Document:

Unassociated Document

Exhibit 10.1

February 25th, 2004

Hector W. Alila, D.V.M., Ph.D.

1268 Turnbury Lane

North Wales, PA 19454

Dear Hector:

Protalex is pleased to make you the following offer of employment. We will employ you as our Senior Vice President of Drug Development. You are to report directly to me as the Company’s Chief Executive Officer. This position is effective March 1st, 2004.

As compensation for your services, you will be paid an annualized salary of $170,000, payable in accordance with our customary payroll practices. Additionally, upon your acceptance of this letter, the Board of Directors will authorize the granting to you of options to acquire 150,000 shares of our common stock. The exercise price of these options will be 85% of the fair market value of our common stock on the date of grant. These options will vest over a period of four (4) years consistent with the provisions of our Employee Stock Option Plan and its related agreements. The first 25% installment will vest six (6) months following your acceptance of this letter and will be retroactive to the date of hire. The options will have a 10-year term.

Additionally, upon and in consideration for your acceptance of this letter, you will receive 50,000 shares of the common stock of the Company and $10,000.

Either you or Protalex may terminate your employment at any time on notice to the other, with or without cause; provided, however, that if Protalex terminates your employment without cause, Protalex will pay you monthly 1/12th of the your base salary in effect on the date of such termination (the “Severance Payments”) for a period of not more than 12 months, with the first payment being made on the 30th day following the date such termination, and
with each subsequent payment being made on the same day of each successive month.

Notwithstanding the foregoing, the Severance Payments shall terminate in the event that you secure new employment with a base salary equal to or greater than your base salary with the Company in effect as of the date of termination. The Severance Payments will also terminate if you enter into direct or indirect competition with the Company. If you accept new employment with a base salary less than your base salary in effect as of the date of termination and the severance period has not expired, the Company, in lieu of the remaining Severance Payments to be made, shall pay you the difference between the total amount of the remaining Severance Payments due and the total amount of your new salary payable during the remaining applicable severance period.

In addition to your cash compensation and options as described above, during your employment with the Company, you will be entitled to participate in any life, health, accident, disability, or hospitalization insurance plans, pension plans, or retirement plans as the Board of Directors makes available to the executive employees of Protalex as a group.

Should a change of control occur, the terms of this agreement shall remain in effect.

Within one week following your acceptance of this letter, you agree that you will sign Protalex’s standard form of non-disclosure and invention assignment agreement, a copy of which has been provided to you.

If this offer of employment is acceptable to you, please sign the enclosed copy of this letter in the space provided below for your signature and return it to us.

Very truly yours,

PROTALEX, INC.

By:  /s/ Steven H. Kane 

      Steven H. Kane,

        Chief Executive Officer

Accepted and approved:

 

/s/ Hector W. Alila        

Hector W. Alila, D.V.M., Ph.D.Unassociated Document

	
Exhibit 10.2

 

October 21, 2004

Mr. Marc L. Rose

1220 Foxglove Lane

West Chester, PA 19380

Dear Marc:

Protalex is pleased to make you the following offer of employment. We will employ you as our Chief Financial Officer. You are to report directly to me, the Company’s Chief Executive Officer. Your starting date should be on or before November 15th, 2004.

As compensation for your services, you will be paid a monthly salary of $13,750.00, payable in accordance with our customary payroll practices. Additionally, upon your acceptance of this letter, the Board of Directors will authorize the granting to you of options to acquire 100,000 shares of our common stock. These options will vest at a rate of 1/48 per month commencing on the six-month anniversary of your date of employment, retroactive to your date of employment, consistent with the provisions of our Employee Stock Option Plan and is related agreements. The options will have a 10-year term, subject to the terms of the Plan. You will also be granted 15,000 restricted shares of stock in Protalex, Inc. You will, as a member of the executive team, be eligible to participate in the annual executive bonus
plan.

In addition to your cash compensation and options as described above, during your employment with the Company, you will be entitled to participate in any life, health, accident, disability, or hospitalization insurance plans, pension plans, or retirement plans as the Board of Directors makes available to the executive employees of Protalex as a group.

Either you or Protalex may terminate your employment at any time on notice to the other, with or without cause; provided, however, that if Protalex terminates your employment without cause, Protalex will pay you monthly 1/12th of your base salary in effect on the date of such termination (the “Severance Payments”) for a period of not more than 12 months, with the first payment being made on the 30th day following the date such termination, and with
each subsequent payment being made on the same day of each successive month.

Notwithstanding the foregoing, the Severance Payments shall terminate in the event that you secure new employment with a base salary equal to or greater than your base salary with the Company in effect on the date of your termination. The severance Payments will also terminate if you enter into direct or indirect competition with the Company. If you accept new employment with a base salary less than your base salary in effect as of the date of termination and the severance period has not expired, the Company, in lieu of the remaining Severance Payments to be made, shall pay the difference between the total amount of the remaining Severance Payments due and the total amount of your new salary payable during the remaining applicable severance period.

	 
	 	 	 
	

	 

Within one week following your acceptance of this letter, you agree that you will sign Protalex’s standard form of non-disclosure and invention assignment agreement, a copy of which has been provided to you.

Marc, I think your qualifications and positive attitude make you the ideal candidate for the job. I look forward to working with you as a member of the Protalex team.

If this offer of employment is acceptable to you, please sign the enclosed copy of this letter in the space provided below for your signature and return it to us.

Very truly yours,

PROTALEX, INC.

By:   /s/ Steven H. Kane 

       Steven H. Kane

         Chief Executive Officer

Accepted and approved:

/s/ Marc L. Rose        

Marc L. RoseExhibit 10.7

         Portions herein identified by [***] have been omitted pursuant
   to a request for confidential treatment and have been filed separately with
       the Commission pursuant to Rule 406 of the Securities Act of 1933

                        LICENSE AND DEVELOPMENT AGREEMENT

      THIS LICENSE AND DEVELOPMENT AGREEMENT (this "Agreement"), effective as of
October 26, 2004 (the "Effective  Date"), is entered into by and between NOVADEL
PHARMA, INC., a Delaware corporation ("NovaDel"), and HANA BIOSCIENCES,  INC., a
Delaware corporation (the "Licensee"). NovaDel and Licensee each may be referred
to herein individually as a "Party," or collectively as the "Parties."

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

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

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

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

                                    ARTICLE 1
                                   DEFINITIONS

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

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

                                  Page 1 of 36
<PAGE>

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

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

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

      1.5 "Confidential Information" shall have the meaning set forth in Article
15.

