Document:

EXHIBIT 10.13

     CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED ON A REQUEST FOR
     CONFIDENTIAL TREATMENT. THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE
     SECURITIES AND EXCHANGE COMMISSION.

                       DEVELOPMENT AND LICENSING AGREEMENT
                       -----------------------------------

         THIS WORLD-WIDE EXCLUSIVE DEVELOPMENT AND LICENSING AGREEMENT [the
"Agreement"], is made, entered into and effective as of ___ September, 2003
["Effective Date"], by and between Innovative Medical Services ["INNOVATIVE"], a
California corporation, having its principal place of business at 1725 Gillespie
Way, El Cajon, Ca 92020, and Therapeutics, Inc., a Delaware corporation, with
its principal place of business at 4180 La Jolla Village Drive, Suite 255, La
Jolla, California 92037 ["THERAPEUTICS"].

                                    RECITALS

         WHEREAS, pursuant to a Core Settlement Agreement dated 15 November
2001, INNOVATIVE became the sole owner and/or assignee of certain patents and
certain technology, known as SDC Core Technology, more fully described in
Exhibit A hereto, which includes silver dihydrogen citrate and other related
silver compounds;

         WHEREAS, INNOVATIVE has developed and commercialized various and
multiple non-healthcare, non-personal care applications utilizing the SDC Core
Technology;

         WHEREAS, THERAPEUTICS is primarily engaged in medical product
development with an emphasis on dermatological products, blending clinical and
regulatory strategies, manufacturing know-how, drug development expertise, and a
thorough understanding of the competitive technologies and the marketplace;

         WHEREAS, INNOVATIVE and THERAPEUTICS are interested in exploring and
investigating the feasibility of developing healthcare and personal care
products utilizing the SDC Core Technology, which may require approval from an
Agency, including the United States Food and Drug Administration ("FDA");

         WHEREAS, the Parties have determined that THERAPEUTICS has the
necessary knowledge, skill and expertise in the identification and development
of proprietary drugs utilizing the SDC Core Technology and that such process can
be more efficiently and effectively accomplished through the beneficial
collaboration by the Parties; and

         WHEREAS, INNOVATIVE and THERAPEUTICS desire to enter into a
collaborative development program for the product development and
commercialization of personal care and healthcare products utilizing the SDC
Core Technology and requiring FDA approval or review.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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                                    AGREEMENT
                                    ---------

         NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto expressly agree as follows:

     SECTION 1.0 DEFINITIONS

1.1 The term "Affiliate" means any entity that directly or indirectly owns, is
owned by or is under common ownership with, a Party to this Agreement, where
"own" or "ownership" means direct or indirect possession of at least fifty
percent (50%) of the outstanding voting securities of a corporation or a
comparable ownership in any other type of entity, provided, however, that if the
law of the jurisdiction in which such entity operates does not allow fifty
percent (50%) or greater ownership by a Party to this Agreement, such ownership
interest shall be at least forty percent (40%).

1.2 The term "Agency" means any governmental regulatory authority, exclusive of
the United States Environmental Protect Agency "EPA" (except as agreed to by the
Parties), responsible for granting health or pricing approvals, registrations,
import permits, and other approvals required before a SDC Product(s) may be
tested or marketed in any country. The term Agency includes the United States
Food and Drug Administration ("FDA")

1.3 The term "Agency Approval" means final authorization by an Agency to market
and sell the SDC Product(s) in a country in the Territory.

1.4 The term "Best Efforts" means that the obligated Party is required to make a
diligent and good faith effort to accomplish the applicable objective through
the use of a sustained manner consistent with the exercise of prudent scientific
and business judgment as applied to other research, development and
commercialization efforts for products of similar scientific and commercial
potential within the research programs and relevant product lines of such Party.

1.5 The term "Budget" means the annual budget approved by the EMC from time to
time pursuant to Section 3.4. As of the Effective Date, the initial Budget
agreed-upon by the Parties shall be included in the initial Development Plan and
Technology Development Plan, which are attached as Exhibit B hereto.

1.6 The term "Development" means, as applied to a Product, that the Party has
been granted the "product specific" license and performed material work with
respect to such Product, such as (without limitation): partnering activities,
formulation development, preclinical testing or submission of an IND.

1.7 The term "Development Costs" or "Development Expenses" means the costs
incurred by THERAPEUTICS or INNOVATIVE for its account after the Effective Date
which are consistent with the Development Plan and are specifically attributable
to the research and development of SDC Product(s) pursuant to the Development
Plan and Technology Development Plan. Such costs shall include the internal and
external

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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verifiable costs incurred either by THERAPEUTICS or INNOVATIVE to further the
SDC Product(s) Development and Technology Development programs. Internal costs
related to the Development Plan and licensing or sale of SDC Products shall
include, but not be limited to, salaries, employee benefits, use of facilities
and equipment, personnel, travel expenses and costs, product/licensing related
legal fees, materials and supplies, which shall be absorbed into the Development
Costs based on generally accepted accounting principles and methods mutually
established and approved by the EMC, such approval not to be unreasonably
withheld. For these Development Costs and Development Expenses to be eligible
for reimbursement per the terms of this Agreement they must be approved by the
EMC.

1.8 The "Development Plan" is defined as the overall two-stage (2) program for
the development of SDC Product(s) approved by the EMC, from time to time,
pursuant to Section 3.2. Within thirty (30) days from the Effective Date of this
Agreement, the Parties will adopt an initial Development Plan, which will
reflect the mutual objectives of the Parties with respect to the sequence of
events leading up to the filing of regulatory submissions and will contain such
description having sufficient detail to enable INNOVATIVE and THERAPEUTICS to
fully understand the overall project goals and objectives. Said Development Plan
will consist of the following two stages:

         (a) Stage One of the Development Plan will refer to all activities
conducted by either Party during Months one (1) through twelve (12) from the
Effective Date for the technology evaluation resulting in the identification and
categorization of potential new SDC Products, which shall then be reviewed,
approved and selected by the EMC, on a "product-by-product" basis, for Stage Two
development. The Development Plan adopted by the Parties will outline Stage One
activities and will include the Product Development Flow Chart attached hereto
as Exhibit "B", a time and events schedule ("T/E") in critical path form
prepared by THERAPEUTICS, utilizing "Microsoft Project(R)" software or
equivalent and initial Budgets developed by the Parties for said initial phase.

         (b) Stage Two of the Development Plan will consist of all activities
conducted by the Parties after a SDC Product(s) has been identified and approved
for Stage Two development and a SDC Product(s) specific plan has been reviewed
and adopted by the EMC for its continued development and commercialization. The
SDC Product(s) specific plan will include a Product specific T/E schedule in
critical path form prepared by THERAPEUTICS, utilizing "Microsoft Project(R)"
software and will include a Budget, updated annually, which will project all
anticipated costs pertaining to the T/E schedule. Concurrently, as necessary, a
Product specific T/E schedule in critical path form for intellectual property
development will be prepared by INNOVATIVE utilizing "Microsoft Project(R)"
software, which will include a Budget, updated annually, projecting the
anticipated costs pertaining to the intellectual property resulting from
THERAPEUTICS's T/E schedule.

         1.9 The term "Executive Management Committee" or "EMC" as used herein
means that committee comprised initially of four (4) senior staff members, two
(2) from each company, which shall be established pursuant to and have the
responsibilities set

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CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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forth in Section 3.2 hereof and elsewhere in this Agreement. Within sixty (60)
days of the Effective Date of this Agreement, the Parties shall adopt rules and
regulations for the EMC's governance, which shall supplement Section 3.2 hereof.

         1.10 The term " cGMP" means current good manufacturing practices.

         1.11 The term "IND" or "Investigational New Drug Application" means an
application as defined in the United States Food, Drug and Cosmetic Act and
applicable regulations promulgated thereunder to the FDA or the equivalent
application to the equivalent agency in any other country or group of countries,
the filing of which is necessary to commence clinical testing of products in
humans. For purposes of this Agreement it shall also include IDE's
(Investigational Device Exemptions).

         1.12 The term "Improvements" means and includes any and all patentable
or non-patentable additions, alterations, modifications, design changes, and
other improvements to the SDC Core Technology and any derivative products, which
are SDC Healthcare Product(s) and individually or jointly developed by
INNOVATIVE, THERAPEUTICS, or any Third Party at any time during the term of this
Agreement, regardless of whether or not INNOVATIVE owns or holds any proprietary
rights therein or thereto.

         1.13 The term "INNOVATIVE Patent Rights" means and includes all rights
under United States Patent No. 6,197,814, issued 6 March 2001, United States
Patent No. 6,583,176, issued 24 June 2003, as transferred to INNOVATIVE pursuant
to that certain Core Settlement Agreement dated 15 November 2001, and all other
patent rights, issued or pending, related in any way to Axenohl(R) or Axen(R) or
any Improvements thereto that were acquired and/or developed prior to the
Effective Date of this Agreement by INNOVATIVE, or any Affiliate of INNOVATIVE.
The term "INNOVATIVE Patent Rights" further means and includes (a) all patent
applications filed heretofore or hereafter during the term of this Agreement in
any country by INNOVATIVE or any Affiliate of INNOVATIVE, together with any and
all United States and foreign patents that have issued or in the future will
issue therefrom, and (b) all divisionals, continuations, continuations-in-part,
reexaminations, reissues, renewals, substitutions, confirmations, registrations,
revalidations, extensions or additions to any such patents and patent
applications and patents issuing thereon; all to the extent and only to the
extent that INNOVATIVE or any Affiliate of INNOVATIVE now has or hereafter will
have the right to grant licenses or other rights thereunder. INNOVATIVE Patent
Rights as of the Effective Date are set forth as Exhibit A to this Agreement and
such Exhibit shall be updated on an annual basis.

         1.14 The term "INNOVATIVE Know-How" means all proprietary inventions,
technology, trade secrets, clinical and pre-clinical results, data, materials,
compounds, know-how, methods, documents, tests, confidential information and
physical, chemical or biological material, or other information, excluding
INNOVATIVE Patent Rights, owned or acquired with right to sublicense during the
term of this Agreement by INNOVATIVE or any Affiliate of INNOVATIVE that are
necessary or useful to the Parties

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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in the development, formulation, manufacture, use or sale of SDC Product(s)
contemplated herein.

         1.15 The term "THERAPEUTICS Know-How" means all proprietary inventions,
technology, trade secrets, clinical and pre-clinical results, materials,
compounds, knowhow, methods, documents, tests, confidential information and
physical, chemical or biological material and formulations thereof, procedures,
techniques or other information developed, owned or acquired with right to
sublicense during the term of this Agreement by THERAPEUTICS or any Affiliate of
THERAPEUTICS that are necessary or useful to the Parties in the development,
formulation, manufacture, use or sale of SDC Product(s) contemplated herein.

         1.16 The term "NDA" or "New Drug Application" means an application as
defined in the United States Food, Drug and Cosmetic Act and applicable
regulations promulgated thereunder to the FDA or the equivalent application to
the equivalent agency in any other country or group of countries, the filing of
which is necessary to achieve approval upon which one may commence sales and
distribution. For purposes of this Agreement, NDA shall include ANDA's
(Abbreviated New Drug Applications), NADA's (New Animal Drug Applications),
PMA's (Pre-Market Approvals), 510K's, supplements or other regulatory
submissions or regulatory compliance to be marketed.

         1.17 The term "Party" means INNOVATIVE or THERAPEUTICS and, when used
in the plural, shall mean INNOVATIVE and THERAPEUTICS.

         1.18 The term "Partnered Transaction(s)" means any agreement or
transaction entered into with any Third Party either by (a) licensing an SDC
Product(s) for its continued development, production, commercialization and/or
marketing; or by (b) the sale of an SDC Product(s) developed pursuant to this
Agreement.

         1.19 The term "Partnered Transaction(s) Proceeds" means any cash or
noncash proceeds derived from or obtained through any Partnered Transaction.

         1.20 The term "Partnering Costs" means any EMC-approved cost or expense
incurred by either Party in the negotiation and documentation of a Partnered
Transaction.

         1.21 The term "Phase I Clinical Trial" means the initial introduction,
through clinical studies, of an investigational new drug into humans, designed
to determine the metabolic and pharmacologic actions of the drug in humans, the
side effects associated with increasing doses, and, if possible, to gain early
evidence on effectiveness, which if successful will permit the design of a
well-controlled, scientifically valid Phase II Clinical Trial.

         1.21 The term "Phase II Clinical Trial" means early well-controlled,
closely monitored clinical studies conducted to obtain some preliminary data on
the effectiveness of the drug for a particular indication or indications in
patients with the disease or condition, including common short-term side effects
and risks associated

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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with the use of the drug, which if successful will permit the design of a
well-controlled, scientifically valid Phase III Clinical Trial.

         1.22 The term "Phase III Clinical Trial" means any clinical studies or
trials primarily designed to serve as a pivotal, well-controlled study upon
which approval of an NDA will be based, including such a study referred to or
denominated as a "Phase III Study" in the United States or the equivalent
elsewhere.

         1.23 The term "Proprietary Information" means, subject to the
limitations set forth in Section 12.1 hereof, all information disclosed by a
Party hereto to the other Party pursuant to this Agreement. In particular,
Proprietary Information shall be deemed to include, but is not limited to,
information relating to research and development programs and results,
therapeutic candidates and products, clinical and pre-clinical data, trade
secrets, business strategy, patent applications, licenses, suppliers,
manufacturers, product and marketing strategy, customers, market data, personnel
and consultants.

         1.24 The term "Research and Development Program" or "research and
development program" as used herein means any and all research and development
activities deemed necessary and appropriate by the EMC from time to time for the
development of SDC Product(s), and as more fully set forth in the Development
Plan and Technology Development Plan, attached hereto as Exhibit B.

         1.25 The term "SDC Core Technology" means all Axenohl(R) and Axen(R)
product rights, the supporting ionic silver technology, which includes silver
dihydrogen citrate ("SDC"), SDC + ETOH, other related silver compounds, and the
entire related intellectual property portfolio, including INNOVATIVE Patent
Rights and INNOVATIVE Know-How, and any and all Improvements made during the
Term of this Agreement.

         1.26 The term "SDC Healthcare Product(s)" means any product requiring a
prescription or authorization by a licensed healthcare practitioner (including
but not limited to a physician, dentist, or veterinarian), including but not
limited to drugs, devices, sterilants (e.g., surgical scrub, instrument cleaning
products exclusive of hard surface disinfectants) or diagnostics, utilizing the
SDC Core Technology or Improvements, or future enhancements or additions to the
technology, having application in the medical, pharmaceutical, or dental
categories of human health and/or animal health and that is supported by an IND
("Investigational New Drug Application"), an NDA ("New Drug Application"), an
ANDA ("Abbreviated New Drug Application"), a NADA ("New Animal Drug
Application"), a PMA ("Pre-Market Approval"), an IDE ("Investigational Device
Exemption"), a 510K, a supplement or other regulatory submission, or that
requires regulatory compliance in order to be marketed.

         1.27 The term "SDC Personal Care Product(s)" means any non-prescription
consumer product utilized for health, beauty, dental, veterinary or other
similar needs and utilizes the SDC Core Technology or Improvements, future
enhancements or additions to the technology and that may require little or no
product clinical testing to establish a claim. Also, included in this category
are products for which no specific

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CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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cosmetic or clinical claim may be pursued, which utilize low concentrations of
SDC Core Technology for preservative or other "non-claim" usage, even though the
SDC Core Technology may confer a beneficial effect.

         1.28 The term "SDC Product(s)" or "Product(s)" means any SDC Healthcare
Product(s) or any SDC Personal Care Product(s) developed through the
collaborative efforts of the Parties pursuant to this Agreement. For the
purposes of this Agreement, the definition of an individual Product shall also
mean each indication for which a formulation is being Developed.

         1.29 The term "SDC Product Categorization," "Product Categorization" or
"Categorization" means the step-by-step process by which the EMC will evaluate
each potential SDC Product identified and evaluated by THERAPEUTICS in order to
determine its proper categorical designation, e.g., Category I, II or III, as
defined in Section 3.1. The SDC Product Categorization process is set forth in a
Product Category Decision Chart, which is attached hereto as Exhibit C.

