Document:

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                                                                    Exhibit 10.1

                         QUATRX PHARMACEUTICALS COMPANY

                 AMENDED AND RESTATED 2005 STOCK INCENTIVE PLAN

                          AS AMENDED ON APRIL 18, 2006

1.   PURPOSES OF THE PLAN.

     The purpose of this Plan is to encourage ownership in QuatRx
Pharmaceuticals Company, a Delaware corporation (the "COMPANY"), by key
personnel whose long-term employment or other service relationship with the
Company is considered essential to the Company's continued progress and,
thereby, encourage recipients to act in the stockholders' interest and share in
the Company's success.

2.   DEFINITIONS.

     As used herein, the following definitions shall apply:

          (a) "ADMINISTRATOR" means the Board, any Committees or such delegates
     as shall be administering the Plan in accordance with Section 4 of the
     Plan.

          (b) "AFFILIATE" means any entity that is directly or indirectly
     controlled by the Company or any entity in which the Company has a
     significant ownership interest as determined by the Administrator.

          (c) "APPLICABLE LAWS" means the requirements relating to the
     administration of stock option and stock award plans under U.S. federal and
     state laws, any stock exchange or quotation system on which the Company has
     listed or submitted for quotation the Common Stock to the extent provided
     under the terms of the Company's agreement with such exchange or quotation
     system and, with respect to Awards subject to the laws of any foreign
     jurisdiction where Awards are, or will be, granted under the Plan, the laws
     of such jurisdiction.

          (d) "AWARD" means a Stock Award, or Option granted in accordance with
     the terms of the Plan.

          (e) "AWARDEE" means an Employee, Consultant or Director of the Company
     or any Affiliate who has been granted an Award under the Plan.

          (f) "AWARD AGREEMENT" means a Stock Award Agreement and/or Option
     Agreement, which may be in written or electronic format, in such form and
     with such terms and conditions as may be specified by the Administrator,
     evidencing the terms and conditions of an individual Award. Each Award
     Agreement is subject to the terms and conditions of the Plan.

          (g) "BOARD" means the Board of Directors of the Company.

          (h) "CHANGE IN CONTROL" means any of the following, unless the
     Administrator provides otherwise:

               i. any merger or consolidation in which the Company shall not be
          the surviving entity (or survives only as a subsidiary of another
          entity whose stockholders did not own all or substantially all of the
          Common Stock in substantially the same proportions as immediately
          prior to such transaction),

               ii. the sale of all or substantially all of the Company's assets
          to any other person or entity (other than a wholly-owned subsidiary),

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               iii. the acquisition of beneficial ownership of a controlling
          interest (including, without limitation, power to vote) the
          outstanding shares of Common Stock by any person or entity (including
          a "group" as defined by or under Section 13(d)(3) of the Exchange
          Act),

               iv. the dissolution or liquidation of the Company,

               v. a contested election of Directors, as a result of which or in
          connection with which the persons who were Directors before such
          election or their nominees (the "INCUMBENT DIRECTORS") cease to
          constitute a majority of the Board; provided however that if the
          election, or nomination for election by the Company's stockholders, of
          any new director was approved by a vote of at least fifty percent
          (50%) of the Incumbent Directors, such new Director shall be
          considered as an Incumbent Director, or

               vi. any other event specified by the Board or a Committee,
          regardless of whether at the time an Award is granted or thereafter.

          (i) "CODE" means the United States Internal Revenue Code of 1986, as
     amended.

          (j) "COMMITTEE" means the compensation committee of the Board or a
     committee of Directors appointed by the Board in accordance with Section 4
     of the Plan.

          (k) "COMMON STOCK" means the common stock of the Company.

          (l) "COMPANY" means QuatRx Pharmaceutical Company, a Delaware
     corporation, or its successor.

          (m) "CONSULTANT" means any person engaged by the Company or any
     Affiliate to render services to such entity as an advisor or consultant.

          (n) "CONVERSION AWARD" has the meaning set forth in Section 4(b)(xi)
     of the Plan.

          (o) "DIRECTOR" means a member of the Board.

          (p) "EMPLOYEE" means a regular, active employee of the Company or any
     Affiliate, including an Officer and/or Director. The Administrator shall
     determine whether or not the chairman of the Board qualifies as an
     "Employee." Within the limitations of Applicable Law, the Administrator
     shall have the discretion to determine the effect upon an Award and upon an
     individual's status as an Employee in the case of (i) any individual who is
     classified by the Company or its Affiliate as leased from or otherwise
     employed by a third party or as intermittent or temporary, even if any such
     classification is changed retroactively as a result of an audit, litigation
     or otherwise, (ii) any leave of absence approved by the Company or an
     Affiliate, (iii) any transfer between locations of employment with the
     Company or an Affiliate or between the Company and any Affiliate or between
     any Affiliates, (iv) any change in the Awardee's status from an employee to
     a Consultant or Director, and (v) at the request of the Company or an
     Affiliate an employee becomes employed by any partnership, joint venture or
     corporation not meeting the requirements of an Affiliate in which the
     Company or an Affiliate is a party.

          (q) "EXCHANGE ACT" means the United States Securities Exchange Act of
     1934, as amended.

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          (r) "FAIR MARKET VALUE" means, as of any date, the value of a share of
     Common Stock is determined as follows:

               i. if such Common Stock is then quoted on Nasdaq, its closing
          price on Nasdaq on the date of determination as reported in The Wall
          Street Journal;

               ii. if such Common Stock is publicly traded and is then listed on
          a national securities exchange, its closing price on the date of
          determination on the principal national securities exchange on which
          the Common Stock is listed or admitted to trading as reported in The
          Wall Street Journal;

               iii. if such Common Stock is publicly traded but is not quoted on
          Nasdaq nor listed or admitted to trading on a national securities
          exchange, the average of the closing bid and asked prices on the date
          of determination as reported by The Wall Street Journal (or, if not so
          reported, as otherwise reported by any newspaper or other source as
          the Board may determine); or

               iv. if none of the foregoing is applicable, by the Administrator
          in such manner as it shall deem reasonable in good faith.

          (s) "GRANT DATE" means the date upon which an Award is granted to an
     Awardee pursuant to this Plan.

          (t) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
     incentive stock option within the meaning of Section 422 of the Code and
     the regulations promulgated thereunder.

          (u) "NASDAQ" means the Nasdaq National Market.

          (v) "NONSTATUTORY STOCK OPTION" means an Option not intended to
     qualify as an Incentive Stock Option.

          (w) "OFFICER" means a person who is an officer of the Company within
     the meaning of Section 16 of the Exchange Act and the rules and regulations
     promulgated thereunder.

          (x) "OPTION" means a right granted under Section 8 to purchase a
     number of Shares at such exercise price, at such times, and on such other
     terms and conditions as are specified in the agreement or other documents
     evidencing the Option (the "OPTION AGREEMENT"). Both Options intended to
     qualify as Incentive Stock Options and Nonstatutory Stock Options may be
     granted under the Plan.

          (y) "PARTICIPANT" means the Awardee or any person (including any
     estate) to whom an Award has been assigned or transferred as permitted
     hereunder.

          (z) "PLAN" means this QuatRx Pharmaceuticals Company 2005 Stock
     Incentive Plan.

          (aa) "QUALIFYING PERFORMANCE CRITERIA" shall have the meaning set
     forth in Section 12(b) of the Plan.

          (bb) "SECTION 162(M) APPLICATION DATE" means the earliest to occur
     after the Company's initial public offering of (i) the expiration date of
     the Plan, (ii) a material modification of the Plan under the Section 162(m)
     regulations, (iii) the issuance of all Company stock and other compensation
     allocated under the Plan, or (iv) the first meeting of stockholders at
     which directors are to be elected that occurs after the close of the third
     calendar year following the calendar year in which the initial public
     offering occurs.

          (cc) "SECURITIES ACT" means the Securities Act of 1933, as amended.

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          (dd) "SHARE" means a share of the Common Stock, as adjusted in
     accordance with Section 13 of the Plan.

          (ee) "STOCK APPRECIATION RIGHT" means a right to receive cash and/or
     shares of Common Stock based on a change in the Fair Market Value of a
     specific number of shares of Common Stock granted under Section 11.

          (ff) "STOCK AWARD" means an award or issuance of Shares, Stock Units,
     Stock Appreciation Rights or similar awards made under Section 11 of the
     Plan, the grant, issuance, retention, vesting and/or transferability of
     which is subject during specified periods of time to such conditions
     (including continued employment or performance conditions) and terms as are
     expressed in the agreement or other documents evidencing the Award (the
     "STOCK AWARD AGREEMENT").

          (gg) "STOCK UNIT" means a bookkeeping entry representing an amount
     equivalent to the Fair Market Value of one Share (or a fraction or multiple
     of such value), payable in cash, property or Shares granted under Section
     11 of the Plan. Stock Units represent an unfunded and unsecured obligation
     of the Company, except as otherwise provided for by the Administrator.

          (hh) "SUBSIDIARY" means any company (other than the Company) in an
     unbroken chain of companies beginning with the Company, provided each
     company in the unbroken chain (other than the Company) owns, at the time of
     determination, stock possessing 50% or more of the total combined voting
     power of all classes of stock in one of the other companies in such chain.

          (ii) "TERMINATION OF EMPLOYMENT" shall mean ceasing to be an Employee,
     Consultant or Director, as determined in the sole discretion of the
     Administrator. However, for Incentive Stock Option purposes, Termination of
     Employment will occur when the Awardee ceases to be an employee (as
     determined in accordance with Section 3401(c) of the Code and the
     regulations promulgated thereunder) of the Company or one of its
     Subsidiaries. The Administrator shall determine whether any corporate
     transaction, such as a sale or spin-off of a division or business unit, or
     a joint venture, shall be deemed to result in a Termination of Employment.

          (jj) "TOTAL AND PERMANENT DISABILITY" shall have the meaning set forth
     in Section 22(e)(3) of the Code.

3.   STOCK SUBJECT TO THE PLAN.

          (a) Aggregate Limits. Subject to the provisions of Section 13 of the
     Plan, the aggregate number of Shares that may be issued pursuant to Awards
     granted under the Plan is 1,810,765 Shares increased by up to 422,415
     Shares issued under the Company's 2000 Equity Incentive Plan (the "Prior
     Plan") that are forfeited to the Company (e.g., in connection with the
     termination of the holder's employment) or that were subject to options
     granted pursuant to the Prior Plan which options terminate or expire or
     become unexercisable for any reason without having been exercised in full
     after April 14, 2005, plus an annual increase on the first day of each of
     the Company's fiscal years beginning on January 1, 2007 equal to the lesser
     of (i) four percent (4.0%) of the shares of Common Stock outstanding on the
     last day of the immediately preceeding fiscal year, (ii) 2,000,000 shares
     of Common Stock, or (iii) such lesser number of shares of Common Stock as
     the Board shall determine. Shares subject to Awards that are cancelled,
     expire or are forfeited shall be available for re-grant under the Plan. If
     an Awardee pays the exercise or purchase price of an Award through the
     tender of Shares, or if Shares are tendered or withheld to satisfy any
     Company withholding obligations, the number of Shares so tendered or
     withheld shall become available for re-issuance thereafter under the Plan.
     The Shares subject to the Plan may be either Shares reacquired by the
     Company, including Shares purchased in the open market, or authorized but
     unissued Shares.

