Document:

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                                  EXHIBIT 10.3
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                             Vyteris Holdings, Inc.
                             2004 Stock Option Plan

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                             VYTERIS HOLDINGS, INC.
                             2004 STOCK OPTION PLAN

                                    ARTICLE I

                        PURPOSE AND ADOPTION OF THE PLAN

        1.01    PURPOSE. The purpose of the Vyteris Holdings, Inc. 2004 Stock
Option Plan (hereinafter referred to as the "Plan") is to assist the Company (as
defined below) in attracting and retaining highly competent employees and to act
as an incentive in motivating selected officers and other employees of the
Company and its subsidiaries, and directors and consultants of the Company and
its subsidiaries, to achieve long-term corporate objectives. The purpose also is
to provide for options initially granted by Vyteris, Inc. ("Vyteris"), assumed
by Treasure Mountain Holdings, Inc. ("Treasure Mountain") pursuant to the Merger
Agreement and Plan of Reorganization, dated as of July 8, 2004, as amended, by
and among Treasure Mountain, a subsidiary of Treasure Mountain and Vyteris, and
subsequently assumed by the Company pursuant to the Plan of Merger adopted by
the Company and Treasure Mountain.

        1.02    ADOPTION AND TERM. The Plan has been approved by the Board of
Directors and sole shareholder of the Company. The Plan is effective from the
date approved by the sole shareholder of the Company (the "Effective Date") and
shall remain in effect until terminated by action of the Board; PROVIDED,
HOWEVER, that no Option (as defined below) or Stock Purchase Right (as defined
below) may be granted hereunder after the tenth anniversary of the Effective
Date.

                                   ARTICLE II

                                   DEFINITIONS

        For the purpose of this Plan, the following capitalized terms shall have
the following meanings:

        2.01    APPLICABLE LAWS means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

        2.02    BENEFICIARY means an individual, trust or estate who or which,
by a written designation of the Participant filed with the Company or by
operation of law, succeeds to the rights and obligations of the Participant
under the Plan and the Option Agreement or Restricted Stock Purchase Agreement
upon the Participant's death.

        2.03    BOARD means the Board of Directors of the Company.

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        2.04    CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes said section

        2.05    COMMITTEE means the Committee defined in Section 3.01.

        2.06    COMPANY means Vyteris Holdings, Inc., a Delaware corporation,
and its successors.

        2.07    COMMON STOCK means Common Stock of the Company, par value $.0001
per share.

        2.08    DATE OF GRANT means the date designated by the Committee as the
date as of which it grants an Option or Stock Purchase Right, which shall not be
earlier than the date on which the Committee approves the granting of such
Option or Stock Purchase Right; provided, however, with respect to Options or
Grant Rights issued to replace options or Stock Purchase Rights which initially
were granted by Vyteris and subsequently assumed by Treasure Mountain and the
Company, the DATE OF GRANT as provided for in the Vyteris, Inc. 2001 Stock
Option Plan (the "PREDECESSOR PLAN")

        2.09    EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.

        2.10    FAIR MARKET VALUE means, as of any applicable date, the fair
market value of the Common Stock as determined by the Board based upon such
evidence as it may think necessary or desirable.

        2.11    INCENTIVE STOCK OPTION means a stock option within the meaning
of Section 422 of the Code.

        2.12    MERGER means any merger, reorganization, consolidation,
exchange, transfer of assets or other transaction having similar effect
involving the Company.

        2.13    NONSTATUTORY STOCK OPTION means a stock option which is not an
Incentive Stock Option.

        2.14    OPTION AGREEMENT means a written agreement between the Company
and a Participant, specifically setting forth the terms and conditions of an
Option granted under the Plan, substantially in the form of EXHIBIT A attached
hereto or such other form as shall be determined from time to time by the
Committee; provided, however, that with respect to options granted by Vyteris,
the term OPTION AGREEMENT shall mean the option agreement entered into by the
applicable optionee with Vyteris, as it may be supplemented by the Company.

        2.15    OPTION PRICE, with respect to Options, shall have the meaning
set forth in Section 6.01(b).

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        2.16    OPTION TERM means, with respect to an Option, the period of time
set forth in the Option Agreement during which the Option may be exercised.

        2.17    OPTIONS means all Nonstatutory Stock Options and Incentive Stock
Options granted at any time under the Plan or the Predecessor Plan.

        2.18    PARTICIPANT means a person designated to receive an Option or
Stock Purchase Right under the Plan in accordance with Section 4.03 or a person
designated to receive an option or stock purchase right pursuant to the
predecessor Plan.

        2.19    PLAN means the Vyteris Holdings, Inc. 2004 Stock Option Plan as
described herein, as the same may be amended from time to time.

        2.20    RESTRICTED STOCK means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Article V of the Plan or shares of
Vyteris' common stock acquired pursuant to a grant of stock purchase rights
under Article V of the Predecessor Plan.

        2.21    RESTRICTED STOCK PURCHASE AGREEMENT means a written agreement
between the Company and an Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right; provided, however,
that with respect to stock purchase rights granted by Vyteris, the term
RESTRICTED STOCK PURCHASE AGREEMENT shall mean the restricted stock purchase
agreement entered into by the applicable optionee with Vyteris, as it may be
supplemented by the Company Each Restricted Stock Purchase Agreement is subject
to the terms and conditions of the Plan and shall be substantially in the form
of EXHIBIT B attached hereto or such other form as shall be determined from time
to time by the Committee.