         1.30 The term "Technology Development Plan" means the plan by which
INNOVATIVE will maintain and expand the SDC Core Technology and INNOVATIVE
Patent Rights including all Improvements, as necessary and needed to perform the
Parties' obligations under this Agreement and to support the Development of the
EMC approved Products. The initial Technology Development Plan including the
initial Budget reflecting the mutual objectives of the Parties with respect to
the research to be carried out by INNOVATIVE to expand the SDC Core Technology
shall contain sufficient detail to enable THERAPEUTICS to understand the overall
goals and objectives and shall include time and event schedules for expansion of
the SDC Core Technology, including evaluation of all appropriate organic acids,
a patent filing plan, a plan to formally assess and evaluate the current SDC
Core Technology Patent portfolio and the plans to expand the portfolio.

         1.31 The term "Territory" as used herein shall mean the entire world.

         1.32 The term "Third Party" as used herein shall mean any person or
entity other than INNOVATIVE, THERAPEUTICS, an Affiliate of either Party, or any
officer or director of either Party.

     SECTION 2.0  GRANT OF LICENSE RIGHTS

         2.1 Grant of License. Subject to the terms of this Agreement and
subject to payment of the "Initial Licensing Fee" in Section 5.1 herein,
INNOVATIVE hereby grants to THERAPEUTICS an exclusive, worldwide license,
without the right to sublicense, of INNOVATIVE Patent Rights and INNOVATIVE
Know-How, limited solely for research and development purposes for the
collaborative investigation and development of SDC Product(s), as contemplated
herein. THERAPEUTICS agrees and warrants that, subject to Section 2.3 of this
Agreement, INNOVATIVE Patent Rights and INNOVATIVE Know-How will not be used by
THERAPEUTICS for any other purpose.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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         2.2 Disclosure of INNOVATIVE Know-How. Within thirty (30) days of the
Effective Date and subject to payment of the "Initial Licensing Fee" in Section
5.1 herein, and throug h the term of this Agreement, INNOVATIVE shall make
available to THERAPEUTICS, subject to the terms of this Agreement, all
INNOVATIVE Know-How.

         2.3 Grant of Future Licenses and Sublicensing Rights. Upon (a)
identification of a potential SDC Product(s), (b) SDC Product Categorization
pursuant to Section 1.29, and (c) adoption of a Development Plan for such SDC
Product(s), reviewed and approved by the EMC, on a product-by-product basis,
INNOVATIVE shall grant, to THERAPEUTICS such "product specific" world-wide
license, or licenses, necessary and required for the continued development,
production, out-licensing, commercialization and marketing, or sale of any such
SDC Product(s) developed pursuant to this Agreement, and the Parties shall enter
into a "product specific" license agreement for such SDC Product(s) in the form
attached hereto as Exhibit E. The "product specific" transfer of technology and
license to THERAPEUTICS refers to a specific Product and includes rights to all
(1) dosage forms, (2) concentrations, (3) related indications or uses and (4)
all types of SDC Core Technology and Improvements predating or conceived during
the Term of the Agreement. Pursuant to such "product specific" licensing,
THERAPEUTICS shall have the right to sublicense the rights granted under the
"product specific" license to Third Parties. If THERAPEUTICS grants a sublicense
to a Third Party, all of the terms and conditions of the "product specific"
license agreement of Exhibit E shall apply to the sublicensee to the same extent
as they apply to THERAPEUTICS.

         2.4 Termination And Reversion Of Non-Utilized Patent Rights. In the
event THERAPEUTICS fails to meet the minimum performance standards set forth in
Section 3.7 within two (2) years from the date of the payment of the Initial
Licensing Fee as required under Section 5.1 of this Agreement, all licensing
rights under Section 2.1 to INNOVATIVE Patent Rights and INNOVATIVE Know-How not
utilized in the development of an SDC Product shall revert to INNOVATIVE and be
automatically terminated. Termination and reversion, as set forth in this
Section 2.4, shall not apply to any and all INNOVATIVE Patent Rights and
INNOVATIVE Know-How being actively utilized in any SDC Product(s) under
Development under this Agreement and approved by the EMC regarding its
out-licensing or sale as a Product.

     SECTION 3.0 PRODUCTS, PRODUCT DEVELOPMENT AND REGULATORY AFFAIRS

         3.1 Products, Product Categories And Product Categorization. Pursuant
to the Development Plan, the Parties shall collaborate in the evaluation,
identification, development and commercialization either through the sale and/or
licensing of SDC Product(s) in the medical, dental and/or veterinary fields for
human or animal health, exclusive of food, water or any product(s) requiring
principally Environmental Protection Agency ("EPA") review and approval. Upon
evaluation of a potential SDC Product(s), SDC Product Categorization, as
described in Section 1.29, shall be carried out by the EMC. The SDC Product(s)
Developed pursuant to the terms of this Agreement shall consist solely of the
following categories of products:

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CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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                  (a) Category I Products. All SDC Healthcare Products,
primarily topical in nature, requiring (i) an Agency approval or compliance, and
(ii) a medical, dental or veterinary healthcare provider's prescription,
authorization , approval or action prior to their dispensation or utilization;
that will be actively developed by THERAPEUTICS pursuant to the terms of this
Agreement.

                  b) Category II Products. All SDC Healthcare Products,
requiring (i) an Agency approval or compliance, and (ii) a medical, dental or
veterinary healthcare provider's prescription, authorization, approval or action
prior to their dispensation or utilization; that will be "licensed or
sublicensed" under the terms of this Agreement or sold directly to a Third Party
for continued development and commercialization, with little or no prior
research and development conducted by the Parties.

                  (c) Category III Products. All SDC OTC (over the counter) and
SDC Personal Care Products.

         3.2 Executive Management Committee.

                  (a) Executive Management Committee Membership and Governance.
The Parties shall establish an Executive Management Committee ["EMC"] to provide
strategic, technical and commercial guidance to their collaborative efforts and
to provide overall coordination of the activities of the Parties with respect to
each SDC Product(s) and implement the initial Development Plan and Technology
Development Plan, all subsequent amendments and revisions thereto and the
initial Budgets and all subsequent amendments and revisions thereto. As a
foundational principle, all EMC decisions shall be oriented to maximizing the
success of the Parties' overall collaborative efforts and their realization of
the highest achievable value of any SDC Product(s) developed hereunder. As a
second foundational principle, all EMC decisions shall be by unanimous consent
of the committee members and if the committee is unable to reach unanimous
consent on any given issue, then as to that issue the decision will be made on a
Category-by-Category basis in favor of the Party set forth in Section 3.2(b)
below. The EMC, in turn, may establish such working groups or other mechanisms
as it desires to achieve this result. The EMC shall consist of an equal number
of employee representatives of each Party, which shall be at least two (2). The
size of the EMC may be changed by the mutual agreement of the Parties. Within
ten (10) days after the Effective Date, each Party shall select its initial
members of the EMC. Each Party may select additional employee representatives to
replace the initial EMC members selected by such Party as necessary during the
term of the Agreement, and may have other representatives attend meetings of the
EMC in addition to the members of the committee. Any EMC members selected by one
Party shall be subject to the reasonable approval of the other Party. The
Chairperson of the EMC shall be a representative of THERAPEUTICS. The
Chairperson of the EMC shall be responsible for providing an agenda for each
meeting of the committee at least ten (10) days in advance of such meeting and
shall prepare written minutes of all committee meetings in reasonable detail.
The Chairperson shall distribute such minutes to all members of the EMC within
twenty (20) days after the relevant meeting. The EMC shall have the authority to
make changes to these governance procedures from time to time

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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as it deems warranted provided that all members of the EMC concur. The EMC shall
attempt to operate by unanimous approval. With the exception of issues outlined
in Section 3.2(b) below, in the event that the EMC is unable to resolve any
issues by unanimous consent, such issues shall be submitted for resolution
pursuant to Section 11.0 below.

                  (b) EMC Meetings And Responsibilities. The EMC shall meet at
least once each quarter i.e. four (4) times per year during the term of this
Agreement. Each Party may request additional meetings as reasonably required.
The EMC shall be responsible for overseeing and monitoring the implementation of
the Development Plan, the Technology Development Plan, intellectual property
maintenance, intellectual property expansion plans, Budgets and all development,
partnering, commercialization plans. The EMC shall determine the Categorization
of all potential SDC Product(s), determine a suitable development program for
each SDC Product and will review and approve all Budgets pursuant to Section
3.4. The EMC shall also monitor the allocation of research and development work
between the Parties and shall recommend changes as necessary. The Parties shall
report to the EMC on all significant clinical, regulatory and intellectual
property issues relating to SDC Product(s), and the EMC shall make
recommendations and provide strategic guidance with respect to such issues. In
the event that any disputes arise in any way relating to the foregoing functions
of the EMC related to Category I, II or III SDC Product(s), their performance
criteria, Third Party sale or Third Party licensing terms and conditions or any
other Product related issue before the EMC that can not be resolved by the EMC,
the issue will be resolved on a Category-by-Category basis in favor of the Party
designated below:

                    Category I and II         THERAPEUTICS

                    Category III              INNOVATIVE

     3.3 Staging, Research/Clinical Development and Regulatory Filings.

         (a) Staging of Development Efforts. Prior to the commencement of any
research and development program of any SDC Product(s), THERAPEUTICS, on a Best
Efforts basis, shall evaluate the SDC Core Technology and explore various
alternative uses in order to determine what it believes to be the potential
commercially reasonable development of viable SDC Product(s). Upon
identification of what it believes to be a potentially viable SDC Product(s) and
completion of its Categorization by the EMC, the Party bearing the primary
responsibility for the conduct and execution of the research and development
activities for said SDC Product(s) shall commence the research and development
activities reviewed and approved by the EMC.

         (b) Clinical Development. Utilizing commercially reasonable efforts,
the collaborative research and clinical development program will follow the most
efficient path to achieve registration of Categories I, II, IIIA and IIIB SDC
Product(s) with THERAPEUTICS bearing the primary and significant role in the
conduct and execution of the research and clinical development activities for
Categories I, II, IIIA and IIIB SDC Product(s), while INNOVATIVE will bear
similar responsibilities for all Categories IIIC and IIID SDC Product(s). The
Parties further agree to fully cooperate as necessary to support the programs
undertaken under this Agreement and freely acknowledge that the distribution of
responsibility may be adjusted and changed from time to time by unanimous
decision of the EMC.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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         (c) Regulatory Filings. With regard to Category I and Category II SDC
Product(s) and after review and approval by the EMC, THERAPEUTICS shall cause to
prepare and file in its own name as "sponsor" any and all INDs and NDAs,
including ANDAs, NADAs, PMAs, IDEs ("Investigational Device Exemptions"), 510Ks,
and supplements or other regulatory submissions (collectively the "Regulatory
Filings") for SDC Product(s) requiring Agency or regulatory compliance in the
United States. The EMC has the right to review and approve all regulatory
submissions, but is required to do so in a timely manner with approval not being
unreasonably withheld. A single representative of INNOVATIVE has the right to
attend any and all FDA meetings (as an observer only), subject to THERAPEUTICS
approval and said approval will not be unreasonably withheld.

         (d) Diligence. In their respective capacities and in regard to the
respective Category types, THERAPEUTICS and INNOVATIVE, on a Best Efforts basis,
will each diligently carry out the research and development of SDC Product(s) as
provided in this Section 3.3. Without limitation of the foregoing, such efforts
shall include the assignment of appropriate personnel and the allocation of
sufficient resources to carry out such Party's responsibilities under the
Development Plan and the research and development program.

         (e) Adverse Reactions. THERAPEUTICS shall be responsible for reporting
to the appropriate regulatory authorities any and all adverse events related to
the use of any Category I and Category II SDC Product(s), while INNOVATIVE shall
bear said responsibility for all Category III SDC Product(s). Adverse events
related to the use of any SDC Product(s) shall be recorded in a single database,
maintained by THERAPEUTICS and the Parties will coordinate their efforts to
assure that all adverse events are properly reported INNOVATIVE will report all
adverse events to THERAPEUTICS within 5 days of notification regardless of the
Category of the Product.

         In the event of termination or breach, or for any other reason
THERAPEUTICS transfers its ownership of any Regulatory Filings for any SDC
Product(s) to INNOVATIVE, INNOVATIVE shall assume and become responsible for the
reporting of adverse events for any Category I and Category II SDC Product(s).

         3.4 Budgets. It is agreed between the Parties that, as of the Effective
Date, both THERAPEUTICS and INNOVATIVE, as part of the Development Plan and
Technology Development Plan will have submitted its initial proposed Budgets for
its activities under this Agreement (a copy of which is attached hereto as
Exhibit B). All future projected Budgets for the budgetary periods determined by
the EMC relating to all future research and development activities of each and
every SDC Product(s) developed under this Agreement, and work proscribed by the
Technology Development Plan will be submitted to the EMC for its review and
approval. Said Budgets shall

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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include projected costs for THERAPEUTICS' internal and external research and
development efforts as well as INNOVATIVE's proposed activities under the
Development Plan and Technology Development Plan. In the event that either Party
determines that its efforts and activities will result in a budget overrun in
excess of ten (10.0%), such Party will immediately notify the EMC thereof.
Budgets in excess of 10% must receive EMC approval to be eligible for
reimbursement per Section 3.6. Budget overruns may include line items not
previously included in an approved Budget. These new items must be approved by
the EMC to be eligible for reimbursement. Approval cannot be withheld for new
items requested by the Agency, directly or indirectly, for a Product.

         3.5 Reports. To the degree applicable, THERAPEUTICS shall provide
monthly reports to INNOVATIVE, as follows: (i) concerning its past and
contemplated research and development efforts and activities relating to all SDC
Product(s), including all technical, scientific and clinical progress; and (ii)
concerning its past and contemplated efforts and activities in locating,
identifying and pursuing potential Third Party purchasers or licensees with the
requisite capital and funding capabilities for an FDA-mandated clinical testing
phase and the maximization of the commercial potential of the identified SDC
Product(s). In particular, such reports as warranted shall include specific
budgets, timetables and time and events schedules for activities in the research
and development of the SDC Product(s), the potential marketing and positioning
of the SDC Product(s), competitive issues and THERAPEUTICS' primary sales and
marketing objectives with respect to "partnering" of the SDC Product(s) on a
worldwide basis with an emphasis on the United States.

         To the degree applicable, INNOVATIVE shall provide monthly reports to
THERAPEUTICS, as follows: (i) concerning its past and contemplated research and
development efforts and activities relating to all improvements and its progress
with Category III Products, including all technical, scientific and clinical
progress; and (ii) concerning its past and contemplated efforts and activities
in locating, identifying and pursuing potential Third Party purchasers or
licensees with the requisite capital and funding capabilities for any required
testing and the maximization of the commercial potential of the identified
Category III SDC Product(s) and (iv) a patent update regarding efforts to
strengthen and broaden the SDC Core Technology and Improvements (Technology
Development Plan) In particular, such reports as warranted shall include patent
application updates and/or pending applications, specific budgets, timetables
and time and events schedules for past and contemplated activities in the
research and development of the SDC Product(s), the potential marketing and
positioning of the SDC Product(s), competitive issues and INNOVATIVES' primary
sales and marketing objectives with respect to "partnering" of the SDC
Product(s) on a worldwide basis with an emphasis on the United States.

         3.6 Development Costs And Reimbursement.

                  (a) General. THERAPEUTICS shall pay, on a current basis, all
research and development expenses, both internal and external, in carrying out
its responsibilities as set forth in the Development Plan, for Category I, II
and those

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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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Category III SDC Product(s) categorized by the FDA as OTC drug products (Exhibit
B as 3A and 3B). INNOVATIVE shall pay, on a current basis, any and all research
and development expenses for Category III SDC Product(s) both internal and
external, exclusive of products categorized by the FDA as OTC drug products, as
well as ongoing intellectual property maintenance expenses in carrying out its
responsibilities as set forth in the Technology Development Plan, as modified
from time to time by the EMC.

         The Parties will be reimbursed for all EMC approved expenses from funds
derived from Partnered Transactions described below and further detailed in
Exhibit D.