          (b) Code Section 162(m) Share Limit. Subject to the provisions of
     Section 13 of the Plan, and provided that such limitation shall not apply
     until the Section 162(m) Application Date, the aggregate number of Shares
     subject to Awards granted under this Plan during any calendar year to any
     one Awardee shall not exceed 1,500,000, except that in connection with his
     or her first commencing service with the Company or an Affiliate, an
     Awardee may be granted Awards covering up to an additional 1,000,000

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     Shares during the year in which such service commences. Notwithstanding
     anything to the contrary in the Plan, the limitations set forth in this
     Section 3(b) shall be subject to adjustment under Section 13(a) of the Plan
     only to the extent that such adjustment will not affect the status of any
     Award intended to qualify as "performance-based compensation" under Code
     Section 162(m) or the ability to grant or the qualification of Incentive
     Stock Options under the Plan.

4.   ADMINISTRATION OF THE PLAN.

          (a) Procedure.

               i. Multiple Administrative Bodies. The Plan shall be administered
          by the Board, a Committee and/or their delegates.

               ii. Section 162. To the extent that the Administrator determines
          it to be desirable to qualify Awards granted hereunder as
          "performance-based compensation" within the meaning of Section 162(m)
          of the Code, Awards to "covered employees" within the meaning of
          Section 162(m) of the Code or Employees that the Committee determines
          may be "covered employees" in the future shall be made by a Committee
          of two or more "outside directors" within the meaning of Section
          162(m) of the Code.

               iii. Rule 16b-3. To the extent desirable to qualify transactions
          hereunder as exempt under Rule 16b-3 promulgated under the Exchange
          Act ("Rule 16b-3"), Awards to Officers and Directors shall be made by
          the entire Board or a Committee of two or more "non-employee
          directors" within the meaning of Rule 16b-3.

               iv. Other Administration. The Board or a Committee may delegate
          to an authorized officer or officers of the Company the power to
          approve Awards to persons eligible to receive Awards under the Plan
          who are not (A) subject to Section 16 of the Exchange Act or (B) at
          the time of such approval, "covered employees" under Section 162(m) of
          the Code.

               v. Delegation of Authority for the Day-to-Day Administration of
          the Plan. Except to the extent prohibited by Applicable Law, the
          Administrator may delegate to one or more individuals the day-to-day
          administration of the Plan and any of the functions assigned to it in
          this Plan. Such delegation may be revoked at any time.

               vi. Nasdaq. In addition, the Plan will be administered in a
          manner that complies with any applicable Nasdaq or stock exchange
          listing requirements.

          (b) Powers of the Administrator. Subject to the provisions of the Plan
     and, in the case of a Committee or delegates acting as the Administrator,
     subject to the specific duties delegated to such Committee or delegates,
     the Administrator shall have the authority, in its discretion:

               i. to select the Employees, Consultants and Directors of the
          Company or its Affiliates to whom Awards are to be granted hereunder;

               ii. to determine the number of shares of Common Stock or amount
          of cash to be covered by each Award granted hereunder;

               iii. to determine the type of Award to be granted to the selected
          Employees, Consultants and Directors;

               iii. to approve forms of Award Agreements for use under the Plan;

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               iv. to determine the terms and conditions, not inconsistent with
          the terms of the Plan, of any Award granted hereunder. Such terms and
          conditions include, but are not limited to, the exercise and/or
          purchase price (if applicable), the time or times when an Award may be
          exercised (which may or may not be based on performance criteria), the
          vesting schedule, any vesting and/or exercisability acceleration or
          waiver of forfeiture restrictions, the acceptable forms of
          consideration, the term, and any restriction or limitation regarding
          any Award or the Shares relating thereto, based in each case on such
          factors as the Administrator, in its sole discretion, shall determine
          and may be established at the time an Award is granted or thereafter;

               v. to correct administrative errors;

               vi. to construe and interpret the terms of the Plan (including
          sub-plans and Plan addenda) and Awards granted pursuant to the Plan;

               vii. to adopt rules and procedures relating to the operation and
          administration of the Plan to accommodate the specific requirements of
          local laws and procedures. Without limiting the generality of the
          foregoing, the Administrator is specifically authorized (A) to adopt
          the rules and procedures regarding the conversion of local currency,
          withholding procedures and handling of stock certificates which vary
          with local requirements and (B) to adopt sub-plans and Plan addenda as
          the Administrator deems desirable, to accommodate foreign laws,
          regulations and practice;

               viii. to prescribe, amend and rescind rules and regulations
          relating to the Plan, including rules and regulations relating to
          sub-plans and Plan addenda;

               ix. to modify or amend each Award, including, but not limited to,
          the acceleration of vesting and/or exercisability, provided, however,
          that any such amendment is subject to Section 14 of the Plan and
          except as set forth in that Section, may not impair any outstanding
          Award unless agreed to in writing by the Participant;

               x. to allow Participants to satisfy withholding tax amounts by
          electing to have the Company withhold from the Shares to be issued
          upon exercise of a Nonstatutory Stock Option or vesting of a Stock
          Award that number of Shares having a Fair Market Value equal to the
          amount required to be withheld. The Fair Market Value of the Shares to
          be withheld shall be determined in such manner and on such date that
          the Administrator shall determine or, in the absence of provision
          otherwise, on the date that the amount of tax to be withheld is to be
          determined. All elections by a Participant to have Shares withheld for
          this purpose shall be made in such form and under such conditions as
          the Administrator may provide;

               xi. to authorize conversion or substitution under the Plan of any
          or all stock options, stock appreciation rights or other stock awards
          held by service providers of an entity acquired by the Company (the
          "Conversion Awards"). Any conversion or substitution shall be
          effective as of the close of the merger, acquisition or other
          transaction. The Conversion Awards may be Nonstatutory Stock Options
          or Incentive Stock Options, as determined by the Administrator, with
          respect to options granted by the acquired entity; provided, however,
          that with respect to the conversion of stock appreciation rights in
          the acquired entity, the Conversion Awards shall be Nonstatutory Stock
          Options. Unless otherwise determined by the Administrator at the time
          of conversion or substitution, all Conversion Awards shall have the
          same terms and conditions as Awards generally granted by the Company
          under the Plan;

               xii. to authorize any person to execute on behalf of the Company
          any instrument required to effect the grant of an Award previously
          granted by the Administrator;

               xiii. to impose such restrictions, conditions or limitations as
          it determines appropriate as to the timing and manner of any resales
          by a Participant or other subsequent transfers by the

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          Participant of any Shares issued as a result of or under an Award,
          including without limitation, (A) restrictions under an insider
          trading policy and (B) restrictions as to the use of a specified
          brokerage firm for such resales or other transfers;

               xiv. to provide, either at the time an Award is granted or by
          subsequent action, that an Award shall contain as a term thereof, a
          right, either in tandem with the other rights under the Award or as an
          alternative thereto, of the Participant to receive, without payment to
          the Company, a number of Shares, cash or a combination thereof, the
          amount of which is determined by reference to the value of the Award;
          and

               xv. to make all other determinations deemed necessary or
          advisable for administering the Plan and any Award granted hereunder.

          (c) Effect of Administrator's Decision. All decisions, determinations
     and interpretations by the Administrator regarding the Plan, any rules and
     regulations under the Plan and the terms and conditions of any Award
     granted hereunder, shall be final and binding on all Participants and on
     all other persons. The Administrator shall consider such factors as it
     deems relevant, in its sole and absolute discretion, to making such
     decisions, determinations and interpretations including, without
     limitation, the recommendations or advice of any officer or other employee
     of the Company and such attorneys, consultants and accountants as it may
     select.

5.   ELIGIBILITY.

     Awards may be granted to Employees, Directors and Consultants of the
Company or any of its Affiliates; provided that Incentive Stock Options may be
granted only to Employees of the Company or of a Subsidiary of the Company.

6.   TERM OF PLAN.

     The Plan shall become effective upon its approval by the stockholders of
the Company. It shall continue in effect for a term of ten (10) years from the
date the Plan is approved by stockholders of the Company unless terminated
earlier under Section 14 of the Plan.

7.   TERM OF AWARD.

     The term of each Award shall be determined by the Administrator and stated
in the Award Agreement. In the case of an Option, the term shall be ten (10)
years from the Grant Date or such shorter term as may be provided in the Award
Agreement; provided that an Incentive Stock Option granted to an Employee who on
the Grant Date owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Subsidiary shall have a term
of no more than five (5) years from the Grant Date; and provided further that
the term may be ten and one-half (10 1/2) years (or a shorter period) in the
case of Options granted to Employees in certain jurisdictions outside the United
States as determined by the Administrator.

8.   OPTIONS.

     The Administrator may grant an Option or provide for the grant of an
Option, either from time to time in the discretion of the Administrator or
automatically upon the occurrence of specified events, including, without
limitation, the achievement of performance goals, the satisfaction of an event
or condition within the control of the Awardee or within the control of others.

          (a) Option Agreement. Each Option Agreement shall contain provisions
     regarding (i) the number of Shares that may be issued upon exercise of the
     Option, (ii) the type of Option, (iii) the exercise price of the Shares and
     the means of payment for the Shares, (iv) the term of the Option, (v) such
     terms and

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     conditions on the vesting and/or exercisability of an Option as may be
     determined from time to time by the Administrator, (vi) restrictions on the
     transfer of the Option or the Shares issued upon exercise of the Option and
     forfeiture provisions and (vii) such further terms and conditions, in each
     case not inconsistent with this Plan as may be determined from time to time
     by the Administrator.

          (b) Exercise Price. The per share exercise price for the Shares to be
     issued pursuant to exercise of an Option shall be determined by the
     Administrator, subject to the following:

               i. Each Option shall have a per Share exercise price equal to no
          less than 100% of the Fair Market Value per Share on the Grant Date;
          provided however that in the case of an Incentive Stock Option granted
          to an Employee who on the Grant Date owns stock representing more than
          ten percent (10%) of the voting power of all classes of stock of the
          Company or any Subsidiary, the per Share exercise price shall be no
          less than 110% of the Fair Market Value per Share on the Grant Date.

               ii. Notwithstanding the foregoing, at the Administrator's
          discretion, Conversion Awards may be granted in substitution and/or
          conversion of options of an acquired entity, with a per Share exercise
          price of less than 100% of the Fair Market Value per Share on the date
          of such substitution and/or conversion.

          (c) Option Repricings. The exercise price of an Option may be reduced,
     or Options cancelled and re-granted in order to reduce the applicable
     exercise price, without stockholder approval.

          (d) Vesting Period and Exercise Dates. Options granted under this Plan
     shall vest and/or be exercisable at such time and in such installments
     during the period prior to the expiration of the Option's term as
     determined by the Administrator. The Administrator shall have the right to
     make the timing of the ability to exercise any Option granted under this
     Plan subject to continued employment, the passage of time and/or such
     performance requirements as deemed appropriate by the Administrator. At any
     time after the grant of an Option, the Administrator may reduce or
     eliminate any restrictions surrounding any Participant's right to exercise
     all or part of the Option.