        2.22    STOCK PURCHASE RIGHT means the right to purchase Common Stock
pursuant to Article V of the Plan, as evidenced by a notice of grant included
within the applicable Restricted Stock Purchase Agreement (the "Notice of
Grant") or, if applicable, a right to purchase Vyteris' common stock pursuant to
Article V of the Predecessor Plan.

        2.23    TEN PERCENT SHAREHOLDER means any individual who, at the time an
Option is granted, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company.

                                   ARTICLE III

                                 ADMINISTRATION

        The Plan shall be administered by the Board or, in the discretion of the
Board, by a committee of the Board (the "Committee") comprised of at least two
persons. The Committee or Board shall have exclusive and final authority in each
determination, interpretation or other action affecting the Plan and its
Participants. The Board or Committee shall have the sole discretionary authority
to interpret the Plan, to establish and modify administrative rules for the
plan, to impose such conditions and restrictions on Options and Stock Purchase
Rights as it

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determines appropriate, and to take such steps in connection with the Plan and
Options and Stock Purchase Rights granted hereunder as it may deem necessary or
advisable. The Board or Committee may delegate such of its powers and authority
under the Plan as it deems appropriate to designated officers or employees of
the Company. In the event of such delegation of authority or exercise of
authority by the Board or Committee, references in the Plan to the Committee
shall be deemed to refer to the delegate of the Board or the Committee as the
case may be. For purposes of this Plan, references to the Committee shall be
deemed references to the Board to the extent that the Board has not appointed a
Committee to administer the Plan.

                                   ARTICLE IV

                            SHARES AND PARTICIPATION

        4.01    NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued under the Plan shall be 2,901,902 shares of Common
Stock. The number of shares available for issuance under the Plan shall be
further subject to adjustment in accordance with Section 7.06. The shares to be
offered under the Plan shall be authorized and unissued Common Stock, or issued
Common Stock which shall have been reacquired by the Company,

        4.02    SHARES SUBJECT TO TERMINATED OPTIONS AND STOCK PURCHASE RIGHTS.
Common Stock covered by any unexercised portions of terminated Options and Stock
Purchase Rights (including canceled Options and Stock Purchase Rights) granted
under Articles V and VI of the Plan or the Predecessor Plan and Common Stock
subject to any Options and Stock Purchase Rights which are otherwise surrendered
by a Participant may again be subject to new Options and Stock Purchase Rights
under the Plan.

        4.03    PARTICIPATION. Participants in the Plan shall be such
consultants, directors, officers and other employees of the Company and its
subsidiaries as the Committee, in its sole discretion, may designate from time
to time. The Committee's designation of a Participant in any year shall not
require the Committee to designate such person to receive Options, Stock
Purchase Rights or grants in any other year. The Committee shall consider such
factors as it deems pertinent in selecting Participants and in determining the
type and amount of their respective Options and Stock Purchase Rights.

                                    ARTICLE V

                              STOCK PURCHASE RIGHTS

        5.01    RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Committee determines that
it will offer Stock Purchase Rights under the Plan, it shall advise the offeree
in writing or electronically, by means of a Restricted Stock Purchase Agreement,
of the terms, conditions and restrictions related to the offer, including the
number of shares of Common Stock that the offeree shall be entitled to purchase

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and the price to be paid for such shares. The offer shall be accepted by
execution of the Restricted Stock Purchase Agreement.

        5.02    REPURCHASE OPTION. Unless the Committee determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
"Permanent Disability" (as defined in Section 6.03)). The purchase price for
shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at a rate determined by the Committee. In the event that the Restricted Stock
Purchase Agreement does not provide for a lapsing schedule, the restrictions
shall lapse as to (a) one third of the shares subject to the Restricted Stock
Purchase Agreement on the first anniversary of the grant of the Stock Purchase
Right, (b) one third of the shares subject to the Restricted Stock Purchase
Agreement on the second anniversary of the grant of the Stock Purchase Right and
(c) one third of the shares subject to the Restricted Stock Purchase Agreement
on the third anniversary of the grant of the Stock Purchase Right.

        5.03    OTHER PROVISIONS. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Committee in its sole discretion.

        5.04    RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised; PROVIDED, HOWEVER, that
Participants are entitled to share adjustments to reflect capital changes under
Section 7.06.

                                   ARTICLE VI

                                  STOCK OPTIONS

        6.01    OPTION AWARDS.

                (A)     GENERAL. The Committee may grant, to such Participants
as the Committee may select, Options entitling the Participant to purchase
shares of Common Stock from the Company in such number, at such price, and on
such terms and subject to such conditions, not inconsistent with the terms of
this Plan, as may be established by the Committee. The terms of any Option
granted under this Plan shall be set forth in an Option Agreement.