      1.6 "Common  Technical  Document"  shall have the meaning set forth in the
International  Conference on  Harmonization  of the Technical  Requirements  for
Registration of Pharmaceuticals  for Human Use (ICH) Guideline M4,  Organization
of the Common Technical Document, as revised on January 13, 2004.

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

      1.8 "Designated Compound" shall mean ondansetron.

      1.9 "Development  Activities"  shall mean the activities  performed by the
Parties under the Development Plan pursuant to Article 3.

      1.10 "Development Budget" shall have the meaning set forth in Section 3.3.

      1.11  "Development  Committee" shall have the meaning set forth in Section
3.4.1.

      1.12 "Development Plan" shall have the meaning set forth in Section 3.3.

      1.13 "Effective Date" shall have the meaning set forth in the preamble.

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

                                  Page 2 of 36
<PAGE>

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

      1.16 "Exploitation" shall mean the making, having made, importation,  use,
sale,  offering  for  sale of a  licensed  product  or  process,  including  the
research, development,  registration,  modification,  improvement,  manufacture,
storage,  optimization,  import,  export,  transport,  distribution,  promotion,
marketing, sale or other disposition of a licensed product or process.

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

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

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

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

      1.21  "Indemnification  Claim  Notice" shall have the meaning set forth in
Section 10.3.1.

      1.22  "Indemnified  Party"  shall  have the  meaning  set forth in Section
10.3.1.

      1.23  "Indeterminate  PK  Outcome"  is  defined  as  detectable  levels of
ondansetron with at least one lingual spray dose tested [***].

      1.24  "Infringement  Suit"  shall  have the  meaning  set forth in Section
6.8.2.

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

                                  Page 3 of 36
<PAGE>

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

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

      1.28  "Licensed  Product(s)"  shall  mean  any  dosage  of  pharmaceutical
composition  or  preparation  in finished  form labeled and packaged for sale by
prescription,  over-the-counter  or any other method for human  application only
that contains ondansetron delivered by means of the Licensed Process.

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

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

      1.31 "Licensee" shall mean Hana Biosciences, Inc., a Delaware corporation.

      1.32 "Losses" shall have the meaning set forth in Section 10.1.

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

      1.34 "Negative PK Outcome" is defined as [***].

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

                                  Page 4 of 36
<PAGE>

      1.36  "New   Designated   Compound"  shall  mean  a  compound  other  than
ondansetron  that (i) belongs to the antiemetic  therapeutic  class and (ii) has
not been licensed to a Third Party.

      1.37 "NovaDel" shall have the meaning set forth in the preamble.

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

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

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

      1.41 "Positive PK Outcome" is defined as [***].

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

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

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

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<PAGE>

      1.45  "Sublicensee"  shall mean any Third Party to which Licensee grants a
sublicense  pursuant  to Section 2.4 under the  licenses  granted to Licensee by
NovaDel under Section 2.1.

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

      1.47 "Technology" shall have the meaning set forth in the preamble.

      1.48 "Term" shall have the meaning set forth in Section 7.1.

      1.49 "Territory" shall mean the United States of America and Canada.

      1.50 "Third Party" shall mean any Entity other than NovaDel,  Licensee and
their respective Affiliates.

      1.51  "Third  Party  Claim"  shall have the  meaning  set forth in Section
10.3.2.

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

      1.53 "Valid  Claim" shall mean,  with respect to a particular  country,  a
claim  of a  Patent  in such  country  that  (a) has not  been  revoked  or held
unenforceable  or  invalid by a decision  of a court or  governmental  agency of
competent  jurisdiction  from  which no  appeal  can be taken or has been  taken
within the time allowed for appeal, and (b) has not been abandoned,  disclaimed,
denied or admitted to be invalid or unenforceable  through reissue or disclaimer
or otherwise in such country,  except if a claim, or the subject matter thereof,
of a pending patent  application  shall not have issued within 4 years after the
filing date from which such claim,  or subject matter  thereof,  takes priority,
such claim shall not  constitute  a valid claim for  purposes of this  agreement
unless and until such claims shall issue.

                                   ARTICLE 2
                                 GRANT OF RIGHTS

      2.1 License Grants to Licensee.

                                  Page 6 of 36
<PAGE>

            2.1.1  Subject to Section 2.3 and the other terms and  conditions of
this  Agreement,  NovaDel  hereby  grants to Licensee  and Licensee  accepts,  a
non-transferable  (except as provided in Article  12),  sublicenseable  (only as
provided in Section 2.4), royalty-bearing, exclusive right and license under the
Licensed  Technology to Exploit the Licensed  Product in the  Territory,  to the
full end of the Term for which  the  Licensed  Technology  is  licensed,  unless
sooner terminated as herein after provided.

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

            2.1.3 Subject to 2.3 and the terms and conditions of this Agreement,
NovaDel herby grants to Licensee a right to develop  Combination  Products under
mutually agreeable terms.

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

      2.3  Retained  Rights.  NovaDel  retains  all right,  title and  interest,
including the right to grant licenses to Third  Parties,  in and to the Licensed
Technology  (other  than  for  delivery  of the  Designated  Compounds  only  as
expressly provided in Section 2.1.1) and the Licensed Trademarks (other than for
the  Exploitation  of Licensed  Product  only as  expressly  provided in Section
2.1.2).  Licensee shall have no rights,  express or implied, with respect to the
Licensed Technology or the Licensed Trademarks, except as expressly set forth in
Section  2.1, and  Licensee  covenants  to NovaDel  that none of  Licensee,  its
Affiliates  or  Sublicenses  shall  use the  Licensed  Technology,  directly  or
indirectly,  for any purpose  other than for  administration  of the  Designated
Compounds  in  connection  with the  Exploitation  of Licensed  Product,  or the
Licensed  Trademarks,  directly or  indirectly,  for any purpose  other than the
marketing, distribution and sale of Licensed Product hereunder.  Notwithstanding
anything in this Agreement to the contrary, NovaDel does hereby retain the right
to (a) enter into collaborations or other agreements with, and to grant licenses
and other rights under the NovaDel Patents and NovaDel Know-How to Third Parties
to Exploit products containing compounds other than the Designated Compounds and
to use the  Licensed  Process in  connection  therewith,  and (b)  independently
Exploit products containing compounds other than the Designated Compounds and to
use the Licensed  Process in  connection  therewith.  Notwithstanding  any other
provision   contained  in  this  Agreement,   NovaDel  retains  an  irrevocable,
non-exclusive,  royalty-free right to use the Licensed Technology (including the
Licensed  Process) with respect to the Designated  Compounds,  for its internal,
non-commercial  research  and  development  activities  and NovaDel  retains the
rights for all other  territories other than the Territory as defined in Section
1.47 and non-human uses of the Designated Compounds.

