Document:

Unassociated Document

    Exhibit
      4.5

    
 

    NOTE
      AND WARRANT PURCHASE AGREEMENT

    

    This
      NOTE
      AND WARRANT PURCHASE AGREEMENT (this “Agreement”) made as of the date set forth
      on the signature page hereof between Innovive Pharmaceuticals, Inc., a Delaware
      corporation having its principal place of business at 555 Madison Avenue,
      25th
      Floor,
      New York, NY 10022 (the “Company”), and the undersigned (the “Subscriber”).

    

    W
      I T N E
      S S E T H:

    

    WHEREAS,
      the Company is offering (the “Offering”) to a limited number of “accredited
      investors,” as that term is defined by Rule 501(a) of Regulation D of the
      Securities Act of 1933, as amended (the “Act”), to sell and issue to such
      investors, senior convertible promissory notes in substantially the form
      attached hereto as Exhibit
      A
      (the
“Notes”) and warrants to purchase capital stock of the Company (the “Warrant
      Shares”) in substantially the form attached hereto as Exhibit
      B
      (the
“Warrants,” together with the Notes, the “Securities”); and

    

    WHEREAS,
      the Company desires to enter into this Agreement to issue and sell the
      Securities and the Subscriber desires to enter into this Agreement to acquire
      the Securities on the terms and conditions set forth herein;
      and

    WHEREAS,
      the terms of the Offering are summarized in that certain Confidential Offering
      Memorandum dated May 23, 2005 (together with all amendments, supplements,
      exhibits and appendices thereto, the “Offering Memo”);

    

    NOW,
      THEREFORE, in consideration of the promises and the mutual representations
      and
      covenants hereinafter set forth, the parties hereto do hereby agree as
      follows:

    

    
      
        	1.	
                PURCHASE
                  AND SALE OF SECURITIES.

              

      

    

    

    1.1  The
      Company has authorized the issuance of Notes up to the aggregate principal
      amount of $2,250,000 (the “Principal Loan Amount”), each with an interest rate
      of five percent (5%) compounded semi-annually, and Warrants to purchase a number
      of shares of Common Stock of the Company equal to fifteen percent (15%) of
      the
      Principal Loan Amount divided by (i) the lowest price paid (the “Next Round
      Price”) for securities by investors in the next Qualified Financing (as defined
      in the Notes) or (ii) if a Qualified Financing does not occur on or before
      the
      Due Date (or the expiration of the Extended Term, if applicable) (each as
      defined in the Notes), the fair market value per share of Common Stock of the
      Company determined based on the Company’s then fully diluted capitalization and
      an aggregate market value of the Company of $12,500,000, all as more fully
      set
      forth in the Warrants. Subscriber’s applicable portion of the Principal Loan
      Amount (the “Subscriber Loan Amount”) is set forth on the signature page
      hereto.

     

    1.2  The
      Warrant exercise price per share will be (i) one hundred and ten percent (110%)
      of the Next Round Price or (ii) if a Qualified Financing does not occur on
      or
      before the Due Date (or the expiration of the Extended Term, if applicable),
      equal to the fair market value per share of Common Stock of the Company
      determined based on the Company’s then fully diluted capitalization and an
      aggregate market value of the Company of $12,500,000, all as more fully set
      forth in the Warrants. The Warrant will be exercisable for the number of shares
      of Common Stock of the Company equal to the quotient of (y) fifteen percent
      (15%) of the Subscriber Loan Amount (as reflected on the signature page hereto),
      divided by (z) either (A) the Next Round Price (if a Qualified Financing occurs
      on or before the Due Date (or the expiration of the Extended Term, if
      applicable)) or (B) the fair market value per share of Common Stock of the
      Company determined based on the Company’s then fully diluted capitalization and
      an aggregate market value of the Company of $12,500,000 (if a Qualified
      Financing does not occur on or before the Due Date (or expiration of the
      Extended Term, if applicable)), all as more fully set forth in the
      Warrants.

     

    
      
        
        

      

      
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    1.3  Subject
      to the terms and conditions hereof, at the closing (the “Closing,” and the date
      thereof, the “Closing Date”) the Company shall issue and sell to the Subscriber
      and the Subscriber shall purchase from the Company, a Note in the principal
      amount equal to the Subscriber Loan Amount set forth on the signature page
      hereto and a Warrant to purchase Warrant Shares as set forth herein.

     

    1.4  The
      Closing shall be held at a date and time designated by the Company prior to
      11:59 p.m. Eastern Standard Time June 30, 2005 (subject to extension at the
      discretion of the Company without notice to the Subscriber of up to 60 days)
      (the “Expiration Date”). The Note and Warrant will be delivered by the Company
      to the Subscriber within 10 days following the Closing. The Closing shall occur
      at the offices of Wyrick Robbins Yates & Ponton LLP at 4101 Lake Boone
      Trail, Suite 300, Raleigh, North Carolina 27607.

     

    1.5  The
      Subscriber Loan Amount is payable by personal or business check, or money order
      made payable to “US Bank & Trust Company, N.A., F/B/O Innovive
      Pharmaceuticals, Inc.” (the “Escrow Agent,”) F/B/O Innovive Pharmaceuticals,
      Inc.” at or prior to the Closing. Subscriber may also pay by wire transfer of
      immediately available funds to:

     

    U.S.
      Bank
      Trust N.A.

    ABA
      Routing Number: 091000022

    Account
      Number: 180121167365

    For:
      Paramount BioCapital/Innovive Pharmaceuticals

    SEI
      Number: 789568000

    Ref:
      [Name
      of Subscriber]

    Attn:
      Angela Friesen

    

    1.6     
Notwithstanding
      anything else herein to the contrary, the Company reserves the right to reject
      any subscription, for any reason and without any penalty, at any time prior
      to
      the occurrence of the Closing. If Subscriber has executed this Agreement and/or
      paid the Subscriber Loan Amount at the time the Company rejects Subscriber’s
      subscription, this Agreement shall be deemed null and void ab initio and any
      amount paid by Subscriber shall be returned to Subscriber.

    

    
      
        
        

      

      
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      	2.	
              REPRESENTATIONS
                AND WARRANTIES OF SUBSCRIBER.

            

    

    

    2.1    The
      Subscriber recognizes that the purchase of the Securities involves a high degree
      of risk including, but not limited to, the following: (i) an investment in
      the
      Company is highly speculative, and only investors who can afford the loss of
      their entire investment should consider investing in the Company and the
      Securities; (ii) the Subscriber may not be able to liquidate his/its investment;
      (iii) transferability of the Securities is extremely limited; (iv) in the event
      of a disposition of the Securities, the Subscriber could sustain the loss of
      his/its entire investment and (v) the Company has not paid any dividends on
      its
      capital stock since inception and does not anticipate the payment of dividends
      in the foreseeable future. 

    

    2.2    The
      Subscriber represents that the Subscriber is an “accredited investor” as such
      term is defined in Rule 501 of Regulation D promulgated under the Act and that
      the Subscriber is able to bear the economic risk of an investment in the
      Company. If the Subscriber is a natural person, the Subscriber has reached
      the
      age of majority in the state or other jurisdiction in which the Subscriber
      resides, has adequate means of providing for the Subscriber’s current financial
      needs and contingencies, is able to bear the substantial economic risks of
      an
      investment in the Securities for an indefinite period of time, has no need
      for
      liquidity in such investment and, at the present time, could afford a complete
      loss of such investment.

     

    2.3     The
      Subscriber acknowledges and represents that the Subscriber has prior investment
      experience, including investment in securities which are non-listed,
      unregistered and/or not traded on the Nasdaq National or SmallCap Market or
      a
      national stock exchange, or the Subscriber has employed the services of an
      investment advisor, attorney and/or accountant to read all of the documents
      furnished or made available by the Company to the Subscriber and to all other
      prospective investors in the Securities and to evaluate the merits and risks
      of
      such an investment on the Subscriber’s behalf.

    

    2.4     The
      Subscriber acknowledges receipt and careful review of this Agreement, the Note,
      the Warrant, the Offering Memo (collectively, the “Offering Documents”).
      Subscriber further represents that the Subscriber has been furnished by the
      Company during the course of this transaction with all information regarding
      the
      Company that the Subscriber, its investment advisor, attorney and/or accountant
      has requested or desired to know, has been afforded the opportunity to ask
      questions of and receive answers from duly authorized officers or other
      representatives of the Company concerning the terms and conditions of the
      Offering, and has received any additional information which the Subscriber
      has
      requested.

    

    2.5     (a)     The
      Subscriber has relied solely upon the information provided by the Company in
      making the decision to invest in the Securities. The Subscriber is familiar
      with
      and understands the terms of the Offering, including the rights to which the
      Subscriber is entitled under this Agreement. In evaluating the suitability
      of an
      investment in the Company, the Subscriber has not relied upon any representation
      or other information (whether oral or written) from the Company, or any agent,
      employee or affiliate of the Company other than as set forth in the Offering
      Documents and the results of Subscriber’s own independent investigation. To the
      extent necessary, the Subscriber has retained, at his/its sole expense, and
      relied upon appropriate professional advice regarding the investment, tax and
      legal merits and consequences of this Agreement and its purchase of the
      Securities hereunder. 

     

    
      
        
        

      

      
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    (b)     The
      Subscriber represents that no Securities were offered or sold to it by means
      of
      any form of general solicitation or general advertising, and in connection
      therewith the Subscriber did not: (A) receive or review any advertisement,
      article, notice or other communication published in a newspaper or magazine
      or
      similar media or broadcast over television or radio whether closed circuit,
      or
      generally available; or (B) attend any seminar meeting or industry investor
      conference whose attendees were invited by any general solicitation or general
      advertising.

    

    2.6     The
      Subscriber represents that the Subscriber, either by reason of the Subscriber’s
      business or financial experience or the business or financial experience of
      the
      Subscriber’s professional advisors, has the capacity to protect the Subscriber’s
      own interests in connection with the transaction contemplated hereby.

    

    2.7     The
      Subscriber acknowledges that the Offering has not been reviewed by the United
      States Securities and Exchange Commission (“SEC”) or any state securities
      regulatory authority or other governmental body or agency, since the Offering
      is
      intended to be exempt from the registration requirements of the Act pursuant
      to
      Regulation D promulgated under the Act. The Subscriber understands that if
      required by the laws or regulations or any applicable jurisdictions, the
      Offering contemplated hereby will be submitted to the appropriate authorities
      of
      such state(s) for registration of exemption therefrom. 

    

    2.8     The
      Subscriber understands that the Securities have not been registered under the
      Act or any state securities laws by reason of a claimed exemption under the
      provisions of the Act and such state securities laws which depends, in part,
      upon the Subscriber’s investment intention. In this connection, the Subscriber
      hereby represents that the Subscriber is purchasing the Securities for the
      Subscriber’s own account for investment purposes only and not with a view toward
      the resale or distribution to others and has no contract, undertaking, agreement
      or other arrangement, in existence or contemplated, to sell, pledge, assign
      or
      otherwise transfer the Securities to any other person. The Subscriber, if an
      entity, also represents that it was not formed for the purpose of purchasing
      the
      Securities. 

    

    2.9     The
      Subscriber understands that no public market now exists for any of the
      securities issued by the Company and that there is no assurance that a public
      market will ever exist for the Notes and the Warrants (or the Warrant Shares).
      The Subscriber understands and hereby acknowledges that the Company is under
      no
      obligation to register any of the Securities under the Act or any state
      securities or “blue sky” laws or assist the Subscriber in obtaining an exemption
      from various registration requirements. The Subscriber agrees to hold the
      Company, any placement agents and their directors, officers, employees,
      controlling persons and agents and their respective heirs, representatives,
      successors and assigns harmless and to indemnify them against all liabilities,
      costs and expenses incurred by them as a result of (i) any misrepresentation
      made by the Subscriber contained in this Agreement, (ii) any sale or
      distribution by the Subscriber in violation of the Act or any applicable state
      securities or “blue sky” laws or (iii) any untrue statement made by the
      Subscriber and contained herein. 

     

    
      
        
        

      

      
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    2.10     The
      Subscriber consents to the placement of a legend on any certificate or other
      document evidencing the Securities substantially as set forth below, that such
      Securities have not been registered under the Act or any state securities or
      “blue sky” laws and setting forth or referring to the restrictions on
      transferability and sale thereof contained in this Agreement. The Subscriber
      is
      aware that the Company will make a notation in its appropriate records with
      respect to the restrictions on the transferability of the Securities.

    

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.
      THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
      AND
      MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
      APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL
      IN
      FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
      TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
      SECURITIES LAWS.

     

    2.11     The
      Subscriber agrees to supply
      the Company, within five (5) days after the Subscriber receives the request
      therefor from the Company, with such additional information concerning the
      Subscriber as the Company deems necessary or advisable in order to establish
      or
      verify the Subscriber’s representations contained herein.

    

    2.12     The
      Subscriber represents that the address of the Subscriber furnished by Subscriber
      on the signature page hereof is the Subscriber’s principal residence if
      Subscriber is an individual or its principal business address if it is a
      corporation or other entity.

    

    2.13     The
      Subscriber represents that the Subscriber has full power and authority
      (corporate, statutory and otherwise) to execute, deliver, and perform this
      Agreement and to purchase the Securities. This Agreement constitutes the legal,
      valid and binding obligation of the Subscriber, enforceable against the
      Subscriber in accordance with its terms.

    

    2.14     If
      the
      Subscriber is a corporation, partnership, limited liability company, trust,
      employee benefit plan, individual retirement account, Keogh Plan, or other
      entity (a) it is authorized and qualified to become an investor in the Company
      and the person signing this Agreement on behalf of such entity has been duly
      authorized by such entity to do so and (b) it is duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization.

     

    
      
        
        

      

      
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    2.15     The
      Subscriber acknowledges that if he or she is a Registered Representative of
      an
      NASD member firm, he or she must give such firm the notice required by the
      NASD
      Rules of Fair Practice, receipt of which must be acknowledged by such
      firm.

    

    2.16     The
      Subscriber understands, acknowledges and agrees with the Company that this
      subscription may be rejected, in whole or in part, by the Company, in the sole
      and absolute discretion of the Company, at any time before the Closing Date
      notwithstanding prior receipt by the Subscriber of notice of acceptance of
      the
      Subscriber’s subscription.

     

    2.17    
 The
      Subscriber understands, acknowledges and agrees with the Company that, except
      as
      otherwise set forth herein, the subscription hereunder is irrevocable by the
      Subscriber, that, except as required by law, the Subscriber is not entitled
      to
      cancel, terminate or revoke this Agreement or any agreements of the Subscriber
      hereunder and that this Agreement and such other agreements shall survive the
      death or disability of the Subscriber and shall be binding upon and inure to
      the
      benefit of the parties and their heirs, executors, administrators, successors,
      legal representatives and permitted assigns. If the Subscriber is more than
      one
      person, the obligations of the Subscriber hereunder shall be joint and several
      and the agreements, representations, warranties and acknowledgments herein
      contained shall be deemed to be made by and be binding upon each such person
      and
      his/her heirs, executors, administrators, successors, legal representatives
      and
      permitted assigns.

    

    2.18     The
      Subscriber understands, acknowledges and agrees with the Company that, the
      Offering is intended to be exempt from registration under the Act by virtue
      of
      the provisions of Regulation D thereunder, and/or the provisions of Regulation
      S
      which is in part dependent upon the truth, completeness and accuracy of the
      statements made by the Subscriber.

    

    2.19     The
      Subscriber acknowledges that the information contained in the Offering Documents
      or otherwise made available to the Subscriber is confidential and non-public
      and
      agrees that all such information shall be kept in confidence by the Subscriber
      and neither used by the Subscriber for the Subscriber’s personal benefit (other
      than in connection with this Subscription) nor disclosed to any third party
      for
      any reason, notwithstanding that a Subscriber’s subscription may not be accepted
      by the Company; provided,
      however,
      that
      this obligation shall not apply to any such information that (i) is part of
      the
      public knowledge or literature and readily accessible at the date hereof, (ii)
      becomes part of the public knowledge or literature and readily accessible by
      publication (except as a result of a breach of this provision) or (iii) is
      received from third parties (except third parties who disclose such information
      in violation of any confidentiality agreements or obligations, including,
      without limitation, any subscription or other similar agreement entered into
      with the Company).

    

    2.20    
 If
      the
      Subscriber is purchasing the Securities in a fiduciary capacity for another
      person or entity, including without limitation a corporation, partnership,
      trust
      or any other entity, the Subscriber has been duly authorized and empowered
      to
      execute this Agreement and all other subscription documents, and such other
      person fulfills all the requirements for purchase of the shares as such
      requirements are set forth herein, concurs in the purchase of the Securities
      and
      agrees to be bound by the obligations, representations, warranties and covenants
      contained herein. Upon request of the Company, the Subscriber will provide
      true,
      complete and current copies of all relevant documents creating the Subscriber,
      authorizing its investment in the Company and/or evidencing the satisfaction
      of
      the foregoing.