          (e) Form of Consideration. The Administrator shall determine the
     acceptable form of consideration for exercising an Option, including the
     method of payment, either through the terms of the Option Agreement or at
     the time of exercise of an Option. Acceptable forms of consideration may
     include:

               i. cash;

               ii. check or wire transfer (denominated in U.S. Dollars);

               iii. subject to any conditions or limitations established by the
          Administrator, other Shares which have a Fair Market Value on the date
          of surrender equal to the aggregate exercise price of the Shares as to
          which said Option shall be exercised, provided that prior to the date
          on which the Company becomes subject to FAS 123R, such Shares shall,
          in the case of Shares acquired by the Participant upon the exercise of
          an Option, have been owned by the Participant for more than six months
          on the date of surrender;

               iv. consideration received by the Company under a broker-assisted
          sale and remittance program acceptable to the Administrator;

               v. provided that it does not result in the Company's incurring
          any adverse accounting charges with respect to an Option relative to
          Options not having such term, by the Company's withholding from the
          Option a number of Shares having as of the exercise date a Fair Market
          Value equal to the aggregate exercise price applicable to the Shares
          being exercised;

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               vi. such other consideration and method of payment for the
          issuance of Shares to the extent permitted by Applicable Laws; or

               vii. any combination of the foregoing methods of payment.

9.   INCENTIVE STOCK OPTION LIMITATIONS/TERMS.

          (a) Eligibility. Only employees (as determined in accordance with
     Section 3401(c) of the Code and the regulations promulgated thereunder) of
     the Company or any of its Subsidiaries may be granted Incentive Stock
     Options.

          (b) $100,000 Limitation. Notwithstanding the designation "Incentive
     Stock Option" in an Option Agreement, if and to the extent that the
     aggregate Fair Market Value of the Shares with respect to which Incentive
     Stock Options are exercisable for the first time by the Awardee during any
     calendar year (under all plans of the Company and any of its Subsidiaries)
     exceeds U.S. $100,000, such Options shall be treated as Nonstatutory Stock
     Options. For purposes of this Section 9(b), Incentive Stock Options shall
     be taken into account in the order in which they were granted. The Fair
     Market Value of the Shares shall be determined as of the Grant Date.

          (c) Effect of Termination of Employment on Incentive Stock Options.

               i. Generally. Unless otherwise provided for by the Administrator,
          upon an Awardee's Termination of Employment other than as a result of
          circumstances described in Sections 9(c)(ii) and (iii) below, any
          outstanding Incentive Stock Option granted to such Awardee, whether
          vested or unvested, to the extent not theretofore exercised, shall
          terminate immediately upon the Awardee's Termination of Employment;
          provided, however, that the Administrator may in the Option Agreement
          specify a period of time (but not beyond the expiration date of the
          Option) following Termination of Employment during which the Awardee
          may exercise the Option as to Shares that were vested and exercisable
          as of the date of Termination of Employment. To the extent such a
          period following Termination of Employment is specified, the Option
          shall automatically terminate at the end of such period to the extent
          the Awardee has not exercised it within such period.

               ii. Disability of Awardee. Unless otherwise provided for by the
          Administrator, upon an Awardee's Termination of Employment as a result
          of the Awardee's disability, all outstanding Incentive Stock Options
          granted to such Awardee that were vested and exercisable as of the
          date of the Awardee's Termination of Employment may be exercised by
          the Awardee until (A) one (1) year following Awardee's Termination of
          Employment as a result of Awardee's disability, including Total and
          Permanent Disability; provided, however, that in no event shall an
          Incentive Stock Option be exercisable after the expiration of the term
          of such Option. If the Participant does not exercise such Option
          within the time specified, the Option (to the extent not exercised)
          shall automatically terminate.

               iii. Death of Awardee. Unless otherwise provided for by the
          Administrator, upon an Awardee's Termination of Employment as a result
          of the Awardee's death, all outstanding Incentive Stock Options
          granted to such Awardee that were vested and exercisable as of the
          date of the Awardee's death may be exercised until the earlier of (A)
          one (1) year following the Awardee's death or (B) the expiration of
          the term of such Option. If an Incentive Stock Option is held by the
          Awardee when he or she dies, the Incentive Stock Option may be
          exercised, to the extent the Option is vested and exercisable, by the
          beneficiary designated by the Awardee (as provided in Section 15 of
          the Plan), the executor or administrator of the Awardee's estate or,
          if none, by the person(s) entitled to exercise the Incentive Stock
          Option under the Awardee's will or the laws of descent or
          distribution. If the Incentive Stock Option is not so exercised within
          the time specified, such Option (to the extent not exercised) shall
          automatically terminate.

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               iv. Other Terminations of Employment. The Administrator may
          provide in the applicable Option Agreement for different treatment of
          Options upon Termination of Employment of the Awardee than that
          specified above.

          (d) Leave of Absence. The Administrator shall have the discretion to
     determine whether and to what extent the vesting of Options shall be tolled
     during any unpaid leave of absence; provided, however, that in the absence
     of such determination, vesting of Options shall be tolled during any leave
     that is not a leave required to be provided to the Awardee under Applicable
     Law. In the event of military leave, vesting shall toll during any unpaid
     portion of such leave, provided that, upon an Awardee's returning from
     military leave (under conditions that would entitle him or her to
     protection upon such return under the Uniform Services Employment and
     Reemployment Rights Act), he or she shall be given vesting credit with
     respect to Options to the same extent as would have applied had the
     Adwardee continued to provide services to the Company throughout the leave
     on the same terms as he or she was providing services immediately prior to
     such leave.

          (e) Transferability. An Incentive Stock Option cannot be transferred
     by the Awardee otherwise than by will or the laws of descent and
     distribution, and, during the lifetime of such Awardee, may only be
     exercised by the Awardee. If the terms of an Incentive Stock Option are
     amended to permit transferability, the Option will be treated for tax
     purposes as a Nonstatutory Stock Option. The designation of a beneficiary
     by an Awardee will not constitute a transfer.

          (f) Exercise Price. The per Share exercise price of an Incentive Stock
     Option shall be determined by the Administrator in accordance with Section
     8(b)(i) of the Plan.

          (g) Other Terms. Option Agreements evidencing Incentive Stock Options
     shall contain such other terms and conditions as may be necessary to
     qualify, to the extent determined desirable by the Administrator, with the
     applicable provisions of Section 422 of the Code.

10.  EXERCISE OF OPTION.

          (a) Procedure for Exercise; Rights as a Stockholder.

               i. Any Option granted hereunder shall be exercisable according to
          the terms of the Plan and at such times and under such conditions as
          determined by the Administrator and set forth in the respective Option
          Agreement.

               ii. An Option shall be deemed exercised when the Company receives
          (A) written or electronic notice of exercise (in accordance with the
          Option Agreement) from the person entitled to exercise the Option; (B)
          full payment for the Shares with respect to which the related Option
          is exercised; and (C) payment of all applicable withholding taxes.

               iii. Shares issued upon exercise of an Option shall be issued in
          the name of the Participant or, if requested by the Participant, in
          the name of the Participant and his or her spouse. Unless provided
          otherwise by the Administrator or pursuant to this Plan, until the
          Shares are issued (as evidenced by the appropriate entry on the books
          of the Company or of a duly authorized transfer agent of the Company),
          no right to vote or receive dividends or any other rights as a
          stockholder shall exist with respect to the Shares subject to an
          Option, notwithstanding the exercise of the Option.

               iv. The Company shall issue (or cause to be issued) such Shares
          as administratively practicable after the Option is exercised. An
          Option may not be exercised for a fraction of a Share.

          (b) Effect of Termination of Employment on Nonstatutory Stock Options.

                                       10

<PAGE>

               i. Generally. Unless otherwise provided for by the Administrator,
          upon an Awardee's Termination of Employment other than as a result of
          circumstances described in Sections 10(b)(ii) and (iii) below, any
          outstanding Nonstatutory Stock Option granted to such Awardee, whether
          vested or unvested, to the extent not theretofore exercised, shall
          terminate immediately upon the Awardee's Termination of Employment;
          provided, however, that the Administrator may in the Option Agreement
          specify a period of time (but not beyond the expiration date of the
          Option) following Termination of Employment during which the Awardee
          may exercise the Option as to Shares that were vested and exercisable
          as of the date of Termination of Employment. To the extent such a
          period following Termination of Employment is specified, the Option
          shall automatically terminate at the end of such period to the extent
          the Awardee has not exercised it within such period.

               ii. Disability of Awardee. Unless otherwise provided for by the
          Administrator, upon an Awardee's Termination of Employment as a result
          of the Awardee's disability, all outstanding Nonstatutory Stock
          Options granted to such Awardee that were vested and exercisable as of
          the date of the Awardee's Termination of Employment may be exercised
          by the Awardee until (A) one(1) year following Awardee's Termination
          of Employment as a result of Awardee's disability, including Total and
          Permanent Disability or (B) the expiration of the term of such Option.
          If the Participant does not exercise such Option within the time
          specified, the Option (to the extent not exercised) shall
          automatically terminate.

               iii. Death of Awardee. Unless otherwise provided for by the
          Administrator, upon an Awardee's Termination of Employment as a result
          of the Awardee's death, all outstanding Nonstatutory Stock Options
          granted to such Awardee that were vested and exercisable as of the
          date of the Awardee's death may be exercised until the earlier of (A)
          one (1) year following the Awardee's death or (B) the expiration of
          the term of such Option. If a Nonstatutory Stock Option is held by the
          Awardee when he or she dies, such Option may be exercised, to the
          extent the Option is vested and exercisable, by the beneficiary
          designated by the Awardee (as provided in Section 15 of the Plan), the
          executor or administrator of the Awardee's estate or, if none, by the
          person(s) entitled to exercise the Nonstatutory Stock Option under the
          Awardee's will or the laws of descent or distribution. If the
          Nonstatutory Stock Option is not so exercised within the time
          specified, such Option (to the extent not exercised) shall
          automatically terminate.

          (c) Leave of Absence. The Administrator shall have the discretion to
     determine whether and to what extent the vesting of Options shall be tolled
     during any unpaid leave of absence; provided, however, that in the absence
     of such determination, vesting of Options shall be tolled during any leave
     that is not a leave required to be provided to the Awardee under Applicable
     Law. In the event of military leave, vesting shall toll during any unpaid
     portion of such leave, provided that, upon an Awardee's returning from
     military leave (under conditions that would entitle him or her to
     protection upon such return under the Uniform Services Employment and
     Reemployment Rights Act), he or she shall be given vesting credit with
     respect to Options to the same extent as would have applied had the Awardee
     continued to provide services to the Company throughout the leave on the
     same terms as he or she was providing services immediately prior to such
     leave.

                                       11

<PAGE>

11.  STOCK AWARDS.

          (a) Stock Award Agreement. Each Stock Award Agreement shall contain
     provisions regarding (i) the number of Shares subject to such Stock Award
     or a formula for determining such number, (ii) the purchase price of the
     Shares, if any, and the means of payment for the Shares, (iii) the
     performance criteria (including Qualifying Performance Criteria), if any,
     and level of achievement versus these criteria that shall determine the
     number of Shares granted, issued, retainable and/or vested, (iv) such terms
     and conditions on the grant, issuance, vesting and/or forfeiture of the
     Shares as may be determined from time to time by the Administrator, (v)
     restrictions on the transferability of the Stock Award and (vi) such
     further terms and conditions in each case not inconsistent with this Plan
     as may be determined from time to time by the Administrator.