                                  Page 7 of 36
<PAGE>

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

            2.4.1  Licensee  must  obtain  NovaDel's  prior  written  consent in
respect of each such  sublicense,  such consent not to be unreasonably  withheld
but in no case will exceed 30 days, and any  sublicense  agreement must be fully
consistent with the terms and conditions of this Agreement,  including  Articles
3.10,  5, 6, 10, 11, 13 and 16, and  provide  that  Sublicensee  will  indemnify
NovaDel and its Affiliates to the extent provided in Article 10.

            2.4.2 Within five (5) days after  execution or receipt  thereof,  as
applicable, Licensee shall provide NovaDel with a full and complete copy of each
sublicense  agreement  granted hereunder and shall deliver copies of all reports
(including  relating to royalties and other payments)  received by Licensee from
such Sublicensees.

            2.4.3  Termination of this Agreement by NovaDel  pursuant to Section
8.3 with  respect to Licensee  shall not  terminate  any  sublicense  granted by
Licensee  pursuant to this Section 2.4 with respect to a  Sublicensee,  provided
that (a) such Sublicensee is not in breach of any provision of this Agreement or
the applicable  sublicense  agreement,  (b) such  Sublicensee  shall perform all
obligations of Licensee under this Agreement,  (c) NovaDel shall have all rights
with respect to any and all  Sublicensees  as it had  hereunder  with respect to
Licensee prior to  termination  of this Agreement with respect to Licensee,  (d)
Licensee shall include in any  sublicense a provision in which said  Sublicensee
acknowledges  its obligations to NovaDel  hereunder and the rights of NovaDel to
terminate this Agreement  with respect to any  Sublicensee  for breaches of this
Agreement  by  such  Sublicensee.  The  failure  of  Licensee  to  include  in a
sublicense  the  provisions  referenced  in clause (d) shall render the affected
sublicense void.

                                   ARTICLE 3
                  DEVELOPMENT AND COMMERCIALIZATION ACTIVITIES

      3.1 Development and Commercialization.  Licensee shall have the sole right
and  obligation  to  develop  and  commercialize  the  Licensed  Product  in the
Territory.  NovaDel  shall  perform  or  cause to be  performed,  on  behalf  of
Licensee,  certain  Development  Activities in  accordance  with this Article 3.
Except as set forth herein,  Licensee shall be solely  responsible for all costs
and  expenses  in  connection  with  all   development   and   commercialization
activities,  including the Development Activities performed by NovaDel on behalf
of Licensee.

      3.2 Development Activities.  NovaDel shall not be required to commence any
Development  Activities  until Licensee has executed 100% of the  non-refundable
License Fee & Equity transaction described in Section 4.4.

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

                                  Page 8 of 36
<PAGE>

            3.2.2 Outcome of Pilot PK Study.  Following  completion of the pilot
PK study,  there are  three  possible  outcomes  with  responsibilities  for the
Parties specified as follows:

                  (a) Positive PK Outcome - development of the Licensed  Product
continues  according to the  Development  Plan and terms and  conditions of this
Agreement.  If more than 120%  relative  bioavailability  is  achieved by direct
comparison of  areas-under-the-curve  to that of the reference tablet for lowest
dose lingual spray tested [***].

                  (b)  Indeterminate  PK  Outcome  -  NovaDel  will  reformulate
Licensed Product at NovaDel's epxense with express purpose of achieving Positive
PK Outcome. Licensee shall bear all costs and expenses incurred by or on behalf
of Licensee in connection with the performance of its Development Activities
beginning with initiation of subsequent pilot PK or other mutually agreed to
studies. NovaDel will not be required to conduct more than one additional round
of formulation work at its own cost. If any further formulation work is desired
by Licensee, Licensee will bear all costs and expenses incurred by or on behalf
of Licensee in connection with the performance of its Development Activities. If
any further formulation work is not desired by Licensee, NovaDel and Licensee
will follow the provisions of the Negative PK Outcome in Section 3.2.2(c).

                  (c)  Negative  PK Outcome - Licensee  has option to identify a
New Designated Compound. License shall bear all costs and expenses incurred by
or on behalf of Licensee in connection with the performance of its Development
Activities and all terms and conditions of this Agreement will apply to the new
Designated Compound. Should Licensee exercise its right to this option, all data
and rights for ondansetron will revert back to NovaDel.

            3.2.3  Reports.  Within  thirty  (30)  days  after  the  end of each
calendar quarter in which Development Activities are performed, each Party shall
provide to the  Development  Committee a written  progress  report,  which shall
describe the Development Activities it has performed,  or cause to be performed,
during such  calendar  quarter,  evaluate the work  performed in relation to the
goals of the  Development  Plan and in relation to the Development  Budget,  and
provide such other  information  as may be required by the  Development  Plan or
reasonably   requested  by  the  Development   Committee  with  respect  to  the
Development  Activities.  Minutes from  periodic  project team meetings or other
meetings between the parties can serve as a substitute for the required progress
reports outlined in this Section 3.2.2.

      3.3 Development Plan and Budget.  The development  plan (the  "Development
Plan") and the development budget (the "Development Budget") for the Development
Activities  relating to ondansetron are attached hereto as Exhibit B and Exhibit
C,  respectively.  The Development  Committee shall review the Development Plans
and the  Development  Budgets at least  monthly and shall have the right to make
such  modifications or updates to the Development  Plans or Development  Budgets
that it deems  appropriate.  The Parties  acknowledge and agree that the amounts
set  forth  in  the   Development   Budgets  are   estimates   and,   given  the
unpredictability of the Development Activities,  there can be no assurances that
the  Development  Activities can be completed  within the  Development  Budgets,
provided,  however, that the Parties agree to use their Commercially  Reasonable
Efforts to adhere to the Development Budgets not to exceed the amounts set forth
in Exhibit C without written approval of the Development Committee.

                                  Page 9 of 36
<PAGE>

      3.4 Development Committee

            3.4.1 Formation and Authority of Development Committee.  NovaDel and
Licensee shall establish a development committee (the "Development  Committee"),
which shall oversee the Development Activities performed by the Parties,  review
and approve the  Development  Budget and approve any changes to the  Development
Plan and  Development  Budget.  Each  Party  shall  appoint  an equal  number of
representatives  with the requisite  experience  and seniority to enable them to
make  decisions  on  behalf  of the  Parties  with  respect  to the  Development
Activities.  From time to time, each Party may substitute its representatives on
written notice to the other Party.