     

    
      
        
        

      

      
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    2.21     The
      Subscriber represents that no
      authorization, approval, consent or license of any person is required to be
      obtained for the purchase of the Securities
      by the
      Subscriber, other than as have been obtained and are in full force and effect.
      The execution and delivery of this Agreement does not, and the consummation
      of
      the transactions contemplated hereby will not, result in any violation of or
      constitute a default under any material agreement or other instrument to which
      the Subscriber is a party or by which the Subscriber or any of its properties
      are bound, or to the best of the Subscriber’s knowledge, any permit, franchise,
      judgment, order, decree, statute, rule or regulation to which the Subscriber
      or
      any of its businesses or properties is subject.

    

    2.22     The
      Subscriber represents that the representations, warranties and agreements of
      the
      Subscriber contained herein and in any other writing delivered in connection
      with the transactions contemplated hereby shall be true and correct in all
      respects on the date hereof and as of the Closing Date as if made on and as
      of
      such date and shall survive the execution and delivery of this Agreement and
      the
      purchase of the Securities. The Subscriber agrees that the Company shall be
      entitled to rely on the representations, warranties and agreements of the
      Subscriber contained herein.

    

    2.23     The
      Subscriber (a) represents and warrants that it has retained no finder
      or
      broker in connection with the transactions contemplated by this Agreement,
      and
      (b) agrees to indemnify and to hold the Company and its directors, officers,
      employees, controlling persons and agents and their respective heirs,
      representatives, successors and assigns, harmless of and from any liability
      for
      any commission or compensation in the nature of a finder’s fee to any broker or
      other person or firm (and the costs and expenses of defending against such
      liability or asserted liability) for which the Subscriber or any of its
      employees or representatives are responsible.

    

    
      	3.	
              REPRESENTATIONS
                BY AND COVENANTS OF THE COMPANY.

            

    

    

    The
      Company hereby represents and warrants to the Subscriber that:

    

    3.1     Organization,
      Good Standing and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has full corporate power and
      authority to conduct its business as currently conducted. The Company is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which the property owned or leased by it or the nature
      of
      the business conducted by it makes such qualification necessary, except to
      the
      extent that the failure to be so qualified or in good standing would not have,
      individually or in the aggregate, a material adverse effect on the business,
      operations, conditions (financial or otherwise), assets, results of operations
      or prospects of that entity individually or of the Company and its Subsidiaries
      (as defined below) as a whole. For purposes of this Section, “Subsidiary” means
      any corporation, partnership, limited liability company, association, or other
      business entity in which the Company owns or controls, directly or indirectly,
      any interest, including, without limitation, any joint venture, partnership,
      or
      similar arrangement.

     

    
      
        
        

      

      
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    3.2     Capitalization.    (a)   
      The authorized capital stock of the Company consists of (i) 25,000,000 shares
      of
      Common Stock, $0.001 par value per share and (ii) 5,000,000 shares of Preferred
      Stock, $0.001 par value per share. As of the Closing Date, there are (y)
      3,160,000 shares of Common Stock issued and outstanding, all of which are duly
      authorized, validly issued, fully paid and non-assessable and (z) no shares
      of
      Preferred Stock issued and outstanding. In addition, there are 925,000 shares
      of
      Common Stock reserved for issuance pursuant to outstanding options and warrants.
      There are no shares of any class or series of preferred stock issued or
      outstanding. All of the securities issued by the Company have been issued in
      accordance with all applicable federal and state securities laws. Other than
      as
      set forth above, there are no other options, warrants, calls, rights,
      commitments or agreements of any character to which the Company is a party
      or by
      which the Company is bound or obligating the Company to issue, deliver, sell,
      repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
      redeemed, any shares of the capital stock of the Company or obligating the
      Company to grant, extend or enter into any such option, warrant, call, right,
      commitment or agreement. There are no preemptive rights or rights of first
      refusal or similar rights which are binding on the Company permitting any person
      to subscribe for or purchase from the Company shares of its capital stock
      pursuant to any provision of law, the Company’s Certificate of Incorporation as
      in effect on the date hereof (the “Certificate of Incorporation”) or the
      Company’s By-laws, as in effect on the date hereof (the “By-laws”) or by
      agreement or otherwise. There are no securities or instruments containing
      anti-dilution or similar provisions that will be triggered by the issuance
      of
      the Securities as described in this Agreement and the Offering Memo. True and
      correct copies of the Company’s Certificate of Incorporation and By-laws are
      available to the Subscriber upon request. 

     

    (b)     The
      Securities
      (including upon exercise of the Warrant, the Warrant Shares, and upon conversion
      of the Note, the securities issuable therefor), have been (or, with respect
      to
      the Warrant Shares and the securities issuable upon conversion of the Note,
      will
      be) duly authorized and, when issued, delivered and paid for in the manner
      set
      forth in this Agreement, the Note and/or the Warrant, will be duly authorized,
      validly issued, fully paid and non-assessable. No stockholder of the Company
      has
      any right to request or require the Company to register the sale of any shares
      owned by such stockholder under the Act. No further approval or authority of
      the
      stockholders or the Board of Directors of the Company will be required for
      the
      issuance and sale of the Securities to be sold by the Company as contemplated
      herein.

    

    3.3     Authorization;
      Enforceability.
      The
      Company has all corporate right, power and authority to enter into this
      Agreement and to consummate the transactions contemplated hereby. All corporate
      action on the part of the Company, its directors and stockholders necessary
      for
      the authorization, execution, delivery and performance of this Agreement by
      the
      Company, the authorization, sale, issuance and delivery of the Securities
      contemplated herein and the performance of the Company’s obligations hereunder
      has been taken. This Agreement has been duly executed and delivered by the
      Company and constitutes a legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, subject to laws
      of
      general application relating to bankruptcy, insolvency and the relief of debtors
      and rules of law governing specific performance, injunctive relief or other
      equitable remedies, and to limitations of public policy. The issuance and sale
      of the Securities contemplated hereby will not give rise to any preemptive
      rights or rights of first refusal on behalf of any person.

     

    
      
        
        

      

      
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    3.4     No
      Conflict; Governmental and Other Consents. 

    

    (a)     The
      execution and delivery by the Company of this Agreement and the consummation
      of
      the transactions contemplated hereby will not result in the violation of any
      law, statute, rule, regulation, order, writ, injunction, judgment or decree
      of
      any court or governmental authority to or by which the Company or any Subsidiary
      is bound, or of any provision of the Certificate of Incorporation or By-Laws
      of
      the Company, and will not conflict with, or result in a breach or violation
      of,
      any of the terms or provisions of, or constitute (with due notice or lapse
      of
      time or both) a default under, any lease, loan agreement, mortgage, security
      agreement, trust indenture or other agreement or instrument to which the Company
      or any Subsidiary is a party or by which it is bound or to which any of its
      properties or assets is subject, nor result in the creation or imposition of
      any
      lien upon any of the properties or assets of the Company or any
      Subsidiary.

    

    (b)    No
      consent, approval, authorization or other order of any governmental authority
      or
      other third-party is required to be obtained by the Company or any Subsidiary
      in
      connection with the authorization, execution and delivery of this Agreement
      or
      with the authorization, issue and sale of the Securities, except such filings
      as
      may be required to be made under the Act and with any state or foreign blue
      sky
      or securities regulatory authority relating to an exemption from registration
      thereunder.

    

    3.5     Investment
      Company.
      The
      Company is not an “investment company” within the meaning of such term under the
      Investment Company Act of 1940, as amended, and the rules and regulations of
      the
      SEC thereunder.

    

    3.6      Proprietary
      Rights.
      To the
      Company’s knowledge, the Company owns or possesses adequate and enforceable
      rights to use all patents, patent applications, trademarks, trade names,
      corporate names, copyrights, trade secrets, licenses, inventions, formulations,
      technology and know-how and other intangible property used or proposed to be
      used in the conduct of its business (the “Proprietary Rights”). To the Company’s
      knowledge, the Company or the entities from whom the Company has acquired rights
      have taken all action necessary to protect all of the Company’s Proprietary
      Rights. The Company has not received any notice of, and there are no facts
      known
      to the Company that indicate the existence of (i) any infringement or
      misappropriation by any third party of any of the Proprietary Rights or (ii)
      any
      claim by a third party contesting the validity of any of the Proprietary Rights.
      The Company has not received any notice of any infringement, misappropriation
      or
      violation by the Company or any of its employees of any Proprietary Rights
      of
      third parties, and, to the best of the Company’s knowledge, neither the Company
      nor any of its employees has infringed, misappropriated or otherwise violated
      any Proprietary Rights of any third parties. To the Company’s knowledge, no
      infringement, illicit copying, misappropriation or violation of any intellectual
      property rights of any third party has occurred or will occur with respect
      to
      any products currently being sold by the Company or with respect to any products
      currently under development by the Company or with respect to the conduct of
      the
      Company’s business as currently contemplated. The Company is not aware that any
      of its employees are obligated under any contract (including licenses, covenants
      or commitments of any nature) or other agreement, or subject to any judgment,
      decree or order of any court or administrative agency, that would interfere
      with
      the use of the employee’s best efforts to promote the interests of the Company
      or that would conflict with the Company’s business as presently conducted or as
      proposed to be conducted. To the Company’s knowledge, neither the execution nor
      delivery of this Agreement, nor the carrying on of the Company’s business by the
      employees of the Company, nor the conduct of the Company’s business, as
      presently conducted or as proposed to be conducted, conflicts with or will
      conflict with or result in a material breach of the terms, conditions or
      provisions of, or constitute a default under, any contract, covenant or
      instrument under which any such employee is now obligated. In addition, all
      employees are required to assign, and have assigned, all intellectual property
      rights to the Company.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    3.7      Taxes.
      The
      Company has filed all Federal, state, local and foreign tax returns that are
      required to have been filed by it and all such returns are true and correct
      in
      all respects. The Company has paid all taxes pursuant to such returns or
      pursuant to any assessments received by it or which they are obligated to
      withhold from amounts owing to any employee, creditor or third party. The
      Company has properly accrued all taxes required to be accrued. The tax returns
      of the Company have never been audited by any state, local or Federal
      authorities. The Company has not waived any statute of limitations with respect
      to taxes or agreed to any extension of time with respect to any tax assessment
      or deficiency.

    

    3.8      Subordination.
      Following the Closing Date, as long as any Note remains outstanding, the Company
      will not, without the prior written consent of the subscribers holding Notes
      evidencing at least sixty-six and two-thirds percent (662⁄3%) of the Principal
      Loan Amount then outstanding, incur indebtedness for borrowed money (“New Debt”)
      in favor of any person or entity (each a “New Lender”) which indebtedness is
      secured or otherwise senior in priority to any Note issued to any subscriber
      pursuant to this Agreement or any substantially similar agreement, unless the
      New Lenders execute and deliver to the subscribers then holding Notes a
      subordination agreement (in a form acceptable to the subscribers holding Notes
      evidencing at least sixty-six and two-thirds percent (662⁄3%) of the Principal
      Loan Amount then outstanding) providing for the subordination of the New Debt
      to
      any of the indebtedness evidenced by any Notes.

    

    
      	4.	
              TERMS
                OF SUBSCRIPTION.

            

    

    

    4.1      The
      Company reserves the right to reject the subscription made hereby, in whole
      or
      in part, in its sole discretion.

    

    4.2      Pending
      the sale of the Securities, all funds paid hereunder shall be deposited by
      the
      Company in escrow with the Escrow Agent.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    4.3      The
      Subscriber hereby authorizes and directs the Company to deliver the Note and
      Warrant to be issued to the Subscriber pursuant to this Agreement to the
      residential or business address indicated on the signature page
      hereto.

     

    4.4      The
      Subscriber hereby authorizes and directs the Company to return, without
      interest, any funds for unaccepted subscriptions to the same account from which
      the funds were drawn.

    4.5      The
      Company’s agreement with each Subscriber is a separate agreement and the sale of
      the Securities to each Subscriber is a separate sale.

    

    4.6      Subscriber
      hereby agrees, in connection with the first registration with the SEC under
      the
      Act of the public sale of the Company’s Common Stock, upon request of the
      Company or any underwriters managing such offering, not to sell, make any short
      sale of, loan, grant any option for the purchase of or otherwise dispose of
      any
      such securities of the Company (including, without limitation, Warrant
      Shares or any securities issuable upon conversion of the Note (other
      than those included in the registration)) or the economic risk of the ownership
      thereof without the prior written consent of the Company or such underwriters,
      as the case may be, for such period of time (not to exceed 180 days) from the
      effective date of such registration as the Company or the underwriters, as
      the
      case may be, shall specify. Each such recipient agrees that the Company may
      instruct its transfer agent to place stop-transfer notations in its records
      to
      enforce this Section.

    

    5.           
       CLOSING
      CONDITIONS.
      Unless
      otherwise provided in this Section 5, the obligations of the Company to issue
      and sell the Note and Warrant at the Closing and the obligations of the
      Subscriber to purchase the Note and Warrant at Closing are subject to the
      fulfillment on or before the Closing of each of the following
      conditions:

    

    5.1      Each
      party shall have performed and complied in all material respect with all
      agreements and conditions contained in this Agreement required to be performed
      or complied with by it on or before Closing.

    5.2      All
      authorizations, approvals or permits, if any, of any governmental authority
      or
      regulatory body of the United States or of any state that are required prior
      to
      and in connection with the lawful issuance and sale of the Note and the Warrant
      pursuant to this Agreement shall have been duly obtained and shall be effective
      on and as of Closing, except for notices required to be filed with certain
      state
      and federal securities commissions after Closing, which notices will be filed
      on
      a timely basis.

    

    5.3      At
      the
      time of Closing, the purchase of the Note and the Warrant by the Subscriber
      hereunder shall be legally permitted by all laws and regulations to which the
      Subscriber or the Company are subject.

    

    5.4      The
      representations and warranties contained in Sections 2 and 3 shall be true
      in
      all material respects (except for those representations and warranties that
      are
      qualified as to materiality, which shall be true in all respects) on and as
      of
      the Closing hereunder with the same force and effect as if they had been made
      at
      the Closing.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    5.5      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    
      	6.	
              MISCELLANEOUS.

            

    

    

    6.1      All
      notices, requests and other communications under this Agreement shall be in
      writing, and shall be sufficiently given if delivered to the addressees in
      person or by recognized overnight courier, mailed by certified or registered
      mail, return receipt requested, or by confirmed facsimile transmission, as
      follows: 

    

     

    
      
        	 	 If to the Company:	Innovive Pharmaceuticals,
                Inc.

      

      
        	 	 	
                555
                  Madison Avenue, 25th
                  Floor 

              

      

    

    
      	 	 	
              New
                York, NY 10022

            

    

    
      	 	 	
              Facsimile:
                212 716 1811

            

    

    
      
        	 	 	
                Attn:
                  President

              

      

      
        	 	 	 

      

      
        	 	 With a copy to: 	Wyrick Robbins Yates & Ponton
                LLP

      

      
        	 	 	4101 Lake Boone Trail, Suite
                300

      

      
        	 	 	Raleigh, North Carolina
                27607

      

      
        	 	 	Attn: W. David Mannheim,
                Esq.

      

      
        	 	 	Telephone: (919)
                781-4000

      

      
        	 	 	Telecopier: (919)
                781-4865

      

    

     

    

    If
      to the
      Subscriber, at such address as the Subscriber shall have provided in writing
      to
      the Company on the signature page hereto or such other addresses as such
      Subscriber furnishes by notice given in accordance with this Section 6.1
or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such person. 

    

    6.2      Except
      as
      otherwise expressly provided herein, any term of this Agreement may be amended
      and the observance of any term of this Agreement may be waived (either generally
      or in a particular instance, either retroactively or prospectively and either
      for a specified period of time or indefinitely) with the written consent of
      the
      Company and subscribers holding Notes evidencing at least sixty-six and
      two-thirds percent (662⁄3%) of the then outstanding Principal Loan Amount of the
      Notes issued pursuant to this Agreement and substantially similar agreements.
      Any amendment or waiver effected in accordance with this Section 6.2 shall
      be
      binding upon the Subscriber and the Company (even if the Subscriber does not
      consent to such amendment or waiver), and upon the effectuation of each such
      amendment or waiver, the Company shall promptly give written notice thereof
      to
      the Subscriber if the Subscriber has not previously consented thereto in
      writing.

    

    6.3      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and to their respective heirs, legal representatives, successors and assigns.
      This Agreement sets forth the entire agreement and understanding between the
      parties as to the subject matter hereof and merges and supersedes all prior
      discussions, agreements and understandings of any and every nature among
      them.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    6.4      Upon
      the
      execution and delivery of this Agreement by the Subscriber, this Agreement
      shall
      become a binding obligation of the Subscriber with respect to the purchase
      of
      the Securities as herein provided; subject, however, to the right hereby
      reserved to the Company to reject this subscription, enter into the same
      agreements with other subscribers and to add and/or delete other persons as
      subscribers. 