                  (b) Reimbursement Of THERAPEUTICS Research/Development Costs
And Expenses And Partnering Costs. Upon the sale or licensing to a Third Party
of any Category I, II or III SDC Product(s) developed pursuant to this Agreement
and, to the degree funds are available from the Partnered Transaction(s),
THERAPEUTICS shall be entitled to reimbursement for all Development Costs and
its time, expenses and legal fees directly related to partnering activities
involved in the sale or license of each Product incurred pursuant to the
Development Plan and as more fully set forth in the Reimbursement Schedule
contained in Exhibit D attached hereto. Reimbursement for EMC approved expenses
will be made from the proceeds of Partnered Transactions for the Product(s) for
which the expenses were incurred.

         The Parties acknowledge that THERAPEUTICS will incur certain
non-Product specific pre-clinical expenses that support multiple Products. The
Parties agree that THERAPEUTICS shall be entitled to reimbursement of such
non-Product specific preclinical expenses from the proceeds of the first three
(3) Category I, II and those Category III SDC Product(s) categorized by the FDA
as OTC drug products (Exhibit B as 3A and 3B) Partnered Transactions, with the
total amount of such non-Product specific pre-clinical expenses allocated
equally across the three Partnered Transactions.

         (c) Reimbursement Of INNOVATIVE's Acquisition Costs, Prior
Research/Development Costs And Expenses, On-Going Maintenance Expenses And
Partnering Costs. The Parties acknowledge that, prior to the Effective Date,
INNOVATIVE has incurred costs and expenses in excess of $2,200,000.00. Upon the
sale or licensing to a Third Party of Category I, II or III SDC Product(s)
developed pursuant to this Agreement and, to the degree funds are available from
the Partnered Transaction(s), INNOVATIVE shall be entitled to reimbursement in
the mutually agreed-upon amount of $2,200,000.00 for costs and expenses incurred
prior to the Effective Date. One fourth (i.e., $550,000) of the aforementioned
$2,200,000.00 reimbursement due INNOVATIVE will be allocated to and recovered
from the proceeds of each of the first four (4) SDC Product Partnering
Transactions regardless of the Category of the SDC Product.

         INNOVATIVE shall be reimbursed for Development Costs, 50% of the costs
directly related to maintenance and expansion of the SDC Core Technology and
100% of the ongoing intellectual property costs for new medical, dental or
veterinary indications directly related to the SDC Products and incurred after
the Effective Date

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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pursuant to the Development Plan and as more fully set forth in the
Reimbursement Schedule contained in Exhibit D attached hereto. Such
reimbursement for EMC approved expenses will be made from the proceeds of
Partnered Transactions for the Product(s) for which the expenses were incurred.

         3.7 Minimum Development Performance Standard. If, regardless of whether
THERAPEUTICS exercises its Best Efforts, within two (2) years from the date of
payment of the Initial Licensing Fee as required by Section 5.1 of this
Agreement at least five (5) SDC Products reviewed and approved by the EMC, in
any combination of Category I or II products, with not less than two in either
Category I or II, are not under Development under the terms of this Agreement,
then the Parties agree that this Agreement shall be automatically terminated and
the licensing rights granted by INNOVATIVE to THERAPEUTICS under Section 2.1
shall terminate and revert to INNOVATIVE; provided, however, that any SDC
Product(s) under Development and all licenses and sublicenses related to the
continued development of those SDC Product(s) shall remain unaffected by
termination under this Section 3.7 and the terms of this Agreement shall remain
in full force and effect for the continued Development of those SDC Product(s).
Upon termination under this Section 3.7, INNOVATIVE shall be entitled to proceed
with the development of any Product(s) in the medical, dental and/or veterinary
fields for human or animal health, in any way it sees fit; provided however,
that INNOVATIVE shall not engage in the development and/or production of any
Product(s) that is competitive with the continued Development of an SDC
Product(s) under the terms of this Agreement and those Products that are the
subject of active Third Party substantive discussions regarding its licensing or
sale.

         SECTION 4.0                DUTIES AND RESPONSIBILITIES

         4.1 THERAPEUTICS' Duties and Responsibilities. With regard to Category
I, II and III Products, on a Best Efforts basis, THERAPEUTICS shall provide:

                  (a) Research and Development Program. Based upon its expertise
and on a commercially reasonable basis exercising its Best Efforts, THERAPEUTICS
will establish an integrated Development Plan for the implementation of research
and development programs for each SDC Product(s) evaluated and identified under
Section 3.3(a) that, in its exercise of sound business judgment, it deems worth
pursuing. The Development Plan, with mutually agreed upon performance standards
and criteria, including time and event scheduling, will identify potential SDC
Healthcare Product candidates, under Categories I and II, as set forth in
Section 3.0, for development by either THERAPEUTICS or a Third Party(s).
THERAPEUTICS shall collaborate and assist INNOVATIVE in identifying Category III
SDC Product candidates. Upon evaluation and identification and SDC Product
Categorization and approval by the EMC, THERAPEUTICS will conduct all product
development, as more fully set forth in Section 3.0 hereof and bear full
responsibility for all technical, scientific and clinical studies associated
with the research and development of all Category I and II SDC Product(s) and
those Category III SDC Product(s) categorized by the FDA as OTC drug products
(Exhibit B as 3A and 3B).

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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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                   (b) Identification and Solicitation of Third Party Purchasers
for SDC Product(s). THERAPEUTICS shall use Best Efforts to identify and solicit
potential Third Party purchasers for sale of any Category I or Category II SDC
Product(s) and, will support, as appropriate INNOVATIVE'S efforts to arrange
sale of a Category III SDC Product(s). THERAPEUTICS will negotiate deal terms
for sale of Category I and II Product(s) to the Third Party(s) and present such
term sheet(s) to EMC for review and approval prior to execution. In most cases,
it is anticipated that such a transaction will occur on or before the completion
of a Phase II Clinical Trial or the equivalent for a given Product.

                  (c) Identification and Solicitation of Third Party Licensees
for SDC Product(s). On a Best Efforts basis, THERAPEUTICS shall identify and
solicit potential Third Party licensees for Partnered Transaction(s) for all
Category I and II SDC Products. THERAPEUTICS will negotiate deal terms for
licensing Category I and II Product(s) to Third Party(s) and present term
sheet(s) to EMC for review and approval prior to execution. In most cases, it is
anticipated that such a transaction will occur on or before the completion of a
Phase II Clinical Trial or the equivalent for a given Product.

         4.2 INNOVATIVE's Duties and Responsibilities. In addition to licensing
its SDC Core Technology pursuant to the terms of this Agreement, as set forth in
Section 2.1 hereof, and with regard to Categories I, II and III Products,
INNOVATIVE shall provide the following:

                  (a) Maintenance and Expansion of SDC Core Technology. On a
Best Efforts basis, INNOVATIVE shall maintain its SDC Core Technology, all
related patents and pending patents and continue to expand the SDC Core
Technology and intellectual property opportunities related to Improvements as is
deemed necessary, reasonable and appropriate in light of the SDC Product
development activities outlined in this Agreement and approved by the EMC and
described in the Technology Development Plan.

                  (b) Research and Development Program. Utilizing its Best
Efforts and with the assistance of THERAPEUTICS, INNOVATIVE will establish an
integrated Development Plan for the implementation of research and development
programs for all Category III SDC Product(s) evaluated and identified under
Section 3.3(a) that, in its exercise of sound business judgment, it deems worth
pursuing. The Development Plan, with mutually agreed-upon performance standards
and criteria, including time and event scheduling, will identify potential SDC
Personal Care candidates under Category III, as set forth in Section 3.0, for
development and THERAPEUTICS shall collaborate and assist INNOVATIVE in
identifying Category III SDC Product candidates. Upon evaluation, identification
and approval by the EMC of such Category III SDC products, INNOVATIVE will
conduct or have conducted all product development, as more fully set forth in
Section 3.0 hereof and bear full responsibility for all studies associated with
the research and development of all Category III SDC Product(s) exclusive of
products categorized by the FDA as OTC drug products The product development of
the aforementioned OTC products is the responsibility of THERAPEUTICS.

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                  (c) Identification and Solicitation of Third Party Purchasers
for SDC Product(s). On a Best Efforts basis, INNOVATIVE shall identify and
solicit potential Third Party purchasers for sale of Category III SDC
Product(s). INNOVATIVE will negotiate terms for sale of Category III Products to
Third Party(s) and present such term sheet to EMC for review and approval prior
to execution. In most cases, it is anticipated that such a transaction will
occur on or before the completion of a Phase II Clinical Trial or the equivalent
for a given Product.

                  (d) Identification and Solicitation of Third Party Licensees
for SDC Products. On a Best Efforts basis, INNOVATIVE shall identify and solicit
potential Third Party licensees of any Category III SDC Product(s) and, will
support, as appropriate THERAPEUTICS' efforts to arrange sale of a Category I
and II SDC Product(s). INNOVATIVE will negotiate terms for licensing Category
III Products to Third Party(s) and present such term sheet to EMC for review and
approval prior to execution. In most cases, it is anticipated that such a
transaction will occur on or before the completion of a Phase II Clinical Trial
or the equivalent for a given Product.

                  (e) Pre-Commercial Manufacturing of Drug Substance. INNOVATIVE
shall by January 1, 2004 produce and provide at no cost to THERAPEUTICS,
cGMP-quality, active pharmaceutical ingredient (SDC drug substance) based upon
SDC Core Technology or Improvements for incorporation into investigational SDC
Healthcare Products, use in all of the formulation development activities,
pre-clinical and clinical studies and trials for all Category I,II and III SDC
Product(s) conducted by or under the direction of THERAPEUTICS or any Licensee
of the SDC Products. INNOVATIVE will provide the SDC (Raw Material) drug
substance in timely and sufficient manner to support forecasted development
demands. In the event that INNOVATIVE is unable to provide the SDC drug
substance in a timely and sufficient manner to support forecasted commercial
demands, THERAPEUTICS shall have the right to manufacture or have manufactured
any SDC drug substance or Improvements required for the Development of SDC
Products that are in Development or necessary to meet the defined commercial
needs and INNOVATIVE shall fully cooperate with the transfer of manufacturing
capability to a Third Party specified by THERAPEUTICS in a timely manner.

                  (f) Commercial Manufacturing of Drug Substance. INNOVATIVE
shall be solely and exclusively responsible for the commercial manufacture of
any SDC bulk drug substance either itself or through approved Third Parties and
prior to commencement thereof, shall establish a fully compliant cGMP
manufacturing facility to produce all SDC (Raw Material) drug substance meeting
all Agency and/or FDA specifications for utilization in all SDC Healthcare and
Personal Care Product(s). INNOVATIVE shall demonstrate its ability to meet these
requirements not less than twelve (12) months prior to the first scheduled
Category I, II or III Product "NDA" submission. but not sooner than January 1,
2004. INNOVATIVE will provide cGMPcompliant SDC drug substance material for
incorporation into all Category I, II or III SDC Products subject to this
Agreement at a cost not to exceed any competitive bid from a qualified Third
Party manufacturer. In the event that INNOVATIVE is unable to provide the SDC
drug substance in a timely and sufficient manner to support forecasted

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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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commercial demands, THERAPEUTICS shall have the right to manufacture or have
manufactured any SDC drug substance or Improvements required for the Development
of SDC Products that are in Development or necessary to meet the defined
commercial needs and INNOVATIVE shall fully cooperate with the transfer of
manufacturing capability to a Third Party specified by THERAPEUTICS in a timely
manner.

     SECTION 5.0 LICENSING FEES, MILESTONE PAYMENTS AND THIRD PARTY SALES AND/OR
                 LICENSING TRANSACTIONS

         5.1 Initial Licensing Fee. As consideration for the rights conveyed by
INNOVATIVE to THERAPEUTICS under this Agreement, THERAPEUTICS shall pay to
INNOVATIVE a licensing fee of TWENTY-FIVE THOUSAND Dollars ($25,000.00) (the
"Initial Licensing Fee") on or before October 15, 2003.

         5.2 Milestone Payments. In addition to the Initial Licensing Fee,
THERAPEUTICS shall also pay to INNOVATIVE the following nonrefundable and
non-creditable amounts: Payment of [CONFIDENTIAL TREATMENT OF THIS ITEM IS
REQUESTED] is payable within ten (10) days after achievement of milestone ("a")
set forth below and Payment of [CONFIDENTIAL TREATMENT OF THIS ITEM IS
REQUESTED] is payable upon receipt of a Third Party payment, if any, related to
milestone ("b") set forth below for the FIRST Category I Product developed
pursuant to this Agreement:

     (a)  [CONFIDENTIAL TREATMENT OF       Upon successful completion
           THIS SECTION IS REQUESTED]      of the first human
                                           Proof-of-Concept ("POC")
                                           Study with results warranting
                                           Phase III testing for a
                                           Category I or II Product

          And

     (b)  [CONFIDENTIAL TREATMENT OF        Either upon sale of a
           THIS SECTION IS REQUESTED]       Category I SDC Product(s)
                                            to a Third Party, or upon
                                            execution of definitive
                                            agreement with Third
                                            Party Licensee of a
                                            Category I SDC Product(s)

         5.3 Sale Or Licensing To Third Party Of SDC Healthcare and Personal
Care Product(s). Upon successful identification and negotiations with a
potential Third Party purchaser or licensee(s) for any Category I, II or III SDC
Product(s), INNOVATIVE or THERAPEUTICS, through the EMC, will enter into sale,
licensing and sublicensing agreements as defined in Section 4.0.

         5.4 Third Party Sale Proceeds, Licensing Fees And Royalty Payments. All
Partnered Transaction Proceeds (including, Third Party sales proceeds, licensing
fees, royalty payments and any and all forms of cash and non-cash consideration)
shall be paid directly to INNOVATIVE and THERAPEUTICS, according to their
respective pro rata share, as set forth below.

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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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     (a)  Category I Product(s) [CONFIDENTIAL TREATMENT OF THIS ITEM IS
          REQUESTED] to THERAPEUTICS [CONFIDENTIAL TREATMENT OF THIS ITEM IS
          REQUESTED to INNOVATIVE

     (b)  Category II Product(s) [CONFIDENTIAL TREATMENT OF THIS ITEM IS
          REQUESTED to INNOVATIVE [CONFIDENTIAL TREATMENT OF THIS ITEM IS
          REQUESTED to THERAPEUTICS

     (c)  Category III Product(s) [CONFIDENTIAL TREATMENT OF THIS ITEM IS
          REQUESTED to INNOVATIVE [CONFIDENTIAL TREATMENT OF THIS ITEM IS
          REQUESTED to THERAPEUTICS (the exact percentage to be determined by
          reference to Exhibit "C" -Product Category III Sub-Categorization)

Upon the Parties receipt of their respective share of any "Partnered Transaction
Proceeds" as referenced in this Section, the Parties will comply with the
reimbursement procedures set forth in Exhibit "D" attached hereto .

         SECTION 6.0 RECORDS, REPORTS, AUDIT AND INSPECTION RIGHTS

         6.1 Reports. On a quarterly basis, within thirty (30) days after the
close of each fiscal quarter, THERAPEUTICS and INNOVATIVE will provide to the
EMC and each other, if requested, regular written reports, fully documenting and
specifically outlining all research and development and partnering costs
incurred for the past quarter, pursuant to the Development Plan approved by the
EMC.

         6.2 Maintenance of Records. Both INNOVATIVE and THERAPEUTICS shall
maintain or cause to be maintained, for a minimum of five (5) years, complete
and proper records and books of account relating to its activities under this
Agreement. Each Party will permit its books and records to be examined from time
to time by the other Party with reasonable notice, as provided in Section 6.3 to
the extent necessary to verify the reports provided for in Section 6.1, such
examination to be made at the expense of the requesting Party.