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

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

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

      3.5 Regulatory Approvals.  All INDs, NDAs and other filings,  applications
or requests pursuant to or in connection with the Regulatory  Approvals required
under the Development Plan shall be made in the name of [***].  [***] shall have
a perpetual,  irrevocable,  worldwide  right to use and reference the Regulatory
Documentation  with  respect to the  Licensed  Product and any data  included or
referenced  therein  for all  purposes.  [***]  agrees  to  utilize  the  Common
Technical Document format for its marketing  applications in order to facilitate
any subsequent submissions filed by [***] outside of the Territory. [***] agrees
to prepare Modules 2.3 and 3 of [***] marketing  applications.  If a Drug Master
File ("DMF") is utilized,  the DMF shall be owned by [***],  provided that [***]
shall have unlimited  access to the DMF for purposes of any  Regulatory  Filings
relating  to each  Licensed  Product.  [***]  agrees to request  that the DMF be
treated as confidential.  [***] agrees to keep [***]  reasonably  informed as to
the communications, if any, between [***] and the Regulatory Authorities.

                                 Page 10 of 36
<PAGE>

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

      3.7 Development Expenses.

            3.7.1  NovaDel's  Obligation.  Novadel  shall  bear  all  costs  and
expenses incurred in providing a formulation for the Pilot PK Study as defined
in Exhibit B or other mutually agreed to studies.

            3.7.2   Licensee's   Obligation.   In   consideration  of  NovaDel's
performance of its Development Activities,  Licensee shall reimburse NovaDel for
the  reasonable  and  documented  costs and  expenses  incurred  by  NovaDel  in
performing such activities in accordance with the Development Budget (as may be
amended in accordance with Section 3.3). Licensee shall bear all costs and
expenses incurred by or on behalf of Licensee in connection with the performance
of its Development Activities starting with initiation of the pilot PK study but
not to include costs and expenses outlined in 3.7.1.

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

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

                                 Page 11 of 36
<PAGE>

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

      3.9 Development and Use of Trademarks.  Licensee shall have the sole right
to determine the Trademarks to be used with respect to the  Exploitation  of the
Licensed  Product in the  Territory,  provided  that the  product  labeling  and
promotional materials disclose that the Licensed Product are delivered using the
Licensed Process and include the Licensed Trademarks.

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

      3.11 Manufacturing.

            3.11.1 Subject to Section 3.11.5,  NovaDel,  or its designee,  shall
manufacture and supply Licensee with Licensed Product on commercially reasonable
terms  for  clinical   development  of  the  Licensed   Product  pursuant  to  a
manufacturing  agreement  (the  "Manufacturing  Agreement")  to be entered  into
following execution of this Agreement.

            3.11.2 Subject to Section  3.11.5,  following  receipt of Regulatory
Approval,  NovaDel, or its designee,  shall manufacture and supply Licensee with
Licensed Product on commercially  reasonable terms pursuant to the Manufacturing
Agreement.

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

            3.11.4 The manufacturing agreement will stipulate among other things
that (i) Licensee will purchase  Licensed Product from NovaDel at actual Cost of
Goods Sold  (COGS) for  commercial  supply will not exceed  actual  manufactured
costs as defined by Generally  Acceptable  Accounting  Principles (GAAP) in each
calendar  year plus 10% or Licensee will acquire  Licensed  Product from NovaDel
designated third party manufacturer directly and (ii) in the event that Licensee
enters into a Sublicense for a Licensed Product and such Sublicensee  desires to
obtain  rights to  manufacture  such  Licensed  Product,  then  NovaDel will not
unreasonably  withhold its consent to transfer the manufacturing  rights to such
Sublicensee,  provided  that  measures are  incorporated  into the  sublicensing
agreement to continue to safeguard the  confidentiality  of NovaDel Know-how and
technology with respect to the Licensed Product as set forth in Section 3.11.5

                                 Page 12 of 36
<PAGE>

            3.11.5  It is  the  intent  of  the  Parties  that  NovaDel,  or its
designee, be the exclusive  manufacturer of the Licensed Product pursuant to the
terms of the Manufacturing Agreement;  provided, however, that in the event that
NovaDel,  or its  designee,  is unable  or  unwilling  to  provide  clinical  or
commercial  supply of Licensed Product within a reasonable  period of time of 90
days from  receipt of purchase  order  preceded  by a twelve (12) month  rolling
forecast upon commercially  reasonable terms, then Licensee shall be entitled to
seek  alternate   manufacturing  source.  In  such  event,  Licensee  shall  use
commercially  reasonable efforts to ensure that any such alternate manufacturing
source agree (a) to maintain in strictest confidence all information relating to
the manufacture of the Licensed Product and the Licensed Technology,  (b) not to
file any intellectual  property protection relating to inventions that may arise
from the manufacture of the Licensed  Product and Licensed  Technology,  and (c)
that any  intellectual  property that does arise out of the  manufacture  of the
Licensed  Product and  Licensed  Technology  belong to  NovaDel.  In such event,
Novadel agrees to transfer all NovaDel  Know-How to enable the  manufacturer  to
meet Licensee's  requirements for a stable and consistent  commercial  supply of
the Licensed Product.

                                   ARTICLE 4
                        ROYALTIES AND OTHER CONSIDERATION

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

            4.1.1 Licensee shall pay to NovaDel royalties as follows:  (i) [***]
percent ([***]%) of up to the first $10,000,000 of Net Sales by Licensee  or any
Affiliate  or  Sublicensee  of  Licensee  of the  Licensed  Product  during each
calendar  year in the Territory  plus (ii) [***]  percent  ([***]%) of Net Sales
greater than $10,000,000 and up to $50,000,000 by Licensee  or  any Affiliate or
Sublicensee of Licensee of the Licensed Product during each calendar year in the
Territory  plus  (iii)  [***]  percent   ([***]%)  of  Net  Sales  greater  than
$50,000,000  by  Licensee or any  Affiliate  or  Sublicensee  of Licensee of the
Licensed  Product during each calendar year in the Territory.  See Exhibit D for
schedule of royalty calculation.

