 8.

      (b) If elected by the Employer in Section 1.06(b), the Participant will
      receive a distribution of all amounts not deferred pursuant to Section
      1.06(b)(1)(B) (and earnings attributable to those amounts) upon
      termination of employment. If elected by the Employer in Section
      1.06(b)(1)(B), the Participant shall have the election to receive
      distributions of amounts deferred pursuant to Section 4.01 (and earnings
      attributable to those amounts) after a date specified by the Participant
      in his deferral election which is at least 12 months after the first day
      of the calendar year in which such amounts would be earned. Amounts
      distributed to the Participant pursuant to Section 1.06(b) shall be
      distributed at the time indicated in Section 1.06(b)(2). Subject to the
      provisions of Section 7.08, the Participant shall receive a distribution
      in the form provided in Section 8.01. If the Participant dies before any
      event in Section 1.06(a) occurs, the Participant shall be considered to
      have terminated employment and the Participant's benefit will be paid to
      the Participant's Beneficiary in the same form and at the same time as it
      would have been paid to the Participant pursuant to this Article 8.
      However, if the Participant dies before the date specified by the
      Participant in an election pursuant to Section 1.06(b)(1)(B), then the
      Participant's benefit shall be paid to the Participant's Beneficiary in
      the form provided in Section 8.01 as if the Participant had elected to be
      paid at termination of employment.

8.03. Determination of Method of Distribution. The Participant will determine
the method of distribution of benefits to himself and his Beneficiary, subject
to the provisions of Section 8.02. Such determination will be made at the time
the Participant enrolls in the Plan or at such later time as permitted by the
Plan Administrator, provided that the Participant may not elect to change the
method of distribution later than 12 months prior to the date benefits are
distributable to the Participant. Unless the Employer has elected Section
1.06(b) to control distributions, the period certain specified in a
Participant's first deferral

                                       25
<PAGE>

election specifying distribution under a systematic withdrawal plan shall apply
to all subsequent elections of distributions under a systematic withdrawal plan
made by the Participant. Once a Participant has made an election for the method
of distribution, that election shall be effective for all contributions made on
behalf of the Participant attributable to any Plan Year after that election was
made and before the Plan Year in which that election was altered in the manner
prescribed by the Administrator. If the Participant does not designate in the
manner prescribed by the Administrator the method of distribution to him and his
Beneficiary, the method of distribution shall be a lump sum at termination of
employment.

8.04. Notice to Trustee. The Administrator will notify the Trustee, pursuant to
the method stated in the Trust Agreement for providing direction, whenever any
Participant or Beneficiary is entitled to receive benefits under the Plan. The
Administrator's notice shall indicate the form, amount and frequency of benefits
that such Participant or Beneficiary shall receive.

8.05. Time of Distribution. In no event will distribution to a Participant be
made later than the date specified by the Participant in his salary reduction
agreement. All distributions will be made as soon as administratively feasible
following the distribution date specified in Section 1.06 or Section 7.08, if
applicable.

Article 9. Amendment and Termination.

9.01 Amendment by Employer. The Employer reserves the authority to amend the
Plan by filing with the Trustee an amended Adoption Agreement, executed by the
Employer only, on which said Employer has indicated a change or changes in
provisions previously elected by it. Such changes are to be effective on the
effective date of such amended Adoption Agreement. Any such change
notwithstanding, no Participant's Account shall be reduced by such change below
the amount to which the Participant would have been entitled if he had
voluntarily left the employ of the Employer immediately prior to the date of the
change. The Employer may from time to time make any amendment to the Plan that
may be necessary to satisfy the Code or ERISA. The Employer's board of directors
or other individual specified in the resolution adopting this Plan shall act on
behalf of the Employer for purposes of this Section 9.01.

9.02 Retroactive Amendments. An amendment made by the Employer in accordance
with Section 9.01 may be made effective on a date prior to the first day of the
Plan Year in which it is adopted if such amendment is necessary or appropriate
to enable the Plan and Trust to satisfy the applicable requirements of the Code
or ERISA or to conform the Plan to any change in federal law or to any
regulations or ruling thereunder. Any retroactive amendment by the Employer
shall be subject to the provisions of Section 9.01.