    

    6.5      Notwithstanding
      the place where this Agreement may be executed by any of the parties hereto,
      the
      parties expressly agree that all the terms and provisions hereof shall be
      construed in accordance with and governed by the laws of the State of New York
      without regard to principles of conflicts of law. 

    

    6.6      The
      holding of any provision of this Agreement to be invalid or unenforceable by
      a
      court of competent jurisdiction shall not affect any other provision of this
      Agreement, which shall remain in full force and effect. If any provision of
      this
      Agreement shall be declared by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced in whole or in part, such provision
      shall
      be interpreted so as to remain enforceable to the maximum extent permissible
      consistent with applicable law and the remaining conditions and provisions
      or
      portions thereof shall nevertheless remain in full force and effect and
      enforceable to the extent they are valid, legal and enforceable, and no
      provisions shall be deemed dependent upon any other covenant or provision unless
      so expressed herein.

    

    6.7      It
      is
      agreed that a waiver by either party of a breach of any provision of this
      Agreement shall not operate, or be construed, as a waiver of any subsequent
      breach by that same party.

    

    6.8      The
      parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further action as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement.

    

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

    

    6.10      (a)      The
      Subscriber agrees not to issue any public statement with respect to the
      Subscriber’s investment or proposed investment in the Company or the terms of
      any agreement or covenant between Subscriber and the Company without the
      Company’s prior written consent, except such disclosures as may be required
      under applicable law or under any applicable order, rule or
      regulation.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    (b)      The
      Company agrees not to disclose the name, address or any other information about
      the Subscriber, except as required by law or under any applicable order, rule
      or
      regulation.

      
           6.11  Nothing
      in this Agreement shall create or be deemed to create any rights in any person
      or entity not a party to this Agreement.

     
      

    
      	7.	
              CONFIDENTIAL
                INVESTOR QUESTIONNAIRE.

            

    

    

    7.1      The
      Subscriber represents and warrants that he, she or it comes within one category
      marked below, and that for any category marked, he, she or it has truthfully
      set
      forth, where applicable, the factual basis or reason the Subscriber comes within
      that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
      CONFIDENTIAL except as otherwise required by law. The undersigned agrees to
      furnish any additional information which the Company deems necessary in order
      to
      verify the answers set forth below.

    

    
      
        	
                Category
                  A __

              	 	
                The
                  undersigned is an individual (not a partnership, corporation, etc.)
                  whose
                  individual net worth, or joint net worth with his or her spouse,
                  presently
                  exceeds $1,000,000.

              
	 	 	 
	 	 	
                Explanation:
                  In calculating net worth you may include equity in personal property
                  and
                  real estate, including your principal residence, cash, short-term
                  investments, stock and securities. Equity in personal property
                  and real
                  estate should be based on the fair market value of such property
                  less debt
                  secured by such property.

              
	 	 	 
	
                Category
                  B __

              	 	
                The
                  undersigned is an individual (not a partnership, corporation, etc.)
                  who
                  had an income in excess of $200,000 in each of the two most recent
                  years,
                  or joint income with his or her spouse in excess of $300,000 in
                  each of
                  those years (in each case including foreign income, tax exempt
                  income and
                  full amount of capital gains and losses but excluding any income
                  of other
                  family members and any unrealized capital appreciation) and has
                  a
                  reasonable expectation of reaching the same income level in the
                  current
                  year.

              
	 	 	 
	
                Category
                  C __

              	 	
                The
                  undersigned is a director or executive officer of the company which
                  is
                  issuing and selling the Securities.

              
	 	 	 
	
                Category
                  D __

              	 	
                The
                  undersigned is a bank; a savings and loan association; insurance
                  company;
                  registered investment company; registered business development
                  company;
                  licensed small business investment company (“SBIC”); or employee benefit
                  plan within the meaning of Title 1 of ERISA and (a) the investment
                  decision is made by a plan fiduciary which is either a bank, savings
                  and
                  loan association, insurance company or registered investment advisor,
                  or
                  (b) the plan has total assets in excess of $5,000,000 or (c) is
                  a self
                  directed plan with investment decisions made solely by persons
                  that are
                  accredited investors. (describe
                  entity)

              
	 	 	 
	 	 	 

      

         

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

        
             

      
        	 	 	 
	
                Category
                  E __

              	 	
                The
                  undersigned is a private business development company as defined
                  in
                  section 202(a)(22) of the Investment Advisors Act of 1940. (describe
                  entity)
                  

              
	 	 	 
	 	 	 
	 	 	 
	
                Category
                  F __

              	 	
                The
                  undersigned is either a corporation, partnership, Massachusetts
                  business
                  trust, or non-profit organization within the meaning of Section
                  501(c)(3)
                  of the Internal Revenue Code, in each case not formed for the specific
                  purpose of acquiring the Securities and with total assets in excess
                  of
                  $5,000,000.(describe
                  entity)

              
	 	 	 
	 	 	 
	 	 	 
	
                Category
                  G __

              	 	
                The
                  undersigned is a trust with total assets in excess of $5,000,000,
                  not
                  formed for the specific purpose of acquiring the Securities, where
                  the
                  purchase is directed by a “sophisticated investor” as defined in
                  Regulation 506(b)(2)(ii) under the Act.

              
	 	 	 
	
                Category
                  H __

              	 	
                The
                  undersigned is an entity (other than a trust) in which all of the
                  equity
                  owners are “accredited investors” within one or more of the above
                  categories. If relying upon this Category alone, each equity owner
                  must
                  complete a separate copy of this Agreement. (describe
                  entity)

              
	 	 	 
	 	 	 
	 	 	 
	
                Category
                  I __

              	 	
                The
                  undersigned is not within any of the categories above and is therefore
                  not
                  an accredited investor.

              

      

    

    

    The
      undersigned agrees that the undersigned will notify the Company at any time
      on
      or prior to the Closing Date in the event that the representations and
      warranties in this Agreement shall cease to be true, accurate and
      complete.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    

    7.2 SUITABILITY.
      (please
      answer each question)

    

    (a)      For
      an individual
      Subscriber, please describe your current employment, including the company
      by
      which you are employed and its principal business: 

     

    
      
        

      

      
        

      

      
        

      

      
        

      

    

    

    (b)      For
      an individual
      Subscriber, please describe any college or graduate degrees held by
      you:

     

    
      
        

      

      
        

      

      
        

      

    (c)      For
      all
      Subscribers, please state whether you have you participated in other
private
      placements
      before:

    

    
      	 	
              YES_______

            	 	
              NO_______

            	 

    

    

    (d)      If
      your answer to
      question 7.2(c) above was “YES”, please indicate frequency of such prior
      participation in private
      placements
      of:

    

    
      	 	
              Public

              Companies

            	
              Private

              Companies

            	
              Public
                or Private

              Biopharmaceutical
                
Companies

            
	
              Frequently

            	 _______	 _______	 _______
	
              Occasionally

            	 _______	 _______	 _______
	
              Never

            	 _______	 _______	 _______

    

     

    (e)     For
      individual
      Subscribers, do you expect your current level of income to significantly
      decrease in the foreseeable future:

    

    
      	 	
              YES_______

            	 	
              NO_______

            	 

    

    

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      (f)      For
        trust,
        corporate, partnership and other institutional Subscribers, do you expect
        your
        total assets to significantly decrease in the foreseeable future: 
        

    

       

    
      	 	
              YES_______

            	 	
              NO_______

            	 

    

    

    (g)      For
      all
      Subscribers, do you have any other investments or contingent liabilities which
      you reasonably anticipate could cause you to need sudden cash requirements
      in
      excess of cash readily available to you: 

    

    
      	 	
              YES_______

            	 	
              NO_______

            	 

    

    

    (h)      For
      all
      Subscribers, are you familiar with the risk aspects and the non-liquidity of
      investments such as the securities for which you seek to subscribe?

    

    
      	 	
              YES_______

            	 	
              NO_______

            	 

    

    

    (i)      For
      all
      Subscribers, do you understand that there is no guarantee of financial return
      on
      this investment and that you run the risk of losing your entire
      investment?

    

    
      	 	
              YES_______

            	 	
              NO_______

            	 

    

    

    7.3      MANNER
      IN WHICH TITLE IS TO BE HELD.
      (circle
      one)

    

    (a) Individual
      Ownership

    (b) Community
      Property

    (c) Joint
      Tenant with Right of Survivorship (both parties must sign)

    (d) Partnership*

    (e) Tenants
      in Common

    (f) Company*

    (g) Trust*

    (h) Other

    

    *If
      Securities are being subscribed for by an entity, the attached Certificate
      of
      Signatory must also be completed.

    

    7.4      NASD
      AFFILIATION.

    

    Are
      you
      affiliated or associated with an NASD member firm (please check
      one):

    

    
      	
              Yes_______

            	 	
              No_______

            	 

    

    

    If
      Yes,
      please describe:

    _________________________________________________________

    _________________________________________________________

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    

    *If
      Subscriber is a Registered Representative with an NASD member firm, have the
      following acknowledgment signed by the appropriate party:

    

    The
      undersigned NASD member firm acknowledges receipt of the notice required by
      Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

    

    _________________________________

    Name
      of
      NASD Member Firm

    

    By:
      ______________________________   Date:
      ____________________________

    Authorized
      Officer

    

    7.5      The
      undersigned is informed of the significance to the Company of the foregoing
      representations and answers contained in the Confidential Investor Questionnaire
      contained in this Section 7 and such answers have been provided under the
      assumption that the Company will rely on them.

    

    8. REGISTRATION
      RIGHTS.

    

    8.1      Definitions.
      As used
      in this Agreement, the following terms shall have the meanings set forth
      below:

    

    (a)      “Holder”
      shall mean a Subscriber who holds Registrable Securities and any holder of
      Registrable Securities to whom the registration rights conferred by this
      Agreement have been transferred in compliance with Section 8.7
      hereof.

    

    (b)      “Other
      Stockholders” shall mean persons other than Holders who, by virtue of agreements
      with the Company, are entitled to include their securities in certain
      registrations hereunder.

    

    (c)      “Registrable
      Securities” shall mean (i) shares of Common Stock issued or issuable pursuant to
      the conversion of the Notes or exercise of the Warrants and (ii) any Common
      Stock issued as a dividend or other distribution with respect to or in exchange
      for or in replacement of the shares referenced in (i) above; provided, however,
      that Registrable Securities shall not include any shares of Common Stock which
      have previously been registered or which have been sold to the public either
      pursuant to a registration statement or an exemption from registration under
      the
      Act (including Rule 144), which have been sold in a private transaction in
      which
      the transferor’s rights under this Agreement are not assigned or which may be
      sold by a Holder in a three-month period pursuant to Rule 144.

    

    (d)      The
      terms
“register,”“registered” and “registration” shall refer to a registration
      effected by preparing and filing a registration statement in compliance with
      the
      Act and applicable rules and regulations thereunder, and the declaration or
      ordering of the effectiveness of such registration statement.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    

    (e)      “Registration
      Expenses” shall mean all expenses incurred in effecting any registration
      pursuant to this Agreement, including, without limitation, all registration,
      qualification, and filing fees, printing expenses, escrow fees, fees and
      disbursements of counsel for the Company, blue sky fees and expenses, and
      expenses of any regular or special audits incident to or required by any such
      registration, but shall not include Selling Expenses and the compensation of
      regular employees of the Company, which shall be paid in any event by the
      Company.

    

    (f)      “Rule
      144” shall mean Rule 144 as promulgated by the SEC under the Act, as such Rule
      may be amended from time to time, or any similar successor rule that may be
      promulgated by the SEC.

    

    (g)      “Rule
      145” shall mean Rule 145 as promulgated by the SEC under the Act, as such Rule
      may be amended from time to time, or any similar successor rule that may be
      promulgated by the SEC.

    

    (h) “Selling
      Expenses” shall mean all underwriting discounts, selling commissions, fees and
      expenses of counsel for the Holders and stock transfer taxes applicable to
      the
      sale of Registrable Securities.

    

    8.2      Piggy-Back
      Registration.

    

    (a)      If
      the
      Company shall determine to register any of its securities either for its own
      account or the account of a security holder or holders exercising any
      registration rights, other than a registration relating solely to employee
      benefit plans, or a registration relating to a corporate reorganization or
      other
      transaction under Rule 145, or a registration on any registration form that
      does
      not permit secondary sales, the Company will:

    

    (i)      promptly
      give to each Holder written notice thereof; and

    

    (ii)      use
      its
      best efforts to include in such registration (and any related qualification
      under blue sky laws or other compliance), except as set forth in Section 8.2(b)
      below, and in any underwriting involved therein, all the Registrable Securities
      specified in a written request or requests, made by any Holder and received
      by
      the Company within twenty (20) days after the written notice from the Company
      described in clause (i) above is mailed or delivered by the Company. Such
      written request may specify all or a part of a Holder’s Registrable
      Securities.

    

    (b)      If
      the
      registration of which the Company gives notice is for a registered public
      offering involving an underwriting, the Company shall so advise the Holders
      as a
      part of the written notice given pursuant to Section 8.2(a)(i). In such event,
      the right of any Holder to registration pursuant to this Section shall be
      conditioned upon such Holder’s participation in such underwriting and the
      inclusion of such Holder’s Registrable Securities in the underwriting to the
      extent provided herein. All Holders proposing to distribute their securities
      through such underwriting shall (together with the Company and the other holders
      of securities of the Company with registration rights to participate therein
      distributing their securities through such underwriting) enter into an
      underwriting agreement in customary form with the representative of the
      underwriter or underwriters selected by the Company.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    

    

    Notwithstanding
      any other provision of this Section, if the representative of the underwriters
      advises the Company in writing that marketing factors require a limitation
      on
      the number of shares to be underwritten, the representative may (subject to
      the
      limitations set forth below) exclude all Registrable Securities from, or limit
      the number of Registrable Securities to be included in, the registration and
      underwriting. The Company shall so advise all holders of securities requesting
      registration, and the number of shares of securities that are entitled to be
      included in the registration and underwriting shall be allocated first to the
      Company for securities being sold for its own account and thereafter as set
      forth in Section 8.8. If any person does not agree to the terms of any such
      underwriting or otherwise fails to comply with the provisions of this Agreement,
      such person shall be excluded therefrom by written notice from the Company
      or
      the underwriter. Any Registrable Securities or other securities excluded or
      withdrawn from such underwriting shall be withdrawn from such
      registration.

    

    If
      shares
      are so withdrawn from the registration or if the number of Registrable
      Securities to be included in such registration was previously reduced as a
      result of marketing factors, the Company shall then offer to all persons who
      have retained the right to include securities in the registration the right
      to
      include additional securities in the registration in an aggregate amount equal
      to the number of shares so withdrawn, with such shares to be allocated among
      the
      persons requesting additional inclusion in accordance with Section 8.8
      hereof.

    

    8.3      Expenses
      of Registration.
      All
      Registration Expenses incurred in connection with any registration,
      qualification or compliance pursuant to this Section shall be borne by the
      Company. All Selling Expenses relating to securities so registered shall be
      borne by the holders of such securities pro rata on the basis of the number
      of
      shares of securities so registered on their behalf, as shall any other expenses
      in connection with the registration required to be borne by the holders of
      such
      securities.