            4.1.2 The conversion  rate for payments  under section 4.1.1,  as it
pertains to sales in Canada, shall be calculated by using the conversion rate on
the last day of the calendar  quarter for which the sales apply.  The conversion
rate to be used will be taken  from the  currency  converter  at  www.oanda.com.
Canadian  dollar sales will be converted into U.S.  dollars and then the royalty
rates outlined in section 4.1.1 will apply.

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

      4.3 Royalty  Payments.  Royalties  under Section 4.1.1 shall be payable to
NovaDel on a calendar quarterly basis,  within thirty (30) days after the end of
each  calendar  quarter.  Royalty  payments to NovaDel  will be reduced by [***]
percent  ([***]%)  from the schedule in Section 4.1.1 up until the time at which
the  Licensee has  recovered  through a) sales of the  Licensed  Product  and/or
through b) license fees, milestone payments,  or development funding received by
Licensee from a Sublicensee of the Licensed  Product,  [***] percent ([***]%) of
the total pharmaceutical  development and clinical costs incurred by the License
during the development of the Licensed Product.  Once the Licensee has recovered
[***]  percent  ([***]%) of the total  pharmaceutical  development  and clinical
costs,  royalties  will be paid to NovaDel as per the schedule in Section 4.1.1.
The Licensee will submit to NovaDel documentation to support the total amount of
funds spent by the Licensee on  pharmaceutical  development and clinical studies
for the  Licensed  Product.  The  Licensee  will  submit  along with  payment to
NovaDel,  a quarterly  royalty  statement  in a format  mutually  agreed by both
parties.  Along  with  the  statement  will  be  all  supporting   documentation
comprising  of a statement of net sales for the period and copies of actual paid
invoices covering clinical supplies, consultants, clinical studies, investigator
fees,  document  preparation,  regulatory  fees and other direct fees related to
development of the Licensed Product,

                                 Page 13 of 36
<PAGE>

      4.4  Licensee  Fee & Equity.  Simultaneously  with the  execution  of this
Agreement,  Licensee shall purchase  400,000 shares of newly issued common stock
in  NovaDel  at a set price of $2.50 per  share.  Licensee  shall  also issue to
NovaDel shares of its common stock  totaling a value of $500,000.  The amount of
shares of  Licensee's  common  stock  issued to NovaDel  will be  determined  by
dividing $500,000 by the average price of the Licensee's common stock during the
ten (10)  business  days prior to the  Effective  Date of this  Agreement.  Both
NovaDel and Licensee  represent  that they are acquiring the common stock of the
other Party for investment  purposes only, and will not sell their shares of the
other  Party's  common  stock for a period  of at least  two (2) years  from the
Effective Date.

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

            4.5.1 $[***]  within ten (10)  Business  Days from the date on which
the  final  report of the pilot  pharmacokinetic  study (as per the  Development
Plan) is issued  provided,  however,  Licensee  chooses to proceed  with further
development.

            4.5.2 $[***]  within ten (10)  Business  Days from the date on which
the IND is filed with the FDA.

            4.5.3 $[***]  within ten (10)  Business  Days from the date on which
the  Company's  NDA is  accepted  for review by the FDA and the  pharmacokinetic
profile  of  the  Licensed   Product  is  superior  to  the  reference   product
(ondansetron  8mg  tablet).  Superiority  will be  achieved  if the  Tmax of the
Licensed  Product  reflects  a [***]%  reduction  in the  Tmax of the  reference
product ([***] ondansetron tablet) used in the pharmacokinetic  study as per the
Development  Plan. This milestone  payment in this Section 4.5.3 will be reduced
to $[***] if superiority is not achieved in the  pharmacokinetic  profile of the
Licensed Product over the reference product.

            4.5.4 $[***]  within ten (10)  Business  Days from the date on which
the  Company's  NDA for the  Licensed  Product  is  approved  by the FDA and the
pharmacokinetic  profile of the  Licensed  Product is superior to the  reference
product (ondansetron [***] tablet).  Superiority will be achieved if the Tmax of
the Licensed  Product  reflects a [***]%  reduction in the Tmax of the reference
product ([***] ondansetron tablet) used in the pharmacokinetic  study as per the
Development  Plan. This milestone  payment in this Section 4.5.4 will be reduced
to $[***] if superiority is not achieved in the  pharmacokinetic  profile of the
Licensed Product over the reference product.

                                 Page 14 of 36
<PAGE>

      4.6  Reduction of Payments.  In the event that, or from and after the date
on which,  (a) no Valid Claim of a NovaDel Patent covering the Licensed  Product
exists in a country  and (b) no  regulatory  exclusivity  with  respect  to such
Licensed  Product  exists in such country  (whether as a result of expiration of
the exclusivity period or otherwise),  the royalty payments set forth in Section
4.1 with  respect to the Licensed  Product in such  country  shall be reduced by
[***]  percent  ([***]%).  In the  event a NovaDel  patent  is  deemed  invalid,
reduction  in payments  will begin when an  appellate  court rules that no valid
claim, from a NovaDel patent, covers the Licensed Product in the country.

      4.7 Mode of Payment. All payments to NovaDel under this Agreement shall be
paid in United States  Dollars to a bank account in the United States as NovaDel
may reasonably designate.

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

                                   ARTICLE 5
                               REPORTS AND RECORDS

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

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

                                 Page 15 of 36
<PAGE>

      5.3  Reports.  Within  thirty (30) days of the end of each quarter of each
calendar year,  Licensee shall deliver to NovaDel complete and accurate reports,
giving  such  particulars  of the  business  conducted  by  Licensee  during the
preceding  quarter  under this  Agreement as shall be pertinent to an accounting
for  royalties,  milestone  payments  and Other  Income  hereunder.  These shall
include at least the following:

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

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

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

            5.3.4  Total   milestone   payments  due  based  on  achievement  of
milestones.

            5.3.5  Total   Sublicensing   Income   owed  by  License   from  its
Sublicensees.

            5.3.6 Total  royalties  due based on Net Sales by or for Licensee or
its Affiliates and Sublicensing  Income owed by its Sublicensees,  including any
adjustments pursuant to Section 4.1.