9.03. Termination. The Employer has adopted the Plan with the intention and
expectation that contributions will be continued indefinitely. However, said
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may discontinue contributions under the Plan or terminate the
Plan at any time by written notice delivered to the Trustee without any
liability hereunder for any such discontinuance or termination.

9.04. Distribution upon Termination of the Plan. Upon termination of the Plan,
no further Deferral Contributions or Matching Contributions shall be made under
the Plan, but Accounts of Participants maintained under the Plan at the time of
termination shall continue to be governed by the terms of the Plan until paid
out in accordance with the terms of the Plan.

Article 10. Miscellaneous.

10.01. Communication to Participants. The Plan will be communicated to all
Participants by the Employer promptly after the Plan is adopted.

10 02. Limitation of Rights. Neither the establishment of the Plan and the
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as

                                       26
<PAGE>

giving to any Participant or other person any legal or equitable right against
the Employer, Administrator or Trustee, except as provided herein; and in no
event will the terms of employment or service of any Participant be modified or
in any way affected hereby.

10.03. Nonalienability of Benefits. The benefits provided hereunder will not be
subject to alienation, assignment, garnishment, attachment, execution or levy of
any kind, either voluntarily or involuntarily, and any attempt to cause such
benefits to be so subjected will not be recognized, except to such extent as may
be required by law.

10 04. Facility of Payment. In the event the Administrator determines, on the
basis of medical reports or other evidence satisfactory to the Administrator,
that the recipient of any benefit payments under the Plan is incapable of
handling his affairs by reason of minority, illness, infirmity or other
incapacity, the Administrator may disburse such payments, or direct the Trustee
to disburse such payments, as applicable, to a person or institution designated
by a court which has jurisdiction over such recipient or a person or institution
otherwise having the legal authority under State law for the care and control of
such recipient. The receipt by such person or institution of any such payments
shall be complete acquittance therefore, and any such payment to the extent
thereof, shall discharge the liability of the Trust for the payment of benefits
hereunder to such recipient.

10.05. Information between Employer and Trustee. The Employer agrees to furnish
the Trustee, and the Trustee agrees to furnish the Employer with such
information relating to the Plan and Trust as may be required by the other in
order to carry out their respective duties hereunder, including without
limitation information required under the Code or ERISA and any regulations
issued or forms adopted thereunder.

10.06. Notices. Any notice or other communication in connection with this Plan
shall be deemed delivered in writing if addressed as provided below and if
either actually delivered at said address or, in the case of a letter, three
business days shall have elapsed after the same shall have been deposited in the
United States mails, first-class postage prepaid and registered or certified:

      (a) If to the Employer or Administrator, to it at the address set forth in
      the Adoption Agreement, to the attention of the person specified to
      receive notice in the Adoption Agreement;

      (b) If to the Trustee, to it at the address set forth in the Trust
      Agreement;

or, in each case at such other address as the addressee shall have specified by
written notice delivered in accordance with the foregoing to the addressor's
then effective notice address.

10.07. Governing Law. The Plan and the accompanying Adoption Agreement will be
construed, administered and enforced according to ERISA, and to the extent not
preempted thereby, the laws of the Commonwealth of Massachusetts, without regard
to its conflicts of law principles.

                                       27
<PAGE>

Article 11. Plan Administration.

11.01. Powers and responsibilities of the Administrator. The Administrator has
the full power and the full responsibility to administer the Plan in all of its
details, subject, however, to the applicable requirements of ERISA. The
Administrator's powers and responsibilities include, but are not limited to, the
following:

      (a) To make and enforce such rules and regulations as it deems necessary
      or proper for the efficient administration of the Plan;

      (b) To interpret the Plan, its interpretation thereof in good faith to be
      final and conclusive on all persons claiming benefits under the Plan;

      (c) To decide all questions concerning the Plan and the eligibility of any
      person to participate in the Plan;

      (d) To administer the claims and review procedures specified in Section
      11.03;

      (e) To compute the amount of benefits which will be payable to any
      Participant, former Participant or Beneficiary in accordance with the
      provisions of the Plan;

      (f) To determine the person or persons to whom such benefits will be paid;

      (g) To authorize the payment of benefits;

      (h) To comply with any applicable reporting and disclosure requirements of
      Part 1 of Subtitle B of Title I of ERISA;

      (i) To appoint such agents, counsel, accountants, and consultants as may
      be required to assist in administering the Plan;

      (j) By written instrument, to allocate and delegate its responsibilities,
      including the formation of an Administrative Committee to administer the
      Plan;

11.02. Nondiscriminatory Exercise of Authority. Whenever, in the administration
of the Plan, any discretionary action by the Administrator is required, the
Administrator shall exercise its authority in a nondiscriminatory manner so that
all persons similarly situated will receive substantially the same treatment.