                (B)     PURCHASE PRICE OF OPTIONS. The Option Price of each
share of Common Stock which may be purchased upon exercise of any Option granted
under the Plan shall be determined by the Committee; PROVIDED, HOWEVER, that (i)
with respect to Incentive

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Stock Options, the Option Price per share shall in all cases be equal to or
greater than the Fair Market Value of a share of Common Stock on the Date of
Grant as required under Section 422 of the Code, and (ii) with respect to any
Incentive Stock Option granted to any Ten Percent Shareholder, the Option Price
per share shall in all cases be equal to or greater than 110 percent of the Fair
Market Value of a share of Common Stock on the Date of Grant as required under
Section 422 of the Code.

                (C)     DESIGNATION OF OPTIONS. Except as otherwise expressly
provided in the Plan, the Committee may designate, at the time of the grant of
each Option, the Option as an Incentive Stock Option or a Nonstatutory Stock
Option.

                (D)     INCENTIVE STOCK OPTION LIMITATIONS. No Participant may
be granted Incentive Stock Options under the Plan (or any other plans of the
Company) which would result in shares with an aggregate Fair Market Value
(measured on the Date of Grant) of more than $100,000 first becoming exercisable
in any one calendar year. No Participant may be granted Incentive Stock Options
under the Plan (or any other plans of the Company) unless the Participant is an
employee of the Company or its Subsidiaries. An individual shall not cease to be
an employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company and its
subsidiaries. For purposes of an Option initially granted as an Incentive Stock
Option, if a leave of absence of more than three months precludes such Option
from being treated as an Incentive Stock Option under the Code, such Option
thereafter shall be treated as a Nonstatutory Stock Option for purposes of this
Plan. Neither service as a director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.

                (E)     RIGHTS AS A SHAREHOLDER. A Participant or a transferee
of an Option pursuant to Section 7.04 shall have no rights as a shareholder with
respect to Common Stock covered by an Option until the Participant or transferee
shall have become the holder of record of any such shares, and no adjustment
shall be made for dividends in cash or other property or distributions or other
rights with respect to any such Common Stock for which the record date is prior
to the date on which the Participant or a transferee of the Option shall have
become the holder of record of any such shares covered by the Option; PROVIDED,
HOWEVER, that Participants are entitled to share adjustments to reflect capital
changes under Section 7.06.

                (F)     VESTING. In the event that an Option Agreement does not
provide for a vesting schedule, the Options covered thereby shall become
exercisable as to (a) one third of the shares subject to the Option Agreement on
the first anniversary of the grant of the Option, (b) one third of the shares
subject to the Option on the second anniversary of the grant of the Option and
(c) one third of the shares subject to the Option on the third anniversary of
the grant of the Option.

        6.02    TERMS OF STOCK OPTIONS.

                (A)     CONDITIONS ON EXERCISE. An Option Agreement with respect
to Options may contain such waiting periods, exercise dates and restrictions on
exercise (including,

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but not limited to, periodic installments) as may be determined by the Committee
as of the Date of Grant.

                (B)     DURATION OF OPTIONS. Options shall terminate after the
first to occur of the following events:

                        (i)     Expiration of the Option as provided in the
        Option Agreement;

                        (ii)    Termination of the Option as provided in Section
        6.03, following the Participant's termination of employment; or

                        (iii)   Ten years from the Date of Grant (five years
        from the Date of Grant in the case of any Incentive Stock Option granted
        to a Ten Percent Shareholder).

                (C)     ACCELERATION OF EXERCISE TIME. The Committee, in its
sole discretion, shall have the right (but shall not in any case be obligated),
exercisable at any time after the Date of Grant, to permit the exercise of any
Option prior to the time such Option would otherwise become exercisable under
the terms of the Option Agreement.

                (D)     EXTENSION OF EXERCISE TIME. The Committee, in its sole
discretion, shall have the right (but shall not in any case be obligated),
exercisable on or at any time after the Date of Grant, to permit any Option
granted under this Plan to be exercised after its expiration date, subject,
however, to the limitation described in Section 6.02(b)(iii).

        6.03    EXERCISE OF OPTIONS UPON TERMINATION OF EMPLOYMENT.

                (A)     GENERAL. In the event of the termination of employment
of the Participant by the Participant or the Company and its subsidiaries for
any reason whatsoever other than death, Permanent Disability (as defined in
Section 6.03(b)) or retirement after attainment of age 65, (i) any Options that
were not vested prior to the date of such termination of employment shall
terminate on such date and (ii) any Options that were vested prior to the date
of such termination of employment (and which were not previously exercised)
shall terminate on the ninetieth (90th) day following the date of such
termination of employment or the last day of the Option Term, whichever is
earlier.

                (B)     DEATH, PERMANENT DISABILITY OR RETIREMENT. In the event
of the termination of the employment of the Participant by reason of death,
Permanent Disability or retirement after attainment of age 65, any Options that
were vested prior to the date of such termination (and which were not previously
exercised), together with any other Options designated by the Committee, shall
terminate on the earlier of (i) the first anniversary of the date of such
termination and (ii) the last day of the Option Term. Any Options that were not
vested prior to the date of such termination and do not become vested pursuant
to the immediately preceding sentence shall terminate as of the date of such
termination. As used in this Plan, the

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term "Permanent Disability" means the Participant being deemed to have suffered
a disability that makes the Participant eligible for immediate benefits under
any long-term disability plan of the Company, as in effect from time to time.