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

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

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

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

                                 Page 16 of 36
<PAGE>

                                   ARTICLE 6
                              PATENT AND TRADEMARK
                           PROSECUTION AND MAINTENANCE

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

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

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

                                 Page 17 of 36
<PAGE>

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

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

      6.5 Prosecution of Patents and Trademarks.

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

                                 Page 18 of 36
<PAGE>

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

      6.6 Enforcement of Patents and Trademarks.

            6.6.1  Technology  and  Trademarks  of  NovaDel.   If  either  Party
determines  that any Technology or Trademark of NovaDel or any Joint  Technology
is being  infringed by a Third  Party's  activities  and that such  infringement
could  affect  the  exercise  by the  Parties  of their  respective  rights  and
obligations  under this Agreement,  it shall promptly notify such other Party in
writing and provide such other Party with any evidence of such infringement that
is reasonably available.  Promptly after the receipt of such written notice, the
Parties  shall meet and discuss in good faith the removal of such  infringement.
NovaDel  shall  consider in good faith any comments from Licensee and shall keep
Licensee  reasonably  informed of any steps  taken to remove such  infringement.
NovaDel  shall have the first  right,  but not the  obligation,  to remove  such
infringement  at its sole cost and expense;  provided,  however,  that  Licensee
shall reimburse NovaDel for [***] of the reasonable out-of-pocket costs incurred
by NovaDel  with respect to the removal of any such  infringement  to the extent
that such  infringement  adversely  affects  the  Exploitation  of the  Licensed
Product in the  Territory.  In the event that NovaDel  fails within  ninety (90)
days following  notice of such  infringement,  or earlier  notifies  Licensee in
writing of its intent not, to take commercially  appropriate steps to remove any
infringement of any NovaDel Patent or Licensed  Trademark that is likely to have
a material adverse effect on the sale of a Licensed Product, Licensee shall have
the right to do so at Licensee's expense; provided, however, that if NovaDel has
commenced  negotiations  with an alleged  infringer for  discontinuance  of such
infringement  within  such  ninety  (90)  day  period,  NovaDel  shall  have  an
additional  ninety (90) days to conclude its  negotiations  before  Licensee may
bring suit for such  infringement,  and provided further that Licensee shall not
enter into any  settlement or compromise  with respect to any NovaDel  Patent or
Licensed  Trademark without NovaDel's prior consent,  which consent shall not be
unreasonably  withheld.  Each Party shall provide  reasonable  assistance to the
other  Party,  including  providing  access  to  relevant  documents  and  other
evidence,  making its employees  available at  reasonable  business  hours,  and
joining  the  action to the extent  necessary  to allow the  enforcing  Party to
maintain the action.  Any amounts recovered by a Party pursuant to this Section,
whether by  settlement  or judgment,  shall be used to reimburse the Parties for
their reasonable costs and expenses in making such recovery (which amounts shall
be allocated pro rata if  insufficient  to cover the totality of such expenses),
with any  remainder  being  retained by the Party that  brought the  enforcement
action; provided,  however, that to the extent that any award is attributable to
the loss of sales of Licensed Product, such amount shall be paid to Licensee and
shall be treated as Net Sales on which royalties shall be due under Article 4.

      6.7 Potential Third Party Rights.

                                 Page 19 of 36
<PAGE>

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

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

            6.7.3  Retained  Rights.  Nothing in this Section 6.7 shall  prevent
Licensee,  at its own expense,  from  obtaining any license or other rights from
Third Parties it deems  appropriate  in order to permit the full and  unhindered
exercise of its rights under this Agreement.

                                 Page 20 of 36
<PAGE>

                                   ARTICLE 7
                              TERM OF THE AGREEMENT

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

                                   ARTICLE 8
                                   TERMINATION

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

      8.2 Termination for Payment Default.  Should Licensee fail to make payment
to NovaDel of royalties  or other  amounts due in  accordance  with the terms of
this Agreement,  NovaDel shall have the right to terminate this Agreement within
ten (10) days after giving said notice of termination  unless Licensee shall pay
to NovaDel, within the 10-day period, all such amounts due and payable. Upon the
expiration  of the  10-day  period,  if  Licensee  shall  not have paid all such
amounts due and payable,  the rights,  privileges and licenses granted hereunder
shall, at the option of NovaDel,  immediately terminate.  In the event a payment
is the subject of a bona fide dispute between NovaDel and Licensee that is being
pursued by a Party  pursuant to the dispute  resolution  mechanism in Article 9,
then Licensee  shall make such payment,  but shall provide  NovaDel with written
notice that such  payment is being made  subject to the outcome of such  pending
dispute  resolution  procedure  and in the event such  dispute  is  finally  and
conclusively resolved in favor of Licensee, NovaDel shall refund such payment to
Licensee with interest  calculated pursuant to Section 5.5 from the date of such
payment.

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

      8.4 Termination By The Licensee.  The Licensee shall have the right at any
time to terminate this  Agreement in whole or as to any Licensed  Product (i) by
giving 90 days notice  thereof in writing to NovaDel or (ii) if Licensee  elects
not to effect Milestone Payments which are due and payable in Article 4.5.

                                 Page 21 of 36
<PAGE>

      8.5 Survival.  Any expiration or  termination of this Agreement  shall not
affect  the  rights  and  obligations  of the  Parties  accrued  prior  to  such
expiration or termination.  Without limiting the foregoing, Articles 4, 5, 6, 9,
10, 11, 14, 15 and 16 and Sections  8.6,  8.7,  16.1,  16.7 and this Section 8.5
shall survive the termination or expiration of this Agreement for any reason.

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

      8.7 Return of Information; Assignment and License.

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

            8.7.2 Upon the  termination of this  Agreement,  Licensee (a) shall,
and shall cause its Affiliates and,  subject to Section 8.7.3,  Sublicensees to,
promptly  disclose  to NovaDel,  in  whatever  form  NovaDel  may  request,  all
Regulatory  Documentation  and  all  other  Information  and  Inventions  in the
possession or Control of Licensee, its Affiliates or Sublicensees that relate to
the Exploitation of such Licensed Product,  (b) shall, and does hereby,  assign,
and shall cause its Affiliates  and,  subject to Section 8.7.3,  Sublicensees to
assign, to NovaDel,  without  additional  compensation,  all of their respective
rights,  titles  and  interests  in and to any and all  (i)  patent,  trademark,
copyright or other intellectual  property rights, (ii) Regulatory  Documentation
and all data included or referenced  therein,  and (iii) other  Information  and
Inventions  in  the  possession  or  Control  of  Licensee,  its  Affiliates  or
Sublicensees,  in each case that  relate to the  Exploitation  of such  Licensed
Product (the  "Agreement-Related  Assets") and are permitted to be assigned, and
(c) to the extent that the Agreement-Related Assets may not be assigned,  shall,
and does hereby,  grant,  and shall cause its Affiliates and, subject to Section
8.7.3,  Sublicensees to grant, to NovaDel,  without additional  compensation,  a
perpetual, irrevocable, royalty-free, exclusive, sublicenseable through multiple
tiers of sublicensees, right and license to Exploit such Licensed Product in the
Territory.