          (b) Restrictions and Performance Criteria. The grant, issuance,
     retention and/or vesting of each Stock Award or the Shares subject thereto
     may be subject to such performance criteria (including Qualifying
     Performance Criteria) and level of achievement versus these criteria as the
     Administrator shall determine, which criteria may be based on financial
     performance, personal performance evaluations and/or completion of service
     by the Awardee. Notwithstanding anything to the contrary herein, the
     performance criteria for any Stock Award that is intended to satisfy the
     requirements for "performance-based compensation" under Section 162(m) of
     the Code shall be established by the Administrator based on one or more
     Qualifying Performance Criteria selected by the Administrator and specified
     in writing not later than ninety (90) days after the commencement of the
     period of service to which the performance goals relates, provided that the
     outcome is substantially uncertain at that time (or in such other manner
     that complies with Section 162(m)).

          (c) Forfeiture. Unless otherwise provided for by the Administrator,
     upon the Awardee's Termination of Employment, the Stock Award and the
     Shares subject thereto shall be forfeited, provided that to the extent that
     the Participant purchased any Shares, the Company shall have a right to
     repurchase the unvested Shares at such price and on such terms and
     conditions as the Administrator determines.

          (d) Rights as a Stockholder. Unless otherwise provided by the
     Administrator, the Participant shall have the rights equivalent to those of
     a stockholder and shall be a stockholder only after Shares are issued (as
     evidenced by the appropriate entry on the books of the Company or of a duly
     authorized transfer agent of the Company) to the Participant. Unless
     otherwise provided by the Administrator, a Participant holding Stock Units
     shall be entitled to receive dividend payments as if he or she was an
     actual stockholder.

          (e) Stock Appreciation Rights.

               i. General. Stock Appreciation Rights may be granted either
          alone, in addition to, or in tandem with other Awards granted under
          the Plan. The Board may grant Stock Appreciation Rights to eligible
          Participants subject to terms and conditions not inconsistent with
          this Plan and determined by the Board. The specific terms and
          conditions applicable to the Participant shall be provided for in the
          Stock Award Agreement. Stock Appreciation Rights shall be exercisable,
          in whole or in part, at such times as the Board shall specify in the
          Stock Award Agreement.

               ii. Exercise of Stock Appreciation Right. Upon the exercise of a
          Stock Appreciation Right, in whole or in part, the Participant shall
          be entitled to a payment in an amount equal to the excess of the Fair
          Market Value on the date of exercise of a fixed number of Shares
          covered by the exercised portion of the Stock Appreciation Right, over
          the Fair Market Value on the grant date of the Shares covered by the
          exercised portion of the Stock Appreciation Right (or such other
          amount calculated with respect to Shares subject to the Award as the
          Board may determine). The amount due to the Participant upon the
          exercise of a Stock Appreciation Right shall be paid in such form of
          consideration as determined by the Board and may be in cash, Shares or
          a combination thereof, over the period or periods specified in the
          Stock Award Agreement. A Stock Award Agreement may place limits on the
          amount that may be paid over any specified period or periods upon the
          exercise of a Stock Appreciation Right, on an aggregate basis or as to
          any Participant. A Stock

                                       12

<PAGE>

          Appreciation Right shall be considered exercised when the Company
          receives written notice of exercise in accordance with the terms of
          the Stock Award Agreement from the person entitled to exercise the
          Stock Appreciation Right.

               iii. Nonassignability of Stock Appreciation Rights. Except as
          determined by the Board, no Stock Appreciation Right shall be
          assignable or otherwise transferable by the Participant except by will
          or by the laws of descent and distribution.

12.  OTHER PROVISIONS APPLICABLE TO AWARDS.

          (a) Non-Transferability of Awards. Unless determined otherwise by the
     Administrator, an Award may not be sold, pledged, assigned, hypothecated,
     transferred, or disposed of in any manner other than by beneficiary
     designation, will or by the laws of descent or distribution. Subject to
     Section 9(e), the Administrator may in its discretion make an Award
     transferable to an Awardee's family member or any other person or entity as
     it deems appropriate. If the Administrator makes an Award transferable,
     either at the time of grant or thereafter, such Award shall contain such
     additional terms and conditions as the Administrator deems appropriate, and
     any transferee shall be deemed to be bound by such terms upon acceptance of
     such transfer.

          (b) Qualifying Performance Criteria. For purposes of this Plan, the
     term "Qualifying Performance Criteria" shall mean any one or more of the
     following performance criteria, either individually, alternatively or in
     any combination, applied to either the Company as a whole or to a business
     unit, Affiliate or business segment, either individually, alternatively or
     in any combination, and measured either annually or cumulatively over a
     period of years, on an absolute basis or relative to a pre-established
     target, to previous years' results or to a designated comparison group, in
     each case as specified by the Administrator in the Award: (i) cash flow;
     (ii) earnings (including gross margin, earnings before interest and taxes,
     earnings before taxes, and net earnings); (iii) earnings per share; (iv)
     growth in earnings or earnings per share; (v) stock price; (vi) return on
     equity or average stockholders' equity; (vii) total stockholder return;
     (viii) return on capital; (ix) return on assets or net assets; (x) return
     on investment; (xi) revenue; (xii) income or net income; (xiii) operating
     income or net operating income; (xiv) operating profit or net operating
     profit; (xv) operating margin; (xvi) return on operating revenue; (xvii)
     market share; (xviii) contract awards or backlog; (xix) overhead or other
     expense reduction; (xx) growth in stockholder value relative to the moving
     average of the S&P 500 Index or a peer group index; (xxi) credit rating;
     (xxii) strategic plan development and implementation (including individual
     performance objectives that relate to achievement of the Company's or any
     business unit's strategic plan); (xxiii) improvement in workforce
     diversity, and (xxiv) any other similar criteria. The Committee may
     appropriately adjust any evaluation of performance under a Qualifying
     Performance Criteria to exclude any of the following events that occurs
     during a performance period: (A) asset write-downs; (B) litigation or claim
     judgments or settlements; (C) the effect of changes in tax law, accounting
     principles or other such laws or provisions affecting reported results; (D)
     accruals for reorganization and restructuring programs; and (E) any gains
     or losses classified as extraordinary or as discontinued operations in the
     Company's financial statements.

          (c) Certification. Prior to the payment of any compensation under an
     Award intended to qualify as "performance-based compensation" under Section
     162(m) of the Code, the Committee shall certify the extent to which any
     Qualifying Performance Criteria and any other material terms under such
     Award have been satisfied (other than in cases where such relate solely to
     the increase in the value of the Common Stock).

          (d) Discretionary Adjustments Pursuant to Section 162(m).
     Notwithstanding satisfaction of any completion of any Qualifying
     Performance Criteria, to the extent specified at the time of grant of an
     Award to "covered employees" within the meaning of Section 162(m) of the
     Code, the number of Shares, Options or other benefits granted, issued,
     retainable and/or vested under an Award on account of satisfaction of such
     Qualifying Performance Criteria may be reduced by the Committee on the
     basis of such further considerations as the Committee in its sole
     discretion shall determine.

                                       13

<PAGE>

          (e) Right of First Refusal. At the discretion of the Administrator,
     the Company may reserve to itself and/or its assignee(s) in the Award
     Agreement a right of first refusal to purchase all Shares that a
     Participant (or a subsequent transferee) may propose to transfer to a third
     party, provided, that such right of first refusal terminates upon the
     Company's initial public offering of Common Stock pursuant to an effective
     registration statement filed under the Securities Act.

          (f) Market Standoff. If requested by the Company or a representative
     of its underwriters in connection with a registration of any securities of
     the Company under the Securities Act, Awardees or certain Awardees shall be
     prohibited from selling some or all of their Shares during a period not to
     exceed 180 days (but subject to such extensions as may be required by the
     underwriters in order to publish research reports while complying with the
     Rule 2711 of the National Association of Securities Dealers, Inc.) after
     the effective date of a registration statement filed with respect to the
     initial public offering of the Company stock and 90 days (but subject to
     such extensions as may be required by the underwriters in order to publish
     research reports while complying with the Rule 2711 of the National
     Association of Securities Dealers, Inc.) after the effective date of any
     other registration statement of the Company. This restriction shall apply
     only to the first two registration statements of the Company to become
     effective under the Securities Act. However, it shall not apply to any
     registration statement on Form S-8 or an equivalent registration statement.
     Moreover, registration statements on Form S-4, S-8 or equivalent
     registration statements shall not count as either of those two registration
     statements.

13.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
     SALE.

          (a) Changes in Capitalization. Subject to any required action by the
     stockholders of the Company, (i) the number and kind of Shares covered by
     each outstanding Award, (ii) the price per Share subject to each such
     outstanding Award and (iii) each of the Share limitations set forth in
     Section 3 of the Plan, shall be proportionately adjusted for any increase
     or decrease in the number or kind of issued shares resulting from a stock
     split, reverse stock split, stock dividend, combination or reclassification
     of the Common Stock, or any other increase or decrease in the number of
     issued shares of Common Stock effected without receipt of consideration by
     the Company; provided, however, that conversion of any convertible
     securities of the Company shall not be deemed to have been "effected
     without receipt of consideration." Such adjustment shall be made by the
     Administrator, whose determination in that respect shall be final, binding
     and conclusive. Except as expressly provided herein, no issuance by the
     Company of shares of stock of any class, or securities convertible into
     shares of stock of any class, shall affect, and no adjustment by reason
     thereof shall be made with respect to, the number or price of shares of
     Common Stock subject to an Award.

          (b) Dissolution or Liquidation. In the event of the proposed
     dissolution or liquidation of the Company, the Administrator shall notify
     each Participant as soon as practicable prior to the effective date of such
     proposed transaction. To the extent it has not been previously exercised or
     the Shares subject thereto issued to the Awardee and unless otherwise
     determined by the Administrator, an Award will terminate immediately prior
     to the consummation of such proposed transaction.

          (c) Change in Control. In the event there is a Change in Control of
     the Company, as determined by the Board or a Committee, the Board or
     Committee may, in its discretion, (i) provide for the assumption or
     substitution of, or adjustment to, each outstanding Award; (ii) accelerate
     the vesting of Options and terminate any restrictions on Stock Awards;
     and/or (iii) provide for termination of Awards as a result of the Change of
     Control on such terms and conditions as it deems appropriate, including
     providing for the cancellation of Awards for a cash payment to the
     Participant.

14.  AMENDMENT AND TERMINATION OF THE PLAN.

          (a) Amendment and Termination. The Administrator may amend, alter or
     discontinue the Plan or any Award Agreement, but any such amendment shall
     be subject to approval of the stockholders of the Company in the manner and
     to the extent required by Applicable Law. To the extent required to comply
     with Section 162(m) of the Code, the Company shall seek re-approval of the
     Plan from time to time by the

                                       14

<PAGE>

     stockholders. In addition, without limiting the foregoing, unless approved
     by the stockholders of the Company, no such amendment shall be made that
     would:

               i. materially increase the maximum number of Shares for which
          Awards may be granted under the Plan, other than an increase pursuant
          to Section 13 of the Plan;

               ii. reduce the minimum exercise price at which Options may be
          granted under the Plan; or

               iii. change the class of persons eligible to receive Awards under
          the Plan.