                (C)     TERMINATION OF EMPLOYMENT. For purposes of the Plan,
there shall have been a termination of employment of a Participant if such
Participant is no longer an employee, consultant, director or officer of the
Company or of any of its subsidiaries.

        6.04    EXERCISE PROCEDURES. Each Option granted under the Plan shall be
exercised by written notice to the Company which must be received by the officer
or employee of the Company designated in the Option Agreement on or before the
close of business on the expiration date of the Option. The Option Price of
shares purchased upon exercise of an Option granted under the Plan shall be paid
in full in cash by the Participant pursuant to the Option Agreement; PROVIDED,
HOWEVER, that the Committee may (but shall not be required to) permit payment to
be made by delivery to the Company of either (a) Common Stock (which may include
shares otherwise issuable in connection with the exercise of the Option, subject
to such rules as the Committee deems appropriate), (b) any combination of cash
and Common Stock, or (c) such other consideration as the Committee deems
appropriate. In the event that any Common Stock shall be transferred to the
Company to satisfy all or any part of the Option Price, the part of the Option
Price deemed to have been satisfied by such transfer of Common Stock shall be
equal to the product derived by multiplying the Fair Market Value of a share of
Common Stock as of the date of exercise times the number of shares of Common
Stock transferred to the Company. The Participant may not transfer to the
Company in satisfaction of the Option Price any fractional share of Common
Stock. Any part of the Option Price paid in cash upon the exercise of any Option
shall be added to the general funds of the Company and may be used for any
proper corporate purpose. Unless the Committee shall otherwise determine, any
Common Stock transferred to the Company as payment of all or part of the Option
Price upon the exercise of any Option shall be held as treasury shares.

                                   ARTICLE VII

                                  MISCELLANEOUS

        7.01    PLAN PROVISIONS CONTROL OPTION AND STOCK PURCHASE RIGHT TERMS.
The terms of the Plan shall govern all Options and Stock Purchase Rights granted
under the Plan, and in no event shall the Committee have the power to grant any
option or stock purchase right under the Plan which is contrary to any of the
provision of the Plan. In the event any provision of any Options or Stock
Purchase Rights granted under the Plan shall conflict with any term in the Plan
as constituted on the Date of Grant of such Option or Stock Purchase Right, the
term in the Plan as constituted on the Date of Grant of such Option or Stock
Purchase Right shall control. Except as provided in Section 7.03 and Section
7.06, the terms of any Option or Stock Purchase Right granted under the Plan may
not be changed after the Date of Grant of such Option or Stock Purchase Right so
as to materially decrease the value of the Option or Stock Purchase Right
without the express written approval of the holder.

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        7.02    OPTION AGREEMENT. No person shall have any rights under any
Option granted under the Plan unless and until the Company and the Participant
to whom such Option shall have been granted shall have executed and delivered an
Option Agreement or received any other Option acknowledgment authorized by the
Committee expressly granting the Option to such person and containing provisions
setting forth the terms of the Option.

        7.03    MODIFICATION OF OPTION AFTER GRANT. No Option or Stock Purchase
Right granted under the Plan to a participant may be modified (unless such
modification does not materially decrease the value of the Option or Stock
Purchase Right) after the Date of Grant except by express written agreement
between the Company and the Participant, provided that any such change (a) shall
not be inconsistent with the terms of the Plan, and (b) shall be approved by the
Committee.

        7.04    LIMITATION ON TRANSFER. Unless determined otherwise by the
Committee, a Participant's rights and interest under the Plan may not be
assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant. In the event that the Committee makes an Option or Stock
Purchase Right transferable, such Option or Stock Purchase Right shall contain
such additional terms and conditions as the Committee deems appropriate.

        7.05    TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable with respect to such Participant's Option or Stock Purchase
Right, or with respect to any income recognized upon a disqualifying disposition
of shares received pursuant to the exercise of an Incentive Stock Option, and
the Company may defer payment or issuance of shares upon exercise of an Option
or Stock Purchase Right unless indemnified to its satisfaction against any
liability for any such tax. The amount of such withholding or tax payment shall
be determined by the Committee and shall be payable by the Participant at such
time as the Committee determines. The Participant shall meet his or her
withholding requirement by direct payment to the Company in cash of the amount
of any taxes required to be withheld with respect to such Option or Stock
Purchase Right; provided, however, that the Committee may (but shall not be
required to) permit the Participant to meet his or her withholding requirement
by (i) having withheld from such Option or Stock Purchase Right at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, whose Fair Market Value is equal to the amount of withholding taxes
due, or (ii) a combination of shares and cash.

        7.06    ADJUSTMENTS TO REFLECT CAPITAL CHANGES.

                (A)     RECAPITALIZATION. The number and kind of shares subject
to outstanding Options or Stock Purchase Rights, the Option Price for such
shares, the number and

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kind of shares available for Options and Stock Purchase Rights subsequently
granted under the Plan and the maximum number of shares in respect of which
Options can be granted to any Participant in any calendar year shall be
appropriately adjusted to reflect any stock dividend, stock split, combination
or exchange of shares, merger, consolidation or other change in capitalization
with a similar substantive effect upon the Plan or the Options or Stock Purchase
Rights granted under the Plan. The Committee shall have the power and sole
discretion to determine the amount of the adjustment to be made in each case.