         6.3 Audit Procedures. Each Party will have the right, at its own
expense and at any reasonable time or times, to cause a Third Party independent
auditor not engaged on a contingency basis to inspect and audit the books and
records of the other Party in order to verify the contents of the reports
required by Section 6.1 above. Any such audit (i) shall be conducted after
reasonable prior notice, during normal business hours and at the location(s)
where such books and records are normally kept and (ii) may not be conducted
more than once in any given twelve (12) month period. Notwithstanding the
foregoing, in the event that any such audit results in a corrected report, on a
material basis, the requesting Party shall have the right to conduct up to two
(2) such audits in the subsequent year. Such audit and the results thereof shall
be confidential and the non-requesting Party reserves the right to require the
auditor to execute an appropriate non-disclosure agreement before permitting the
inspection and audit to proceed. The auditor shall report directly to the
requesting Party and shall provide a copy of such report to each of the Parties.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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         SECTION 7.0        INTELLECTUAL PROPERTY

         7.1 Warranty Of Title By INNOVATIVE. INNOVATIVE warrants that it has
good and marketable title, and all rights to, the INNOVATIVE Patent Rights set
forth in Exhibit A hereto, the INNOVATIVE Know-How, and the SDC Core Technology.

         7.2 Improvements.

                  (a) Improvements And Associated Technology Relating To
INNOVATIVE's SDC Core Technology. THERAPEUTICS acknowledges that in
consideration of the collaboration established hereby and the enabling nature of
the work previously done by INNOVATIVE, Improvements to the SDC Core Technology
may result that are not utili zed in the development of any SDC Product(s) under
the terms and conditions of this Agreement. In addition, associated technology
and data may be acquired and developed that may assist INNOVATIVE in the
development of other uses and applications for the SDC Core Technology unrelated
to the SDC Product Development Program outlined in this Agreement. Any such
Improvements, together with the associated technology and data, shall remain the
sole and separate property of INNOVATIVE, which shall have the right to
independently use such associated technology and data provided that such use
does not result in the improper disclosure or misuse of Proprietary Information.
INNOVATIVE may seek to obtain, enforce and defend any and all intellectual
property protection with regard to the associated technology and data in its own
name, at its own expense and in its sole discretion.

         (b) Improvements And Associated Technology Not Related to or Dependent
Upon SDC Core Technology. INNOVATIVE acknowledges that in consideration of the
collaboration established hereby and the enabling nature of the work to be done
pursuant to this Agreement, technology, materials, results, know-how, methods,
data and documents may be developed by THERAPEUTICS that are not related to or
dependent upon the SDC Core Technology. In addition, associated technology and
data may be acquired and developed that may assist THERAPEUTICS in the
development of other uses and applications not related to or dependent upon the
SDC Core Technology or the SDC Product Development Program outlined in this
Agreement. Any such technology, materials, results, know-how, methods, data and
documents shall remain the sole and separate property of THERAPEUTICS, which
shall have the right to independently use the same provided that such use does
not result in the improper disclosure or misuse of SDC-related Proprietary
Information. THERAPEUTICS may seek to obtain, enforce and defend any and all
intellectual property protection with regard to such technology, materials,
results, know-how, methods, data and documents in its own name, at its own
expense and in its sole discretion. Any patents resulting from THERAPEUTICS
efforts in the collaboration that are not related to or dependent upon the SDC
Core Technology will belong to THERAPEUTICS. THERAPEUTICS will be responsible
for filing, prosecution and maintenance of such patents and associated costs.
Should INNOVATIVE wish to use such technology, materials, results, know-how,
methods, data and documents solely in connection with SDC Product(s) and in a
manner that is not competitive with

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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THERAPEUTICS, THERAPEUTICS may grant a non-exclusive worldwide license on terms
to be agreed upon by the Parties.

         7.3 Prosecution Of Patents.

                  (a) INNOVATIVE Patents Relating to SDC Product(s). It is
anticipated that as part of this collaborative Development Program, patents may
be filed by and issued to INNOVATIVE that may cover compositions of matter,
including formulations of product(s), as well as biological uses or processes
for the manufacture of various SDC Product(s). In order to promote and achieve
the overall goals of this Agreement, INNOVATIVE, at its expense, shall hire and
retain patent counsel with expertise in the biomedical field to assist
INNOVATIVE and THERAPEUTICS in properly protecting and safeguarding the
INNOVATIVE Patent Rights, including conducting the review of all existing
patents and related materials contemplated by the Technology Development Plan,
and preparation and prosecution of any patents hereunder. Said patent counsel
shall be approved either by THERAPEUTICS or the EMC, and such approval shall not
be unreasonably withheld. Such patent review shall be conducted, and patents
shall be prosecuted (including the handling of interferences) and maintained, by
INNOVATIVE at its expense. In recognition of the importance to both Parties of
the INNOVATIVE Patent Rights, and the Parties' community of interest therein,
INNOVATIVE will provide THERAPEUTICS access to the results of such patent
review, and INNOVATIVE will consult with THERAPEUTICS and give due consideration
to all THERAPEUTICS comments at each stage of the patent application process,
including prior to the initial preparation of draft applications, finalization
of applications for filing with the relevant patent authorities, and amendment
of applications during prosecution. In this connection, INNOVATIVE shall furnish
THERAPEUTICS with copies of draft submissions to the relevant patent authorities
for THERAPEUTICS's review and comment prior to formal submittal. THERAPEUTICS
shall maintain all information and documents relating to such patent review, and
to preparation and prosecution of patent applications, in strictest confidence.
INNOVATIVE shall always be entitled to proceed with any submission or other
contemplated action, provided that INNOVATIVE makes reasonable efforts to inform
THERAPEUTICS as early as practicable and to consider its comments where
possible. In the event that INNOVATIVE elects not to file any patent
applications requested in writing by THERAPEUTICS, or elects to abandon claims
in pending patent applications, relating to SDC Product(s), INNOVATIVE shall
give timely written notice to and consult with THERAPEUTICS. INNOVATIVE shall
not allow any patent applications, or claims or potential claims of any patent
application, relating to SDC Product(s) to become barred or abandoned, or fail
to maintain any patents, without first offering assignment of such applications
and patents to THERAPEUTICS, which if it accepts such assignment shall
thereafter prepare and/or prosecute such applications, and maintain such
patents, at its sole expense and in its sole discretion. In the event such
applications and patents are assigned to THERAPEUTICS, INNOVATIVE shall retain a
non-exclusive license for uses not competitive to Therapeutics or it's licenses
and forego any and all consideration related to Products developed based upon
said patents.

         7.4 Infringement Of Patents By Third Parties.

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                  (a) Notification. Each Party shall promptly notify the other,
in writing, of any alleged or threatened Third Party infringement of INNOVATIVE
Patent Rights, of which it becomes aware.

                  (b) INNOVATIVE Patents Covering SDC Product(s). INNOVATIVE
shall have the right, but not the obligation, to bring, at INNOVATIVE's expense
and in its sole control, an appropriate action against any person or entity
infringing upon a INNOVATIVE Patent Right directly or contributorily. If
INNOVATIVE does not bring such action within ninety (90) days [forty-five (45)
days in the case of an action brought under the Hatch-Waxman Act] of
notification thereof to or by INNOVATIVE, THERAPEUTICS shall have the right, but
not the obligation, to bring at its expense and in its sole control, such
appropriate action. The Party not bringing an action under this paragraph (b)
shall be entitled to separate representation in such matter by counsel of its
own choice and at its own expense, but such Party shall cooperate fully with the
Party bringing such action.

                  (c) Costs And Awards. The Party which is not in control of any
action brought pursuant to Section 7.4(b) may elect to contribute fifty percent
(50%) of the costs of litigation against such Third Party infringer, by
providing written notice to the controlling Party within ninety (90) days after
such action is first brought. If the non-controlling Party elects to bear fifty
percent (50%) of such litigation costs, it shall receive fifty percent (50%) of
any damage award or settlement resulting from such action. If the
non-controlling Party does not elect to share such litigation costs, it shall
not participate in any damage award or settlement resulting from such action.

                  (d) Settlement; Allocation Of Proceeds. Neither Party shall
settle a claim brought under this Section 7.4 without the consent of the other
Party. In the event of any recovery of monetary damages from the Third Party,
whether such damages result from the infringement of a INNOVATIVE Patent(s),
such recovery shall be allocated first to the reimbursement of any expenses
incurred by the Parties in the litigation under this Section 7.4 (including, for
this purpose, a reasonable allocation of internal counsel and other expenses).
If the amount recovered from the Third Party is less than the aggregate expenses
of the Parties incurred in connection with such litigation, the recovery shall
be shared pro rata between THERAPEUTICS and INNOVATIVE in proportion to their
respective expenses.

         7.5 Infringement Of Third Party Rights. In the event that any SDC
Product(s) developed under this Agreement becomes the subject of a Third Party
claim or there is the potential for a claim for patent infringement anywhere in
the world, and irrespective of whether THERAPEUTICS or INNOVATIVE is charged
with said infringement, the Parties shall promptly meet to consider the claim
and the appropriate course of action. Unless the Parties otherwise agree, the
Party against which such Third Party infringement claim is brought shall defend
against such claim at its sole expense and the other Party shall have the right,
but not the obligation, to participate in any such suit, at its sole option and
at its own expense. Such other Party shall reasonably cooperate with the Party
conducting the defense of the claim, including if required to conduct such
defense, furnishing a power of attorney. Neither Party shall

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enter into any settlement that affects the other Party's rights or interests
without such other Party's written consent, which consent shall not be
unreasonably withheld. If in the opinion of INNOVATIVE's counsel, a license with
respect to such Third Party patents is necessary to avoid substantial risks
which could prevent INNOVATIVE, THERAPEUTICS or a sublicensee from making,
using, marketing, offering for sale or selling an SDC Product(s), then
INNOVATIVE shall notify THERAPEUTICS of such conclusion and the basis for it and
give THERAPEUTICS a reasonable opportunity to discuss INNOVATIVE's opinion. If
THERAPEUTICS concurs in INNOVATIVE's opinion, INNOVATIVE shall have the right,
but not the obligation, to negotiate directly with such Third Party for a
license. If THERAPEUTICS does not concur with INNOVATIVE's opinion, the matter
shall be submitted to an independent counsel, selected by mutual consent and
paid equally by INNOVATIVE and THERAPEUTICS, to determine whether there is a
substantial risk of infringement of such Third Party rights. If such independent
counsel determines that a substantial risk exists, then INNOVATIVE may, but
shall not be required or obligated, to negotiate directly with such Third Party
on behalf of the Parties. If such independent counsel determines that a
substantial risk does not exist, then INNOVATIVE may still negotiate for a
license from such Third Party if it elects to do so, but shall not be obligated
to do so.

         Anything herein to the contrary notwithstanding, if a court of
competent jurisdiction rules that practice of the rights granted to THERAPEUTICS
or a sublicensee in Section 2.1 infringes a Third Party patent, INNOVATIVE at
its own expense will obtain all enabling licenses necessary to restore the
rights granted to THERAPEUTICS in Section 2.1. If the infringement results from
the utilization of INNOVATIVE Patent Rights or INNOVATIVE Know-How in existence
or acquired prior to the Effective Date of this Agreement, then INNOVATIVE shall
not be entitled to reimbursement of any of such expense under Section 3.6(c) of
this Agreement or otherwise. If the infringement results from utilization of
INNOVATIVE Patent Rights or INNOVATIVE Know-How developed or acquired after the
Effective Date pf this Agreement, INNOVATIVE shall be entitled to reimbursement
of 50% for SDC Core Technology and 100% of specific medical patents related to
SDC Healthcare or Personal Care Products of such expense under Section 3.6(c).

         7.6 Patent Marking. SDC Products subsequently marketed and/or sold by
the Parties hereunder shall be marked with appropriate patent numbers or indicia
at INNOVATIVE's request, reflecting INNOVATIVE's ownership of the SDC Core
Technology, subject to THERAPEUTICS' consent and that of any pertinent Third
Party that may license the SDC Product.

         7.7 Retention of Right To Sell Or License SDC Core Technology.
Irrespective of the terms of this Agreement, INNOVATIVE shall retain any and all
rights as to its SDC Core Technology, including but not limited to the right to
sell, transfer, assign or license the SDC Core Technology (in a manner not
inconsistent with this Agreement), provided that and upon condition that
INNOVATIVE shall retain all rights for all applications relative to the SDC
Healthcare and Personal Care Product(s), as defined in this Agreement and
contemplated herein.

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         SECTION 8.0 REPRESENTATIONS AND WARRANTIES

         8.1 Mutual Representations. Each Party represents and warrants that (i)
it is a corporation in good standing under the laws of the state of its
incorporation; that (ii) it has the authority to enter into this Agreement; that
(iii) it has obtained all corporate approvals necessary to enter into this
Agreement; that (iv) this Agreement is valid and binding and enforceable in
accordance with its terms; and that (v) its execution, delivery, and performance
of this Agreement will not infringe upon the rights of any Third Party or
violate the provisions of any agreement to which it is a party.

         8.2 INNOVATIVE Representations And Warranties. INNOVATIVE warrants and
 represents that:

                  (a) No Litigation. To the best of its knowledge, INNOVATIVE
has no pending legal actions or obligations or financial obligations that would
or could infringe or impede its ability to carry out its obligations under the
terms of this Agreement.

                  (b) Performance of Obligations. To the best of its knowledge,
INNOVATIVE warrants that it will perform its obligations under the terms of this
Agreement on a Best Efforts basis and further warrants that it will allocate
sufficient resources in its active pursuit of viable SDC Product(s), as
contemplated by the Parties under the terms of this Agreement.

                  (c) Safety Data. To the best of its knowledge, INNOVATIVE has
informed THERAPEUTICS about all significant information in its possession or
control concerning Axenohl(R), Axen(R), any potential side effects, injury,
toxicity or sensitivity reaction and incidents or severity thereof with respect
to any SDC Product(s) tests conducted by INNOVATIVE or its predecessors.
INNOVATIVE acknowledges that such tests have been entirely pre-clinical and may
not be indicative of results that may be obtained in humans.

                  (d) Patent Matters. As of the Effective Date and other than as
outlined herein, INNOVATIVE has no knowledge of the existence of any patent
owned or controlled by a Third Party which covers SDC Core Technology and would
prevent INNOVATIVE from making, using or selling such SDC Core Technology. To
the best of INNOVATIVE's knowledge and belief, as of the Effective Date, the
INNOVATIVE Patent Rights set forth in Exhibit A and the INNOVATIVE Know-How at
the Effective Date are owned by INNOVATIVE, and INNOVATIVE is not in possession
of information that would, in its opinion, render any of its patent claims
invalid and/or unenforceable. INNOVATIVE further warrants that NVID (a party to
the Core Settlement Agreement referenced in the Recitals of this Agreement)
holds no rights to import, make, use, offer for sale or sell the SDC Core
Technology, nor, under any circumstances, unless granted by INNOVATIVE, can NVID
recover more than patent ownership, but in such case INNOVATIVE would retain the
rights to import, make, use, offer for sale and sell the SDC Core Technology.

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     8.3 THERAPEUTICS' Representations And Warranties. THERAPEUTICS warrants and
represents that:

                  (a) No Litigation. To the best of its knowledge, THERAPEUTICS
has no pending legal actions or obligations or financial obligations that would
or could infringe or impede its ability to carry out its obligations under the
terms of this Agreement.

Performance of Obligations. To the best of its knowledge, THERAPEUTICS warrants
that it will perform its obligations under the terms of this Agreement on a Best
Efforts basis and further warrants that it will allocate sufficient resources in
its active pursuit of viable SDC Product(s), as contemplated by the Parties
under the terms of this Agreement.

         8.4 No Other Representations. THE EXPRESS REPRESENTATIONS AND
WARRANTIES STATED IN THIS AGREEMENT, INCLUDING THIS SECTION 8.0 ARE IN LIEU OF
ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITA TION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.

         SECTION 9.0 TERM AND TERMINATION

         9.1 Term. Unless earlier terminated as hereinafter provided, this
Agreement shall commence upon the Effective Date and, unless sooner terminated
as provided in this Section 9.0, extend until the latter of the payment of the
last royalty payable by a Third Party licensee or any payments due from any
Third Party purchaser under Section 5.0 or the expiration date of the last SDC
patent relevant to this Agreement.