    

    8.4      Registration
      Procedures.
      In the
      case of each registration effected by the Company pursuant to this Section,
      the
      Company will keep each Holder advised in writing as to the initiation of each
      registration and as to the completion thereof. At its expense, the Company
      will
      use its best efforts to:

     

    (a)      subject
      to Section 8.9 below, keep such registration effective for a period of one
      hundred eighty (180) days or until the Holder or Holders have completed the
      distribution described in the registration statement relating thereto, whichever
      first occurs; provided, however, that such one hundred eighty (180) day period
      shall be extended for a period of time equal to the period the Holder refrains
      from selling any securities included in such registration at the request of
      an
      underwriter of Common Stock (or other securities) of the Company;

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

    

    (b)      prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection with such registration statement
      as may be necessary to comply with the provisions of the Act with respect to
      the
      disposition of all securities covered by such registration
      statement;

    

    (c)      furnish
      such number of prospectuses and other documents incident thereto, including
      any
      amendment of or supplement to the prospectus, as a Holder from time to time
      may
      reasonably request;

    

    (d)      notify
      each seller of Registrable Securities covered by such registration statement
      at
      any time when a prospectus relating thereto is required to be delivered under
      the Act of the occurrence of any event as a result of which the prospectus
      included in such registration statement, as then in effect, includes an untrue
      statement of a material fact or omits to state a material fact required to
      be
      stated therein or necessary to make the statements therein not misleading or
      incomplete in the light of the circumstances then existing, and at the request
      of any such seller, prepare and furnish to such seller a reasonable number
      of
      copies of a supplement to or an amendment of such prospectus as may be necessary
      so that, as thereafter delivered to the purchasers of such shares, such
      prospectus shall not include an untrue statement of a material fact or omit
      to
      state a material fact required to be stated therein or necessary to make the
      statements therein not misleading or incomplete in the light of the
      circumstances then existing;

    

    (e)      use
      its
      best efforts to cause all such Registrable Securities registered pursuant
      hereunder to be listed on each securities exchange or market on which similar
      securities issued by the Company are then listed;

    

    (f)      provide
      a
      transfer agent and registrar for all Registrable Securities registered pursuant
      to such registration statement and a CUSIP number for all such Registrable
      Securities, in each case not later than the effective date of such
      registration;

    

    (g)      otherwise
      use its best efforts to comply with all applicable rules and regulations of
      the
      SEC, and make available to its security holders, as soon as reasonably
      practicable, an earnings statement covering the period of at least twelve (12)
      months, but not more than eighteen (18) months, beginning with the first month
      after the effective date of the Registration Statement, which earnings statement
      shall conform materially with the provisions of Section 11(a) of the Act;
      and

    

    (h)      furnish,
      at the request of a majority of the Holders participating in the registration,
      on the date that such Registrable Securities are delivered to the underwriters
      for sale, if such securities are being sold through underwriters, or, if such
      securities are not being sold through underwriters, on the date that the
      registration statement with respect to such securities becomes effective (i)
      an
      opinion, dated as of such date, of the counsel representing the Company for
      the
      purposes of such registration, in form and substance as is customarily given
      to
      the underwriters in an underwritten public offering and reasonably satisfactory
      to a majority in interest of the Holders requesting registration, addressed
      to
      the underwriters, if any, and to the Holders requesting registration of
      Registrable Securities and (ii) a letter dated as of such date from the
      independent certified public accountants of the Company, in form and substance
      as is customarily given by independent certified public accountants to
      underwriters in an underwritten public offering and reasonably satisfactory
      to a
      majority in interest of the Holders requesting registration, addressed to the
      underwriters, if any, and if permitted by applicable accounting standards,
      to
      the Holders requesting registration of Registrable Securities.

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

    

    8.5      Indemnification.

    

    (a)     The
      Company will indemnify each Holder, each of such Holder’s officers, directors,
      managers, members, partners, legal counsel, and accountants and each person
      controlling such Holder within the meaning of Section 15 of the Act with respect
      to which registration, qualification, or compliance has been effected pursuant
      to this Section, and each underwriter, if any, and each person who controls
      within the meaning of Section 15 of the Act any underwriter, against all
      expenses, claims, losses, damages, and liabilities (or actions, proceedings
      or
      settlements in respect thereof) arising out of or based on any breach of this
      Agreement by the Company, any untrue statement (or alleged untrue statement)
      of
      a material fact contained in any prospectus, offering circular or other document
      (including any related registration statement, notification, or the like)
      incident to any such registration, qualification, or compliance, or based on
      any
      omission (or alleged omission) to state therein a material fact required to
      be
      stated therein or necessary to make the statements therein not misleading,
      or
      any violation by the Company of the Act or any rule or regulation thereunder
      applicable to the Company and relating to action or inaction required of the
      Company in connection with any such registration, qualification, or compliance,
      and will reimburse each such Holder, each of its officers, directors, partners,
      legal counsel, and accountants and each person controlling such Holder, each
      such underwriter, and each person who controls any such underwriter, for any
      legal and any other expenses reasonably incurred in connection with
      investigating and defending or settling any such claim, loss, damage, liability,
      or action, provided that the Company will not be liable in any such case to
      the
      extent that any such claim, loss, damage, liability, or expense arises out
      of or
      is based on any untrue statement or omission based upon written information
      furnished to the Company by such Holder or underwriter and stated to be
      specifically for use therein, unless such Holder timely provided to the Company
      additional information to correct the previously inaccurate or incomplete
      information. It is agreed that the indemnity agreement contained in this Section
      shall not apply to amounts paid in settlement of any such loss, claim, damage,
      liability, or action if such settlement is effected without the consent of
      the
      Company (which consent has not been unreasonably withheld).

       

    (b)      Each
      Holder will, if Registrable Securities held by such Holder are included in
      the
      securities as to which such registration, qualification, or compliance is being
      effected, indemnify the Company, each of its directors, officers, partners,
      legal counsel, and accountants and each underwriter, if any, of the Company’s
      securities covered by such a registration statement, each person who controls
      the Company or such underwriter within the meaning of Section 15 of the Act,
      each other such Holder and Other Stockholder, and each of their officers,
      directors, managers, members, partners, and each person controlling such Holder
      or Other Stockholder, against all expenses, claims, losses, damages and
      liabilities (or actions, proceedings or settlements in respect thereof) arising
      out of or based on any untrue statement (or alleged untrue statement) of a
      material fact contained in any such registration statement, prospectus, offering
      circular or other document, (including any related registration statement,
      notification, or the like) incident to any such registration, qualification,
      or
      compliance, or based on any omission (or alleged omission) to state therein
      a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, and will reimburse the Company and such Holders, Other
      Stockholders, directors, officers, managers, members, partners, legal counsel,
      and accountants, persons, underwriters, or control persons for any legal or
      any
      other expenses reasonably incurred in connection with investigating and
      defending or settling any such claim, loss, damage, liability, or action, in
      each case to the extent but only to the extent that such untrue statement (or
      alleged untrue statement) or omission (or alleged omission) is made in such
      registration statement, prospectus, offering circular, or other document in
      reliance upon and in conformity with written information furnished to the
      Company by such Holder; provided, however, that the obligations of such Holder
      hereunder shall not apply to amounts paid in settlement of any such claims,
      losses, damages, or liabilities (or actions in respect thereof) if such
      settlement is effected without the consent of such Holder (which consent shall
      not be unreasonably withheld); and provided that in no event shall any indemnity
      under this Section exceed the gross proceeds from the offering received by
      such
      Holder.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    (c)      Each
      party entitled to indemnification under this Section (the “Indemnified Party”)
      shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
      of any claim as to which indemnity may be sought, and shall permit the
      Indemnifying Party to assume the defense of such claim or any litigation
      resulting therefrom, provided that counsel for the Indemnifying Party, who
      shall
      conduct the defense of such claim or any litigation resulting therefrom, shall
      be approved by the Indemnified Party (whose approval shall not unreasonably
      be
      withheld), and the Indemnified Party may participate in such defense at such
      party’s expense, and provided further that the failure of any Indemnified Party
      to give notice as provided herein shall not relieve the Indemnifying Party
      of
      its obligations under this Section, to the extent such failure is not
      prejudicial. No Indemnifying Party, in the defense of any such claim or
      litigation, shall, except with the consent of each Indemnified Party, consent
      to
      entry of any judgment or enter into any settlement that does not include as
      an
      unconditional term thereof the giving by the claimant or plaintiff to such
      Indemnified Party of a release from all liability in respect to such claim
      or
      litigation. Each Indemnified Party shall furnish such information regarding
      itself or the claim in question as an Indemnifying Party may reasonably request
      in writing and as shall be reasonably required in connection with the defense
      of
      such claim and litigation resulting therefrom.

    

    (d)      If
      the
      indemnification provided for in this Section is held by a court of competent
      jurisdiction to be unavailable to an Indemnified Party with respect to any
      loss,
      liability, claim, damage, or expense referred to therein, then the Indemnifying
      Party, in lieu of indemnifying such Indemnified Party hereunder, shall
      contribute to the amount paid or payable by such Indemnified Party as a result
      of such loss, liability, claim, damage, or expense in such proportion as is
      appropriate to reflect the relative fault of the Indemnifying Party on the
      one
      hand and of the Indemnified Party on the other in connection with the statements
      or omissions that resulted in such loss, liability, claim, damage, or expense
      as
      well as any other relevant equitable considerations. The relative fault of
      the
      Indemnifying Party and of the Indemnified Party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the omission to state a material fact relates to information
      supplied by the Indemnifying Party or by the Indemnified Party and the parties’
      relative intent, knowledge, access to information, and opportunity to correct
      or
      prevent such statement or omission.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

    

    (e)      Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      contribution contained in the underwriting agreement entered into in connection
      with the underwritten public offering are in conflict with the foregoing
      provisions, the provisions in the underwriting agreement shall
      control.

    

    8.6      Information
      by Holder.
      Each
      Holder of Registrable Securities shall furnish to the Company such information
      regarding such Holder and the distribution proposed by such Holder as the
      Company may reasonably request in writing and as shall be reasonably required
      in
      connection with any registration, qualification, or compliance referred to
      in
      this Section.

    

    8.7      Transfer
      or Assignment of Registration Rights.
      The
      rights to cause the Company to register securities granted to a Holder by the
      Company under this Section may be transferred or assigned by a Holder only
      to a
      transferee or assignee of not less than fifty percent (50%) of such Holder’s
      Registrable Securities (as presently constituted and subject to subsequent
      adjustments for stock splits, stock dividends, reverse stock splits, and the
      like), provided that, in either case (i) the Company is given written notice
      at
      the time of or within thirty (30) days after transfer or assignment, stating
      the
      name and address of the transferee or assignee and identifying the securities
      with respect to which such registration rights are being transferred or
      assigned, (ii) the transferee or assignee of such rights assumes in writing
      the
      obligations of such Holder under this Agreement, and (iii) the proposed
      transferee is not, in the Company’s reasonable opinion, a competitor of the
      Company or a party who is hostile towards the Company. Notwithstanding the
      foregoing, the transfer of registration rights to a partner, manager,
      stockholder, affiliate or member of a Holder shall be without
      restriction.

    

    8.8      Allocation
      of Registration Opportunities.
      In any
      circumstance in which all of the Registrable Securities and other shares of
      Common Stock of the Company (including shares of Common Stock issued or issuable
      upon conversion of shares of any currently unissued series of Preferred Stock
      of
      the Company) with registration rights (the “Other Shares”) requested to be
      included in a registration on behalf of the Holders or other selling
      stockholders cannot be so included as a result of limitations of the aggregate
      number of shares of Registrable Securities and Other Shares that may be so
      included, the number of shares of Registrable Securities and Other Shares that
      may be so included shall be allocated first to the Holders, and then among
      the
      other selling stockholders requesting inclusion of shares, in each case pro
      rata
      on the basis of the number of shares of Registrable Securities and Other Shares
      that would be held by such Holders and other selling stockholders, assuming
      conversion; provided, however, that if any Holder or other selling stockholder
      does not request inclusion of the maximum number of shares of Registrable
      Securities and Other Shares allocated to him pursuant to the above-described
      procedure, and the remaining portion of his allocation shall be reallocated
      among those requesting Holders and other selling stockholders whose allocations
      did not satisfy their requests pro rata on the basis of the number of shares
      of
      Registrable Securities and Other Shares which would be held by such Holders
      and
      other selling stockholders, assuming conversion, and this procedure shall be
      repeated until all of the shares of Registrable Securities and Other Shares
      which may be included in the registration on behalf of the Holders and other
      selling stockholders have been so allocated. The Company shall not limit the
      number of Registrable Securities to be included in a registration pursuant
      to
      this Agreement in order to include shares held by stockholders with no
      registration rights or any other shares of stock issued to employees or
      consultants pursuant to a Company Stock Option Plan, in order to include in
      such
      registration securities registered for the Company’s own account.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    8.9      Termination
      of Registration Rights.
      The
      registration rights pursuant to this Section shall terminate as to any Holder
      when all of a Holder’s Registrable Securities may be sold during a single three
      month period under Rule 144.

    

    [REMAINDER
      OF PAGE LEFT BLANK]

    

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    

    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed as an
      instrument under seal and as of the date first above written.

     

    

    Subscriber
      Loan Amount: U.S. $_____________________ 

    

    SUBSCRIBER:

     

    

      

        
          	 	 	 
	
                  Signature

                	 	
                  Signature
                    (if purchasing jointly)

                
	 	 	 
	
                  Name
                    Typed or Printed

                	 	
                  Name
                    Typed or Printed

                
	 	 	 
	
                  Entity
                    Name (if applicable)

                	 	 
	 	 	 
	
                  Address

                	 	
                  Address

                
	 	 	 
	
                  City,
                    State and Zip Code

                	 	
                  City,
                    State and Zip Code

                
	 	 	 
	
                  Telephone-Business

                	 	
                  Telephone—Business

                
	 	 	 
	
                  Telephone-Residence

                	 	
                  Telephone—Residence

                
	 	 	 
	
                  Facsimile-Business

                	 	
                  Facsimile—Business

                
	 	 	 
	
                  Facsimile-Residence

                	 	
                  Facsimile—Residence

                
	 	 	 
	
                  Email
                    Address

                	 	
                  Email
                    Address

                
	 	 	 
	
                  Tax
                    ID # or Social Security #

                	 	
                  Tax
                    ID # or Social Security #

                
	 	 	 
	
                  Name
                    in which securities should be issued:

                	 	 
	 	 	 
	
                  Dated:
                    _____________ , 2005

                	 	 
	 	 	 

        

      

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    This
      Agreement is agreed to and accepted by the Company as of June 28,
      2005.  

     

    
      
        	 	 	 
	 	INNOVIVE
                PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
                
Name:
Steven
                Kelly
	 	Title:
                 President

      

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    

    CERTIFICATE
      OF SIGNATORY

    

    (To
      be
      completed if Securities are

    being
      subscribed for by an entity)

    

    I,____________________________,
      am the_________________ of _____________________(the “Entity”).

    

    I
      certify
      that I am empowered and duly authorized by the Entity to execute and carry
      out
      the terms of the Note and Warrant Purchase Agreement to which this Certificate
      is attached and to purchase and hold the Securities, and certify further that
      the Note and Warrant Purchase Agreement has been duly and validly executed
      on
      behalf of the Entity and constitutes a legal and binding obligation of the
      Entity.

    

    IN
      WITNESS WHEREOF, I have set my hand this ______ day of _________________,
      2005.

     

    

      
        	 	 
	 	
                (Signature)

              

      

    

     

     

    
      
        
        

      

      
        28Unassociated Document

    Exhibit
      10.1

    Portions
      of this exhibit marked [*] are requested to be treated
      confidentially.

    

    

    LICENSE
      AGREEMENT

    

    

    This
      License Agreement, effective upon the date of last signature herein (the
      "Effective Date"), by and between The Penn State Research Foundation
      (hereinafter referred to as "PSRF"), a non-profit corporation duly organized
      and
      existing under the laws of the Commonwealth of Pennsylvania and having an office
      at 304 Old Main, University Park, PA 16802, and INNOVIVE Pharmaceuticals, Inc.
      a
      corporation organized under the laws of the State of Delaware (hereinafter
      referred to as "LICENSEE"), having its principal office at 787 Seventh Avenue,
      48th Floor, New York, New York 10019.

    

    WITNESSETH

    

    WHEREAS,
      Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P. Smith, employees
      of
      The Pennsylvania State University (the "UNIVERSITY") have made inventions
      entitled: "Opioid Growth Factor and Cancer", filed as The Pennsylvania State
      University Invention Disclosure No. 96-1565, "Combination Therapy with Opioid
      Growth Factor and Taxanes for the Treatment of Cancer", filed as The
      Pennsylvania State University Invention Disclosure No. 2003-2839, and "Combined
      Therapy with Opioid Growth Factor and Gemcitabine for the Treatment of Cancer",
      filed as The Pennsylvania State University Invention Disclosure No. 2004-2890,
      (the "INVENTIONS"); 

    

    WHEREAS,
      PSRF is dedicated to fostering and advancing scientific research within the
      Commonwealth of Pennsylvania and, in particular, within the UNIVERSITY and
      is
      responsible for developing inventions made by employees of the UNIVERSITY by
      evaluating invention disclosures, pursuing patents, and pursuing licensing
      arrangements thereon;

    

    WHEREAS,
      PSRF is the owner of certain "PATENT RIGHTS" (as defined herein below) relating
      to the INVENTIONS and has the right to grant licenses under PATENT
      RIGHTS;

    

    WHEREAS,
      LICENSEE has represented to PSRF, to induce PSRF to enter into this Agreement,
      that it shall commit itself to a thorough, vigorous and diligent program of
      exploiting the PATENT RIGHTS so that public utilization shall result therefrom;
      

    

    NOW
      THEREFORE, in consideration of the mutual promises and covenants set forth
      herein and for good and valuable consideration, the adequacy and sufficiency
      of
      which is hereby acknowledged, the parties hereby agree as follows:

    

    ARTICLE
      1 - DEFINITIONS

    

    For
      purposes of this License Agreement, the following words and phrases shall have
      the following meanings:

    

    1.1    
      "IMPROVEMENTS"
      shall mean any modification of a LICENSED PROCESS or LICENSED PRODUCT or any
      INVENTIONS (whether patentable or not), information and data, in the FIELD
      OF
      USE that, developed by Drs. Zagon, McLaughlin and Smith and those acting under
      their control and direction, for a period of [*] years from the Effective Date,
      the manufacture use or sale of which would infringe an issued or pending claim
      within the PATENT RIGHTS. 