          (b) Effect of Amendment or Termination. No amendment, suspension or
     termination of the Plan shall impair the rights of any Award, unless
     mutually agreed otherwise between the Participant and the Administrator,
     which agreement must be in writing and signed by the Participant and the
     Company; provided further that the Administrator may amend an outstanding
     Award in order to conform it to the Administrator's intent (in its sole
     discretion) that such Award not be subject to Code Section 409A(a)(1)(B).
     Termination of the Plan shall not affect the Administrator's ability to
     exercise the powers granted to it hereunder with respect to Awards granted
     under the Plan prior to the date of such termination.

          (c) Effect of the Plan on Other Arrangements. Neither the adoption of
     the Plan by the Board or a Committee nor the submission of the Plan to the
     stockholders of the Company for approval shall be construed as creating any
     limitations on the power of the Board or any Committee to adopt such other
     incentive arrangements as it or they may deem desirable, including without
     limitation, the granting of restricted stock or stock options otherwise
     than under the Plan, and such arrangements may be either generally
     applicable or applicable only in specific cases. The value of Awards
     granted pursuant to the Plan will not be included as compensation,
     earnings, salaries or other similar terms used when calculating an
     Awardee's benefits under any employee benefit plan sponsored by the Company
     or any Subsidiary except as such plan otherwise expressly provides.

15.  DESIGNATION OF BENEFICIARY.

          (a) An Awardee may file a written designation of a beneficiary who is
     to receive the Awardee's rights pursuant to Awardee's Award or the Awardee
     may include his or her Awards in an omnibus beneficiary designation for all
     benefits under the Plan. To the extent that Awardee has completed a
     designation of beneficiary while employed with the Company, such
     beneficiary designation shall remain in effect with respect to any Award
     hereunder until changed by the Awardee to the extent enforceable under
     Applicable Law.

          (b) Such designation of beneficiary may be changed by the Awardee at
     any time by written notice. In the event of the death of an Awardee and in
     the absence of a beneficiary validly designated under the Plan who is
     living at the time of such Awardee's death, the Company shall allow the
     executor or administrator of the estate of the Awardee to exercise the
     Award, or if no such executor or administrator has been appointed (to the
     knowledge of the Company), the Company, in its discretion, may allow the
     spouse or one or more dependents or relatives of the Awardee to exercise
     the Award to the extent permissible under Applicable Law or if no spouse,
     dependent or relative is known to the Company, then to such other person as
     the Company may designate.

                                       15

<PAGE>

16.  NO RIGHT TO AWARDS OR TO EMPLOYMENT.

     No person shall have any claim or right to be granted an Award and the
grant of any Award shall not be construed as giving an Awardee the right to
continue in the employ of the Company or its Affiliates. Further, the Company
and its Affiliates expressly reserve the right, at any time, to dismiss any
Employee, Consultant or Awardee at any time without liability or any claim under
the Plan, except as provided herein or in any Award Agreement entered into
hereunder.

17.  LEGAL COMPLIANCE.

     Shares shall not be issued pursuant to the exercise of an Option or Stock
Award unless the exercise of such Option or Stock Award and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

18.  INABILITY TO OBTAIN AUTHORITY.

     To the extent the Company is unable to or the Administrator deems it
infeasible to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, the Company shall be relieved of any
liability with respect to the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

19.  RESERVATION OF SHARES.

     The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

20.  NOTICE.

     Any written notice to the Company required by any provisions of this Plan
shall be addressed to the Secretary of the Company and shall be effective when
received.

21.  GOVERNING LAW; INTERPRETATION OF PLAN AND AWARDS.

          (a) This Plan and all determinations made and actions taken pursuant
     hereto shall be governed by the substantive laws, but not the choice of law
     rules, of the state of Delaware.

          (b) In the event that any provision of the Plan or any Award granted
     under the Plan is declared to be illegal, invalid or otherwise
     unenforceable by a court of competent jurisdiction, such provision shall be
     reformed, if possible, to the extent necessary to render it legal, valid
     and enforceable, or otherwise deleted, and the remainder of the terms of
     the Plan and/or Award shall not be affected except to the extent necessary
     to reform or delete such illegal, invalid or unenforceable provision.

          (c) The headings preceding the text of the sections hereof are
     inserted solely for convenience of reference, and shall not constitute a
     part of the Plan, nor shall they affect its meaning, construction or
     effect.

          (d) The terms of the Plan and any Award shall inure to the benefit of
     and be binding upon the parties hereto and their respective permitted
     heirs, beneficiaries, successors and assigns.

          (e) All questions arising under the Plan or under any Award shall be
     decided by the Administrator in its total and absolute discretion. In the
     event the Participant believes that a decision by the Administrator with
     respect to such person was arbitrary or capricious, the Participant may
     request arbitration with respect to such decision. The review by the
     arbitrator shall be limited to determining whether the Administrator's

                                       16

<PAGE>

     decision was arbitrary or capricious. This arbitration shall be the sole
     and exclusive review permitted of the Administrator's decision, and the
     Awardee shall as a condition to the receipt of an Award be deemed to
     explicitly waive any right to judicial review.

          (f) Notice of demand for arbitration shall be made in writing to the
     Administrator within thirty (30) days after the applicable decision by the
     Administrator. The arbitrator shall be selected from amongst those members
     of the Board who are neither Administrators nor Employees. If there are no
     such members of the Board, the arbitrator shall be selected by the Board.
     The arbitrator shall be an individual who is an attorney licensed to
     practice law in the State of Michigan. Such arbitrator shall be neutral
     within the meaning of the Commercial Rules of Dispute Resolution of the
     American Arbitration Association; provided, however, that the arbitration
     shall not be administered by the American Arbitration Association. Any
     challenge to the neutrality of the arbitrator shall be resolved by the
     arbitrator whose decision shall be final and conclusive. The arbitration
     shall be administered and conducted by the arbitrator pursuant to the
     Commercial Rules of Dispute Resolution of the American Arbitration
     Association. The decision of the arbitrator on the issue(s) presented for
     arbitration shall be final and conclusive and may be enforced in any court
     of competent jurisdiction.

22.  LIMITATION ON LIABILITY.

     The Company and any Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant, an Employee, an Awardee or any
other persons as to:

          (a) The Non-Issuance of Shares. The non-issuance or sale of Shares as
     to which the Company has been unable to obtain from any regulatory body
     having jurisdiction the authority deemed by the Company's counsel to be
     necessary to the lawful issuance and sale of any shares hereunder; and

          (b) Tax Consequences. Any tax consequence realized by any Participant,
     Employee, Awardee or other person due to the receipt, exercise or
     settlement of any Option or other Award granted hereunder.

23.  UNFUNDED PLAN.

     Insofar as it provides for Awards, the Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Awardees who are granted
Stock Awards under this Plan, any such accounts will be used merely as a
bookkeeping convenience. The Company shall not be required to segregate any
assets which may at any time be represented by Awards, nor shall this Plan be
construed as providing for such segregation, nor shall the Company nor the
Administrator be deemed to be a trustee of stock or cash to be awarded under the
Plan. Any liability of the Company to any Participant with respect to an Award
shall be based solely upon any contractual obligations which may be created by
the Plan; no such obligation of the Company shall be deemed to be secured by any
pledge or other encumbrance on any property of the Company. Neither the Company
nor the Administrator shall be required to give any security or bond for the
performance of any obligation which may be created by this Plan.

                                       17<PAGE>

                                                                    EXHIBIT 10.7

                                                                  EXECUTION COPY

                           EXCLUSIVE LICENSE AGREEMENT

      THIS EXCLUSIVE LICENSE AGREEMENT (this "Agreement") is made effective the
7th day of November, 2001, by and between Deltanoid Pharmaceuticals, Inc., a
Delaware corporation (hereinafter called "DPI"), and Quatrx Pharmaceuticals
Company (hereinafter called "Licensee"), a corporation organized and existing
under the laws of the State of Delaware. DPI and Licensee are each individually
referred to herein as a "Party" and collectively as the "Parties".

      WHEREAS, DPI owns certain inventions that are described in the "Licensed
Patents" defined below, and DPI is willing to grant a license to Licensee under
all of the Licensed Patents and Licensee desires a license under all of them;

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties covenant and agree as follows:

SECTION 1. DEFINITIONS.

      "Affiliate" shall mean each and every business entity controlling,
controlled by or under common control with a Party. For purposes of this
definition, "control" shall mean ownership, directly or indirectly, of more than
fifty percent (50%) of the voting or income interest of the applicable business
entity.

      "Agreement" has the meaning set forth in the first paragraph.

      "Claim" has the meaning set forth in Section 9.1.

      "Compound" shall mean either **************************
***************************************************
***************************, or ***********************************
*********************** as claimed in a Licensed Patent.

      "Confidential Information" has the meaning set forth in Section 7.1.

                                       1

<PAGE>

      "Cosmetic Product" shall mean any product approved, made, used, sold and
marketed for nonprescription cosmetic applications, which does not contain a
Product Compound unless (a) such Product Compound is
***************************************, and (b) the concentration of
*************************************** in the applicable product is no greater
than 5 parts per million.

      "Development Plan" has the meaning set forth in Section 3.2.

      "Disclosing Party" has the meaning set forth in Section 7.1.

      "DPI" has the meaning set forth in the first paragraph.

      "Effective Date" shall mean the date first above written as the effective
date of this Agreement.

      "Exploratory Clinical Trial" shall have the meaning set forth in Section
3.1.

      "FDA" shall mean the United States Food and Drug Administration.

      "First Commercial Sale" shall mean the first sale of a Product to a third
party (other than an Affiliate or sublicensee) in a jurisdiction after
regulatory approval for such sale has been obtained from the appropriate
regulatory authorities in such jurisdiction.

      "Invention" has the meaning set forth in Section 8.1.

      "Inventor" has the meaning set forth in Section 8.1.

      "License Rights" has the meaning set forth in Section 2.2.

      "Licensed Patents" shall mean the patent applications and patents listed
in Exhibit A, which is attached hereto and is incorporated herein by reference,
and any foreign counterparts thereof, and any continuations,
continuations-in-part, divisions, re-issues, additions, renewals and extensions
thereof, and any patents issuing therefrom, all to the extent owned or licensed
by DPI or which DPI has the right to license or sublicense to Licensee.

      "Licensee" has the meaning set forth in the first paragraph.

                                       2

<PAGE>

      "Licensee Notice" has the meaning set forth in Section 2.2.

      "Net Sales" shall mean the gross receipts from sales in any country less
deductions for: (i) transportation and insurance charges; (ii) sales and excise
taxes, tax, tariff, duty or any other governmental charges or duties paid; (ii)
normal and customary trade, quantity and cash discounts and rebates allowed;
(iii) sales commissions; (iv) allowances on account of rejection or return by
customers; (v) credits, rebates, charge-back rebates, reimbursements or similar
payments actually granted or given to wholesalers and other distributors, buying
groups, health care insurance carriers, governmental agencies and other
institutions; (vi) payments or rebates actually paid in connection with state or
federal Medicare, Medicaid or similar programs. However, except where the
sublicensee or Affiliate is the end-user, any sale to a sublicensee or Affiliate
shall be excluded from the computation of Net Sales, but any subsequent sale by
the sublicensee or Affiliate to a third party other than another sublicensee or
Affiliate shall be included in the computation of Net Sales.