                (B)     MERGER. After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of an Option or Stock Purchase Right to receive
(subject to any required action by shareholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Option or
Stock Purchase Right, the number and class of shares or other securities to
which such Participant would have been entitled pursuant to the terms of the
Merger if, at the time of the Merger, such participant had been the holder of
record of a number of shares equal to the number of shares receivable or
exercisable pursuant to such Option or Stock Purchase Right. Comparable rights
shall accrue to each Participant in the event of successive Mergers of the
character described above. In the event of a Merger in which the Company is not
the surviving corporation, the surviving, continuing, successor, or purchasing
corporation, as the case may be (the "Acquiring Corporation"), shall either
assume the Company's rights and obligations under outstanding Options and Stock
Purchase Rights or substitute comparable options and stock purchase rights in
respect of the Acquiring Corporation's stock for such outstanding Options and
Stock Purchase Rights. In the event the Acquiring Corporation elects not to
assume or substitute comparable options and stock purchase rights for such
outstanding Options and Stock Purchase Rights, the Board shall provide that any
unexercisable and/or unvested portion of the outstanding Options and Stock
Purchase Rights shall be immediately exercisable and vested as of a date prior
to such Merger or consolidation, as the Board so determines. The exercise and/or
vesting of any Option and any Stock Purchase Right that was permissible solely
by reason of this Section 7.07(b) shall be conditioned upon the consummation of
the Merger or consolidation. Any Options and Stock Purchase Rights which are
neither assumed by the Acquiring Corporation nor exercised as of the date of the
Merger shall terminate effective as of the effective date of the Merger.

        For purposes of the Plan, all outstanding Options and Stock Purchase
Rights will be considered assumed if, following the consummation of the Merger,
the option or stock purchase rights confers the right to purchase or receive,
for each share of stock subject to the Option or Stock Purchase Right
immediately prior to the consummation of the Merger, the consideration (whether
stock, cash, or other securities property) received in the Merger by holders of
Common Stock for each share of the Company's Common Stock held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type chosen by the holders of a majority of the outstanding shares of the
Company's Common Stock); provided, however, that if such consideration received
in the Merger is not solely common stock of the successor corporation or its
parent, the Committee may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, for each share of stock subject to the Option or Stock
Purchase Right, to

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be solely common stock of the successor corporation or its parent or subsidiary
equal in fair market value to the per share consideration received by holders of
the Company's Common Stock in the Merger.

                Any outstanding Option which is assumed or replaced in the event
of a Merger and does not otherwise accelerate at that time will automatically
accelerate in the event that the Participant's service terminates through an
"Involuntary Termination" effected within eighteen (18) months following the
effective date of such Merger. Any Option so accelerated will remain exercisable
until the earlier of (i) the expiration of the Option Term or (ii) the end of
the one-year period measured from the date of the Involuntary Termination.

                An Involuntary Termination will be deemed to occur upon (i) the
Participant's involuntary dismissal or discharge by the Company or its
subsidiaries or their successors for reasons other than cause or (ii) such
individual's voluntary resignation following (A) a reduction in his or her level
of compensation (including base salary, fringe benefits and any
corporate-performance based bonus or incentive programs) by more than ten
percent or (B) a relocation of such individual's place of employment by more
than fifty (50) miles, provided and only if such reduction or relocation is
effected by the Company or its subsidiaries or their successor without the
Participant's written consent.

                (C)     OPTIONS TO PURCHASE SHARES OF STOCK OF ACQUIRED
COMPANIES. After any Merger in which the Company shall be a surviving
corporation, the Committee may grant substituted options outside of the terms of
this Plan, pursuant to Section 424 of the Code, replacing old options granted
under a plan of another party to the Merger whose shares or stock subject to the
old options may no longer be issued following the Merger. The foregoing manner
of application of the foregoing provisions shall be determined by the Committee
in its sole discretion. Any such application may provide for the elimination of
any fractional shares which might otherwise become subject to any Options.

        7.07    NO RIGHT TO EMPLOYMENT. No employee or other person shall have
any claim of right to be granted an Option under this Plan. Neither the Plan nor
any action taken hereunder shall be construed as giving any employee any right
to be retained in the employ of the Company or any of its subsidiaries.

        7.08    OPTIONS NOT INCLUDABLE FOR BENEFIT PURPOSES. Common Stock
received by a Participant pursuant to the provisions of the Plan shall not be
included in the determination of benefits under any pension, group insurance or
other benefit plan applicable to the Participant which is maintained by the
Company, except as may be provided under the terms of such plans or determined
by the Board.

        7.09    GOVERNING LAW. All determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of Delaware and
construed in accordance therewith.

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        7.10    NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Board, the Committee, or any other person in
the interpretation of any of the terms of the Plan, any Option or Stock Purchase
Right granted under the Plan or any rule or procedure established by the
Committee.

        7.11    CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions have
been used in the Plan.

        7.12    SEVERABILITY. Whenever possible, each provision in the Plan and
every Option and Stock Purchase Right at any time granted under the Plan shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Plan or any Option or Stock Purchase Right at any
time granted under the Plan shall be held to be prohibited by or invalid under
applicable law, then (a) such provision shall be deemed amended to accomplish
the objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of the Plan and every other Option
and Stock Purchase Right at any time granted under the Plan shall remain in full
force and effect.