         9.2 Termination Without Cause. Upon one hundred twenty days (120) days
written notice, THERAPEUTICS shall have the right to terminate this Agreement,
without cause, on condition that and provided that, all licenses granted to
THERAPEUTICS under this Agreement under Section 2.1 hereof shall terminate and
all rights to all SDC Product(s) shall be promptly and efficiently transferred
by THERAPEUTICS to INNOVATIVE. In addition, upon such termination, THERAPEUTICS
hereby grants to INNOVATIVE the exclusive, royalty-free license to use any and
all of the SDC-related Proprietary Information obtained from THERAPEUTICS under
the terms of this Agreement in any manner which is necessary or useful for the
continued research, development, manufacture, future use or sale of any SDC
Product(s) that INNOVATIVE continues after THERAPEUTICS' termination.
Furthermore, in the event that any SDC Product(s) have been either licensed or
sold to a Third Party, as outlined in Section 5.0 hereof and any sales proceeds,
licensing fees, or royalty payments remain due and payable from any Third Party,
said termination shall not in any way affect THERAPEUTICS' right to receive its
share of the payments due and payable to THERAPEUTICS pursuant to Section 5.4
hereof.

         9.3 Termination For Breach. Each Party shall have the right to
terminate this Agreement and its obligations hereunder for material breach by
the other Party, which breach remains uncured for thirty (30) business days
after written notice is

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provided to the defaulting Party, unless there exists a bona fide dispute as to
whether or not a breach has occurred. Notwithstanding any termination under this
Section 9.3, any obligation by a Party to make any monetary payment, which had
accrued or has become payable as of the date of termination shall survive
termination of this Agreement.

         9.4 Termination For THERAPEUTICS' Breach. In the event INNOVATIVE
terminates this Agreement as a result of THERAPEUTICS' breach, pursuant to
Section 9.3 above, the licenses granted to THERAPEUTICS under Section 2.1 hereof
of this Agreement shall terminate and any and all rights in any SDC Product(s)
under Development as outlined herein shall be automatically terminated. In
addition thereto, THERAPEUTICS shall cooperate with INNOVATIVE in all respects
to effect the prompt and efficient transfer to INNOVATIVE of all SDC Product(s)
research and development information and data. In the event of such termination,
in regard to any Category I or II SDC Product(s), THERAPEUTICS hereby assigns to
INNOVATIVE all right, title and interest in and to all Regulatory Filings and
approvals with any Agency, including the FDA, pertaining to any SDC Product(s)
and THERAPEUTCIS agrees to resign as Sponsor from any Regulatory Filings with
any Agency, including the FDA, and assist INNOVATIV E and its agents, to assume
all duties as Sponsor for all SDC Product(s) being processed with any Agency,
including the FDA. INNOVATIVE will assume full responsibility for all Category I
and II SCD Product related expenses incurred after the date of the Termination
for Breach by THERAPEUTICS. In the event that any SDC Product(s) have either
been licensed or sold to a Third Party, as outlined in Section 5.0 hereof, prior
to termination under this Section 9.4, termination of this Agreement shall not
in any way affect THERAPEUTICS' right to receive its share of any remaining
payments due and payable to THERAPEUTICS from a Third Party purchaser or
licensee pursuant to Section 5.4 hereof and THERAPEUTICS shall be entitled to
receive all sales proceeds, licensing fees, or royalty payments that remain due
and payable from any Third Party. In addition, upon termination under this
Section 9.4 THERAPEUTICS hereby grants to INNOVATIVE the exclusive, royalty-free
license to use any and all of the SDC-related Proprietary Information obtained
from THERAPEUTICS under the terms of this Agreement in any manner which is
necessary or useful for the continued development, manufacture, sale or
licensing of the SDC Product(s) as such product(s) exist as of the date of
termination. Furthermore, INNOVATIVE shall retain all of its rights to bring an
action against THERAPEUTICS under Section 11.0 [Dispute Resolution], including
all of its rights for recovery of damages.

         In the case of Termination or Breach as defined in Section 9.0, prior
to the transfer of any Regulatory Filings to INNOVATIVE, THERAPEUTICS shall
provide INNOVATIVE, copies of all material correspondence with any Agency,
including the FDA, and, subject to EMC approval, INNOVATIVE shall have the right
to be present at all meetings with any Agency, including the FDA, related to the
SDC Product(s). In the event of any transfer of ownership in the Regulatory
Filings occurs, pursuant to Section 9.0, or any other Section hereof, beginning
prior to the time of transfer of ownership of the Regulatory Filings to
INNOVATIVE by THERAPEUTICS, THERAPEUTICS shall provide INNOVATIVE with letters
of access to, any drug master files or other regulatory

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dossiers containing information necessary or useful to INNOVATIVE in connection
with the impending transfer. Upon THERAPEUTICS' resignation as Sponsor,
INNOVATIVE, by and through its agents, and with THERAPEUTICS' reasonable
assistance (at no expense to THERAPEUTICS) shall assume all duties of the
Sponsor and become primarily responsible for all regulatory affairs related to
the SDC Product(s)

         9.5 Termination For INNOVATIVE's Breach. In the event that THERAPEUTICS
terminates this Agreement as a result of INNOVATIVE's' breach, pursuant to
Section 9.3, all licenses granted to THERAPEUTICS under this Agreement shall
survive to the degree commercially reasonable and necessary for any proper
purpose of this Agreement. Further, in the event that INNOVATIVE is unable to
manufacture the SDC (Raw Material) active ingredient drug substance, either
itself or through INNOVATIVE'S Third Party manufacturer in timely and sufficient
manner to support THERAPEUTICS forecasted development demands, INNOVATIVE will
grant THERAPEUTICS a world-wide royalty-based license to manufacture SDC Core
Technology based drug substance. In any case, INNOVATIVE will continue to
provide SDC drug substance as described in Section 4.2 at least until
THERAPEUTICS can establish an alternate source of supply. THERAPEUTICS shall
retain all of its rights to bring an action against INNOVATIVE under Section
11.0 [Dispute Resolution], including all of its rights for recovery of damages.

         9.6 Partial Termination For Failure To Achieve Minimum Development
Performance Standard. In the event that THERAPEUTICS is unable to meet the
Minimum Development Performance Standards set forth in Section 3.7, this
Agreement will automatically terminate and the licensing rights granted by
INNOVATIVE to THERAPEUTICS under Section 2.1 shall terminate and revert to
INNOVATIVE provided, however, that any SDC Product(s) under Development at the
time of such termination and all licenses and sublicenses related to the
continued Development of those SDC Product(s) shall remain unaffected by
termination under this Section 9.6 and the terms of this Agreement shall remain
in full force and effect for the continued development of those SDC Product(s).
Upon termination under this Section 9.6, INNOVATIVE shall be entitled to proceed
with the development of any Product(s) in the medical, dental and/or veterinary
fields for human or animal health, in any way it sees fit provided however that
INNOVATIVE shall not engage in the development and/or production of any
Product(s) that is competitive with any SDC Product(s) under Development
according to the terms of this Agreement. In any case, subsequent to a Partial
Termination described herein, if an SDC Product is developed and commercialized
by INNOVATIVE or a Third Party and such SDC Product uses or references
information developed by THERAPEUTICS, For Category I, II and III A and III B
Products, THERAPEUTICS shall receive the lesser of 5% of all proceeds received
by INNOVATIVE in connection with such Third Party transaction or for five (5)
years from the date of Product launch a royalty of 1.5% of Net Sales derived
from such Product. For Category III C and III D Products, THERAPEUTICS shall
receive the lesser of 2.5% of all proceeds received by INNOVATIVE in connection
with such Third Party transaction or for five (5) years from the date of Product
launch a royalty of 0.75% of Net Sales derived from such Product In the event
that any SDC Product(s) have either been licensed or sold to a Third Party, as
outlined in Section 5.0 hereof, prior to

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termination under this Section 9.6, termination shall not in any way affect
THERAPEUTICS' right to receive its share of any remaining payments due and
payable to THERAPEUTICS from a Third Party purchaser or licensee pursuant to
Section 5.4 hereof and THERAPEUTICS shall be entitled to receive all sales
proceeds, licensing fees, or royalty payments that remain due and payable from
any Third Party.

         9.7 Notice. In the event of default or failure by either Party to
perform any of the terms, covenants or provisions of this Agreement, the
defaulting Party shall have thirty (30) days after the giving of written notice
of such default by the non-defaulting Party to correct such default. If such
default is not corrected within the said thirty (30) day period, non-defaulting
Party shall have the right, at its option, to cancel and terminate this
Agreement.

         9.8 No Waiver. No termination of this Agreement shall constitute a
termination or a waiver of any rights of either Party against the other Party
accruing at or prior to the time of such termination.

         SECTION 10.0 GOVERNMENTAL COMPLIANCE

         During the term of this Agreement, INNOVATIVE and THERAPEUTICS shall,
at all times, comply with all laws and regulations that may control the
development, production, commercialization, manufacture, use, sale, marketing,
distribution and other commercial exploitation of the any SDC Product(s)
undertaken pursuant to this Agreement.

         SECTION 11.0 DISPUTE RESOLUTION, VENUE AND GOVERNING LAW

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

         In the event of disputes between the Parties, including disputes among
the members of the EMC which such committee is unable to resolve, a Party
seeking to resolve such dispute will, by written notice to the other, have such
dispute referred to their respective executive officers designated below or
their successors, for attempted resolution by good faith negotiations within
fourteen (14) days after such notice is received. Said designated officers are
as follows:

            INNOVATIVE     Chief Executive Officer

            THERAPEUTICS   Chief Executive Officer

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         In the event the designated executive officers are not able to resolve
such dispute, either Party may at any time after the fourteen business (14) day
period invoke the provisions of Section 11.2 hereinafter.

         11.2 Alternative Dispute Resolution. Following settlement efforts
pursuant to Section 11.1, any dispute, controversy or claim arising out of or
relating to the validity, construction, enforceability or performance of this
Agreement, including disputes relating to alleged breach or to termination of
this Agreement under Section 9.3, other than disputes described in Section 11.2
(c) which are expressly prohibited herein from being resolved by this mechanism,
shall be settled by binding Alternative Dispute Resolution ("ADR") in the manner
described below:

                  (a) ADR Request. If a Party intends to begin an ADR to resolve
a dispute, such Party shall provide written notice (the "ADR Request") to
counsel for the other Party informing such other Party of such intention and the
issues to be resolved. From the date of the ADR Request and until such time as
any matter has been finally settled by ADR, the running of the time periods
contained in Section 9.3 as to which a Party must cure a breach of this
Agreement shall be suspended as to the subject matter of the dispute.

                  (b) Additional Issues. Within ten (10) business days after the
receipt of the ADR Request, the other Party may, by written notice to the
counsel for the Party initiating ADR, add additional issues to be resolved.

                  (c) No ADR Of Patent Issues. Disputes regarding the scope,
validity and enforceability of patents shall not be subject to this Section
11.2, and shall be submitted to a court of competent jurisdiction.

         11.3 Arbitration Procedures. The ADR shall be conducted pursuant to the
Rules of the American Arbitration Association (San Diego) then in effect, except
that notwithstanding those rules, the following provisions shall apply to the
ADR hereunder.

                  (a) Arbitrator. The arbitration shall be conducted by a panel
of three arbitrators (the "Panel"). The Panel shall be selected from a pool of
retired judges to be presented to the Parties by American Arbitration
Association ("AAA").

                  (b) Proceedings. The time periods set forth in the AAA rules
shall be followed, unless a Party can demonstrate to the Panel that the
complexity of the issues or other reasons warrant the extension of one or more
of the time tables. In such case, the Panel may extend such time tables, but in
no event shall the time tables being extended so that the ADR proceeding extends
more than twelve (12) months from its beginning to the Award. In regard to such
time tables, the Parties (i) acknowledge that the issues that may arise in any
dispute involving this Agreement may involve a number of complex matters and
(ii) confirm their intention that each Party will have the opportunity to
conduct any discovery reasonably necessary with respect to all material issues
involved in a dispute within the framework provided above. Within such time
frames, each Party shall have the right to conduct discovery in accordance with

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California Code of Civil Procedure. The Panel shall not award punitive damages
to either Party and the Parties shall be deemed to have waived any right to such
damages. The Panel shall, in rendering its decision, apply the substantive law
of the State of California, without regard to its conflict of laws provisions.
The Panel shall apply California's Rules of Evidence to the hearing. The
proceeding shall take place in the City of San Diego. The fees of the Panels and
AAA shall be paid by the losing Party which shall be designated by the Panel. If
the Panel is unable to designate a losing Party, it shall so state and the fees
shall be split equally between the Parties.

                  (c) Award. The Panel is empowered to award any remedy allowed
by law, including money damages, multiple damages, prejudgment interest and
attorneys' fee, and to grant final, complete, interim, or interlocutory relief,
including injunctive relief but excluding punitive damages.

                  (d) Costs. Except as set forth in Section 11.3(b), above, each
Party shall bear its own legal fees. The Panel shall assess its costs, fees and
expenses, including reasonable attorneys' fees and costs, against the Party
losing the ADR unless it believes that neither Party is the clear loser, in
which case the Panel shall divide such fees, costs and expenses according to the
Panel's sole discretion.

                  (e) Confidentiality. The ADR proceeding shall be confidential
and the Panel shall issue appropriate protective orders to safeguard each
Party's Proprietary Information. Except as required by law, no Party shall make
(or instruct the Panel to make) any public announcement with respect to the
proceedings or decision of the Panel without prior written consent of each other
Party. The existence of any dispute submitted to ADR, and the award, shall be
kept in confidence by the Parties and the Panel, except as required in
connection with the enforcement of such award or as otherwise required by
applicable law.

         11.4 Judicial Enforcement. The Parties agree that judgment on any
arbitral award issued pursuant to this Article 11 shall be entered in the
Superior Court of the State of California, in the County of San Diego.

         11.5 Governing Law. This Agreement is made in accordance with and shall
be governed and construed under the laws of the State of California, as such
laws are applied to contract entered into and to be performed within such state.

         SECTION 12.0 CONFIDENTIALITY

         12.1 Proprietary Information; Exceptions. Each Party will maintain all
Proprietary Information received or generated by it under this Agreement in
trust and confidence and will not disclose any such Proprietary Information to
any Third Party or use any such Proprietary Information for any purposes other
than those necessary or permitted for performance under this Agreement. Neither
THERAPEUTICS or INNOVATIVE shall use any of the other Party's Know-How for any
purpose other than those expressly described herein. Each Party may use the
other's Proprietary Information only to the extent required to accomplish the
purposes of this Agreement.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>
Proprietary Information shall not be used for any purpose or in any manner that
would constitute a violation of any laws or regulations, including without
limitation the export control laws of the United States. Proprietary Information
shall not be reproduced in any form except as required to accomplish the intent
of this Agreement. No Proprietary Information shall be disclosed to any
employee, agent, consultant, Affiliate, or sublicensee who does not have a need
for such information. To the extent that disclosure is authorized by this
Agreement, the disclosing Party will prospectively notify the other Party of
such intended disclosure and obtain prior agreement from its employees, agents,
consultants, Affiliates, sublicensees or clinical investigators to whom
disclosure is to be made to hold in confidence and not make use of such
information for any purpose other than those permitted by this Agreement. Each
Party will use at least the same standard of care as it uses to protect its own
Proprietary Information of a similar nature to ensure that such employees,
agents, consultants and clinical investigators do not disclose or make any
unauthorized use of such Proprietary Information, but no less than reasonable
care. Each Party will promptly notify the other upon discovery of any
unauthorized use or disclosure of the Proprietary Information.

         Proprietary Information shall not include any information which:

                  (a) is now, or hereafter becomes, through no act or failure to
act on the part of the receiving Party in breach hereof, generally known or
available;

                  (b) is known by the receiving Party at the time of receiving
such information, as evidenced by its written records;

                  (c) is hereafter furnished to the receiving Party by a Third
Party, as a matter of right and without restriction on disclosure;

                  (d) is independently developed by the receiving Party without
any breach of this Agreement; or

                  (e) is the subject of a written permission to disclose
provided by the disclosing Party.