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.2    
      "KNOW-HOW"
      shall mean all currently existing tangible information
      within the FIELD OF USE (other than those contained in the PATENT RIGHTS)
      whether patentable or not (but which have not been patented) and physical
      objects related to the INVENTIONS or to the LICENSED PRODUCTS, including but
      not
      limited to formulations, biological samples, tissues, animals, organisms,
      compounds, intermediates, laboratory notebooks, in vitro, preclinical or
      clinical design, information or results, other proprietary materials, processes,
      including but not limited to manufacturing processes, data, drawings and
      sketches, designs, testing and test results, regulatory information of a like
      nature, owned by any of PSRF, which PSRF have the right to disclose and license
      to the LICENSEE, provided however, that the provision hereunder shall be subject
      to the reasonable time and clinical constraints of Dr. Ian S. Zagon, Dr.
      Patricia J. McLaughlin and Dr. Jill P. Smith. 

    

    1.3    
      “LICENSED
      PROCESS(ES)” shall mean any process, use or method, which is covered, in whole,
      or in part, by at least one unexpired VALID CLAIM of PATENT RIGHTS in the
      country in which the process or method is used.

    

    1.4    
      "LICENSED
      PRODUCT(S)" shall mean any product or part thereof, or use of a product or
      part
      thereof, which is covered in whole or in part by at least one unexpired VALID
      CLAIM of PATENT RIGHTS in the country in which any such product or part thereof
      is made, used, or sold.

    

    1.5    
      "FIELD
      OF
      USE" shall mean all human uses in the field of oncology and the treatment of
      neoplasia, including tumors (whether cancerous or not).

    

    1.6    
      "PATENT
      RIGHTS" shall mean all of the following without limitation:

    

    a)    
      The
      United States patents and patent applications listed in Appendix B and any
      additions thereto that shall be added by amendment during the term of this
      license; divisionals, continuations, and continuations in part (to the extent
      the practice of licensed subject matter would infringe any claims) wherein
      the
      claimed invention arises from subject matter specifically described in the
      specification of the aforesaid patent applications, and the resulting patents,
      and any patents resulting from reissues, renewals, extensions, substitutions,
      additions, continuations, continuations in part, or reexaminations of the United
      States patents described above; 

    

    b)    
      The
      foreign patents and foreign patent applications listed in Appendix B, and any
      additions thereto that shall be added by amendment during the term of this
      license, divisionals, and continuations, continuations in part (to the extent
      the practice of licensed subject matter would infringe any claims), wherein
      the
      claimed invention arises from subject matter specifically described in the
      aforesaid foreign patent applications, or arises from subject matter described
      in any U.S. applications and patents listed in Appendix B, and any foreign
      patents resulting from equivalent foreign procedures to United States reissues
      and reexaminations of the foreign patents described above;

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    c)    
      Any
      United States and/or foreign patents issuing from any of the
      foregoing.

    

    1.7    
      "NET
      SALES" shall mean the total gross receipts for the sale, lease, transfer or
      consignment to independent third parties of a LICENSED PRODUCT or LICENSED
      PROCESS by or on behalf of the LICENSEE or any of its AFFILIATES or
      sublicensees, whether invoiced or not, less only the sum of the following:
      (a)
      usual trade discounts to customers; (b) sales, tariff duties and/or use taxes
      directly imposed and with reference to particular sales; (c) outbound
      transportation prepaid or allowed and transportation insurance; (d) packaging
      and freight charges; (e) bad debt deductions (not to exceed [*]% of NET SALES),
      actually written off during the accounting period; and (f) amounts allowed
      or
      credited on returns, each determined in accordance with generally accepted
      accounting principles consistently applied. It is understood that the intent
      of
      both parties is that PSRF shall receive its royalty on the basis of the market
      price for sale of LICENSED PROCESSES or LICENSED PRODUCTS to clinicians or
      end
      users.

    

    
      
        	 	
                1.8
                  

              	
                "TERRITORY"
                  shall mean the World.

              

      

      
        	 	 	 

      

      
        	 	1.9	"VALID CLAIM" shall mean any claim of any unexpired
                patent included among the PATENT RIGHTS, which has not been held
                unenforceable, unpatentable or invalid by a decision of a court or
                governmental body of competent jurisdiction, unappealable or unappealed
                within the time allowed for appeal, which has not been rendered
                unenforceable through disclaimer or otherwise or which has not been
                lost
                through an interference proceeding. 

      

      
        	 	 	 

      

      
        	 	1.10 	“AFFILIATE(S)” shall mean with respect to any Entity, any
                Entity that directly or indirectly controls, is controlled by, or
                is under
                common control with such Entity. Control for purposes of this definition
                shall mean control (by ownership, contract or otherwise) of at least
                fifty
                percent (50%) of the voting equity of the respective organization.
                Such
                AFFILIATES shall be bound by the relevant terms and conditions of
                this
                Agreement. 

      

      
        	 	 	 

      

       

      [*] Confidential treatment requested; certain information
        omitted and filed separately with the SEC.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	 	1.11 	“INDICATION” shall mean the use of LICENSED PRODUCTS or
                LICENSED PROCESSES in the treatment of abnormal cell proliferation,
                including tumors (whether cancerous or not), cancer, or other neoplasias,
                such as pancreatic, colon, and head and neck cancer, wherein said
                indications are unique in that LICENSEE will be required to conduct
                clinical trials with specific end points relating to such use or
                treatment
                for the FDA or other applicable regulatory agency to approve such
                use of a
                LICENSED PRODUCT OR LICENSED PROCESS for such
                indication.

      

      
        	 	 	 

      

      
        	 	1.12	“INITIATE
                A PHASE I CLINICAL TRIAL” shall mean the date a patient is first dosed
                with a LICENSED PRODUCT, in the first Phase I clinical trial sponsored
                by
                the LICENSEE or its sublicensee or
                AFFILIATE.

      

      
        	 	 	 

      

      
        	 	1.13	“INITIATE
                A PHASE II CLINICAL TRIAL” shall mean the date a patient is first dosed
                with a LICENSED PRODUCT, in the first Phase II clinical trial sponsored
                by
                the LICENSEE or its sublicensee or
                AFFILIATE.

      

      
        	 	 	 

      

      
        	 	1.14	“INITIATE A PHASE III CLINICAL TRIAL” shall mean the date
                a patient is first dosed with a LICENSED PRODUCT, in the first Phase
                III
                clinical trial sponsored by the LICENSEE or its sublicensee or
                AFFILIATE.

      

      
        	 	 	 

      

      
        	 	1.15 	“NON
                SALES RELATED INCOME” means all amounts, and all consideration, including
                equity, received by LICENSEE or AFFILIATE from their sublicensees
                in
                consideration of any sublicense or other similar agreement, including
                but
                not limited to initial license fees, clinical milestone payments,
                license
                maintenance payments, and all other payments or other consideration
                made
                to LICENSEE or AFFILIATE for such grant other than (a) payments received
                from the sale of debt or equity securities of LICENSEE or AFFILIATE
                and
                (b) payments directly relating to the sale of one or more LICENSED
                PRODUCTS or LICENSED PROCESSES, including
                royalties. 

      

    

     

    ARTICLE
      2 - THE LICENSE

    

    2.1    
      Subject
      to any preexisting rights of the Government of the United States created by
      the
      use of Government funding, PSRF hereby grants to LICENSEE and the LICENSEE
      hereby accepts an exclusive right and exclusive license in the FIELD OF USE
      under the PATENT RIGHTS, KNOW-HOW, and IMPROVEMENTS (such licensing of
      IMPROVEMENTS subject to any restrictions imposed by any government agency or
      not-for-profit organization) in the TERRITORY (a) to make, have made, use,
      lease
      and/or sell the LICENSED PRODUCTS and to practice and have practiced the
      LICENSED PROCESSES, to the full end of the term for which the PATENT RIGHTS
      are
      granted, unless sooner terminated as hereinafter provided and (b) to sublicense
      to third parties, in accordance with the terms of this Agreement.

    

    2.2    
      PSRF
      reserves the rights for itself and the UNIVERSITY to practice under the PATENT
      RIGHTS for its own research and educational purposes.

    

    2.3    
      LICENSEE
      acknowledges that PATENT RIGHTS resulted from federally-supported research,
      and
      their assignment is governed by the applicable provisions of the Federal funding
      agreements, including the 35 USC Chapter 18 (the “Bayh-Dole Act”), 37 CFR Part
      401.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.4    
      LICENSEE
      shall have the exclusive right, at its sole discretion, to sublicense any of
      the
      rights, privileges and licenses granted hereunder during the term of this
      License Agreement. All sublicenses granted by LICENSEE or AFFILIATE or
      sublicensee of their rights hereunder shall be subject to the terms of this
      License Agreement and shall provide for the payment of running royalties
      hereunder at amounts at least equal to the levels specified for payments by
      LICENSEE to PSRF in Paragraph 3.2 hereof. Sublicensees shall not be permitted
      to
      grant any further sublicenses without prior written notification to PSRF.
      LICENSEE shall be responsible for its sublicensees and shall not grant any
      rights which are inconsistent with the rights granted to and obligations of
      LICENSEE hereunder. Any act or omission of a sublicensee which would be a breach
      of this License Agreement if performed by LICENSEE shall be deemed to be a
      breach by LICENSEE of this License Agreement. Upon termination of this Agreement
      other than by expiration in accordance with Article 14, any and all sublicenses
      shall survive such termination, provided such sublicensee accepts, in writing,
      the obligations of LICENSEE in Articles 3 and 4. Notwithstanding the foregoing,
      if LICENSEE believes that the PSRF has terminated this Agreement for the primary
      purpose of doing business directly with the sublicensee, the termination may
      be
      disputed under the provisions of Article 13 and this Agreement shall remain
      in
      full force and effect while such dispute is resolved. 

    

    2.5    
      Each
      sublicense agreement granted by LICENSEE shall include an audit right by PSRF
      of
      the same scope as provided in Article 5 hereof with respect to LICENSEE.

    

    2.6    
      LICENSEE
      agrees to forward a copy of any and all sublicense agreements, including
      sublicenses issued by sublicensees, to PSRF promptly after execution thereof,
      and to forward to PSRF a copy of reports received by LICENSEE from its
      sublicensees under the sublicenses as shall be pertinent to a royalty accounting
      under said sublicense agreements.

    

    2.7    
      The
      license rights granted hereunder shall not be construed to confer any rights
      upon LICENSEE by implication, estoppel or otherwise to any technology owned
      or
      controlled by PSRF which is not specifically set forth herein.

    

    2.8    
      PSRF
      also
      grants to LICENSEE the right of a first option to negotiate a royalty-bearing
      license to intellectual property derived or filed subsequent to the Effective
      Date that is directly related to the exogenous administration of
      [Met5]-enkephalin
      and that is created by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr.
      Jill
      P. Smith, which is outside of the FIELD OF USE, for a period of [*] years from
      the Effective Date. LICENSEE shall advise PSRF as to its decision to negotiate
      a
      license within [*] days of notice from PSRF of said intellectual
      property.

    

    2.9    
      LICENSEE
      shall not receive from sublicensees anything of value in
      lieu
      of cash
      payments in consideration for any sublicense under this License Agreement,
      without prior written notification to PSRF.

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3 - PAYMENTS

    

    3.1    
      In
      partial consideration of the rights granted by this License Agreement, LICENSEE
      shall
      pay
      to PSRF a non-refundable,
      License
      Issue Fee of [*] Dollars ($[*]) within thirty (30) days of the execution of
      this
      License Agreement. 

    

    3.2    
      During
      the term of the License Agreement, LICENSEE shall pay to PSRF royalties equal
      (i) to [*] percent ([*]%) of NET SALES of LICENSED PRODUCTS or LICENSED
      PROCESSES by LICENSEE and/or AFFILIATES of up to [*] Dollars ($[*]) in any
      calendar year, [*] percent ([*]%) of NET SALES in excess of [*] Dollars ($[*])]
      but less than [*] Dollars ($[*]) in any calendar year, and [*] percent ([*]%)
      of
      NET SALES equal to or in excess of [*] Dollars ($[*]) in any calendar year;
      or
      (ii) if LICENSEE or AFFILIATE or sublicensee has entered into a sublicense
      agreement with a third party, LICENSEE or AFFILIATE shall pay to PSRF: (a)
      royalties in an amount equal to [*] Percent ([*]%) of the royalties received
      by
      the LICENSEE or AFFILIATE from any sublicensee, provide however, that in no
      event shall the royalty paid by LICENSEE or AFFILIATE to PSRF be less than
      [*]%
      of NET SALES by any sublicensee; and (b) [*]. 

    

    3.3    
      The
      LICENSEE or AFFILIATE shall make the following one-time milestone payments
      to
      PSRF:

    

    (a)    
      [*]
      Dollars [*] upon the first dosing of a patient, with a LICENSED
      PRODUCT, in the first Phase II clinical trial sponsored by the LICENSEE or
      its
      sublicensee or AFFILIATE under a LICENSEE or sublicensee or AFFILIATE sponsored
      Investigative New Drug application (“an IND”);

     

    (b)    
      [*]
      Dollars ($[*]) upon the first dosing of a patient, with a LICENSED PRODUCT,
      in
      the first Phase III clinical trial sponsored by the LICENSEE or its sublicensee
      or AFFILIATE;

    

    (c)    
      [*]
      Dollars ($[*]) upon the acceptance for review of the first LICENSEE or
      sublicensee or AFFILIATE sponsored New Drug Application (an “NDA”) by the Food
      and Drug Administration (“FDA”) for a LICENSED PRODUCT; 

    

    (d)    
      [*]
      Dollars ($[*]) upon the final approval by the FDA of the first LICENSEE or
      sublicensee or AFFILIATE sponsored NDA for a LICENSED PRODUCT filed by the
      LICENSEE or its sublicensee or AFFILIATE;

    

    (e)    
      [*]
      Dollars ($[*]) upon the final approval by the FDA of the first LICENSEE or
      sublicensee or AFFILIATE sponsored NDA for a LICENSED PRODUCT filed by the
      LICENSEE or its sublicensee or AFFILIATE for an INDICATION other than that
      approved by the FDA in (d) above;

    

    (f)    
      [*]
      Dollars ($[*]) upon the final approval by the FDA of the first LICENSEE or
      sublicensee or AFFILIATE sponsored NDA for a LICENSED PRODUCT filed by the
      LICENSEE or its sublicensee or AFFILIATE for an INDICATION other than that
      approved by the FDA in (d) and (e) above;

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (g)    
      [*]
      Dollars ($[*]) upon the acceptance for review of the first LICENSEE or
      sublicensee or AFFILIATE sponsored NDA (or such similar document) by the
      European Medicines Association (the “EMA”) for the commercial sale of a LICENSED
      PRODUCT; 

    

    (h)    
      [*]
      Dollars ($[*]) upon the final approval by the EMA of the first LICENSEE or
      sublicensee or AFFILIATE sponsored NDA (or such similar application) for the
      commercial sale of a LICENSED PRODUCT filed by the LICENSEE or its sublicensee
      or AFFILIATE in the European Union;

    

    (i)    
      [*]
      Dollars ($[*]) upon the acceptance for review of the first LICENSEE or
      sublicensee or AFFILIATE sponsored NDA (or such similar document) by the
      applicable Japanese regulatory authorities for the commercial sale of a LICENSED
      PRODUCT;

    

    (j)    
      [*]
      Dollars ($[*]) upon the final approval by the applicable Japanese regulatory
      authorities of the first LICENSEE or sublicensee or AFFILIATE sponsored NDA
      (or
      such similar application) for the commercial sale of a LICENSED PRODUCT filed
      by
      the LICENSEE or its sublicensee or AFFILIATE in Japan;

    

    3.4    
      Payment
      of the royalties specified in Article 3.2 shall be made by LICENSEE to PSRF
      within ninety (90) days after June 30 and December 31 of each year during the
      term of this License Agreement covering the quantity of LICENSED PRODUCTS or
      LICENSED PROCESSES sold by LICENSEE during the preceding half year. After
      termination or expiration of this License Agreement, a final payment shall
      be
      made by LICENSEE covering the whole or applicable partial half-year. Each
      royalty payment shall be accompanied by a written statement of NET SALES as
      described in Article 5.2 hereunder. 

    

    3.5    
      LICENSEE
      shall promptly report the achievement of each milestone specified in Article
      3.3. The milestone payments specified in Article 3.3 shall be made by LICENSEE
      to PSRF within thirty (30) days after the completion of said milestone.