        7.13    AMENDMENT AND TERMINATION.

                (A)     AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time. No termination or amendment of the Plan
may, without the consent of the Participant to whom any Option or Stock Purchase
Right shall theretofore have been granted under the Plan, adversely affect the
right of such individual under such Option or Stock Purchase Right.

                (B)     TERMINATION. The Board shall have the right and the
power to terminate the Plan at any time; provided, however, that the Plan shall
terminate no later than ten years after the adoption of the Plan by the Board.
No Option or Stock Purchase Right shall be granted under the Plan after the
termination of the Plan, but the termination of the Plan shall not have any
other effect and any Option or Stock Purchase Right outstanding at the time of
the termination of the Plan may be exercised after termination of the Plan at
any time prior to the expiration date of such Option or Stock Purchase Right to
the same extent such Option or Stock Purchase Right would have been exercisable
had the Plan not terminated.

        7.14    LIMITATIONS. The following limitations shall apply to grants of
Options:

                (i)     No Participant shall be granted, in any fiscal year of
the Company, Options to purchase more than 104,750 shares of Common Stock, other
than grants made to the chief executive officer of the Company pursuant to an
employment agreement approved by the Board of Directors of the Company, in which
case the maximum number of shares covered by Options granted to such officer in
any fiscal year shall not exceed 5% of the Company's outstanding common stock,
calculated on a fully diluted basis.

                                      -12-
<PAGE>

                (ii)    The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 7.06(b).

                (iii)   If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 7.06(b)), the canceled Option will be counted against the
limits set forth in subsections (i) and (ii) above.

        7.15    CONDITIONS UPON ISSUANCE OF SHARES.

                (A)     LEGAL COMPLIANCE. Shares of Common Stock shall not be
issued pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such shares shall comply with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

                (B)     INVESTMENT REPRESENTATIONS. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the shares of Common Stock are being
purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required.

                (C)     ADDITIONAL CONDITIONS. The Committee shall have the
authority to condition the grant of any Option or Stock Purchase Right in such
other manner that the Committee determines to be appropriate, provided that such
condition is not inconsistent with the terms of the Plan. Such conditions may
include, among other things, obligations of Optionees to execute lock-up
agreements and shareholder agreements in the future.

        7.16.   INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares of Common Stock hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.

        7.17.   RESERVATION OF SHARES. The Company, during the term of this
Plan, will at all times reserve and keep available such number of shares of
Common Stock as shall be sufficient to satisfy the requirements of the Plan.

                                      -13-
<PAGE>

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

                                  as of , 200_

        The parties to this Stock Option Agreement (this "Agreement") are
Vyteris Holdings, Inc., a Delaware corporation having its principal place of
business in Fair Lawn, New Jersey (the "Company") and ___________________, [an
employee] of the Company (the "Optionee").

        The Company desires to have the Optionee serve as [an employee] of the
Company and to provide the Optionee with an incentive to put forth maximum
effort for the success of the business.

        The Company has adopted the Vyteris Holdings, Inc. 2004 Stock Option
Plan (the "Plan") to attract and retain highly competent employees and to
provide an incentive in motivating selected employees, officers, directors and
consultants to achieve long-term corporate objectives. Capitalized terms used in
this Agreement, unless otherwise defined herein, shall have the meanings given
to such terms in the Plan.

        This Agreement sets forth the terms and conditions applicable to options
to purchase shares of the Common Stock of the Company, par value $.0001 per
share (the "Common Stock"), granted to the Optionee under the Plan as of the
date first above written (the "Grant Date").

        Accordingly, intending to be legally bound hereby, the parties agree as
follows:

                                    ARTICLE I

                                GRANT OF OPTIONS

        1.1     Subject to the terms and conditions of this Agreement, the
Company hereby grants to the Optionee as of the Grant Date the right and option
to purchase from the Company up to, but not exceeding in the aggregate, shares
of Common Stock, at an exercise price of $ per share (the "Options"), and -- for
the period beginning on the Grant Date and ending on ________, 201_ (the "Option
Term").

        1.2     The Options are [not] incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended.

                                      -14-
<PAGE>

                                   ARTICLE II

                      VESTING, EXERCISE AND TAX WITHHOLDING

        2.1     Unless sooner vested or terminated pursuant to this Agreement,
the Options granted to the Optionee hereunder shall vest in accordance with the
following schedule:

                                              Number of Shares
        DATE OF VESTING                     FOR WHICH OPTIONS VEST

        _______, 200_                              _______
        _______, 200_                              _______
        _______, 200_                              _______

On and after the date Options have vested, they may be exercised at any time and
from time to time during the Option Term, subject to earlier termination in
accordance with Article III of this Agreement. Upon the termination of any of
the Options pursuant to such Article III, the Options so terminated shall cease
to be exercisable and the Optionee shall have no further rights under this
Agreement with respect to the Options so terminated.

        2.3     The Company, in its sole discretion, shall have the right (but
shall not in any case be obligated), exercisable at any time after the Grant
Date, to vest the Options, in whole or in part, prior to the time the Options
would otherwise vest under the terms of this Agreement.