      "Party" or "Parties" has the meaning set forth in the first paragraph.

      "Product" shall mean any product which contains a Compound as one of its
active ingredients, the use, sale, offer for sale, manufacture, or importation
of which, if unlicensed, would infringe one or more Valid Claims of a patent
within the Licensed Patents.

      "Product Compound" shall mean a Compound which is the active ingredient in
a Product.

      "Royalty Term" shall mean, with respect to a particular Product in any
jurisdiction, the period of time commencing on the First Commercial Sale of such
Product in such jurisdiction and ending upon the expiration of the last to
expire Licensed Patent containing a Valid Claim which would be infringed by the
manufacture, use, importation, offer for sale, or sale of such Product in such
jurisdiction.

      "Selected Compound" shall have the meaning set forth in Section 3.1.

      "Technical Information" shall mean any and all know-how, trade secret and
other information of a technical nature relating to any Product or potential
Product, which is in the possession of DPI as of the Effective Date, and which
is necessary

                                       3

<PAGE>

or useful to Licensee in furtherance of the research, development, manufacture
or marketing of such Product or potential Product.

      "Valid Claim" shall mean a claim contained in an issued patent, which
claim has not expired and has not been held unenforceable, unpatentable or
invalid by an unappealable decision of a court or other governmental agency of
competent jurisdiction.

      "WARF" shall mean Wisconsin Alumni Research Foundation, a nonstock,
nonprofit Wisconsin corporation.

      "WARF Agreement" shall have the meaning set forth in Section 3.1.

      "WARF Compound" shall have the meaning set forth in Section 3.1.

SECTION 2. GRANT.

2.1. License. DPI hereby grants to Licensee a worldwide, exclusive (even as to
DPI) license, with the right to grant sublicenses, under the Licensed Patents to
a compound (including any metabolites discovered by Deltanoid) selected from
***, ***, or ***, to make, have made, use, sell, have sold, and import for
topical treatments (topical treatments do not include patch delivery systems or
mucous membrane delivery systems, such as a suppository, intended for systemic
treatment) of skin diseases (including treatments of skin, hair and nails). DPI
agrees not to sell, market, or license any of the compounds that it currently
owns or has right to use to any other company for the topical treatment of skin
disease, including psoriasis, while this license is in effect. DPI specifically
excludes from the foregoing license and reserves for itself the exclusive right
to, and the right to license others to, make, have made, use, sell, have sold,
or import any Cosmetic Product which contains ***. If the selected compound is
***, or ***, or ***, DPI specifically excludes from the foregoing license and
reserves for itself the exclusive right to, and the right to license others to,
make, have made, use, sell, have sold, or import any treatment of cancer or
renal osteodystrophy. DPI will, if at all possible in view of a prior agreement
with

                                       4

<PAGE>

******************* dated *****************, avoid using the selected compound
for development as a topical treatment for cancer. DPI agrees that if a systemic
use of the "selected compound" in this license is found by DPI, Quatrx shall
have a **-day option to license or reach an agreement to license such use for
development as set forth in Section 2.2. Further, if DPI finds a new use for any
of its compounds in topical application (includes skin, hair and nails), Quatrx
will have a **-day option to license or reach an agreement to license such use
for development as set forth in Section 2.2. In the case of these options, a new
and separate license agreement must be negotiated. DPI specifically excludes
from the foregoing license and reserves for itself the exclusive right to, and
the right to license others to, make, have made, use, sell, have sold, or import
Products approved, made, use, sold, and marketed for systemic applications.
Within 30 days of the date hereof, DPI shall deliver to Licensee copies of all
materials consisting of the Licensed Patents and Technical Information and shall
provide to Licensee all Technical Information that is not in a tangible medium.

      2.2 Option. If, at any time prior to the first anniversary of the
Effective Date, DPI determines to grant a license under the Licensed Patents to
make, have made, use, sell, have sold, export or import any products for
systemic treatment of psoriasis, or other skin diseases (including treatments of
skin, hair, and nails), DPI shall notify the Licensee in a writing which
references this Section and which describes in detail the rights which DPI
desires to license. If within ** days of receipt of such a written notice from
DPI, Licensee notifies DPI in writing that it desires to obtain such a license
(the "Licensee Notice"), the Parties shall negotiate the terms of such a license
exclusively with each other and in good faith for a period of ** days from the
date of the Licensee Notice. If the Parties are unable to agree on the terms of
a license to the License Rights, DPI shall be free to negotiate with third
parties for a license to the License Rights provided, however, that DPI for a
period of not longer than one year shall not grant to any such third party a
license to such License Rights on terms which in aggregate are more favorable
than the Licensee indicated it would accept in the foregoing ** day period.

SECTION 3. DEVELOPMENT.

      3.1. Exploratory Development. Within 30 days of the receipt by Licensee of
the results of all currently ongoing experiments involving Compounds, which
experiments are being conducted by DPI or its employees, officers, agents or
representatives (the "Ongoing DPI Experiments"), Licensee and DPI shall select a

                                       5

<PAGE>

Compound for treatment of psoriasis, (the "Selected Compound") to be used in
clinical development which may include an exploratory clinical trial which may
compare such Compound against a certain compound licensed by Licensee from WARF
(the "WARF Compound") pursuant to that certain agreement between WARF and
Licensee (the "WARF Agreement"), with the goal of selecting the best compound
for full scale clinical development (the "Exploratory Clinical Trial"). Licensee
and DPI shall agree on the protocol for such clinical trial, provided that DPI
acknowledges that Licensee may not be permitted to disclose to DPI certain
information obtained by Licensee from WARF relating to the WARF Compound.
Licensee shall use its best commercial efforts to conduct such exploratory
clinical trial. Licensee shall notify DPI if it is proceeding with further
clinical development of the Selected Compound within the earlier of (i) ****
following availability of the results of the Exploratory Clinical Trial or (ii)
**** after the availability of clinical trial material containing the Selected
Compound and the WARF Compound which is sufficient to dose the number of
patients projected to participate in the Exploratory Clinical Trial. If Licensee
fails to provide DPI with such notice within the foregoing time frame, then all
rights under the Licensed Patents shall revert to DPI, this Agreement shall be
deemed to be terminated, and Licensee shall transfer to DPI the results of the
Exploratory Development Plan, subject to any obligations Licensee has to WARF
under the WARF Agreement.

      3.2. Further Clinical Development; Diligence and Termination. Licensee
shall be responsible for funding the clinical development of the Selected
Compound. Licensee shall develop the Selected Compound using efforts comparable
to those efforts Licensee makes with respect to other compounds in its
development portfolio. If Licensee receives the results of the Ongoing DPI
Experiments and Licensee has not conducted any clinical development activity
(including, without limitation, filing of an IND or causing an investigator to
file an IND, contracting with third parties to provide services to Licensee for
such development, engaging in activities relating to preparation for manufacture
of the applicable Compound or beginning preparation of clinical study protocols
for any Compound) on any Compound prior to the six month anniversary of the
later of (i) the Effective Date or (ii) the date Licensee receives the results
of the Ongoing DPI Experiments, then this Agreement and Licensee's rights
hereunder shall be terminated.

Licensee and DPI have agreed on certain development milestones for the
development of the Selected Compound which are listed on the attached Exhibit B.
Within 30 days of the Effective Date, the parties shall agree on a development
plan

                                       6

<PAGE>

for the development of the Selected Compound, which shall include the milestones
set forth on Exhibit B (such plan is hereinafter referred to as the "Development
Plan"). The Development Plan shall include projected dates by which certain
development activities shall be completed as well as the underlying assumptions
upon which such projections are based. Licensee shall provide DPI with a
quarterly report of the status of development of the Selected Compound and the
Parties shall, upon request, review the status of the development of the
Selected Compound as compared to the proposed Development Plan. The Parties
acknowledge and agree that the Development Plan shall be regularly reviewed and
modified to reflect the actual experience of Licensee in conducting development
of the Selected Compound. If, at any time after the end of the initial 2
quarters from the date of final selection of the Selected Compound, DPI provides
Licensee with written notice that Licensee has failed to adhere to the
milestones contained in the Development Plan for reasons unrelated to the safety
or efficacy of the Selected Compound, the availability of clinical supplies or
patient recruitment, or other reasons beyond the reasonable control of Licensee,
then Licensee shall have up to 1 quarter to provide a detailed written response
to these concerns, highlighting additional steps to be taken, if appropriate. In
the event that Licensee still has not met the milestones set forth in the
Development Plan for reasons unrelated to the safety or efficacy of the Selected
Compound, the availability of clinical supplies or patient recruitment, or other
reasons beyond the reasonable control of Licensee, DPI may terminate this
Agreement.

SECTION 4. CONSIDERATION.

      4.1. License Fee. Licensee agrees to pay to DPI a license fee of $50,000,
due within 2 business days of the Effective Date.

                                       7

<PAGE>

      4.2. Milestones. Licensee shall make the following milestone payments to
DPI within 30 days after the first achievement of each of the following
milestones:

<TABLE>
<CAPTION>
                 Milestone                             Payment
                 ---------                             -------
<S>                                                  <C>
Dosing of the first patient in a Phase *
Clinical Trial of the Selected Compound.             $   *******

Acceptance for filing of an NDA with the
FDA for a product containing the Selected
Compound.                                            $   *******

Approval of an NDA by the FDA for a
Product containing the Selected Compound.            $   *******

</TABLE>

The milestone payments received by DPI under this Section 4 shall be
non-refundable and non-creditable. Each milestone payment referred to in this
Section 4 shall be made only once, regardless of whether additional formulations
of Products are, or more than one Product is, developed or commercialized.

      4.3. Royalty. Licensee agrees to pay to DPI a royalty payment on Net Sales
of each Product sold by Licensee and its Affiliates and permitted sublicensees
in each calendar year in jurisdictions where a Valid Claim would be infringed by
the manufacture, use or sale of such Product in such jurisdiction according to
the following rates, and during the Royalty Term applicable to the particular
Product in such jurisdictions:

            *% for such Net Sales up to $****** per year.

            *% for such Net Sales in excess of $********** and less than $***
            ******* in each calendar year.

            *% for such Net Sales of $*********** or more in each calendar
            year.

In the event that Licensee notifies DPI under Section 3.1 that Licensee elects
to develop the WARF compound instead of the Selected Compound for uses covered
under this DPI license, then Licensee agrees to pay to DPI a percentage of

                                       8

<PAGE>
Licensee's Net Sales of the WARF Compound for such uses equal to **% of the
royalty which Licensee would have been required to pay to DPI if the product
containing the WARF Compound was a Product under this Agreement, provided that
such percentage shall only apply to such Net Sales in jurisdictions where the
manufacture, use or sale of such product would infringe a patent licensed by
Licensee from WARF under the WARF Agreement. The period of time over which
Licensee shall make such payments to DPI shall commence on the First Commercial
Sale of the product containing the WARF Compound and shall end on the date that
such product can be made, used and sold without infringing the patents licensed
by Licensee from WARF under the WARF Agreement in all jurisdictions in which
Licensee is generating such Net Sales. This Section 4.3 shall survive the
termination or expiration of this Agreement other than a termination for breach
of this Agreement by DPI.