    

    3.6    
      All
      payments due hereunder are expressed in and shall be paid by check payable
      in
      United States of America currency, without deduction of exchange, collection
      or
      other charges, to PSRF in University Park, PA or at such other place as PSRF
      may
      reasonably designate. 

    

    3.7    
      For
      converting into United States dollars any payment accrued hereunder in the
      currency of any other country, the rate of exchange for the purchase of United
      States dollars with such currency quoted by The Chase Manhattan Bank, New York,
      New York, on the last business day of the payment period in question shall
      be
      used.

    

    3.8    
      No
      multiple royalties shall be payable because any LICENSED PRODUCTS, their
      manufacture, use, lease or sale are or shall be covered by more than one patent
      application, patent or certificate of registration licensed under this License
      Agreement. In addition, royalties shall be paid for a LICENSED PRODUCT or
      LICENSED PROCESS based upon only one of Articles 3.2(i) or 3.2(ii) above (that
      is, royalties on direct sales of a LICENSED PRODUCT or LICENSED PROCESS by
      the
      LICENSEE or its AFFILIATES shall be based only on Article 3.2(i), while
      royalties on sales of a LICENSED PRODUCT or LICENSED PROCESS by any sublicensee
      shall be based solely on Article 3.2(ii), so as to avoid double
      counting).

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    3.9    
      All
      payments set forth in this Agreement shall, if overdue, bear interest until
      payment at a per annum rate of [*]% above the prime rate in effect at the Chase
      Manhattan Bank, New York, New York, on the due date. The payment of such
      interest shall not foreclose PSRF from exercising any other rights it may have
      as a consequence of the lateness of any payment.

    

    3.10    
      In
      the
      event that a LICENSED PRODUCT is sold in the form of a combination product
      containing one or more products or technologies which are themselves not
      included in the PATENT RIGHTS, the NET SALES for such combination product shall
      be calculated by equitably determining through mutual agreement the value added
      to the combination product by the LICENSED PRODUCT.

    

    ARTICLE
      4 - DUE DILIGENCE AND MARKETING EFFORTS

    

    4.1    
      (a)    
      LICENSEE
      or AFFILIATE shall use all reasonable commercial efforts to bring LICENSED
      PRODUCTS and/or LICENSED PROCESSES to market through thorough, vigorous and
      diligent programs for exploitation of the PATENT RIGHTS and to achieve the
      milestones set forth in Article 3.3 as timely and efficiently as possible.
      

    

    (b)    
      LICENSEE
      or AFFILIATE shall be required to satisfy the following diligence

    milestones:

    

    (i)    
      Within
      [*] months of the Effective Date, LICENSEE or sublicensee or AFFILIATE shall
      INITIATE A PHASE I CLINICAL TRIAL (or Foreign Equivalent) of a LICENSED
      PRODUCT.

    

    (ii)    
      Within
      [*] months of the Effective Date, LICENSEE or sublicensee or AFFILIATE shall
      INITIATE A PHASE II CLINICAL TRIAL (or Foreign Equivalent) of a LICENSED
      PRODUCT.

    

    (iii)    
      Within
      [*] months of the Effective Date, LICENSEE or sublicensee or AFFILIATE shall
      INITIATE A PHASE III CLINICAL TRIAL (or Foreign Equivalent) of a LICENSED
      PRODUCT.

    

    4.2    
      Should
      all of LICENSEE, any sublicensee and any AFFILIATE fail to achieve any
      applicable milestone dates set forth in 4.1(b)(i), (ii) or (iii) (as may be
      amended pursuant to this 4.2), then LICENSEE shall, within thirty (30) days
      after the applicable milestone date, provide PSRF with a written explanation
      for
      such delay. PSRF shall, in good faith, consider the explanation of LICENSEE
      for
      such delay, and if PSRF finds LICENSEE’s explanation reasonable, PSRF shall
      grant, in writing, LICENSEE additional time to achieve the applicable milestone
      detailed in 4.1(b) above, such amount of time to reasonably take into
      consideration LICENSEE’s recommendations and the circumstances of each such
      delay. Should the LICENSEE’s explanation of such delay include the written
      requirement by the FDA or other applicable regulatory agency that LICENSEE
      perform additional studies or trials, that LICENSEE reformulate or alter the
      manufacturing process of any LICENSED
      PRODUCT,
      that
      LICENSEE cease any clinical trial or redesign any clinical trial, or that
      LICENSEE perform any other action or cease to perform any action or otherwise
      delay the clinical development of any LICENSED PRODUCT, then such FDA or other
      applicable regulatory agency evidence presented to PSRF by LICENSEE in
      accordance with this paragraph shall be deemed “reasonable” by PSRF and PSRF
      shall grant LICENSEE reasonable time extensions or milestone adjustments
      accordingly. LICENSEE shall provide copies to PSRF of any such FDA or other
      applicable regulatory agency documentation.

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    4.3    
      Should
      LICENSEE and PSRF be unable to reach agreement on a reasonable time extension
      or
      milestone adjustment pursuant to Article 4.2, or should PSRF contest the
      reasonableness, good faith, or adequacy of proof for the stated reason for
      such
      failure, PSRF may declare LICENSEE to be in material breach unless LICENSEE
      pays
      a non-refundable monthly fee to PSRF (the "Penalty Fee"), [*] of such Penalty
      Fee to be creditable against fees due to PSRF under Article 3.3. The initiation
      of the Penalty Fee period shall commence upon written notification from PSRF
      to
      LICENSEE that PSRF has, in good faith, determined that LICENSEE is not using
      its
      commercially reasonable efforts to develop and commercialize any LICENSED
      PRODUCT or LICENSED PROCESSES and, accordingly, will not extend or further
      extend or alter any diligence milestone described in 4.1(b) above and remain
      in
      effect until achievement of any applicable milestone that caused LICENSEE to
      be
      in non-compliance with 4.1(b). The Penalty Fee shall be [*] Dollars ($[*])
      in
      the first month, increasing at a rate of [*] Dollars ($[*]) per month
      thereafter, until achievement of any applicable milestone that caused LICENSEE
      to be in non-compliance with 4.1(b). A representative payment schedule appears
      in Appendix E. The first Penalty Fee shall be due within fourteen (14) days
      of
      such written notification from PSRF to LICENSEE. All subsequent Penalty Fees
      shall be paid within fourteen (14) days of the end of the month for which
      LICENSEE intends to delay notification of breach. PSRF shall not have the right
      to terminate this License Agreement pursuant to this Article 4 as long as the
      LICENSEE continues to make the monthly Penalty Fee payments. Upon achievement
      of
      any applicable milestone that caused LICENSEE to be in non-compliance with
      4.1(b), LICENSEE shall no longer have the obligation to pay to PSRF the Penalty
      Fee payments and PSRF shall no longer have the right to terminate the License
      Agreement by reason of failure to comply with 4.1(b). 

    

    4.4    
      In
      the
      event LICENSEE has failed to make payments in accordance with Article 4.3,
      then
      LICENSEE shall be considered to be in financial breach or default and subject
      to
      termination pursuant to Paragraph 14.4 hereof.

    

    4.5    
      A
      Development Committee (the “Committee”) shall be organized to monitor the
      clinical progress of the LICENSED PRODUCTS or LICENSED PROCESSES at the
      LICENSEE’s expense. The Committee will consist of independent scientific and
      technical thought leaders that are highly regarded by the scientific community
      in the FIELD OF USE of each LICENSED PRODUCT or LICENSED PROCESS and at least
      one representative from each of PSRF and the LICENSEE. The Committee will be
      responsible for (i) making recommendations to the LICENSEE’s management relating
      to the pre-clinical and clinical development strategy; (ii) analysis and
      assessment of ongoing pre-clinical and clinical development of each LICENSED
      PRODUCT or LICENSED PROCESS; and (iii) assisting the LICENSEE to prepare
      pre-clinical and clinical development budgets. The actions and opinions of
      the
      Committee will be confidential, however, the PSRF representative may report
      clinical updates to a designated senior official at PSRF who will agree to
      keep
      such information confidential. The Committee will meet at least two (2) times
      per year. Said Committee shall meet within one (1) year of the Effective
      Date.

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    4.6    
      In
      the
      event that LICENSEE in its sole discretion decides to market one or more
      LICENSED PRODUCTS or LICENSED PROCESSES in any country, then LICENSEE shall
      exert reasonable efforts to have such LICENSED PRODUCTS or LICENSED PROCESSES
      cleared for marketing by the responsible government agencies of that country
      requiring such clearance. Should LICENSEE terminate this License Agreement,
      LICENSEE agrees to assign its full right, title, and interest in and to such
      market clearance application, including all data relating thereto, to PSRF
      at no
      cost to PSRF.

    

    4.7    
      On
      June
      1, 2005, and each annual anniversary thereof, LICENSEE shall remit [*] Dollars
      ($[*]) to UNIVERSITY for sponsored research. The parties shall enter a sponsored
      research agreement, substantially as set forth in Appendix D. 

    

    4.8    
      To
      the
      extent that the LICENSEE or any AFFILIATE of the LICENSEE is required to obtain
      a license from a third party in order to practice the PATENT RIGHTS then the
      parties shall re-negotiate in good faith over the stacking of royalties. After
      completing its due diligence, LICENSEE is not aware of the need to obtain any
      such license rights. It is understood by both parties that this is not intended
      to cover currently anticipated combination therapies.

    

    

    4.9    
      Except
      as
      otherwise provided herein, LICENSEE's failure to perform in accordance with
      Article 4.5 shall constitute a material breach or default and shall be grounds
      for termination of this License Agreement pursuant to Paragraph 14.5
      hereof.

    

    ARTICLE
      5 - REPORTS AND RECORDS

    

    5.1    
      LICENSEE
      shall keep and preserve, in accordance with generally accepted accounting
      principles and procedures, complete and accurate books, records and accounts
      containing all particulars that may be necessary for the purpose of showing
      the
      amounts payable to PSRF hereunder including any amounts deducted by LICENSEE
      under Article 4.8. Said books, records and accounts shall be kept at LICENSEE's
      principal place of business or the principal place of business of the
      appropriate division of LICENSEE to which this License Agreement relates. Said
      books and supporting data shall be open, upon reasonable notice at all
      reasonable times and places during business hours for five (5) years following
      the end of the calendar year to which they pertain, to the inspection of PSRF
      or
      its agents for the purpose of verifying LICENSEE's royalty statement or
      compliance in other respects with this License Agreement. Should such inspection
      lead to the discovery of a greater than [*] ([*]%) discrepancy in reporting
      to
      PSRF's detriment, LICENSEE agrees to reimburse PSRF for the full cost of such
      inspection.

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    5.2    
      LICENSEE
      shall, within sixty (60) days of March 31, June 30, September 30 and December
      31, of each year, deliver to PSRF true and accurate reports, giving such
      particulars of the business conducted by LICENSEE and its sublicensees during
      the preceding calendar quarter under this License Agreement as shall be
      pertinent to a royalty accounting hereunder. These reports shall be duly signed
      by an authorized signatory of LICENSEE on behalf of LICENSEE and shall include
      at least the following:

    

    (a)    
      number
      and type of LICENSED PRODUCTS manufactured and sold by LICENSEE and its
      sublicensees;

    

    (b)    
      total
      billings for LICENSED PRODUCTS sold by LICENSEE and its
      sublicensees;

    

    (c)    
      listing
      of applicable deduction as provided in Article 1.7 hereinabove;

    

    (d)    
      royalties
      due on sublicensee payments under Article 3.2 hereinabove;

    

    (e)    
      total
      royalties due; and

     

    (f)    
      names
      and
      addresses of all sublicensees of LICENSEE.

    

    5.3    
       With
      each
      such report submitted, LICENSEE shall pay to PSRF the royalties due and payable
      under this License Agreement. If no royalties shall be due, LICENSEE shall
      so
      report.

    

    5.4      
      LICENSEE
      shall use the royalty-reporting sheet attached hereto as Appendix C, or a
      similar document, to fulfill the royalty and reporting requirements of this
      Article 5.

    

    5.5     
      Financial
      Dispute Resolution:
      -Arbitration The parties agree that in the event of a dispute as to the amount
      of payments owed hereunder, the dispute shall not be ripe for arbitration under
      the terms of Article 13.2 until the parties have first attempted to resolve
      the
      matter through non-binding mediation as described in Article 13.1. Non-payment
      of any resulting binding arbitration award shall be resolved in accordance
      with
      Article 13.2.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6 - INTELLECTUAL PROPERTY AND PUBLICATION 

    

    6.1    
      Responsibility
      for Patent Prosecution.
      LICENSEE shall apply for, seek prompt issuance of, and maintain the PATENT
      RIGHTS during the term of this Agreement. The ultimate responsibility for
      prosecution, filing and maintenance of patent applications and patents which
      issue therefrom shall be LICENSEE’s, provided however, that PSRF shall be given
      the opportunity to review and comment upon the breadth and coverage of said
      patent applications, and patent counsel jointly selected by the parties shall
      use all due care to address and incorporate any comments offered by PSRF. In
      addition, PSRF shall have the right to designate its own separate counsel,
      at
      PSRF’s expense, to review and comment upon the prosecution and drafting of the
      jointly selected counsel and said comments shall also be given due
      consideration. Appropriate documents (such as associate power of attorney)
      shall
      be executed to ensure that both parties have direct access to all patent
      filings. PSRF shall be promptly furnished with all communications to and from
      the Patent Office including, transmittal documents. During the patent
      preparation, prosecution and maintenance process, PSRF shall have reasonable
      opportunities to advise LICENSEE to ensure that said PATENT RIGHTS adequately
      address PSRF’s needs. Both parties agree to provide reasonable cooperation to
      each other to facilitate the application and prosecution of patents pursuant
      to
      this Agreement.

    

    6.2    
      Abandonment.
      The
      LICENSEE may, in its discretion, elect to abandon any patent applications or
      issued patent in the PATENT RIGHTS, in which case the LICENSEE shall have no
      further royalty obligation to PSRF in respect of any LICENSED PRODUCTS and
      LICENSED
      PROCESSES
      the
      manufacture, use or sale of which is covered by an issued claim of such
      abandoned PATENT RIGHTS. Prior to any such abandonment, the LICENSEE shall
      give
      PSRF at least sixty (60) days notice and a reasonable opportunity to take over
      prosecution of such PATENT RIGHTS. In such event, PSRF shall have the right,
      but
      not the obligation, to commence or continue such prosecution and to maintain
      any
      such PATENT RIGHTS under its own control and at its expense and the LICENSEE
      shall then have no royalty or other obligation to PSRF in respect of any
      LICENSED PRODUCTS and LICENSED PROCESSES, the manufacture, use or sale of which
      is covered by an issued claim of such PATENT RIGHTS. The LICENSEE agrees to
      cooperate in such activities including execution of any assignments or other
      documents necessary to enable PSRF to obtain and retain sole ownership and
      control of such PATENT RIGHTS.

    

    6.3    
      University
      Publications.
      In the
      event that PSRF or the UNIVERSITY desires to publish or disclose, by written,
      oral or other presentation, PATENT RIGHTS, KNOW-HOW, and Intellectual Property,
      within the FIELD OF USE, related to the PATENT RIGHTS, then PSRF shall notify
      the LICENSEE in writing by facsimile where confirmed by the receiving party,
      and/or by certified or registered mail (return receipt requested) of their
      intention at least sixty (60) days prior to any speech, lecture or other oral
      presentation and at least sixty (60) days before any written or other
      publication or disclosure. PSRF shall include with such notice a description
      of
      any proposed oral presentation or, in any proposed written or other disclosure,
      a current draft of
      such
      proposed disclosure or abstract. LICENSEE may request that PSRF, no later than
      thirty (30) days following the receipt of such notice, delay such 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    presentation,
      publication or disclosure for up to an additional sixty (60) days in order
      to
      enable LICENSEE to file, or have filed on their behalf, a patent application,
      copyright or other appropriate form of intellectual property protection related
      to the information to be disclosed or request that PSRF do so. Upon receipt
      of
      such request to delay such presentation, publication or disclosure, PSRF or
      the
      UNIVERSITY shall arrange for a delay of such presentation, publication or
      disclosure until such time as LICENSEE or PSRF have filed, or had filed on
      its
      behalf, such patent application, copyright or other appropriate form of
      intellectual property protection in form and in substance reasonably
      satisfactory to the LICENSEE or PSRF. If PSRF does not receive any request
      from
      LICENSEE to delay such presentation, publication or disclosure, PSRF may submit
      such material for presentation, publication or other form of
      disclosure.