11.03. Claims and Review Procedures.

      (a) Claims Procedure. If any person believes he is being denied any rights
      or benefits under the Plan, such person may file a claim in writing with
      the Administrator. If any such claim is wholly or partially denied, the
      Administrator will notify such person of its decision in writing. Such
      notification will contain (i) specific reasons for the denial, (ii)
      specific reference to pertinent Plan provisions, (iii) a description of
      any additional material or information necessary for such person to
      perfect such claim and an explanation of why such material or information
      is necessary, and (iv) information as to the steps to be taken if the
      person wishes to submit a request for review, including a statement of the
      such person's right to bring a civil action under Section 502(a) of ERISA
      following as adverse determination upon review. Such notification will be
      given within 90 days after the claim is received by the Administrator (or
      within 180 days, if special circumstances require an extension of time for
      processing the claim, and if written notice of such extension and
      circumstances is given to such person within the initial 90-day period).

            If the claim concerns disability benefits under the Plan, the Plan
      Administrator must notify the claimant in writing within 45 days after the
      claim has been filed in order to deny it. If special circumstances require
      an extension of time to process the claim, the Plan Administrator must
      notify

                                       28
<PAGE>

      the claimant before the end of the 45-day period that the claim may take
      up to 30 days longer to process. If special circumstances still prevent
      the resolution of the claim, the Plan Administrator may then only take up
      to another 30 days after giving the claimant notice before the end of the
      original 30-day extension. If the Plan Administrator gives the claimant
      notice that the claimant needs to provide additional information regarding
      the claim, the claimant must do so within 45 days of that notice.

      (b) Review Procedure. Within 60 days after the date on which a person
      receives a written notice of a denied claim (or, if applicable, within 60
      days after the date on which such denial is considered to have occurred),
      such person (or his duly authorized representative) may (i) file a written
      request with the Administrator for a review of his denied claim and of
      pertinent documents and (ii) submit written issues and comments to the
      Administrator. This written request may include comments, documents,
      records, and other information relating to the claim for benefits. The
      claimant shall be provided, upon the claimant's request and free of
      charge, reasonable access to, and copies of, all documents, records, and
      other information relevant to the claim for benefits. The review will take
      into account all comments, documents, records, and other information
      submitted by the claimant relating to the claim, without regard to whether
      such information was submitted or considered in the initial benefit
      determination. The Administrator will notify such person of its decision
      in writing. Such notification will be written in a manner calculated to be
      understood by such person and will contain specific reasons for the
      decision as well as specific references to pertinent Plan provisions. The
      decision on review will be made within 60 days after the request for
      review is received by the Administrator (or within 120 days, if special
      circumstances require an extension of time for processing the request,
      such as an election by the Administrator to hold a hearing, and if written
      notice of such extension and circumstances is given to such person within
      the initial 60-day period). The extension notice shall indicate the
      special circumstances requiring an extension of time and the date by which
      the Plan expects to render the determination on review.

            If the initial claim was for disability benefits under the Plan and
      has been denied by the Plan Administrator, the claimant will have 180 days
      from the date the claimant received notice of the claim's denial in which
      to appeal that decision. The review will be handled completely
      independently of the findings and decision made regarding the initial
      claim and will be processed by an individual who is not a subordinate of
      the individual who denied the initial claim. If the claim requires medical
      judgment, the individual handling the appeal will consult with a medical
      professional whom was not consulted regarding the initial claim and who is
      not a subordinate of anyone consulted regarding the initial claim and
      identify that medical professional to the claimant.

            The Plan Administrator shall provide the claimant with written
      notification of a plan's benefit determination on review. In the case of
      an adverse benefit determination, the notification shall set forth, in a
      manner calculated to be understood by the claimant - the specific reason
      or reasons for the adverse determinations, reference to the specific plan
      provisions on which the benefit determination is based, a statement that
      the claimant is entitled to receive, upon the claimant's request and free
      of charge, reasonable access to, and copies of, all documents, records,
      and other information relevant to the claim for benefits.