        2.4     Vested Options shall be exercised by the Optionee (i) by
delivering to the Company a Notice in the form set forth as Appendix A annexed
hereto, together with a check payable to the order of the Company, or (ii) in
such other manner as may be permitted by the Company.

        2.5     The Company shall notify the Optionee of the amount of
withholding tax or other tax, if any, that must be paid under federal and, where
applicable, state and local law in connection with the exercise of the Options
or the sale of shares of Common Stock subject to the Options. The Optionee shall
meet his or her withholding requirement (i) by direct payment to the Company in
cash of the amount of any taxes required to be withheld with respect to such
exercise, or (ii) in such other manner as may be permitted by the Company.

                                   ARTICLE III

                            TERMINATION OF EMPLOYMENT

        3.1     In the event of the termination of employment of the Optionee by
the Optionee or the Company and its subsidiaries for any reason whatsoever other
than death, Permanent Disability (as defined in Section 3.2) or retirement after
attainment of age 65, (i) any Options that were not vested prior to the date of
such termination of employment shall terminate on such date and (ii) any Options
that were vested prior to the date of such termination of

                                      -15-
<PAGE>

employment (and which were not previously exercised) shall terminate on the
ninetieth (90th) day following the date of such termination of employment or the
last day of the Option Term, whichever is earlier.

        3.2     In the event of the termination of the employment of the
Optionee by reason of death, Permanent Disability or retirement after attainment
of age 65, those unexercised Options that were vested prior to the date of such
termination (and which were not previously exercised) shall terminate on the
earlier of (i) the first anniversary of the date of such termination and (ii)
the last day of the Option Term. Any Options that were not vested prior to the
date of such termination shall terminate as of the date of such termination. As
used in this Agreement, the term "Permanent Disability" means the Optionee being
deemed to have suffered a disability that makes the Optionee eligible for
immediate benefits under any long-term disability plan of the Company, as in
effect from time to time.

        3.3     In the event of termination of employment, the Company, in its
sole discretion, shall have the right (but shall not in any case be obligated),
exercisable on or at any time after the Grant Date, to permit an Option to be
exercised, in whole or in part, after its expiration date described in Section
3.1 or Section 3.2, but not after the expiration of the Option Term.

        3.4     For purposes of this Agreement, there shall have been a
termination of employment of the Optionee if the Optionee is no longer an
employee, consultant, director or officer of the Company or of any of its
subsidiaries.

                                   ARTICLE IV

                                  MISCELLANEOUS

        4.1     The number and kind of shares subject to outstanding Options and
the option price for such shares shall be appropriately adjusted to reflect any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Options. The Company shall have the power and sole discretion to
determine the amount of the adjustment to be made in each case.

        4.2     After any merger, reorganization, consolidation, exchange,
transfer of assets or other transaction having a similar effect involving the
Company (collectively, a "Merger"), in which the Company is the surviving
corporation, the Optionee shall, at no additional cost, be entitled upon any
exercise of the Options to receive (subject to any required action by
shareholders), in lieu of the number of shares of Common Stock receivable or
exercisable pursuant to such Options, the number and class of shares or other
securities to which the Optionee would have been entitled pursuant to the terms
of the Merger if, at the time of the Merger, the Optionee had been the holder of
record of a number of shares equal to the number of shares receivable or
exercisable pursuant to the Options. Comparable rights shall accrue to the
Optionee in the event of successive Mergers of the character described above. In
the event of a Merger in which the Company is not the surviving corporation, the
surviving, continuing, successor, or purchasing corporation, as the case may be
(the "Acquiring Corporation"), shall

                                      -16-
<PAGE>

either assume the Company's rights and obligations under this Stock Option
Agreement or substitute comparable options in respect of the Acquiring
Corporation's stock for such outstanding Options. In the event the Acquiring
Corporation elects not to assume or substitute comparable options for such
outstanding Options, the Board of Directors of the Company shall provide that
any unexercisable and/or unvested portion of the outstanding Options shall be
immediately exercisable and vested as of a date prior to such Merger or
consolidation, as the Board so determines. The exercise and/or vesting of the
Options that was permissible solely by reason of this Section 4.2 shall be
conditioned upon the consummation of the Merger or consolidation. Any Options
which are neither assumed by the Acquiring Corporation nor exercised as of the
date of the Merger shall terminate effective as of the effective date of the
Merger.

        For purposes of this Stock Option Agreement, all outstanding Options
will be considered assumed if, following the consummation of the Merger, the
option confers the right to purchase or receive, for each share of stock subject
to the Option immediately prior to the consummation of the Merger, the
consideration (whether stock, cash, or other securities property) received in
the Merger by holders of Common Stock for each share of the Company's Common
Stock held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type chosen by the holders of a majority of the
outstanding shares of the Company's Common Stock); provided, however, that if
such consideration received in the Merger is not solely common stock of the
successor corporation or its parent, the Committee may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each share of stock subject to the Option, to be
solely common stock of the successor corporation or its parent or subsidiary
equal in fair market value to the per share consideration received by holders of
the Company's Common Stock in the Merger.