            8.7.3  Notwithstanding  anything  contained  in  Sections  8.7.1 and
8.7.2, in the event that any sublicense granted by Licensee survives pursuant to
Section 2.4.3,  the  Sublicensee  may retain (a) the  information  and materials
identified  in  Section  8.7.1 that are  rightfully  in its  possession  and (b)
Agreement-Related Assets, in each case until the termination of such sublicense,
whereupon such Sublicensee shall return such materials to NovaDel,.

      8.8 Cumulative Remedies. The rights and remedies set forth in this Article
8 are  cumulative  and in addition to any other  rights that may be available to
the Parties.

                                 Page 22 of 36
<PAGE>

      8.9  Non-Refundability  of Milestones and Development  Costs.  Any and all
Milestone Payments made to NovaDel by Licensee under Article 4 of this Agreement
shall be  non-refundable in the event of termination of this Agreement by either
party under any of the provisions of Article 8.

                                    ARTICLE 9
                                   ARBITRATION

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

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

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

                                   ARTICLE 10
                          INDEMNIFICATION AND INSURANCE

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

                                 Page 23 of 36
<PAGE>

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

      10.3 Indemnification Procedure.

            10.3.1  Notice  of  Claim.  The  indemnified  Party  shall  give the
indemnifying Party prompt written notice (an "Indemnification  Claim Notice") of
any Losses or discovery  of fact upon which such  indemnified  Party  intends to
base a request for indemnification under Section 10.1 or Section 10.2, but in no
event shall the indemnifying Party be liable for any Losses that result from any
delay in providing such notice. Each Indemnification Claim Notice must contain a
description  of the claim and the  nature and amount of such Loss (to the extent
that the nature and amount of such Loss is known at such time).  The indemnified
Party shall furnish promptly to the indemnifying  Party copies of all papers and
official documents received in respect of any Losses. All indemnification claims
in respect of a Party, its Affiliates or their respective  directors,  officers,
employees and agents shall be made solely by such Party to this  Agreement  (the
"Indemnified Party").

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

                  (a) Control of Defense.  At its option, the indemnifying Party
may assume the defense of any Third Party Claim by giving  written notice to the
Indemnified Party within thirty (30) days after the indemnifying Party's receipt
of an  Indemnification  Claim Notice.  The  assumption of the defense of a Third
Party  Claim  by  the   indemnifying   Party  shall  not  be   construed  as  an
acknowledgment   that  the  indemnifying   Party  is  liable  to  indemnify  any
indemnified Party in respect of the Third Party Claim, nor shall it constitute a
waiver by the  indemnifying  Party of any  defenses  it may assert  against  any
indemnified  Party's claim for  indemnification.  Upon assuming the defense of a
Third Party  Claim,  the  indemnifying  Party may appoint as lead counsel in the
defense of the Third Party Claim any legal counsel  selected by the indemnifying
Party. In the event the indemnifying  Party assumes the defense of a Third Party
Claim, the Indemnified Party shall immediately deliver to the indemnifying Party
all original  notices and documents  (including  court  papers)  received by any
indemnified  Party  in  connection  with  the  Third  Party  Claim.  Should  the
indemnifying  Party assume the defense of a Third Party Claim,  the indemnifying

                                 Page 24 of 36
<PAGE>

Party  shall  not be liable to the  Indemnified  Party or any other  indemnified
Party for any legal expenses  subsequently incurred by such indemnified Party in
connection with the analysis, defense or settlement of the Third Party Claim. In
the event that it is ultimately  determined that the  indemnifying  Party is not
obligated to indemnify,  defend or hold harmless an  Indemnified  Party from and
against  the Third Party  Claim,  the  Indemnified  Party  shall  reimburse  the
indemnifying Party for any and all costs and expenses (including attorneys' fees
and costs of suit) and any  Losses  incurred  by the  indemnifying  Party in its
defense of the Third Party Claim with respect to such Indemnified Party.

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

                  (c) Settlement.  With respect to any Losses relating solely to
the  payment of money  damages in  connection  with a Third Party Claim and that
will not result in the  Indemnified  Party's  becoming  subject to injunctive or
other relief or otherwise adversely affect the business of the Indemnified Party
in any manner, and as to which the indemnifying Party shall have acknowledged in
writing the  obligation  to  indemnify  the  Indemnified  Party  hereunder,  the
indemnifying  Party  shall  have the sole  right to  consent to the entry of any
judgment,  enter into any settlement or otherwise  dispose of such Loss, on such
terms as the indemnifying Party, in its sole discretion, shall deem appropriate.
With respect to all other Losses in connection  with Third Party  Claims,  where
the  indemnifying  Party has  assumed  the  defense of the Third  Party Claim in
accordance with Section  10.3.2(a),  the indemnifying Party shall have authority
to consent to the entry of any judgment,  enter into any settlement or otherwise
dispose  of such Loss  provided  it  obtains  the prior  written  consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed).
The  indemnifying  Party  shall  not be  liable  for  any  settlement  or  other
disposition  of a Loss by an  indemnified  Party  that is  reached  without  the
written  consent  of  the   indemnifying   Party.   Regardless  of  whether  the
indemnifying  Party  chooses to defend or prosecute  any Third Party  Claim,  no
indemnified  Party  shall  admit any  liability  with  respect  to,  or  settle,
compromise or discharge, any Third Party Claim without the prior written consent
of the indemnifying Party.

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

                                 Page 25 of 36
<PAGE>

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

      10.4 Insurance.

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

            10.4.2 At all times during the Development Activities, NovaDel shall
have and  maintain  such type and amounts of  liability  insurance  covering the
manufacture,  supply,  use and sale of the  Licensed  Product  as is normal  and
customary  in  the  pharmaceutical  industry  generally  for  parties  similarly
situated,  and  shall  upon  request  provide  the  Licensee  with a copy of its
policies of insurance in that regard,  along with any  amendments  and revisions
thereto.