         12.2 Authorized Disclosure. Upon signing this Agreement the Parties
shall issue a mutually approved joint press release that does not include the
financial terms of the Agreement. The Parties agree that the material financial
terms of the Agreement, other than the initial payment provided in Section 5.1
and the milestone payments provided for 5.2, will be considered Proprietary
Information of both Parties. Notwithstanding the foregoing, either Party may
make disclosures required by law or regulation, provided prior notice is given
to the other Party whenever possible, and may disclose the material financial
terms of the Agreement to bona fide potential corporate partners, to the extent
required or contemplated by this Agreement, and to financial underwriters,
prospective investors and other parties with a need to know such information.
Any such disclosures, and any disclosure of the development and marketing or
Products or other developments under this Agreement, including but not limited
to press releases, will be reviewed and consented to by each Party prior to such

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 30 OF 43

<PAGE>
disclosure. Such consent shall not be untimely or unreasonably withheld by
either Party. All such disclosures shall be made only to parties under an
obligation of confidentiality.

         Notwithstanding any other provision of this Agreement, each Party may
disclose Proprietary Information if such disclosure:

         (a) is in response to a valid order of a court or other governmental
body of the United States or a foreign country, or any political subdivision
thereof; provided, however, that the responding Party shall first have given
notice to the other Party hereto and shall have made a reasonable effort to
obtain a protective order requiring that the Proprietary Information so
disclosed be used only for the purposes for which the order was issued;

          (b) is otherwise required by law or regulation, including SEC related
documents; or

          (c) is otherwise necessary to file or prosecute patent applications,

prosecute or defend litigation or comply with applicable governmental
regulations or otherwise establish rights or enforce obligations under this
Agreement, but only to the extent that any such disclosure is necessary.

         12.3 Return Of Proprietary Information. In the event THERAPEUTICS loses
its license to INNOVATIVE Patents and INNOVATIVE Know-How which was granted to
it under this Agreement, THERAPEUTICS shall use diligent efforts (including
without limitation a diligent search of files and computer storage devices) to
return all Proprietary Information received by it from INNOVATIVE, provided,
however, that THERAPEUTICS may keep one copy of such Proprietary Information for
legal archival purposes. Access to the copy so retained by THERAPEUTICS' legal
department shall be restricted to counsel and such Proprietary Information shall
not be used except in the resolution of any claims or disputes arising out of
this Agreement.

         12.4 Publications. Except as required by law, neither Party shall
publish or present, or cause to be published or presented, the results of
studies carried out with respect to any SDC Product(s) without the opportunity
for prior review by the other Party. Each Party shall provide to the other the
opportunity to review any proposed abstracts, manuscripts or presentations which
relate to any SDC Product(s) at least thirty (30) days prior to their intended
submission for publication and such submitting Party agrees, upon written
request from the other Party, not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is given a
reasonable period of time to seek patent protection for any material in such
publication or presentation that it believes is patentable.

         12.5 Mutual Confidentiality Agreement. This Agreement shall supersede
the Mutual Confidentiality Agreement ["MCA"] executed between the Parties on or
about 21 March 2003 and the MCA shall be terminated upon the Effective Date of
this Agreement. However, each Party's obligations of confidentiality and non-use
of

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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>
information under the MCA shall continue with respect to all Proprietary
Information disclosed prior to its termination.

         12.6 Right To Injunctive Relief. Each Party shall be entitled, in
addition to any other right or remedy it may have, at law or equity, to an
injunction, without the posting of any bond or other security, enjoining or
restraining any other Party from any violation or threatened violation of this
Section 12.0.

         SECTION 13.0 INDEMNIFICATION.

         13.1 Indemnification By INNOVATIVE. INNOVATIVE hereby agrees to
indemnify, hold harmless and defend THERAPEUTICS against any and all expenses,
costs of defense (including without limitation attorneys' fees, witness fees,
damages, judgments, fines and amounts paid in settlement) and any amounts
THERAPEUTICS becomes legally obligated to pay because of any claim or claims
against it by NVID or others to the extent that such claim or claims (i) arise
out of the breach or alleged breach of any representation or warranty by
INNOVATIVE hereunder, or (ii) are due to the negligence or misconduct of
INNOVATIVE; provided that (a) THERAPEUTICS provides INNOVATIVE with prompt
notice of any such claim and the exclusive ability to defend (with the
reasonable cooperation of THERAPEUTICS) and settle any such claim and (b) such
indemnities shall not apply to the extent such claims are covered by
THERAPEUTICS' indemnity set forth in Section 13.2 below.

         13.2 Indemnification By THERAPEUTICS. THERAPEUTICS hereby agrees to
indemnify, hold harmless and defend INNOVATIVE against any and all expenses,
costs of defense (including without limitation attorneys' fees, witness fees,
damages, judgments, fines and amounts paid in settlement) and any amounts
INNOVATIVE becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) result from THERAPEUTICS'
activities under this Agreement, (ii) arise out of the breach or alleged breach
of any representation or warranty by THERAPEUTICS hereunder, (iii) are due to
the negligence or misconduct of THERAPEUTICS, or (iv) arise out of the
possession, manufacture, use, sale or administration of an SDC Product by
THERAPEUTICS or THERAPEUTICS' Affiliates or sublicensees provided that (a)
INNOVATIVE provides THERAPEUTICS with prompt notice of any such claim and the
exclusive ability to defend (with the reasonable cooperation of INNOVATIVE) or
settle any such claim and (b) such indemnities shall not apply to the extent
such claims are covered by INNOVATIVE's indemnity set forth in Section 13.1
above.

         13.3 Mechanics. In the event that the Parties cannot agree as to the
application of Sections 13.1 and 13.2 above to any particular loss or claim, the
Parties may conduct separate defenses of such claim. Each Party further reserves
the right to claim indemnity from the other in accordance with Sections 13.1 and
13.2 above upon resolution of the underlying claim, notwithstanding the
provisions of Sections 13.1 and 13.2 above requiring the indemnified Party to
tender to the indemnifying Party the exclusive ability to defend such claim or
suit.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 32 OF 43

<PAGE>

         13.4 Insurance Coverage. Each Party represents and warrants that it is
covered and will continue to maintain the following insurance coverage covering
all of each Party's activities and obligations hereunder. Furthermore, both
Parties agree to give due notice to the other Party during the period stated of
any such material change that may affect the continuation of such coverage.

                  (a) Worker's Compensation and Occupational Disease Disability
insurance as required by the laws of the State of California;

                  (b) Comprehensive Automobile Liability insurance for vehicles
furnished by such Party or used by such Party in the performance of this
Agreement with bodily injury and property damage limits of $1,000,000 each
occurrence, combined single limit; and

                  (c) Commercial General Liability insurance with bodily injury
and property damage limits of $1,000,000 each occurrence, aggregate combined
single limit.

         Furthermore, each Party shall provide the other Party with written
notice at least fifteen (15) days prior to any cancellation or material change
in such insurance program. Each Party shall maintain such insurance program, or
other program with comparable coverage, beyond the expiration or termination of
this Agreement during (i) the period that any SDC Product is being commercially
distributed or sold other than for the purpose of obtaining regulatory approvals
by THERAPEUTICS, Affiliate or agent of THERAPEUTICS and (ii) a commercially
reasonable period thereafter.

         SECTION 14.0 GENERAL TERMS AND CONDITIONS.

                  14.1 Entire Agreement. Other than the Mutual Confidentiality
Agreement and its effective terms, as outlined in Section 12.5, this Agreement
memorializes and constitutes the final expression and the complete and exclusive
statement of agreement and understanding among the Parties with regard to the
subject matter hereof. All negotiations, agreements, proposed agreements,
covenants, representations and warranties, express and implied, oral and
written, of the Parties with regard to the subject matter hereof are contained
herein. No other agreements, covenants, representations or warranties, express
or implied, oral or written, have been made by either Party to the other with
respect to the subject matter of this Agreement. All prior and contemporaneous
conversations, negotiations, possible and alleged agreements and
representations, covenants, and warranties with respect to the subject matter,
including the undated Silver Bullet Agreement previously prepared by the Parties
are hereby waived, merged herein and superseded by this Agreement. This is an
integrated agreement.

                  14.2 No Agency Or Legal  Representative  Status.  The Parties
are and, at all times,  shall be and remain independent  contractors as to each
other. No joint venture or other  relationship which would impose liability
upon either Party for any act or failure to act of the other Party shall be
created or implied hereby or herefrom. This Agreement

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>

does not and is not intended to constitute THERAPEUTICS as the agent or legal
representative of INNOVATIVE. Except as provided herein, neither Party is
granted any express or implied right or authority by the other Party to assume
or create any obligation or responsibility on behalf of or in the name of the
other Party, or to bind the other Party in any manner or thing whatsoever.
Nothing in this relationship shall be construed to create a relationship of
joint venture, partnership, fiduciary or other similar relationship between the
Parties.

         14.3 Exhibits. The following exhibits are attached to the Agreement
and incorporated by reference:

         Exhibit A - INNOVATIVE Patent Rights
         Exhibit B - Product Development Flow Chart
         Exhibit C -Product Category Decision Chart
         Exhibit D - Approved Reimbursement Costs and Reimbursement Schedule
         Exhibit E - Form of "Product Specific" License Agreement

         14.4 Attorneys' Fees And Court Costs. In the event that it becomes
necessary to initiate legal proceedings by either Party to enforce any of the
terms or provisions of this Agreement, to recover damages, or to obtain any
relief, at law or in equity, the prevailing Party shall be entitled to recover,
in addition to any relief afforded or obtained in such proceeding, reasonable
attorneys' fees and costs as well as any court costs incurred by such Party in
connection with any such action(s).

         14.5 No Waiver. The failure of either Party to enforce any provision of
this Agreement shall not be deemed a waiver of that provision or of the right of
the Party to thereafter enforce that or any other provision.

         14.6 Legal Representation/No Operative Presumption. This document is
the result of negotiations between Parties, each of whom was represented or had
the opportunity to be represented in the transaction, and has had the
opportunity to have had the transactional documents reviewed by counsel of their
own choice. There shall be no operative presumption against any Party on the
ground that such Party was responsible for the preparation of this Agreement or
any part thereof.

         14.7 Assignment. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder will be assignable in part or in whole by
any Party without the prior written consent of the other which cannot be
unreasonably withheld; provided, however, that either Party may assign or
otherwise transfer this Agreement to any of its Affiliates or to any successor
by merger or sale of all or substantially all of its business assets to which
this Agreement relates in a manner such that the assignor will remain liable and
responsible for the performance and observance of all its duties and obligations
hereunder. This Agreement will be binding upon the successors and permitted
assigns of the Parties, and the name of a Party herein will be deemed to include
the names of such Party's successors and permitted assigns to the extent
necessary to carry out the intent of this Agreement. Any assignment which is not
in accordance with this Section 14.7 will be void.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
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                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>

         14.8 Affiliates. The Parties hereto acknowledge that they may carry out
some of the activities required or permitted pursuant to this Agreement through
its Affiliates. The Parties hereby mutually represent and warrant that this
Agreement shall be binding on its Affiliates and further guarantees the
performance of its Affiliates in accordance with this Agreement as if such
Affiliates were parties to this Agreement.

         14.9 Survival Of Representations And Warranties. The representations
and warranties contained in Section 4.0 survive and continue in full force and
effect notwithstanding early termination of this Agreement. In addition,
Sections 1.0, 2.0, 5.0, 7.0, 9.0, 11.0, 12.0 and 14.0 of this Agreement shall
survive the termination of this Agreement (subject to any subsequent dates of
termination referred to in such individual Sections).

         14.10 Additional Documents And Acts. Each of the Parties hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions, and conditions of this Agreement and
the transactions contemplated hereby.

         14.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.

         14.12 Governing Law And Jurisdiction. This Agreement shall be construed
in accordance with and governed by the laws of the State of California. This
Agreement is performable in part in the County of San Diego, California, and the
Parties mutually agree that personal jurisdiction and venue shall be proper in
the state and federal courts situated in San Diego County, California. Other
than as expressly modified by Section 11.0 hereof, the Parties agree that any
litigated dispute will be conducted solely in such courts. Each Party further
agrees that personal jurisdiction over it may be effected by service of process
by registered or certified mail addressed to them at the address listed
hereinabove and that when so made shall be as if served upon its registered
agent for service of process within its respective state.

         14.13 Severability. In the event that any covenant, condition or other
provision herein contained is held to be invalid, void or illegal by any court
of competent jurisdiction the same shall be deemed severable from the remainder
of this Agreement and. shall in no way affect, impair or invalidate any other
covenant, condition or other provision herein contained. If such condition,
covenant or other provision shall be deemed invalid due to its scope or breadth,
such covenant, condition or other provision shall be deemed valid to the extent
of the scope or breadth permitted by law.

         14.14 Notices. All notices, as well as any reports or statements,
required hereunder shall be deemed to be duly given on the date same is mailed
or sent and/or acknowledged via hand delivery, facsimile or reliable overnight
delivery to the Party concerned at the following addresses:

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 35 OF 43

<PAGE>

         INNOVATIVE     1725 Gillespie Way
                        El Cajon, California 92020
                        ATTN: Mr. Michael L. Krall
                        Telephone: 619.596.8600
                        Facsimile : 619.596.8700
                        [Confirmation By Registered Mail, If Requested]

         THERAPEUTICS   4180 La Jolla Village Drive, Suite 255
                        La Jolla, California 92037
                        ATTN: Charles E. Holland, Ph.D.
                              Daniel Piacquadio. M.D.
                        Telephone:  858.642.9100
                        Facsimile : 858.642.9108
                        [Confirmation By Registered Mail, If Requested]

         14.15 Reformation. All Parties hereby agree that neither Party intends
to violate any public policy, statutory or common law, rule, regulation, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries; that if any word, sentence, paragraph or
clause or combination thereof of this Agreement is found, by a court or
executive body with judicial powers having jurisdiction over this Agreement or
any of its Parties hereto, in a final unappealed order to be in violation of any
such provision in any country or community or association of countries, such
words, sentences, paragraphs or clauses or combination shall be inoperative in
such country or community or association of countries, and the remainder of this
Agreement shall remain binding upon the Parties hereto.

         14.16 Cumulative Rights. The rights, powers and remedies hereunder
shall be in addition to, and not in limitation of, all rights, powers and
remedies provided at law or in equity, or under any other agreement between the
Parties. All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.

         14.17 Force Majeure. No liability hereunder shall result to a Party by
reason of delay in performance caused by force majeure, that is, circumstances
beyond the reasonable control of the Party, including, without limitation, acts
of God, fire, flood, war, civil unrest, labor unrest, terrorist acts, shortage
of or inability to obtain material as equipment.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>

         14.18 Section  Headings.  The section  headings used in this Agreement
are intended for convenience only and shall not be deemed to supersede or
modify any provisions.

         IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement in multiple originals by their duly authorized officers and
representatives on the respective dates shown below, but the terms hereof are
effective as of the Effective Date.

                                     INNOVATIVE MEDICAL SERVICES

Dated: September 5, 2003           By: /s/ Michael L. Krall
                                       -----------------------------------
                                       Michael L. Krall President / CEO

                                     THERAPEUTICS, INC.