11.04. Costs of Administration. Unless some or all costs and expenses are paid
by the Employer, all reasonable costs and expenses (including legal, accounting,
and employee communication fees) incurred by the Administrator and the Trustee
in administering the Plan and Trust will be paid first from the forfeitures (if
any) resulting under Section 7.05, then from the remaining Trust Fund. All such
costs and expenses paid from the Trust Fund will, unless allocable to the
Accounts of particular Participants, be charged against the Accounts of all
Participants on a prorata basis or in such other reasonable manner as may be
directed by the Administrator.

                                       29
<PAGE>

TECHNITROL, INC. SUPPLEMENTAL SAVINGS PLAN                          May 16, 2003
ADOPTION AGREEMENT

--------------------------------------------------------------------------------
INSERT A
--------------------------------------------------------------------------------

1.03(a) 2

Employees whose compensation (as defined in this Plan) exceeds maximum covered
by the Technitrol, Inc. 401(k) Retirement Savings Plan.

--------------------------------------------------------------------------------
INSERT B
--------------------------------------------------------------------------------

1.05(b) 1E

Value of restricted stock and related payments under the restricted stock plan.

--------------------------------------------------------------------------------
INSERT C
--------------------------------------------------------------------------------

"Matching Contribution Offset. For each Participant who has made deferrals of at
least the maximum allowed pursuant to Section 402(g) of the Code or the maximum
allowed under the Employer's plan listed below to such plan, the Employer shall
make a Matching Contribution in an amount equal to (A) minus (B) below:

      (A) The matching employer contribution that the Participant would have
received under the Technitrol, Inc. 401(k) Retirement Savings Plan or the Pulse
Engineering, Inc. 401(k) Plan, whichever Plan that he participates, if (i) the
limit on compensation under Section 401(a)(17) of the Code was not applicable
for the year, (ii) the limit on elective deferrals under Section 402(g) of the
Code was not applicable and (iii) the Participant made elective deferrals to
such Plan equal to 4% of his Compensation (or 6% of his Compensation if he
participates in the Pulse Engineering, Inc. 401(k) Plan).

      (B) The amount of the matching employer contribution actually allocated on
behalf of the Participant under the Technitrol, Inc. 401(k) Retirement Savings
Plan or the Pulse Engineering, Inc. 401(k) Plan for the Plan Year of the
determination of the Matching Contribution hereunder."

--------------------------------------------------------------------------------
INSERT D
--------------------------------------------------------------------------------

1.07 (d)

Cause, which for purposes hereof shall have the meaning set forth in any
unexpired employment or severance agreement between the Participant and the
Company or Designated Subsidiary (and in the absence of any such agreement,
shall mean (A) the continued and willful failure of the Employee to follow the
lawful orders of his/her direct superior, (B) violation by the Employee of a
published rule or regulation of the Company or a provision of the Company's
Statement of Principles (in effect from time to time) or (C) conviction of a
crime which renders the Employee unable to perform his/her duties effectively;
provided that in the case of (A) or (B), the Company shall give the Employee
written notice of the action or omission which the Company believes to
constitute cause and the Employee shall have 30 calendar days to cure such
action or omission. Determination of "cause" by the Company shall be final and
binding on all parties.

--------------------------------------------------------------------------------
INSERT E
--------------------------------------------------------------------------------

1.12

"Change in Control" shall mean the occurrence of either of the following events:
(c) any "Person" or "Persons" as defined in Sections 13(d) and 14(b) of the
Securities Exchange Act of 1934, as amended (the "Act") is or becomes the
"Beneficial Owner" (as defined in Rule 13(d)-3 of the Act), directly or
indirectly, of securities of the Company representing more than twenty-five
percent (25%) of the combined voting power of the Company's then outstanding
securities or (d) more than fifty percent (50%) of the assets of the Company,
which are used to generate more than fifty percent (50%) of the earnings of the
Company in any one of the last three fiscal years, are disposed of, directly or
indirectly, by the Company (including stock or assets of a subsidiary (ies)) in
a sale, exchange, merger, reorganization or similar transaction.

EMPLOYER: Technitrol, Inc.               DATE: May 16, 2003

BY: /s/  David W. Lacey                  TITLE:  Vice President, Human Resources

                                       30

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