      4.4. Minimum Royalty. Licensee further agrees to pay to DPI a minimum
royalty on the sale of Products, but not on the sale of products containing WARF
Compounds, of (i) $*** for the first consecutive $*** period following the First
Commercial Sale of the first Product in the United States, (ii) $*** for the
second such *** period, (iii) $*** for the third such *** period, (iv) $*** for
the fourth such *** period, and (v) $*** for the fifth such *** period and all
subsequent *** periods during the Royalty Term applicable to such Products.
Royalties paid to DPI pursuant to Section 4.3 for Net Sales in the *** period
applicable to each minimum royalty amount shall be credited against each such
minimum royalty. The minimum royalty amounts shall be due and owing within 30
days of the end of the *** period applicable to each such minimum royalty
amount.

      4.5. Accounting; Payments.

            4.5.1. Licensee shall keep and maintain complete books and records
containing an accurate accounting in sufficient detail of all data required to
enable verification of earned royalties and other payments due hereunder.

            4.5.2. Within 30 days after the end of each calendar quarter,
Licensee shall remit to DPI a statement of Net Sales by Licensee and by its
sublicensees on account for such quarter, which statement shall be accompanied
by the payment due to DPI pursuant to Section 4.3.

            4.5.3. DPI may request that the financial statements of Licensee and
of its sublicensees relating to the sale of Products shall be audited annually
by a

                                       9

<PAGE>

nationally recognized independent certified public accountant reasonably
acceptable to Licensee for the purpose of verifying the amount of royalty
payments due. Such examination of books and records of Licensee and its
sublicensees shall take place during regular business hours during the term of
this Agreement and for two (2) years after its termination, provided however,
that such an examination shall not take place more than once a year and shall
not cover records for more than the preceding three (3) years, and provided that
such accountant shall agree to keep confidential all the information obtained by
such accountant during such audit and shall report to DPI only as to the
accuracy of the royalty statements and payments. If such accountant shall find
an underpayment to DPI, presentation of a written statement substantiating the
underpayment shall be provided to Licensee. If Licensee is not in agreement with
the findings of the accountant selected by DPI, then Licensee shall so notify
DPI in writing within 30 days of receipt by Licensee of said findings, in which
case the parties shall jointly appoint, within a further period of 30 days, an
independent certified public accountant to validate, at Licensee's expense,
DPI's accountant's findings, and the decision of said independent accountant
shall be final. If said independent accountant verifies that an underpayment has
occurred, the amount due and interest (accruing at the prevailing prime rate of
interest for commercial loans published in the Wall Street Journal, Eastern
Edition, from the date payment was due through the date of actual payment to
DPI) shall be paid to DPI within thirty (30) days.

            4.5.4. All payments due to DPI under this Agreement shall be made in
United States dollars and shall be sent by Licensee to DPI to the attention of
"President" at the address shown in Section 10. If Licensee receives Net Sales
in currency other than United States dollars, royalty payments due to DPI on
account of Net Sales shall be converted into United States dollars at the
conversion rate for the foreign currency as published in the eastern edition of
The Wall Street Journal as of the last business day of the applicable calendar
quarter.

            4.5.5. Any income or other tax that Licensee hereunder, its
Affiliates or sublicensees are required to withhold and pay on behalf of DPI
hereunder with respect to the royalties payable under this Agreement shall be
deducted from and offset against said royalties prior to remittance to DPI;
provided, however, that in regard to any tax so deducted, the Licensee shall
give or cause to be given to DPI such assistance as may reasonably be necessary
to enable DPI to claim exemption therefrom or credit therefor, and in each case
shall furnish DPI proper evidence of the taxes paid on its behalf.

                                       10

<PAGE>

SECTION 5. REPRESENTATIONS AND WARRANTIES.

      5.1. DPI represents and warrants that it is the owner or Licensee of the
Licensed Patents or otherwise has the right to grant the licenses granted to
Licensee in this Agreement. DPI further represents and warrants that it has
licensed some or all of the Licensed Patents from WARF pursuant to that certain
License Agreement dated as of April 7, 2000, as amended, between DPI and WARF
and that it will use its best efforts to maintain such License Agreement in good
standing.

      5.2. DPI shall request that WARF prepare, file, prosecute and maintain
patents and patent applications claiming the inventions claimed in the Licensed
Patents in jurisdictions requested by Licensee. Licensee shall notify DPI in
writing indicating those jurisdictions in which Licensee desires DPI to make or
maintain such patents or patent applications. DPI reserves the right to request
that WARF file a patent application, at its own expense, in any countries not
requested by Licensee pursuant to this Section 5.

      5.3. Each of the Parties hereby represents and warrants to the other Party
as follows:

            5.3.1. This Agreement is a legal and valid obligation binding upon
such Party and enforceable in accordance with its terms. The execution, delivery
and performance of this Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a Party
or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.

            5.3.2. Such Party has not granted, and during the term of this
Agreement will not grant, any right to any third party relating to its
respective patents and know-how which would conflict with the rights granted to
the other Party hereunder.

            5.3.3. In the course of the development of the Compounds, such Party
has not used, and during the term of this Agreement will not use, any employee
or consultant that is debarred by the FDA or, to the best of such Party's
knowledge, is the subject of debarment proceedings by the FDA.

                                       11

<PAGE>

            5.3.4. The Parties recognize that each may perform some or all of
its obligations under this Agreement through Affiliates. Each Party shall remain
responsible for, and hereby guarantees, the performance by its Affiliates and
shall cause its Affiliates to comply with the provisions of this Agreement in
connection with such performance. In the event of any dispute arising from the
performance by an Affiliate under this Agreement, the Party having such a
dispute may proceed directly against the other Party, without any obligation to
first proceed against the Affiliate.

SECTION 6. TERM AND TERMINATION.

      6.1. The term of this license shall begin on the effective date of this
Agreement and continue until this Agreement is terminated as provided herein.

      6.2. Licensee may terminate this Agreement at any time by giving at least
90 days written and unambiguous notice of such termination to DPI. Such a notice
shall be accompanied by a statement of the reasons for termination. However,
Licensee may not terminate Section 4.3 pertaining to royalties on the WARF
Compound.

      6.3. If Licensee at any time defaults in the timely payment of any monies
due to DPI hereunder or commits any breach of any other covenant herein
contained, and Licensee fails to remedy any such breach or default within 30
days after written notice thereof by DPI, DPI may, at its option, terminate this
Agreement by giving written notice of termination to Licensee.

      6.4. This Agreement shall be automatically terminated upon the
commencement of an involuntary case or other proceeding against Licensee seeking
liquidation, reorganization or other relief with respect to Licensee or its
debts under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, and such case or proceeding remains unstayed and
undismissed for a period of sixty (60) days, or an order for relief is entered
against Licensee under the federal bankruptcy laws as now or hereafter in
effect.

      6.5. This Agreement shall be automatically terminated if Licensee
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consents to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or

                                       12

<PAGE>

similar official) of Licensee or for any substantial part of Licensee's
property, or Licensee makes any general assignment for the benefit of creditors,
or takes any corporate action to authorize any of the foregoing.

      6.7. Upon the termination of this Agreement, Licensee shall remain
obligated to provide an accounting for and to pay royalties earned up to the
date of the termination and any minimum royalties shall be prorated as of the
date of termination by the number of days elapsed in the applicable 12 month
period.

      6.8. Waiver by either party of a single breach or default, or a succession
of breaches or defaults, shall not deprive such party of any right to terminate
this Agreement in the event of any subsequent breach or default.

SECTION 7. CONFIDENTIALITY.

      7.1. Except as specifically permitted hereunder or as required to
research, develop, manufacture or market Products or potential Products, each
Party hereby agrees to hold in confidence and not use on behalf of itself or
others all data, samples, technical and economic information (including the
economic terms hereof), commercialization, clinical and research strategies and
know-how provided by the other Party (the "Disclosing Party") for a period of
five years from the date of disclosure and all data, results and information
developed pursuant to the Collaboration and solely owned by the other Party
(collectively the "Confidential Information"), except that the term
"Confidential Information" shall not include:

                  (i) information that is or becomes part of the public domain
through no fault of the non-Disclosing Party or its Affiliates;

                  (ii) information that is obtained after the date hereof by the
non-Disclosing Party or one of its Affiliates from any third party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;

                  (iii) information that is known to the non-Disclosing Party or
one or more of its Affiliates prior to disclosure by the Disclosing Party, as
evidenced by the non-Disclosing Party's written records; and

                                       13

<PAGE>

                  (iv) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, provided that in
such case the non-Disclosing Party notifies the Disclosing Party reasonably in
advance of such disclosure and cooperates with the Disclosing Party to minimize
the scope or content of such disclosure.

      7.2. The Parties shall cooperate in the publication of the results of the
development. DPI shall not issue any press releases or other communications to
the general public without the prior written consent of Licensee, except to the
extent required by law, rule or regulation, and in such event, DPI shall provide
Licensee with a copy of such press release or communication at least 5 business
days prior to release and shall in good faith consider all comments or suggested
edits made by Licensee.

      7.3. The obligations of Section 7.1 shall survive the expiration or
termination of this Agreement for a period of 5 years.

SECTION 8. INTELLECTUAL PROPERTY RIGHTS.

      8.1. Inventorship of any invention that is developed, discovered or made
by a Party, solely or jointly with the other Party (as applicable, the
"Inventor") pursuant to work conducted under this Agreement (an "Invention")
shall be determined in accordance with United States laws of inventorship.
Subject only to the license rights granted under this agreement, each Party
shall own the entire right, title and interest in and to any Invention made
solely by such Party's employees or agents, and all intellectual property rights
therein and shall own an undivided one-half interest in and to any Invention
made jointly by the employees or agents of both Parties, and all intellectual
property rights therein. Each Party shall promptly notify the other Party if it
determines that an Invention has been made, including any such jointly owned
Invention.

      8.2. With respect to any patent that only claims Inventions that are
solely-owned by one Party hereunder, the Inventor shall have the right, at its
option and expense, to prepare, file and prosecute in its own name any patents
with respect to any such Invention and to maintain any patents issued thereon.
In connection with any such prosecution efforts, the other Party agrees to
cooperate reasonably with the Inventor at the Inventor's expense in the
preparation and prosecution of all such patents and in the maintenance of any
patents issued. This obligation shall survive the expiration or termination of
this Agreement.

                                       14

<PAGE>

      8.3. Licensee will have first right to control the preparation, filing and
prosecution of joint patents and of maintenance of patents issuing thereon, and
DPI shall cooperate reasonably with Licensee in such prosecution efforts.
Licensee shall pay all expenses in connection with its preparation, filing and
prosecution of such patents. Licensee shall, from time to time (no more often
than once per calendar quarter), notify DPI of the actual amount of
out-of-pocket expenses incurred in such efforts, and DPI shall promptly
thereafter pay Licensee **% of such out-of-pocket expenses. Notwithstanding the
foregoing, DPI shall have no obligation to pay any fees in connection with the
prosecution of any joint patent unless the filing of such joint patent is agreed
to in writing by DPI, provided, however, that if DPI refuses to agree to the
prosecution of a joint patent in any jurisdiction, DPI shall assign and shall be
deemed to have assigned to Licensee all of DPI's right, title and interest in
such patent and patent application in such jurisdiction.