Dated: September 5, 2003           By: /s/ Dan Piacquadio
                                       ---------------------
                                       Dan Piacquadio, M.D
                                       Title: President

Dated: September 5, 2003           By: /s/ Charles E. Holland
                                       --------------------------
                                       Charles E. Holland, Ph.D

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 37 OF 43

<PAGE>

                                    Exhibit A

U. S. PATENTS

       98-0114      Disinfectant and Method of Making
                    --------------------------------------------------------
       Case No.     USSN 09/169,229 filed 10-09-98
       Status:      U.S. Patent 6,197,814 B1 issued 03-06-01
       00-0128      Disinfectant and Method of Making (Divisional Application)
                    --------------------------------------------------------
       Case No.:    USSN 09/798,763 filed 03-02-01
       Status:      U.S. Patent 6,583,176 issued 06-24-03

                            U. S. PATENT APPLICATIONS

              [CONFIDENTIAL TREATMENT OF THIS SECTION IS REQUESTED]

      0x-xxxx        XXXXXXXXXXXXXXXXXXXXXXXXX - filed XXXXX, 2003
      0x-xxxx        XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX - filed XXXXXX, 2002
                     -----------------------------------------------------
      0x-xxxx        XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX -filed XXXXXX, 2003
                     -----------------------------------------------------
      0x-xxxx        XXXXXXXXXXXXXXXXXXXXXXXXX -filed XXXXXXXXX, 2003
                     -----------------------------------------------------

                                 FOREIGN PATENTS
                                 ---------------

     00-0043 Disinfectant and Method of Making - OAPI Region
     Case No. Serial Number 1200000094
     Status: Patent Number 11368 issued 10-17-00
     00-0044 Disinfectant and Method of Making -Russia
     Case No. 200000396
     Status: Patent No. 002646 issued 08-29-2002
     00-0024 Disinfectant and Method of Making -Australia
     Case No. 11880/99
     Status: Patent No. 753,470 issued 08-29-2002
     00-0031 Disinfectant and Method of Making -New Zealand
     Case No. 503582
     Status: Patent 503582 issued

PENDING FOREIGN PATENT APPLICATIONS
-----------------------------------

              [CONFIDENTIAL TREATMENT OF THIS SECTION IS REQUESTED]

00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -Brazil
00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -Canada
00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -China
00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -EPO
00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -Japan
00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -Mexico
02-0XXX  XXXXXXXXXXXXXXXX  (Div. App) -New Zealand
00-00XX  XXXXXXXXXXXXXXXXXXXXXXX -ARIPO Region

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>

                                    Exhibit B

          Development Plan Flow Chart (full size chart to be included)

         PURE Bioscience
         Therapeutics Inc.
         Term Sheet
         Definitive Agreement
         JV Formation Complete

STAGE ONE - Months 1 thru 12 from execution of Contract
     Axenohl Technology Transfer - Exploration of Technologies
     Pre-Clinical Evaluation Period of SDC and SDC + ETOH Technology
     Best Efforts to Determine Viable FDA Products
     TI Determined Non-Viable FDA Products
     Rejected Return to IMS (Typical)
     Product Category Determination (Product Category Evaluation Flow Chart,
     Exhibit C)
     Product Development Product Pool
     TI Developed Category 1
     First Three Products Identified for TI Development

STAGE 2 - Months 1-24 Projected Sequenced Product Regulatory Starts from
         execution of Contract

     Pre-Clinical
     Phase 1 Clinical
     Phase 2 Clinical
     Pharma or 3rd Party Out-Licensing
     License to Development and Sub-License Agreements (Product Specific)
          Pre-Clinical
          Phase 1 Clinical
          Phase 2 Clinical
          Pharma or 3rd Party Out-Licensing
          License to Development and Sub-License Agreements (Product Specific)
               Pre-Clinical Phase 1 Clinical
               Phase 2 Clinical
               Pharma or 3rd Party Out-Licensing
               License to Development and Sub-License Agreements (Product
               Specific)

3rd Party Developed Category 2

First Two Products Identified for Out-Licensed Development
         Pre-Clinical Evaluation Period
         Phase 1 Clinical
         Phase 2 Clinical
         Phase 3 Clinical
         License to Development and Sub-License Agreements (Product Specific)
                  Pre-Clinical Evaluation Period
                  Phase 1 Clinical
                  Phase 2 Clinical
                  Phase 3 Clinical
                  License to Development and Sub-License Agreements
                  (Product Specific)

IMS, TI or Out-Sourced developed Cat 3
         Development and Sub-Licensing Agreements on a case by case basis as
         required

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
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<PAGE>

                                    Exhibit C

     Product Category Evaluation Flow Chart (full size chart to be included)

1.   Will the Product be used in the Medical, Dental or Veterinary Fields?
     a.   If (1) is Yes then - Is the Product to be used in other than food or
          water? (Goto 2)
     b.   If (1) No then - Not In Contract (NIC) - Remains Innovative Medical
          Services Property

2.   Is the Product to be used in other than food or water?
     a.   If (2) is Yes then - Does the Product require a Healthcare Provider
          RX, Authorization or Action to be utilized?
     b.   If (2) is No then - Not In Contract (NIC) - Remains Innovative Medical
          Services Property

3.   Does the Product require a Healthcare Provider RX, Authorization or Action
     to be utilized?
     a.   If (3) is Yes then - Will Product be developed by Therapeutics?
     b.   If (3) is No then - Product becomes Category 3 per contract (Goto 5)

4.   Will Product be developed by Therapeutics?
     a.   If (4) is Yes then - Product becomes Category 1 Product
          [Confidentiality Requested for this item]
     b.   If (4) is No then - Product becomes Category 2 Product
          [Confidentiality Requested for this item]

5.   Was this Product previously Category 1 or 2?
     a.   If (5) is Yes then - Category 3A OTC Product [Confidentiality
          Requested for this item]
     b.   If (5) is No then - Does the Product require FDA Approval? (Goto 6)

6.   Does the Product require FDA Approval?
     a.   If (6) is Yes then - Was the Product developed directly as an OTC NDA?
          (Goto 7)
     b.   If (6) is No then - Does the Product require the disclosure or
          utilization of Therapeutics Data? (Goto8)

7.   Was the Product developed directly as an OTC NDA?
     a.   If (7) is Yes then - Product becomes Category 3B Product
          [Confidentiality Requested for this item]
     b.   If (7) is No then - Was the Product developed under a Monograph for
          OTC? (Goto 9)

8.   Does the Product require the disclosure or utilization of Therapeutics
     Data?
     a.   If (8) is Yes then - Was the Product developed under a Monograph for
          OTC? (Goto 9)
     b.   If (8) is No then - Not In Contract (NIC) - Remains Innovative Medical
          Services Property

9.   Was the Product developed under a Monograph for OTC?
     a.   If (9) is Yes then - Product becomes Category 3A Product
          [Confidentiality Requested for this item]
     b.   If (9) is No then - Does the Product require the disclosure or
          utilization of Therapeutics Data? (Goto 10)

10.  Does the Product require the disclosure or utilization of Therapeutics
     Data?
     a.   If (10) is Yes then - Does the Product Make a FDA Claim? (Goto 11)
     b.   If (10) is No then - Not In Contract (NIC) - Remains Innovative
          Medical Services Property

11.  Does the Product Make a FDA Claim?
     a.   If (11) is Yes then - Product becomes Category 3C Product
          [Confidentiality Requested for this item]
     b.   If (11) is No then - Product becomes Category 3D Product
          [Confidentiality Requested for this item]

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 40 OF 43

<PAGE>
                        Exhibit D Reimbursement of Costs

Cost of Therapeutics, Inc. Services Determination

         For reimbursement purposes related to in-house THERAPEUTICS services
         rendered in support of the Products, the cost will be billed according
         to the then current THERAPEUTICS rate schedule less 10%. The then
         current schedule of THERAPEUTICS services and costs shall be included
         with any Budget submitted by THERAPEUTICS to the EMC.

Reimbursement Methodology

         It is anticipated that the Partnered Transaction Proceeds will be
         received by the Parties directly from the Third Party in proportion to
         its allocable percentage set forth in Section 5.4. Within 30 days of
         receipt of each direct Third Party payment representing their allocated
         share of Partnered Transaction Proceeds from a Category I - III
         Product, the Parties will submit to the EMC a detailed list of costs
         incurred in development, partnering and intellectual property
         activities relative to the Product for which the payment was received.

         For reimbursement calculations, [CONFIDENTIAL TREATMENT OF THIS ITEM IS
         REQUESTED] under this Agreement to acquire the SDC Core Technology and
         associated intellectual property from NVID and others will be allocated
         to each of the first four deals regardless of the Category of the
         Product upon which the deal is based. Likewise, one third of
         THERAPEUTICS' costs incurred for pre-clinical investigations that
         support multiple Products will be allocated to each of the first three
         Category I and II deals and Category IIIA and IIIB deals (categorized
         by the FDA as OTC drug products).

         If either Party subsequently incurs costs that qualify for the above
         described allocation across multiple Products (and the same is included
         in an approved Budget), a detailed list of those costs shall be
         submitted monthly to the EMC for approval.

         Reimbursement of all reimbursable costs shall take place according to
         the "50/50
         -0/100" scheme described below. The Parties will "even-up" based upon
         the costs submitted to and approved by the EMC and the respective
         payments received by the Parties from the Third Parties. For
         reimbursement purposes, the gross "Partnered Transaction Proceeds" will
         be split 50/50 until the one Party is fully reimbursed and then 0/100
         until the second Party is fully reimbursed.

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 41 OF 43

<PAGE>
                            Cost Control and Approval

The EMC will review and approve all costs submitted for reimbursement and
determine the net effect of "evening-up". Within 10 business days of the EMC
approval of the submitted costs and the "evening-up amount" determination the
"owing" Party will pay the other Party the "evening-up amount".

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 42 OF 43

<PAGE>
             EXHIBIT E FORM OF "PRODUCT SPECIFIC" LICENSE AGREEMENT

Within fifteen (15) days of the effective date of this agreement the Parties
will provide and agree to the form of the "Product Specific" license and it will
be attached hereto as Exhibit "E".

W02-W97-oc:LGA\41332973.5              FINAL DEVELOPMENT AND LICENSING AGREEMENT
CONFIDENTIAL                   DATED SEPTEMBER 5, 2003 BY AND BETWEEN INNOVATIVE
                                         MEDICAL SERVICES AND THERAPEUTICS, INC.
                                                                   Page 43 OF 43

<PAGE>Exhibit 10.6

 

LEASE

 

THIS LEASE is made as of
December 15, 2003, by and between VADNAIS HEIGHTS INVESTMENT COMPANY,
a Minnesota general partnership, MCH CAPITAL, LLC, a Minnesota limited
liability company, ROBERT TIPLER and RICHARD K. MATHEWS
(collectively, “Lessor”), and ANGEION CORPORATION, a Minnesota
corporation and MEDICAL GRAPHICS CORPORATION, a Minnesota corporation
(collectively, “Tenant”).

 

RECITALS:

 

Lessor and Tenant are parties to
that certain Lease with an original date of March 6, 1985, as amended by eight
(8) written amendments and one (1) Renewal of Lease dated December 21, 2001
(collectively, the “Original Lease”) regarding certain real property located at
350 Oakgrove Parkway, Vadnais Heights, Minnesota with a building consisting of
approximately 52,254 sq. ft  (the
“Premises”).  The Premises includes
without limitation the exterior portion of the real property, specifically
including the parking lot and all exterior landscaped areas of the real
property.

 

The term of the Original Lease will
expire as of June 30, 2004 and Lessor and Tenant desire to enter into this
Lease regarding Tenant’s continued occupancy of the Premises.

 

NOW, THEREFORE, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Lessor and Tenant
agree as follows:

 

1.                                       Term.  The term of this Lease
(“Term”) shall be five (5) years, commencing on July 1, 2004, and
terminating on June 30, 2009.

 

3.                                       Use of Premises. 
Tenant may use the Premises for any lawful use.  Tenant agrees that Lessor shall have no
liability or obligation to make any alterations, improvements or repairs of any
kind on or about the Premises or the building or buildings of which they are a
part, or the equipment, fixtures, plumbing, appliances, or machinery in, upon,
or serving same, or the streets, alleys, areas, area-ways, or passages
adjoining or appurtenant thereto, except as specifically set forth in this
Lease.

 

4.                                       Rent.  Tenant agrees to pay Lessor
rent in the annual amounts set forth in this Section 4, which shall be payable
in monthly installments, payable in advance on the first day of each and every
month for and during the full term of this Lease, at the office of Lessor.  

 

	
  First Year

  	
   

  	
  $285,600 per year

  	
   

  	
  $23,800 per month

  
	
  Second Year

  	
   

  	
  $285,600 per year

  	
   

  	
  $23,800 per month

  
	
  Third Year

  	
   

  	
  $303,600 per year

  	
   

  	
  $25,300 per month

  
	
  Fourth Year

  	
   

  	
  $309,600 per year

  	
   

  	
  $25,800 per month

  
	
  Fifth Year

  	
   

  	
  $316,800 per year

  	
   

  	
  $26,400 per month

  

 

5.                                       Tenant to Maintain and Surrender Premises in
Good Order.  Tenant also covenants and agrees that Tenant
will, at its own expense, (a) keep the Premises and the equipment, plumbing,
drains, fixtures, appliances, and machinery in, upon, serving, or appurtenant
to the Premises, in good repair and in good sanitary condition during the Term,
(b) replace promptly any and all glass broken in or about the Premises with
glass of the same quality; (c) make no alterations in or additions to the
Premises, without first obtaining Lessor’s written consent, which consent shall
not be unreasonably withheld, delayed or conditioned; (d) not use or permit
anything upon said premises that will increase the rate of insurance thereon,
or anything that may be dangerous to life or limb; (e) not in any manner deface
or injure the Premises, or any part thereof, or overload the floors, or do or
permit anything to be done upon the Premises or in the passageways, alleys,
areas, area-ways, sidewalks, or streets adjacent thereto, that will amount to
or create a nuisance; (f) not use the Premises or permit the same or any part
thereof to be used for lodging or sleeping purposes, or for any purpose
contrary to the laws, ordinances or regulations of the United States of America
or the State of Minnesota, or the City of Vadnais Heights or of any rules or
regulations of the City of Vadnais Heights, or of any boards or officers of
said city; and (g) return the Premises peaceably and promptly to Lessor at the
end of the

 

 

Term, or at any previous termination thereof,
in as good condition as they are now in or may hereafter be put in, loss by
casualty and ordinary wear excepted.

 

6.                                       Ice, Snow and Utilities. 
Tenant further covenants and agrees to keep the sidewalks bordering on
the Premises (where the leased space borders upon a sidewalk or passageway) at
all times free from ice and snow and other obstructions, and to neither waste
nor misuse water, electricity, gas, steam, or any other utilities or agencies
which are or may be furnished by Lessor, and to promptly pay all rates, costs
and charges for the same, except as to such, if any, as Lessor has specifically
agreed herein to furnish free of charge.

 

7.                                       Signs.  Tenant shall not erect or
permit to be erected on the Premises, any signs on the exterior of the Premises
or buildings without the written consent of Lessor, which consent shall not be
unreasonably withheld, delayed or conditioned, nor place or permit to be placed
in any portion of any of the Premises any weight or weights in excess of the
reasonable or safe carrying capacity of the structure.  Notwithstanding the foregoing sentence,
Lessor hereby consents to Tenant’s signage currently on the Premises and/or the
building.

 

8.                                       Condition of Premises; Release of Lessor. 
Subject to (a) Lessor’s obligation to complete Lessor’s Work as described
in Section 25 of this Lease and (b) the terms and conditions of Section 11 of
this Lease, Tenant (1) acknowledges the receipt of the Premises in good and
sanitary condition, and in good repair; (2) agrees that Tenant’s taking
possession of the Premises shall be conclusive evidence that the Premises, and
the equipment, plumbing, drains, fixtures, appliances, and machinery therein,
were at the time of taking possession thereof in good, clean, sanitary, and
tenantable condition, and in all respects satisfactory and acceptable to
Tenant, and in the condition in which they were represented to Tenant to be and
agreed to be put in by Lessor; and (3) releases Lessor from any and all claims
arising from any defect in the condition of the Premises, or the equipment,
fixtures, or appliances in or serving the Premises, and the building or
buildings of which they are a part, and the streets, alleys, areas, area-ways,
passages, or sidewalks adjoining or appurtenant thereto.