    

    6.4    
      PSRF
      hereby authorizes the LICENSEE (a) to include in any NDA for a LICENSED PRODUCT,
      as the LICENSEE may deem appropriate under the Federal Food, Drug and Cosmetic
      Act (the “Act”), a list of patents included among the PATENT RIGHTS that relate
      to such LICENSED PRODUCT and such other information as the LICENSEE in its
      reasonable discretion believes is appropriate to be filed pursuant to the Act;
      (b) to commence suit for any infringement of the PATENT RIGHTS under §271(e) of
      Title 35 of the United States Code occasioned by the submission by a third
      party
      of an IND, or an Abbreviated New Drug Application (as that term is defined
      in
      the Act) for a LICENSED PRODUCT pursuant to §505(j) of the Act or an NDA for a
      LICENSED PRODUCT pursuant to §505(b)(2) of the Act; and (c) subject to the
      PSRF’s consent (which consent will not be unreasonably withheld or delayed), and
      to exercise any rights that may be exercisable by PSRF as patent owner under
      the
      Act to apply for an extension of the term of any patent included among the
      PATENT RIGHTS. In the event that applicable law in any other country of the
      TERRITORY hereafter provides for the extension of the term of any patent
      included among the PATENT RIGHTS in such country, upon request by and at the
      expense of the LICENSEE, the PSRF shall use reasonable efforts to obtain such
      extension or, in lieu thereof, shall authorize the LICENSEE or, if requested
      by
      the LICENSEE or its sublicensees to apply for such extension, in consultation
      with PSRF. PSRF, at the LICENSEE’s expense, agrees to reasonably cooperate with
      the LICENSEE or its sublicensees, as applicable, in the exercise of the
      authorization granted herein or which may be granted pursuant to this ARTICLE
      and will execute such documents and take such additional actions as the LICENSEE
      may reasonably request in connection therewith, including, if necessary,
      permitting itself to be joined as a proper party in any suit for infringement
      brought by the LICENSEE under this ARTICLE. The provisions of this ARTICLE
      shall
      apply to any suit for infringement brought by the LICENSEE under clause (b)
      above. In the event the LICENSEE decides not to commence suit for infringement
      under clause (b) above, the LICENSEE will notify PSRF of its decision within
      twenty five (25) days after the receipt of notice that the third party has
      made
      a certification described in § 505(b)(2)(A)(iv) or 505(j)(2)(A)(vii)(IV) of
      the Act, so that PSRF may institute such litigation itself, if it wishes, at
      its
      own cost and expense.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      7 - INFRINGEMENT AND OTHER ACTIONS

    

    7.1    
      LICENSEE
      and PSRF shall promptly provide written notice, to the other party, of any
      alleged infringement by a third party of any patent licensed under PATENT RIGHTS
      and provide such other party with any available evidence of such infringement.
      If necessary, a prima
      facie determination
      of infringement shall be made by an independent patent attorney satisfactory
      to
      both PSRF and LICENSEE.

    

    7.2    
      During
      the term of the License Agreement, LICENSEE shall have the initial right, but
      not the obligation, to prosecute and/or defend, at its own expense, utilizing
      counsel of its own choice, any infringement of, and/or challenge to, the PATENT
      RIGHTS. In furtherance of such right, PSRF hereby agrees that PSRF may be
      legally joined as a party in any such suit, without expense to PSRF. Before
      LICENSEE commences an action hereunder, it shall consult with PSRF, and give
      careful consideration to the views of PSRF and the potential impact of
      litigation on PSRF. This shall include a face-to-face meeting between the
      parties’ designated representatives prior to the initiation of litigation. No
      settlement, consent judgment or other voluntary, final disposition of the suit
      may be entered into without the consent of PSRF, which consent shall be timely
      given and not unreasonably be withheld, unless such settlement does not
      materially affect the rights of PSRF. LICENSEE agrees to keep PSRF reasonably
      informed as to the status of any such action and to provide copies to PSRF,
      upon
      request by PSRF, of any papers or information relevant to the prosecution of
      any
      such action. LICENSEE shall timely inform PSRF of any offer for settlement
      presented by a third party for any such action and LICENSEE shall consider
      PSRF’s input in deciding whether or not to accept any such settlement offer. The
      total cost of any such action, commenced or defended solely by the LICENSEE,
      shall be borne by the LICENSEE. Any funds resulting from such action, whether
      in
      an out-of-court settlement or through a judgment in the courts will be used
      first to pay LICENSEE the cost paid out by LICENSEE in taking such action.
      Any
      funds remaining therefrom will be treated as NET SALES under this License
      Agreement, with the exception of amounts awarded for treble, exemplary or
      punitive damages, which shall be divided equally between the
      parties.

    

    7.3    
      If
      within
      six (6) months after having been notified of any alleged infringement, LICENSEE
      shall have been unsuccessful in persuading the alleged infringer to desist
      and
      shall not have brought and shall not be diligently prosecuting an infringement
      action, or if LICENSEE shall notify PSRF at any time prior thereto of its
      intention not to bring suit against any alleged infringer in the TERRITORY
      for
      the FIELD OF USE, then, and in those events only, PSRF shall have the right,
      but
      not the obligation, at its own expense and utilizing counsel of its own choice,
      to prosecute any infringement of, and/or defend any challenge to, the PATENT
      RIGHTS. Before PSRF commences any action hereunder, it shall consult with
      LICENSEE and give careful consideration to the views of LICENSEE. Any funds
      resulting from such action, whether in an out-of-court settlement or through
      a
      judgment in the courts will be paid to PSRF, with the exception of amounts
      awarded for treble, exemplary or punitive damages, which shall be divided
      equally between the parties.

    

    7.4    
      In
      the
      event the parties hereto agree to share the costs of an action initiated
      hereunder, any funds resulting from such action, whether in an out-of-court
      settlement or through a
      judgment in the courts will be used first to reimburse the parties costs paid
      out in the action and the remainder shall be divided
      equally.

     

    
      
        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

      

    

     

    7.5    
      In
      the
      event that a declaratory judgment action alleging invalidity or noninfringement
      of any of the PATENT RIGHTS shall be brought against PSRF, LICENSEE, at its
      option, shall have the right, within thirty (30) days after commencement of
      such
      action, to intervene and take over the sole defense of the action, at its own
      expense; however, LICENSEE shall have the primary obligation to defend the
      patent at its expense. 

    

    7.6    
      In
      any
      infringement suit either party may institute to enforce the PATENT RIGHTS
      pursuant to this License Agreement, the other party hereto shall, at the request
      and expense of the party initiating such suit, cooperate in all respects and,
      to
      the extent possible, have its employees testify when requested and make
      available relevant records, papers, information, samples, specimens, and the
      like.

    

    7.7     
      LICENSEE,
      during the exclusive period of this License Agreement, shall have the sole
      right
      in accordance with the terms and conditions herein to grant a sublicense to
      an
      infringer under Article 7.1 in the TERRITORY for the FIELD OF USE for future
      use
      of the PATENT RIGHTS. Any fees received shall be treated as sublicense fees
      according to Article 3.2(ii).

    

    7.8     
      Each
      party hereto agrees that it and its AFFILIATES will not challenge the validity
      of the PATENT RIGHTS.

     

    ARTICLE
      8 - REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION

    

    8.1    
      LICENSEE
      shall at all times during the term of this License Agreement and thereafter,
      indemnify, defend and hold PSRF, its trustees, directors, officers, employees
      and affiliates, harmless against all claims, proceedings, demands and
      liabilities of any kind whatsoever, including legal expenses and reasonable
      attorneys' fees, arising out of the death of or injury to any person or persons
      or out of any damage to property, or resulting from the production, manufacture,
      sale, use, lease, consumption or advertisement of the LICENSED PRODUCTS or
      LICENCED PROCESSES.

    

    8.2    
      Prior
      to
      the first dosing of a patient with a LICENSED PRODUCT or LICENSED PROCESS,
      in
      the first clinical trial sponsored by the LICENSEE or its sublicensee or
      AFFILIATE, LICENSEE shall obtain and carry in full force and effect commercial,
      general liability insurance which shall protect LICENSEE and PSRF with respect
      to events covered by Article 8.1 above. Such insurance shall be written by
      a
      reputable insurance company authorized to do business in the Commonwealth of
      Pennsylvania, shall list PSRF and The UNIVERSITY as an additional named insured
      thereunder, shall include product liability coverage and shall require thirty
      (30) days written notice to be given to PSRF prior to any cancellation or
      material change thereof. The limits of such insurance shall not be less than
      [*]
      Dollars ($[*]) per occurrence with an
      aggregate of [*] Dollars ($[*]). LICENSEE shall provide PSRF with Certificates
      of Insurance evidencing the same. 

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    (a)    
      Prior to the first commercial sale of a LICENSED PRODUCT or LICENSED PROCESS,
      PSRF and LICENSEE shall agree upon appropriate levels of insurance coverage.
      

    

    8.3    
      EXCEPT
      AS
      OTHERWISE EXPRESSLY SET FORTH IN THIS LICENSE AGREEMENT, PSRF, ITS TRUSTEES,
      DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS AND
      EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
      NOT
      LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
      VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT
      OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS LICENSE AGREEMENT
      SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY PSRF THAT
      THE
      PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE
      PATENT RIGHTS OF ANY THIRD PARTY. IN NO EVENT SHALL PSRF, ITS TRUSTEES,
      DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR
      CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO
      PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER PSRF SHALL BE ADVISED, SHALL
      HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
      POSSIBILITY.

    

    8.4    
      Intellectual
      Property. PSRF represents that (i) PSRF has the sole right to grant to LICENSEE
      the rights granted herein and the rights are unencumbered by any liens (ii)
      to
      the best of its knowledge, PSRF is not aware of any third party patents that
      would block the commercialization of LICENSED PRODUCTS or LICENSED PROCESSES;
      (iii) PSRF has not received any notice, including written notice, alleging
      any
      infringement by PSRF of any intellectual property rights of a third party in
      respect of the PATENT RIGHTS; and (iv) to the knowledge of PSRF, the rights
      granted under this Agreement do not conflict with the rights granted by PSRF
      to
      any other third party. 

    

    8.5    
      PSRF
      represents and warrants that, to the best of its knowledge:

    

    a)    
      PSRF has disclosed to LICENSEE all potential and existing PATENT RIGHTS in
      the
      control of PSRF or in control of a third party known to PSRF which may be needed
      to commercialize any LICENSED PRODUCT or LICENSED PROCESS;

    

    b)    
      Appendix B lists all patents and patent applications owned by PSRF that cover
      the LICENSED PRODUCT or LICENSED PROCESS, and PSRF will during the term of
      this
      Agreement, promptly upon request, provide LICENSEE with an updated version
      of
      Appendix A and B; and

     

    c)    
      PSRF is the exclusive owner of the patents and patent applications listed in
      Appendix B as of the date hereof and has the sole and exclusive right to license
      the PATENT RIGHTS and all other intellectual property rights of the UNIVERSITY.
      

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    8.6    
      PSRF
      shall at all times during the term of this License Agreement and thereafter,
      indemnify, defend and hold LICENSEE, its AFFILIATES, and each of their
      respective officers, directors, agents, employees, shareholders, successors
      and
      assigns harmless against all claims, proceedings, demands and liabilities of
      any
      kind whatsoever, including legal expenses and reasonable attorneys' fees,
      arising out of: activities conducted by PSRF; breach by PRSF of this agreement;
      or PSRF's material violation of any applicable law, including any foreign,
      federal, state or local law or judicial decision.

     

       8.7    
      Both
      parties hereby represent and warrant the following:

    

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

    

    (b)    
      Each
      party hereto has the full right, power and legal capacity to enter and deliver
      this Agreement and to perform its duties and other obligations hereunder. 
      This Agreement constitutes the legal, valid and binding obligation of each
      party
      hereto enforceable against it in accordance with its terms.  No approvals
      or consents of any persons or entities are required for either party to execute
      and deliver this Agreement or perform their duties and other obligations
      hereunder and contemplated herein.

    
 

    ARTICLE
      9 - EXPORT CONTROLS

    

    9.1    
      LICENSEE
      acknowledges that it is subject to United States export laws and regulations,
      and that a license thereunder may be required. PSRF neither represents that
      a
      license shall not be required nor that, if required, it shall be issued, and
      all
      costs thereof shall be borne by LICENSEE.

    

    ARTICLE
      10 - NON-USE OF NAMES

    

    10.1    
      LICENSEE
      shall not use the names or trademarks of UNIVERSITY, PSRF, or any of their
      employees, or any adaptation thereof, in any advertising, promotional or sales
      literature without prior written consent obtained from PSRF, in each case,
      except that LICENSEE may, without prior written consent, state that it is
      licensed by PSRF, under one or more of the patents and/or applications
      comprising the PATENT RIGHTS. Further, PSRF acknowledges and agrees that
      LICENSEE may use the names of PSRF and UNIVERSITY in various documents used
      by
      LICENSEE for capital raising and financing without such prior written consent
      where the use of such names may be required by law, provided that LICENSEE
      shall
      promptly provide copies of any such documents, including private placement
      memoranda, prospectus documents, etc. 

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    10.2    
      PSRF
      shall not use the names or trademarks of LICENSEE, or any of their employees,
      or
      any adaptation thereof, in any advertising, promotional or sales literature
      without prior written consent obtained from LICENSEE, in each case, except
      that
      PSRF may, without prior written consent, state that it has licensed to LICENSEE,
      one or more of the patents and/or applications comprising the PATENT
      RIGHTS.

    

    ARTICLE
      11- PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

    

    11.1    
      Any
      payment, notice or other communication pursuant to this License Agreement shall
      be sufficiently made or given on the date of mailing if sent to such party
      by
      certified or registered first class mail, postage prepaid, addressed to it
      at
      its address below or as it shall designate by written notice given to the other
      party as follows:

    

    In
      the
      case of THE PENN STATE RESEARCH FOUNDATION:

    

    President

    The
      Penn
      State Research Foundation

    c/o
      Intellectual Property Office

    113
      Technology Center

    University
      Park, PA 16802-7000

    

    In
      the
      case of LICENSEE: 

     

    Innovive
      Pharmaceuticals, Inc.

    787
      Seventh Avenue, 48th
      Floor

    New
      York,
      NY 10019

    Attn:
      Chief Executive Officer

    

    ARTICLE
      12 - ASSIGNMENT

    

    12.1    
      This
      Agreement and the rights and duties appertaining hereto may not be assigned
      by
      either party without first obtaining the written consent of the other which
      consent shall not be unreasonably withheld. Any such purported assignment,
      without the written consent of the other party, shall be null and of no effect.
      Notwithstanding the foregoing, each party may assign this Agreement with prior
      written notification to the other party, but without the consent of the other
      party (i) to a purchaser, merging or consolidating corporation, or acquirer
      of
      substantially all of the assignor’s assets or business and/or pursuant to any
      reorganization, including those qualifying under section 368 of the Internal
      Revenue Code of 1986, as amended, as may be in effect at such time, or (ii)
      to
      an AFFILIATE of the assignor, provided that any successor entity must have
      a net
      asset value (using GAAP) of at least ten (10) million dollars.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      13 - DISPUTE RESOLUTION

    

    13.1    
      Except
      for the right of either party to apply to a court of competent jurisdiction
      for
      a temporary restraining order, a preliminary injunction, or other equitable
      relief to preserve the status
      quo
      or
      prevent irreparable harm, any and all claims, disputes or controversies arising
      under, out of, or in connection with this License Agreement, including any
      dispute relating to patent validity or infringement, which the parties shall
      be
      unable to resolve within sixty (60) days, shall be mediated in good faith.
      The
      party raising such dispute shall promptly advise the other party of such claim,
      dispute or controversy in a writing, which describes in reasonable detail the
      nature of such dispute. By not later than five (5) business days after the
      recipient has received such notice of dispute, each party shall have selected
      for itself a representative who shall have the authority to bind such party,
      and
      shall additionally have advised the other party in writing of the name and
      title
      of such representative. By not later than ten (10) business days after the
      date
      of such notice of dispute, the party against whom the dispute shall be raised
      shall select a mediation firm in Pennsylvania and such representatives shall
      schedule a date with such firm for a mediation hearing. The parties shall enter
      into good faith mediation and shall share the costs equally. If the
      representatives of the parties have not been able to resolve the dispute within
      fifteen (15) business days after such mediation hearing, the parties shall
      have
      the right to pursue any other remedies legally available to resolve such dispute
      in either the Centre County Court of Common Pleas or in the United States
      District Court for the Middle District of Pennsylvania, to whose jurisdiction
      for such purposes PSRF and LICENSEE each hereby irrevocably consents and
      submits.