      8.4. As used in this Section 8, "out-of-pocket expenses" shall mean direct
costs, excluding internal labor costs (and any indirect costs associated
therewith).

      8.5. Each Party hereby grants to the other an exclusive (except as to the
licensing Party), worldwide right and license under all Inventions, know-how and
all patents owned or controlled by such Party to make, have made, use, import
and export all Compounds and any product containing any Compound as an active
ingredient, to the extent necessary to conduct the development of the Compounds.

SECTION 9. INDEMNIFICATION.

      9.1. Each Party hereby agrees to save, defend and hold the other Party and
its agents and employees harmless from and against any and all costs, expenses
(including reasonable attorneys' fees and amounts paid in settlement), damages
and liabilities claimed by a third party ("Claim") resulting directly or
indirectly from activities conducted by the indemnifying Party, its agents or
sublicensees, but only to the extent such Claim result from the negligence or
willful misconduct or breach of this Agreement by such Party or its employees
and agents and only to the extent such Claim do not also result from the
negligence or willful misconduct or breach of this Agreement by the Party
seeking indemnification or its agents or sublicensees.

                                       15

<PAGE>

      9.2. In the event that a Party is seeking indemnification under this
Section 9, it shall inform the other Party of a Claim as soon as reasonably
practicable after it receives notice of the Claim, shall permit the indemnifying
Party to assume direction and control of the defense of the Claim (including the
right to settle the Claim solely for monetary consideration), and shall
cooperate as requested in the defense and settlement of the Claim. The
indemnified Party shall not voluntarily make any payment or incur any expense in
connection with any claim or suit without the consent of the indemnifying Party,
provided that if the indemnifying Party does not assume direction and control of
the defense of the Claim, the indemnified Party may assume direction and control
of the defense of the Claim and, if successful, shall be reimbursed by the
indemnifying Party for costs incurred in connection with such defense.

      9.3. The terms of this Section 9 shall survive the termination or
expiration of this Agreement.

SECTION 10. MISCELLANEOUS.

            10.1. Dispute Resolution.

            10.1.1. Informal Resolution Procedure. The Parties recognize that
disputes as to certain matters may from time to time arise during the term of
this Agreement which relate to either Party's rights and/or obligations. It is
the objective of the Parties to establish procedures to facilitate the
resolution of disputes arising under this Agreement in an expedient manner by
mutual cooperation and without resort to litigation, if possible. To accomplish
this objective, the Parties agree to follow the procedures set in this Section
10.1 if and when an issue or dispute arises under this Agreement.

            10.1.2. Senior Executive Discussion. If representatives of both
Parties, other than their respective chief executive officers, are unable to
resolve any issue or dispute arising within their authority within thirty (30)
days thereof, or upon any other dispute or issue regarding a Party's rights or
obligations under the Agreement, any Party may, by written notice to the other,
have such dispute or issue referred to their respective chief executive officers
for attempted resolution by good faith negotiations. Upon such referral of an
issue or dispute for resolution, such designated officers shall meet promptly
thereafter and shall use good faith efforts to attempt to resolve such dispute
or issue. If the Parties are unable to

                                       16

<PAGE>

resolve such dispute after referral to their respective chief executive
officers, then either Party may pursue any legal or equitable remedies available
to it.

      10.2. Assignment.

            10.2.1. Affiliates. Either Party may assign any of its rights or
obligations under this Agreement in any country to any Affiliates; provided,
however, that such assignment shall not relieve the assigning Party of its
responsibilities for performance of its obligations under this Agreement, and
further provided that if a proposed assignment would have an adverse financial
impact upon the other Party (e.g., by reason of changed tax treatment of
payments due under this Agreement), such assignment shall be subject to the
other Party's prior written consent.

            10.2.2. Merger, Acquisition Or Sale Of Assets. Subject to the terms
hereof, either Party may assign its rights or obligations under this Agreement
to a non-Affiliate only in connection with a merger or similar reorganization or
the sale of all or substantially all of its assets or the sale of all or
substantially all of its pharmaceutical and/or healthcare assets, or otherwise
without the prior written consent of the other Party. This Agreement shall
survive any such merger or reorganization of either Party with or into, or such
sale of assets to, another party and no consent for such merger, reorganization
or sale shall be required hereunder; provided, that in the event of such merger,
reorganization or sale, no intellectual property rights of the acquiring
corporation shall be included in the technology licensed hereunder.

            10.2.3. Binding Upon Successors And Assigns. This Agreement shall be
binding upon and inure to the benefit of the successors and permitted assigns of
the Parties. Any assignment not in accordance with this Agreement shall be void.

      10.3. Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

      10.4. No Trademark Rights. Except as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the name
DPI, Licensee or any other trade name or trademark of the other Party or its
Affiliates in connection with the performance of this Agreement.

                                       17

<PAGE>

      10.5. Notices. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).

      If to Licensee, addressed to:
           Quatrx Pharmaceuticals Company

           5430 Data Court, Suite 300
           Ann Arbor, MI 48108
           Attention: CEO
           Telephone: 734-913-0743
           Telecopy: 734-913-9900

      With a copy to:
           Butzel Long
           350 South Main Street, Suite 300
           Ann Arbor, MI 48104
           Attention: Jeffery M. Brinza, Esq.
           Telephone: 734-213-3605
           Telecopy: 313-225-7080

      If to DPI, addressed to:
           Deltanoid Pharmaceuticals, Inc.
           645 Science Drive
           Madison, WI 53711
           Attention: President
           Telephone: 608-238-7710
           Telecopy: 608-238-7715

                                       18

<PAGE>

      With a copy to:
           Michael Best & Friedrich LLP
           One South Pinckney Street, Suite 700
           Madison, WI 53703
           Attention: Gregory J. Lynch, Esq.
           Telephone: 608-257-3501
           Telecopy: 608-283-2275

      10.6. Limitation Of Liability. IN NO EVENT SHALL EITHER PARTY OR ITS
RESPECTIVE AFFILIATES AND PERMITTED SUBLICENSEES BE LIABLE FOR SPECIAL,
EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER IN CONTRACT, WARRANTY,
TORT, STRICT LIABILITY OR OTHERWISE, except to the extent such Party may be
required to indemnify the other Party from such damages claimed by third parties
under Article 9.

      10.7. Waiver. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.

      10.8. Severability. If any term, covenant or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to the Parties or under
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.

      10.9. Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.

                                       19

<PAGE>

      10.10. Governing Law. This Agreement is made pursuant to and shall be
governed by and construed in accordance with the laws of the State of Michigan,
United States, without reference to conflicts of laws' rules or principles.

      10.11. Bankruptcy Provision. All rights and licenses granted by DPI to
Licensee under or pursuant to this Agreement are, and shall otherwise be deemed
to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
rights to "intellectual property" as defined in Section 101 of the Bankruptcy
Code. The Parties agree that Licensee, as exclusive licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against DPI under the
Bankruptcy Code, Licensee shall be entitled to a complete duplicate of (or
complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and same, if not already in its
possession, shall be promptly delivered to Licensee (i) upon such commencement
of a bankruptcy proceeding, unless DPI elects to continue to perform all of its
obligations under this Agreement; or (ii) if not delivered under (i) above, upon
rejection of this Agreement by or on behalf of DPI.

      10.12. Headings. The Section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said Sections.

      10.13. 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.

      10.14. Entire Agreement. This Agreement and all exhibits attached hereto,
and all documents delivered concurrently herewith, set forth all the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the Parties hereto with respect to the subject matter hereof and
supersede and terminate all prior agreements and understanding between the
Parties as to such subject matter. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral or
written, between the Parties with respect to such subject matter other than as
set forth herein and therein. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties. This Agreement shall

                                       20

<PAGE>

not constitute an amendment of either of the existing collaboration agreements
between the Parties, each of which will continue in full force and effect.

      10.15. Independent Contractors. Each Party acknowledges that neither it
nor any of its employees are employees of the other Party and that neither it
nor any of its employees are eligible to participate in any employee benefit
plans of the other Party. Each Party further acknowledges that neither it nor
any of its employees are eligible to participate in any such benefit plans even
if it is later determined that its or any of its employees' status during the
period of this Agreement was that of an employee of the other Party. In
addition, each Party hereby waives any claim that it may have under the terms of
any such benefit plans or under any law for participation in or benefits under
any of the other Party's benefit plans.

      10.16 Use Of Names. Neither Party shall use the name of the other Party in
relation to this transaction in any public announcement, press release or other
public document without the written consent of such other Party, which consent
shall not be unreasonably withheld or delayed; provided, however, that either
Party may use the name of the other Party in any document required to be filed
to obtain regulatory approval or to comply with applicable laws, rules or
regulations.

      10.17. Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, earthquake, explosion, flood, strike, lockout, embargo, act
of God, or any other similar or dissimilar cause beyond the control of the
defaulting Party, provided that the Party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure.

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the dates indicated below.

QUATRX PHARMACEUTICALS                      DELTANOID
COMPANY                                     PHARMACEUTICALS, INC.

By:      /s/ Robert L. Zerbe                By:     /s/ Hector F. DeLuca
       -------------------------                   -----------------------------
       (Signature)                                          (Signature)

         Robert L. Zerbe                             Hector F. DeLuca
       -------------------------                   -----------------------------
       (Print Name)                                         (Print Name)

Title: Chief Executive Officer              Title: President and CEO

                                       21

<PAGE>

                                    EXHIBIT A

                                LICENSED PATENTS

<TABLE>
<CAPTION>
                                                         APPLICATION
REFERENCE                    PATENT        ISSUE           SERIAL
 NUMBER        COUNTRY       NUMBER         DATE           NUMBER
<S>            <C>          <C>         <C>              <C>
                  US          ***           ***             ***
                  US          ***           ***             ***
                  US                                        ***
                  US                                        ***
                  US                                        ***
                  US          ***           ***             ***
                  US          ***           ***             ***
                  US          ***           ***             ***
                  US          ***           ***             ***
                  WO          ***
                  WO          ***
</TABLE>

-----------
*     Application number for parent; this subsequent application was filed on
      August 10, 1999

                                       22

<PAGE>

                                    EXHIBIT B

                   QUATRx/ DELTANOID TOPICAL PSORIASIS PROGRAM

KEY MILESTONE ESTIMATES FOR EARLY DEVELOPMENT

<TABLE>
<CAPTION>
                  KEY ACTIVITIES                                         ESTIMATED COMPLETION
-------------------------------------------------       -------------------------------------------------
<S>                                                     <C>
1. ***                                                  ***

2. ***                                                  ***

3. ***                                                  ***

4. File IND                                             ***

5. Start of Phase *                                     ***

6. Start of Phase *                                     ***

</TABLE>

Nb: ******* estimates to be finalized based on further consideration of the
final clinical plan, timing of initiation of long term toxicology work etc.

                                       23

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