 

9.                                       Subleasing.  Tenant agrees that Tenant will
not sublet the Premises, or any part thereof, and will not assign this Lease or
any interest therein, nor permit this Lease to become transferred by operation
of law or otherwise, and that no act or acts will be done or suffered whereby
the same may be or become sublet or assigned in whole or in part, without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld, delayed or conditioned. 
Lessor’s consent shall be required as to each and every case of
underleasing or assignment, as they shall from time to time occur or be
desired, and that nothing whatever shall be held to be a waiver of or to
supersede the necessity of such endorsement. 
Notwithstanding the foregoing, Tenant shall have the right, without
Lessor’s consent, to assign Tenant’s interest in this Lease as a result of any
of the following, provided that the financial condition of the assignee shall
be equal to or better than Tenant’s financial condition immediately before the
assignment: (i) any merger, consolidation or other reorganization of Tenant’s
corporate existence; (ii) the sale or transfer of any of the stock of Tenant;
or (iii) any change in the form of Tenant’s legal organization under applicable
state law (individually and collectively, “Tenant’s Restructuring”) .  Tenant agrees to provide Landlord with copies
of any and all necessary documents evidencing Tenant’s Restructuring and any
such assignment within thirty (30) days following the effective date of such Tenant’s
Restructuring assignment.

 

10.                                 Bankruptcy.  Any assignment, sale in
bankruptcy, or insolvency of Tenant may, at the option of Lessor, be considered
an assignment within the meaning of this Lease and as a breach of the covenants
hereof.

 

11.                                 Liability of Lessor and Tenant. 
Tenant further agrees that Lessor shall not be liable for any damage,
either to person or persons or property or the loss of property sustained by
Tenant, or by any other person or persons due to the Premises or the buildings
of which the Premises are a part, or the equipment, fixtures, appliances, or
machinery in or upon the same, or the halls, passages, areas, area-ways, and
sidewalks or streets adjoining or appurtenant to the same being or becoming out
of repair or defective, or due to the happening of any accident, or due to any
act or neglect of Tenant, or any tenant or occupant of said building, or of any
other person, persons or corporations (other than Lessor and Lessor’s officers,
directors, employees, managers, contractors and/or invitees), or by the
bursting of pipes, or by the use or misuse of any instrumentality or agency in
or connected with the Premises

 

 

or the building of which it is a part, or
occasioned by any nuisance made or suffered thereon or therein, unless such
damage results from the gross negligence or intentional act or omission of
Lessor and/or Lessor’s officers, directors, employees, managers, contractors
and/or invitees.

 

12.                                 Liability of Lessor and Tenant. 
Tenant assumes all liability and
obligation on account of all damages on account of the matters and things above
referred to, and agrees to save Lessor harmless thereon and therefrom, and to
indemnify Lessor on account thereof, except for liability and/or obligation
which results from the gross negligence or intentional act or omission of
Lessor and/or Lessor’s officers, directors, employees, managers, contractors
and/or invitees.  This provision shall
apply especially, but not exclusively, to damage caused by water, snow, rain,
hail, backing up of water mains, or sewers, frost, steam, sewage, illuminating
gas, sewer gas, or odors, electricity and electric current, and by the
bursting, stoppage, or leaking of pipes or radiators, plumbing, sinks, and
fixtures in or about the Premises or the building of which the Premises are a
part.  In case of such damage Lessor may
at its option repair such damage, and if such damage has occurred in the
Premises or on account of the defects in the Premises against which Tenant has
agreed to make repairs, Tenant shall thereupon reimburse Lessor for the costs
of repairing such damages.  If Tenant
fails to perform any of the covenants or agreements herein provided to be kept
or performed by Tenant, Lessor may perform the same and charge Tenant with the
expense of such performance, and Tenant agrees promptly on demand to repay to
Lessor the cost of such performance by Lessor. 
Notwithstanding the foregoing, Lessor will be responsible for any costs
incurred by Tenant by reason of damage to the Premises, which damage is the
result of the failure, deficiency or lack of repair of any structural member of
the Premises, including without limitation, the roof, foundation, windows, and
parking lot (“Structural Repair Damage”). 
The cost of Structural Repair Damage includes without limitation,
repair, replacement and/or restoration of the damaged areas and/or equipment to
their original condition.  Tenant, at its
option, may undertake repair, replacement and/or restoration of the Structural
Repair Damage and Lessor will reimburse Tenant for the cost of Structural
Repair Damage.  If Lessor does not
reimburse Tenant for Structural Repair Damage within 45 days of Tenant’s
invoice for the same, Tenant may set-off the cost of Structural Repair Damage
from all rent next owing pursuant to this Lease.  If the cost of any Structural Repair Damage
is not fully paid by such set-offs, Lessor will pay the balance to Tenant
within thirty (30) days following the termination of this Lease.

 

13.                                 Notice to Clean Premises. 
Tenant further covenants and agrees that the service of notice by any
officer of the City of Vadnais Heights upon either party to this Lease to clean
said premises, or to do any other act in connection therewith, shall be
conclusive evidence as between the parties that Tenant has breached the
covenant, which Tenant’s non-performance has occasioned the notice.  Any notice from Lessor to Tenant, relating to
the Premises or the occupancy thereof, shall be deemed duly served if left at
the Premises addressed to Tenant

 

14.                                 Tenant to Company with City Regulations.  Tenant
further covenants and agrees at its own expense to observe and keep all
regulations and requirements of the City of Vadnais Heights or other public
authorities in force at the time Tenant took possession of the Premises or
which may thereafter be made regarding the condition and conduct of the
Premises, any part thereof, and the sidewalks adjacent thereto, including all
building, fire, sanitary, police, or other regulations.

 

15.                                 Insurance.  During the Term of this Lease,
Tenant will, at Tenant’s sole cost and expense, keep the building and any other
improvements now or hereafter located on the Premises insured against loss by
fire, vandalism and malicious mischief and normal extended coverage risks for
the full insurable value thereof.  Lessor
shall be named as an additional insured on any such casualty insurance carried
by Tenant for the Premises.

 

16.                                 Taking for Public Use. 
Tenant further agrees that if (a) the entire Premises, or (b) more than
ten percent (10%) of the Building, or (c) the access from the Premises to
public thoroughfares, shall be taken for any street or other public use, or
shall during the continuance of this Lease be destroyed by the action of the
public authorities, then this Lease and its term shall thereupon terminate.  In the event of any lesser taking, Lessor
shall restore the Premises to a complete architectural unit, at Lessor’s
expense, and the Rent payable by Tenant shall be proportionately adjusted to
reflect the remaining Premises during the remaining Term of this Lease.

 

 

17.                                 Destruction by Fire; Repair of Premises After
Fire.  Lessor and Tenant agree that if during the
Term, the Premises or the improvements thereon shall be injured or destroyed by
fire or the elements, or through any other cause, so as to render the Premises
unfit for occupancy, or makes it impossible to conduct the business of Tenant
thereon, or to such an extent that they cannot be repaired with reasonable
diligence within ninety (90) days from the happening of such injury, then
Lessor may terminate this Lease and its term from the date of such damage or
destruction by written notice of termination delivered to Tenant, and Tenant
shall promptly surrender the Premises and all interest therein to Lessor, and
Tenant shall pay rent only to the time of such surrender; except that Tenant
shall during such time pay a pro rata portion of the rent apportioned to the
portion of the Premises which are in condition for occupancy or which may be
actually occupied the period from the date of such damage or destruction until
the termination of this Lease by Lessor. 
In the case of any such termination, Lessor may re-enter and repossess
the Premises, and may dispossess all parties then in possession thereof.  But if the Premises can be restored within
ninety (90) days from the happening of the injury thereto, and Lessor within
fifteen (15) days from the occurrence of such injury elects in writing to so
repair or restore said premises within ninety (90) days from the happening of
the injury thereto, then this Lease shall not end or terminate on account of
such injury by fire or otherwise, but the rent shall not run or accrue after
the injury and during the process of repairs, and up to the time when the
repairs shall be completed, except that Tenant shall during such time pay a pro
rata portion of the rent apportioned to the portion of the Premises which are
in condition for occupancy or which may be actually occupied during such
repairing period and Tenant shall assign the proceeds of any casualty insurance
coverage to Lessor to the extent of such repairs or restoration so completed by
Lessor.  If, however, the Premises shall
be so slightly injured by any cause aforesaid, as not to be rendered unfit for
occupancy, then Lessor shall repair the same with reasonable promptness, and in
that case the rent shall not cease or be abated during such repairing period,
except that Tenant shall during such time pay a pro rata portion of the rent
apportioned to the portion of the Premises which are in condition for occupancy
or which may be actually occupied during such repairing period.  All improvements or betterments placed by
Tenant on the Premises shall, however, in any event, be repaired and replaced
by Tenant at its own expense and not at the expense of Lessor.

 

18.                                 Quiet Enjoyment. 
Lessor agrees and covenants that Tenant, on paying the rent and
performing the covenants aforesaid, shall and may peaceably and quietly have,
hold, and enjoy the demises premises for the Term, except as otherwise provided
in this Lease.

 

19.                                 Alterations; Liens.  It
is understood and agreed with respect to all alterations, repairs or
improvements to the Premises, or any part thereof, which shall only be with the
written consent of Lessor, which consent shall not be unreasonably withheld,
delayed or conditioned, that Tenant shall and will in each instance hold Lessor
and the Premises forever harmless and free from all costs, damages, loss, and
liability of every kind and character which may be claimed, asserted, or
charged, including liability to adjacent owners based upon the acts of
negligence of Tenants or its agents, contractors, or employees, or upon the
negligence of any other person or persons in or about said premises or upon the
failure of any or either of them to observe and comply with the requirement of
the law or with the regulations of the authorities in the said city of Vadnais
Heights and will hold Lessor and the Premises forever free and clear from liens
for labor and material furnished by or on behalf of Tenant.  If the cost of such improvement or alteration
exceeds $100,000, Tenant will, before making any such repairs, improvements, or
alterations, furnish Lessor with a bond in an amount and with sureties
satisfactory to Lessor conditioned for the performance by Tenant of the matters
and things in this paragraph required to be done by Tenant.

 

20.                                 Right of Re-Entry; Subleasing; Termination of
Lease Under Bankruptcy.  It is further agreed between Lessor and
Tenant that this Lease is made upon the condition that if Tenant shall neglect
or fail to keep, observe, and perform any of the covenants and agreements
Tenant has agreed to in this Lease, or if the leasehold interest of Tenant
shall be taken on execution or other process of law or if Tenant shall petition
to be or be declared bankrupt or insolvent according to law, or if Tenant shall
vacate the Premises or abandon them during the Term, then Lessor may
immediately or at any time thereafter, and without further notice or demand,
enter into and upon the Premises, or any part thereof, in the name of the whole,
and take absolute possession of the Premises fully and absolutely, without such
re-entry working a forfeiture of the rents to be paid and the covenants to be
performed by Tenant for the full term of this Lease, and may at Lessor’s
election lease or sublet the Premises, or any part thereof, on such terms and
conditions and for such rents and for such time as Lessor may elect, and after

 

 

crediting the rent actually collected by
Lessor from such re-letting on the rentals stipulated to be paid under this
Lease by Tenant from time to time, collect from Tenant any balance remaining
due from time to time on the rent reserved under this Lease, charging to Tenant
such reasonable expenses as Lessor may expand in putting the Premises in
tenantable condition.  Or Lessor may at
its election and upon written notice to Tenant declare this Lease forfeited and
void, and may thereupon re-enter and take full and absolute possession of the
Premises as the owner thereof, and free from any right or claim of Tenant, or any
person or persons claiming through or under Tenant; and such election and
re-entry shall constitute an absolute bar to any right to enter by Tenant upon
the payment of all arrearages of rent and costs after a dispossession under any
suit or process for breach of any of the covenants of this Lease, and the
commencement by Lessor of any action to recover possession of the Premises
shall be deemed a sufficient notice of Lessor’s election to treat this Lease as
void and terminated, without the written notice above specified, unless Lessor
shall in writing, before beginning such proceeding, notify Tenant that after
obtaining such possession Lessor will continue to look to Tenant for the
performance of this Lease and will submit the Premises on Tenant’s account, in
the manner as above provided.

 

21.                                 Taxes.  Tenant shall pay directly all
real estate taxes and special assessments levied against the Premises during
the Term (“Taxes”), making payment directly to the taxing authority, as
required by law.  Tenant’s payment of
Taxes shall be made after receipt (from Lessor or from the taxing authority) of
a statement for the same and, provided Tenant receives such receipt at least
twenty (20) days prior to the date Taxes are due, before penalty attaches to
the same.  Lessor agrees that Tenant
shall have the unrestricted right to contest and appeal from any assessment or
real estate taxes against the Premises either in its own name or in the name of
Lessor, should this be required by law. 
Notwithstanding the foregoing, no contest shall involve the possibility
of forfeiture, sale or disturbance of Lessor’s interest in the Premises.  Lessor further agrees to cooperate in all
reasonable ways to further any such procedure by Tenant and to notify Tenant
promptly of the amount of each assessment communicated to Lessor in order that
Tenant may make a timely election regarding its possible contest thereof.  Expenses of any such contest shall be borne
by Tenant.  In the absence of a contest
thereof, Lessor agrees that no assessment of the Premises shall be negotiated
or accepted without the participation and concurrence of Tenant.  Tenant shall not be liable in any event for
any income tax due or levied and assessed against Lessor as to benefits
received under this Lease.

 

22.                                 Surrender.  Tenant, upon leaving the
Premises hereby leased, shall at its own expense remove all ashes, dirt,
rubbish, and refuse, and upon Tenant’s failure to do so, Lessor may immediately
without further notice to Tenant do the same at Tenant’s expense, which Tenant
shall immediately pay upon receipt of a bill for same from Lessor.  If Tenant remains in the Premises after the
expiration of the term, such possession shall not extend the Term, and Tenant
shall promptly vacate the Premises; and if for any reason Tenant does not
promptly vacate the Premises at the end of the term, Tenant agrees to pay
Lessor, for such time as elapses between the end of the term and the time when
Tenant actually vacates the Premises, a pro rata rental equal to one and
one-half (1 1⁄2) times the rent provided to be paid during the Term.  Tenant agrees that no assent, express or
implied, by Lessor to any breach of any of Tenant’s covenants or agreements
shall be deemed or taken to be a waiver of any succeeding breach of such
covenant.

 

23.                                 Right of Entry. 
Lessor shall at all reasonable times, and upon twenty-four (24) hours
notice to Tenant, have the right to enter upon the Premises to inspect the
condition, and at its election to make reasonable and necessary repairs thereon
for the protection and preservation thereof, but nothing herein shall be
construed to require Lessor to make such repairs, and Lessor shall not be
liable to Tenant, or any other person or persons, for failure or delay in
making said repairs, or for damage or injury to person or property caused in or
by the making of such repairs, or the doing of such work.  Lessor shall have the right during the last
30 days of the Term to place and maintain on the Premises and in the windows
thereof the usual notice of “To Let” and “To Rent,” and to show the Premises to
prospective tenants.

 

24.                                 Heirs and Others. Each of the covenants, provisions, terms,
and agreements of this Lease shall inure to the benefit of and shall be
obligatory upon the respective heirs, executors, administrators, successors and
assigns of Lessor and Tenant respectively.

 

25.                                 No Further Amendments.     There are no
understandings or agreements outside of this Lease.

 

 

26.                                 Lessor’s Work. 
Lessor shall, at its expense, complete the improvements to the Premises
described on Exhibit A attached to this Lease (“Lessor’s Work”) on or before
June 15, 2004.  Lessor’s failure to
complete Lessor’s Work on or before June 15, 2004 shall be a material default
by Lessor of this Lease and shall entitle Tenant to set-off the cost of
completing Lessor’s Work from all rent next owing pursuant to this Lease.

 

IN TESTIMONY WHEREOF Lessor
and Tenant have executed this Lease the day and year first written.

 

 

	
  Lessor:

  	
   

  	
  Tenant:

  
	
   

  	
   

  	
   

  
	
  /s/ Brian Hoelcher

  	
   

  	
  /s/ Richard E.
  Jahnke

  
	
  MCH Capital, LLC

  	
   

  	
  Angeion
  Corporation

  
	
   

  	
   

  	
   

  
	
  /s/ John T.
  Kubinski

  	
   

  	
  /s/ Rex Fasching

  
	
  Vadnais Heights
  Investment Company

  	
   

  	
  Medical Graphics
  Corporation

  
	
   

  	
   

  	
   

  
	
  /s/ Robert Tipler

  	
   

  	
   

  
	
  Robert Tipler

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Richard K.
  Mathews

  	
   

  	
   

  
	
  Richard K. Mathews

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]