            10.4.3 Each of Licensee and NovaDel  shall,  starting 6 months prior
to anticipated receipt of NDA approval of Licensed Product and extending through
the remaining term of this Agreement and for a period of not less than 36 months
following  the  termination  of  this  Agreement,   carry  liability   insurance
(including  blanket  contractual  liability)  in an  amount  of  not  less  than
$10,000,000  combined  single  limit,  which  insurance  will  be  written  on a
"claims-made"  policy basis with an insurance carrier  reasonably  acceptable to
the other  party.  Each party shall  provide  the other  party with  evidence of
coverage  contemplated  hereby,  in the form of  certificates  of insurance,  as
reasonably  requested.  Such certificates shall be provided by written notice to
the  other  party  15  days  prior  to  any  material  change,  cancellation  or
non-renewal of the policy.  The said amount can vary if mutually  agreed by both
parties.

                                   ARTICLE 11
                         REPRESENTATIONS AND WARRANTIES;
                             LIMITATION OF LIABILITY

      11.1  Representations,   Warranties  and  Covenants.   Each  Party  hereby
represents and warrants to the other Party as of the Effective Date as follows:

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

                                 Page 26 of 36
<PAGE>

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

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

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

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

      11.2 Additional Representations and Warranties of NovaDel.

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

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

                                 Page 27 of 36
<PAGE>

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

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

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

                                 Page 28 of 36
<PAGE>

                                   ARTICLE 12
                                   ASSIGNMENT

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

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

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

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

                                 Page 29 of 36
<PAGE>

                                   ARTICLE 14
                   PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

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

If to NovaDel to:

         NovaDel Pharma Inc.
         25 Minneakoning Road
         Flemington, NJ  08822
         Attention:  President
         908.806.2445 (fax)

         with a copy (not constituting notice) to:

If to Licensee to:

         Hana Biosciences
         400 Oyster Point Boulevard
         Suite 215
         South San Francisco, California 94080
         Attention: President
         650.588.2787 (fax)

         with a copy (not constituting notice) to:

or to such  other  address  as the Party to whom  notice is to be given may have
furnished  to the  other  Party in  writing  in  accordance  herewith.  Any such
communication  shall  be  deemed  to have  been  given  (a) when  delivered,  if
personally  delivered  or sent  by  telecopier  on a  business  day,  (b) on the
business day after dispatch, if sent by nationally-recognized overnight courier,
and (c) on the third  business  day  following  the date of mailing,  if sent by
mail. It is understood and agreed that this Article 14 is not intended to govern
the  day-to-day  business  communications   necessary  between  the  Parties  in
performing their duties, in due course, under the terms of this Agreement.

                                 Page 30 of 36
<PAGE>

                                   ARTICLE 15
                                 CONFIDENTIALITY

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

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

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

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

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

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

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

                                 Page 31 of 36
<PAGE>

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

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

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

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

            15.4.2  Required  by  Law.  Otherwise  required  by  law;  provided,
however,  that the  disclosing  Party  shall (a)  provide  the other  Party with
reasonable  advance notice of and an opportunity to comment on any such required
disclosure,  (b) if requested by such other Party, seek  confidential  treatment
with respect to any such  disclosure to the extent  available,  and (c) use good
faith  efforts to  incorporate  the  comments  of such  other  Party in any such
disclosure or request for confidential treatment;

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

            15.4.4 Required by Agreement. Made by such Party, in connection with
the  performance  of  this  Agreement,  to  Affiliates,  Sublicensees,  research
parties, employees,  consultants,  representatives or agents, each of whom prior
to disclosure  must be bound by  obligations of  confidentiality  and non-use at
least equivalent in scope to those set forth in this Article 15.

                                 Page 32 of 36
<PAGE>

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

                                   ARTICLE 16
                            MISCELLANEOUS PROVISIONS

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

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

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

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

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

                                 Page 33 of 36
<PAGE>

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

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

      16.8 Force  Majeure.  Neither Party shall be held liable or responsible to
the other Party or be deemed to have defaulted  under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the  reasonable
control of the  non-performing  Party,  including  fires,  floods,  earthquakes,
embargoes, shortages,  epidemics,  quarantines, war, acts of war (whether war be
declared or not),  acts of terrorism,  insurrections,  riots,  civil  commotion,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental  authority.  The non-performing Party shall
notify  the other  Party of such force  majeure  within ten (10) days after such
occurrence by giving written notice to the other Party stating the nature of the
event, its anticipated duration, and any action being taken to avoid or minimize
its effect.  The suspension of  performance  shall be of no greater scope and no
longer  duration  than is  necessary  and the  non-performing  Party  shall  use
commercially  reasonable  efforts to remedy its inability to perform;  provided,
however,  that  in  the  event  the  suspension  of  performance  continues  for
one-hundred  and eighty  (180) days after the date of the  occurrence,  and such
failure to perform would  constitute a material  breach of this Agreement in the
absence of such force  majeure,  the  non-performing  Party may  terminate  this
Agreement pursuant by written notice to the other Party.

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

                                 Page 34 of 36
<PAGE>

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

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

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

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

                                 Page 35 of 36
<PAGE>

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

NOVADEL PHARMA INC.                            HANA BIOSCIENCES, INC.

By: _______________________                    By: ________________________

Name: _____________________                    Name: ______________________

Title: ____________________                    Title: _____________________

Date: _____________________                    Date: ______________________

List of Exhibits:

A - Patents and Trademarks
B - Development Plan
C - Development Budget
D - Royalty Rate Structure

                                 Page 36 of 36
<PAGE>

                                    EXHIBIT A

                             PATENTS AND TRADEMARKS

1. United States Patent No. 6,676,931 B2

<PAGE>

                                    EXHIBIT B

                          DEVELOPMENT PLAN ONDANSETRON

                   FORMULATION DEVELOPMENT FOR PILOT PK STUDY

 -------------------------------------------------------------------------------

[***]

INFORMATION  MARKED  BY  [***]  HAS  BEEN  OMITTED  PURSUANT  TO A  REQUEST  FOR
CONFIDENTIAL  TREATMENT.  THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
<PAGE>

                                    EXHIBIT C

                         DEVELOPMENT BUDGET ONDANSETRON

                   [To be prepared by Development Committee]

<PAGE>

                                    EXHIBIT D

                             Royalty Rate Structure

Net Sales (U.S. Sales and Canadian
Sales Converted to U.S. Dollars)                                    Royalty Rate
--------------------------------------------------------------------------------

$0 to $10,000,000                                                     [***]%

Plus

$10,000,001 to $50,000,000                                            [***]%

Plus

$50,000,001 and above                                                 [***]%

INFORMATION  MARKED  BY  [***]  HAS  BEEN  OMITTED  PURSUANT  TO A  REQUEST  FOR
CONFIDENTIAL  TREATMENT.  THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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