    

    13.2    
      Any
      and
      all claims, disputes or controversies in relation to the amount of any royalty
      or other payments owed by LICENSEE pursuant to Article 3, which the parties
      hereto shall be unable to resolve within sixty (60) days, shall be mediated
      in
      good faith. The party raising such dispute shall promptly advise the other
      party
      of such claim, dispute or controversy in writing which describes in reasonable
      detail the nature of such dispute. By not later than five (5) business days
      after the recipient has received such notice of dispute, each party shall have
      selected for itself a representative who shall have the authority to bind such
      party, and shall additionally have advised the other party in writing of the
      name and title of such representative. By not later than ten (10) business
      days
      after the date of such notice of dispute, the party against whom the dispute
      shall be raised shall select a mediation firm in Pennsylvania and such
      representatives shall schedule a date with such firm for a mediation hearing
      not
      to exceed one (1) day in length, and less where applicable. The parties shall
      enter into good faith mediation and shall share the costs equally. If the
      representatives of the parties have not been able to resolve the dispute within
      fifteen (15) business days after such mediation hearing, it will be finally
      decided by an appropriate method of alternate dispute resolution, in
      Pennsylvania, as mutually agreed by the parties including without limitation,
      private arbitration, conducted in accordance with the applicable, then current,
      procedures of the American Arbitration Association. The arbitration panel will
      include members generally knowledgeable in the FIELD OF USE of the INVENTIONS
      and oncology. Judgment upon any such award rendered may be entered into the
      highest court or forum having jurisdiction, state or federal. The binding
      decision of the arbitration board can be enforced by a court of law having
      jurisdiction upon the parties. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      14 - TERM AND TERMINATION

    

    14.1    
      LICENSEE
      shall have the right to terminate this Agreement at any time on sixty (60)
      days
      notice to PSRF, and upon payment of all amounts due PSRF through the effective
      date of the termination.

    

    14.2    
      Unless
      earlier terminated as hereinafter provided, this License Agreement shall
      continue until the end of the life of the last to expire patent licensed under
      the PATENT RIGHTS, on a country-by-country basis. From and after the expiration
      of such PATENT RIGHTS, LICENSEE will have a paid up, royalty-free license under
      the PATENT RIGHTS to make, have made, use, have used, sell and have sold
      LICENSED PRODUCTS and to practice and have practiced the LICENSED
      PROCESSES.

    

    14.3    
      Financial
      Solvency of LICENSEE.
      LICENSEE agrees that as a part of its material inducement to PSRF to enter
      this
      License Agreement, it shall provide PSRF with at least ninety (90) days written
      notice hereunder of its intent to file a petition in Bankruptcy, whether it
      be
      for a Chapter 7, 11, 13 or any other such petition. LICENSEE agrees and
      understands that PSRF has an obligation to UNIVERSITY, a land grant institution
      under the Morrell Act, to license the PATENT RIGHTS pursuant to terms and
      conditions which maximize the public benefit. PSRF shall have the right to
      immediately terminate this License Agreement by giving written notice to
      LICENSEE, in the event LICENSEE does any of the following: a) provides notice
      hereunder of its intent to file (or does actually file without providing said
      notice) a petition in bankruptcy, b) attempts to make an assignment of this
      Agreement for the benefit of creditors, c) discontinues or dissolves its
      business, or d) if a receiver is appointed by a court of competent jurisdiction
      for LICENSEE.

    

    14.4    
      Financial
      Breach.
      Except
      as provided in Article 13.2, in the event LICENSEE has breached its obligations
      to pay royalties or fees under Article 3 or Article 4.3 of this License
      Agreement, and such fees are not subject to a good faith bona fide dispute
      between the parties, and/or fails to file royalty reports in accordance with
      Article 5 of this License Agreement, (hereafter “Financial Breach”) PSRF shall
      provide LICENSEE with written notice of said breach, and LICENSEE shall have
      a
      period of thirty (30) days to cure said breach. In the event LICENSEE does
      not
      fully cure the breach within that thirty (30) day period, and fails within
      that
      thirty (30) days to commence mediation pursuant to Article 13.1 of this License
      Agreement alleging grounds for its non-payment thereof, this License Agreement
      shall be automatically terminated without further notice or action by PSRF.
      If a
      dispute regarding termination is addressed according to Article 13, this license
      shall remain in full force and effect until such dispute is settled in a manner
      that is not further appealable or not appealed. 

    

    14.5    
      Failure
      of Other Performance.
      Upon any
      material breach of performance under this License Agreement, by LICENSEE, other
      than those occurrences set out in Articles 14.3 or 14.4 hereinabove, which
      shall
      always take precedence in that order over any material breach or default
      referred to in this Article 14.5, PSRF shall have the right to terminate this
      License Agreement and the rights, privileges and license granted hereunder
      effective sixty (60) days after PSRF
      first notifies LICENSEE of the alleged breach under the notice provisions
      contained in Article 14 of this License Agreement. Such termination shall become
      effective upon final notification by PSRF after the sixty (60) days, unless
      LICENSEE shall have fully cured any such material breach or default prior to
      the
      expiration of the sixty (60) day period. In the event of a dispute as to whether
      LICENSEE has cured the alleged breach, the matter shall be resolved pursuant
      to
      Article 13 of this License Agreement. If a dispute regarding termination is
      addressed according to Article 13, this license shall remain in full force
      and
      effect until such dispute is settled in a manner that is not further appealable
      or not appealed. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

    14.6    
      Upon
      termination of this License Agreement for any reason, nothing herein shall
      be
      construed to release either party from any obligation that matured prior to
      the
      effective date of such termination; and Articles 1, 8, 9, 10, 16, 17 and
      Articles 14.5 and 14.6 shall survive any such termination. LICENSEE and any
      sublicensee thereof may, however, after the effective date of such termination,
      sell all LICENSED PRODUCTS, and complete LICENSED PRODUCTS in the process of
      manufacture at the time of such termination and sell the same, provided that
      LICENSEE submit the reports required by Article 5 hereof.

    

    14.7    
      Upon
      termination of this Agreement other than by expiration in accordance with
      Article 14, any and all sublicenses shall survive such termination.
      Notwithstanding the foregoing, if LICENSEE believes that PSRF has terminated
      this Agreement for the primary purpose of doing business directly with the
      sublicensee, the termination may be disputed under the provisions of Article
      13.

    ARTICLE
      15 - AGENCY

    

    15.1    
      Nothing
      herein shall be deemed to establish a relationship of principal and agent
      between PSRF and the LICENSEE, nor any of their agents or employees for any
      purpose whatsoever.

    

    ARTICLE
      16. CONFIDENTIALITY

    

    16.1    
      Except
      as
      expressly authorized under article 6.3, any proprietary or confidential
      information relating to the PATENT RIGHTS within the FIELD OF USE, (including
      but not limited to KNOW-HOW and patent prosecution documents relating to PATENT
      RIGHTS) collectively constitute the “Confidential Information." LICENSEE and
      PSRF agree that they will not use the Confidential Information for any purpose
      unrelated to this Agreement, and will hold it in confidence during the term
      of
      this Agreement and for a period of [*] years after the termination or expiration
      date of this Agreement. LICENSEE shall not disclose Confidential Information
      or
      permit its disclosure to any third party (except to those of its employees,
      consultants, or agents who are bound by the same obligation of confidentiality
      as LICENSEE is bound by pursuant to this Agreement). However, such undertaking
      of confidentiality by LICENSEE shall not apply to any information or data
      which:

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

       

    

    16.1.1    
      LICENSEE
      receives at any time from a third-party lawfully in possession of same and
      having the right to disclose same.

    

    16.1.2    
      Is,
      as of
      the date of this Agreement, in the public domain, or subsequently enters the
      public domain through no fault of LICENSEE.

    

    16.1.3    
      Is
      independently developed by LICENSEE as demonstrated by written evidence without
      reference to information disclosed to LICENSEE by PSRF.

    

    16.1.4    
      Is
      disclosed pursuant to the prior written approval of PSRF.

    

    16.1.5    
      Is
      required to be disclosed pursuant to law or legal process (including, without
      limitation, to a governmental authority) provided, in the case of disclosure
      pursuant to legal process, reasonable notice of the impending disclosure is
      provided to PSRF.

     

    ARTICLE
      17 - MISCELLANEOUS PROVISIONS

    

    17.1    
      Entire
      Agreement.
      This
      License Agreement embodies the entire understanding of the parties and shall
      supersede all previous communications, representations, or undertakings, either
      verbal or written, between the parties relating to the subject matter
      hereof.

    

    17.2    
      Amendment.
      This
      License Agreement may be amended only by a written agreement embodying the
      full
      terms of the amendment signed by authorized representatives of both
      parties.

    

    17.3    
      Severability.
      Should
      any provision of this License Agreement be held to be illegal, invalid or
      unenforceable, by any court of competent jurisdiction, such provision shall
      be
      modified by such court in compliance with the law and, as modified, enforced.
      The remaining provisions of this License Agreement shall be construed in
      accordance with the modified provision and as if such illegal, invalid or
      unenforceable provision had not been contained herein.

    

    17.4    
      No
      Strict Construction.
      The
      language used in this License Agreement shall be deemed to be the language
      chosen by both parties hereto to express their mutual intent and no rule of
      strict construction against either party shall apply to any term or condition
      of
      this License Agreement.

    

    17.5    
      Relationship
      of Parties.
      Nothing
      contained in this License Agreement shall be construed as creating a
      partnership, joint venture, agency or an association of any kind.

    

    17.6    
      No
      Waiver.
      The
      failure of one party hereto to enforce at any time any of the provisions of
      this
      License Agreement, or any rights in respect thereto, or to exercise any election
      herein provided, shall in no way be considered to be a waiver of such provision,
      rights or elections or in any way to affect the validity of this License
      Agreement, or excuse a similar subsequent failure to perform any such term
      or
      condition by the other party. Any waiver must be in writing.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    17.7    
      Interpretation.
      The
      headings of several Articles contained herein are inserted for convenience
      of
      reference only, and are not intended to be a part of or to affect the meaning
      or
      interpretation of this License Agreement.

    

    17.8    
      Governing
      Law.
      This
      License Agreement shall be governed by and construed in accordance with the
      laws
      of the Commonwealth of Pennsylvania without giving effect to any choice of
      law
      or conflict of law provision or rule that would cause the application of the
      laws of any jurisdiction other than the Commonwealth of Pennsylvania, except
      that questions affecting the construction and effect of any patent shall be
      determined by the law of the country in which the patent was
      granted.

    

    17.9    
      Product
      Marking.
      LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States with
      all
      applicable United States patent numbers. All LICENSED PRODUCTS shipped to or
      sold in other countries shall be marked in such a manner as to conform with
      the
      patent laws and practices of the country of manufacture or sale.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
IN
      WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
      have
      each caused a duly authorized representative to execute this License Agreement
      on the day and year set forth below.

    

    

    ________________________________

    INNOVIVE
      PHARMACEUTICALS, INC. 

    

    By:
      /s/
      Steven Kelly

    Name:
      Steven Kelly

    Title:
      President
      & CEO

    Date:
      3/15/05

    

    THE
      PENN
      STATE RESEARCH FOUNDATION

    (PSRF)

    

    By:
      /s/
      David E. Branigan

    Name:
      David
      E. Branigan

    Title:
      Treasurer

    Date:
      March
      16, 20005

    

    THE
      PENNSYLVANIA STATE UNIVERSITY

    Read
      and
      acknowledged specifically regarding Article 6.3.

    

    By:
      /s/
      David F. Marshall

    Name:
      David
      F. Marshall

    Title:
      Assistant
      Treasurer

    Date:
      March
      16, 2005

    

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      A: INVENTIONS

    

    
      	
              PSU
                Invention

              Disclosure
                Number

            	
              Invention
                Title

            	
              Inventors

            
	
              96-1565

            	
              “Opioid
                Growth Factor and Cancer”

            	
              Dr.
                Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P.
                Smith

            
	
              2003-2839

            	
              “Combination
                Therapy with Opioid Growth Factor and Taxanes for the Treatment of
                Cancer”

            	
              Dr.
                Ian S. Zagon, Dr. Patricia J. McLaughlin

            
	
              2004-2890

            	
              “Combined
                Therapy with Opioid Growth Factor and Gemcitabine for the Treatment
                of
                Cancer”

            	
              Dr.
                Ian S. Zagon, Dr. Patricia J.
                McLaughlin

            

    

    

    

     

     

     

     

     

     

     

    

 

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      B: PATENT RIGHTS 

    

    
      	
              PSU
                Invention 
Disclosure Number

            	
              Invention
                Title

            	
              Intellectual
                Property / Patent Status

            
	
              96-1565

            	
              “Opioid
                Growth Factor and Cancer”

            	
              U.S.
                Patent No.[*]

              U.S.
                Patent No. [*]

            
	
              2003-2839

               

               

               

              2004-2890

            	
              “Combination
                Therapy with Opioid Growth Factor and Taxanes for the Treatment of
                Cancer”

               

              “Combined
                Therapy with Opioid Growth Factor and Gemcitabine for the Treatment
                of
                Cancer”

            	
              U.S.
                Provisional Patent No. [*] filed
                [*]

            

    

    

    

     

     

     

     

     

    [*]
      Confidential treatment requested; certain information omitted and
      filed separately with the SEC.

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      C

     

    [LICENSEE]/PSRF
      License Agreement Royalty Report for the Period
      ____________through__________

    

    Instructions:
      Please fill in all boxes (write "none" if not applicable), and sign and date
      at
      bottom. All Article numbers refer to the License Agreement.

    

    Answer
      questions 1 and 2 (AND SIGN AND DATE AT BOTTOM) EVEN IF THERE HAS BEEN NO
      ACTIVITY in reporting period.

    

    1.
      Number of transactions: by
      [LICENSEE]    r  
      by
      Sublicensees   r  

    

    2.
      Any new sublicenses entered into during the period?  yes
r no r 

    If
      yes,
      attach separate sheet listing names and addresses of sublicensees, and attach
      sublicense agreements.

    

    Answer
      this Article only
      if there has been LICENSED PRODUCT/PROCESS activity or non-running royalty
      sublicensee payment in reporting period.

    

    
      	
               

              Date
                of Transaction

            	
               

              Type
                of Transaction

            	
              By
                ______ or Sublicensee?

              (if
                latter, identify)

            	
              Product
                or Process Type (name and id number)

            	
               

              Total
                Billings

            	
              Deductions
                per § __ (specify type)

            	
               

              Royalties
                Due

            	
               

              Customer
                Name and Address

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

    

    Number
      of
      Royalty Report continuation sheets attached________

    

    Non-running
      royalty payments received from sublicensees (per §___): $__________, of which
      $________ (__%) goes to PSRF.

    Specify
      each sublicensee and amount of payment on separate sheet.

    

    Total
      amount enclosed $_______________

    

    [LICENSEE]

    

    By:                        
        Date:                             

    

    Name
      and
      Title:                                        

    
 

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      C

    

    Continuation
      sheet number _____to [LICENSEE]/PSRF License Agreement Royalty Report for the
      Period _____________ through ______________

    

    Use
      this
      sheet if there are additional transactions to report.

    

    
      	
               

              Date
                of Transaction

            	
               

              Type
                of Transaction

            	
              By
                _____ or Sublicensee? (if latter, identify)

            	
              Product
                or Process Type (name and id number)

            	
               

              Total
                Billings

            	
              Deductions
                per §__ (specify type)

            	
               

              Royalties
                Due

            	
               

              Customer
                Name and Address

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

    

    

     

     

     

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      D

    

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      E

    

    

    
      	
              Month
                Number

            	
              Monthly
                Payment

            	
              Cumulative

            
	
              1

            	
              [*]

            	
              [*]

            
	
              2

            	
              [*]

            	
              [*]

            
	
              3

            	
              [*]

            	
              [*]

            
	
              4

            	
              [*]

            	
              [*]

            
	
              5

            	
              [*]

            	
              [*]

            
	
              6

            	
              [*]

            	
              [*]

            
	
              7

            	
              [*]

            	
              [*]

            
	
              8

            	
              [*]

            	
              [*]

            
	
              9

            	
              [*]

            	
              [*]

            
	
              10

            	
              [*]

            	
              [*]

            
	
              11

            	
              [*]

            	
              [*]

            
	
              12

            	
              [*]

            	
              [*]

            
	
              13

            	
              [*]

            	
              [*]

            
	
              14

            	
              [*]

            	
              [*]

            
	
              15

            	
              [*]

            	
              [*]

            
	
              16

            	
              [*]

            	
              [*]

            
	
              17

            	
              [*]

            	
              [*]

            
	
              18

            	
              [*]

            	
              [*]

            
	
              19

            	
              [*]

            	
              [*]

            
	
              20

            	
              [*]

            	
              [*]

            
	
              21

            	
              [*]

            	
              [*]

            
	
              22

            	
              [*]

            	
              [*]

            
	
              23

            	
              [*]

            	
              [*]

            
	
              24

            	
              [*]

            	
              [*]

            

    

    

    This
      schedule is provided for purposes of clarity and is in no way intended to limit
      the amount or duration of the Penalty Fee Payments.

     

     

    [*]
      Confidential treatment requested; certain
      information omitted and filed separately with the SEC.

    
      
        
        

      

      
        30

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