        4.3     Any outstanding Option which is assumed or replaced in the event
of a Merger and does not otherwise accelerate at that time will automatically
accelerate in the event that the Optionee's service terminates through an
"Involuntary Termination" effected within eighteen (18) months following the
effective date of such Merger. Any Option so accelerated will remain exercisable
until the earlier of (i) the expiration of the Option Term or (ii) the end of
the one-year period measured from the date of the Involuntary Termination. An
Involuntary Termination will be deemed to occur upon (i) the Optionee's
involuntary dismissal or discharge by the Company or its subsidiaries or their
successors for reasons other than cause or (ii) the Optionee's voluntary
resignation following (A) a reduction in the Optionee's level of compensation
(including base salary, fringe benefits and any corporate-performance based
bonus or incentive programs) by more than ten percent or (B) a relocation of the
Optionee's place of employment by more than fifty (50) miles, provided and only
if such reduction or relocation is effected by the Company or its subsidiaries
or their successor without the Optionee's written consent.

        4.4     Nothing contained in this Agreement shall be deemed to confer
upon the Optionee, in the Optionee's capacity as a holder of Options, any right
to prevent or to approve or vote upon any of the corporate actions described in
this Article IV. The existence of the Options

                                      -17-
<PAGE>

granted hereunder shall not affect in any way the right or the power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

        4.5     Whenever the term "the Optionee" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, or the person or
persons to whom Options may be transferred by will or by the laws of descent and
distribution or otherwise, the term "the Optionee" shall be deemed to include
such person or persons.

        4.6     Unless otherwise determined by the Company in writing, the
Options granted hereunder are not transferable by the Optionee otherwise than by
will or the laws of descent and distribution and are exercisable during the
Optionee's lifetime only by the Optionee. No assignment or transfer of the
Options granted hereunder, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution or as otherwise determined by the Company
in writing), shall vest in the assignee or transferee any interest or right
herein whatsoever, but immediately upon any such assignment or transfer the
Options shall terminate and become of no further effect.

        4.7     The Optionee shall not be deemed for any purpose to be a
shareholder of the Company in respect of any shares as to which the Options
shall not have been exercised as herein provided.

        4.8     Nothing in this Agreement shall confer upon the Optionee any
right to continue in the employ of the Company or any of its subsidiaries or
shall affect the right of the Company and its subsidiaries to terminate the
employment of the Optionee (as such phrase is described in Section 3.4 of this
Agreement), with or without cause.

        4.9     Nothing in this Agreement or otherwise shall obligate the
Company to vest any of the Options, to permit the Options to be exercised other
than in accordance with the terms hereof or to grant any waivers of the terms of
this Agreement, regardless of what actions the Company, the Board or the
Committee may take or waivers the Company, the Board or the Committee may grant
under the terms of or with respect to any options now or hereafter granted to
any other person or any other options granted to the Optionee.

        4.10    Notwithstanding any other provision, hereof, the Optionee shall
not exercise the Options granted hereunder, and the Company shall not be
obligated to issue any shares to the Optionee hereunder, if the exercise thereof
or the issuance (or such purchase) of such shares would constitute a violation
by the Optionee or the Company of any provision of any law or regulation of any
governmental authority. Any determination in this connection by the Company
shall be final and binding. The Company shall in no event be obligated to
register any

                                      -18-
<PAGE>

securities pursuant to the Securities Act of 1933 (as the same shall be in
effect from time to time) or to take any other affirmative action in order to
cause the exercise of the Options or the issuance of shares pursuant thereto to
comply with any law or regulation of any governmental authority.

        4.11    No amounts of income received by the Optionee pursuant to this
Agreement shall be considered compensation for purposes of any pension or
retirement plan, insurance plan or any other employee benefit plan of the
Company or its subsidiaries, unless otherwise provided in such plan.

        4.12    Every notice or other communication relating to this Agreement
shall be in writing and shall be mailed to or delivered to the party for whom it
is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; PROVIDED,
HOWEVER, that unless and until some other address be so designated, all notices
or communications by the Optionee to the Company shall be mailed or delivered to
the President of the Company at its headquarters in Fair Lawn, New Jersey and
all notices or communications by the Company to Optionee may be given to the
Optionee personally or may be mailed to the Optionee at the Optionee's home
address as reflected in the Company's records.

        4.13    This Agreement shall be governed by the laws of the State of
Delaware applicable to agreements made and performed wholly within the State of
Delaware (regardless of the laws that might otherwise govern under applicable
conflicts of laws principles).

        4.14    As used in this Agreement, unless the context otherwise requires
(i) references to "Articles" or "Sections" are to articles or sections of this
Agreement, (ii) "hereof", "hereunder", "hereunder" and comparable tends refer to
this Agreement in its entirety and not to any particular part of this Agreement,
(iii) references to any gender include references to all genders, (iv)
"including" means including without limitation, and (v) headings of the various
articles and sections are for convenience of reference only.

        4.15    This Agreement and the Plan (the terms of which are incorporated
by reference herein) sets forth a complete understanding between the parties
with respect to its subject matter and supersedes all prior and contemporaneous
agreements and understandings with respect thereto. Except as expressly set
forth in this Agreement, the Company makes no representations, warranties or
covenants to the Optionee with respect to this Agreement or its subject matter,
including with respect to (i) the current or future value of the shares subject
to the Options and (ii) whether the option price is equal to less than or
greater than the fair market value of a share of Common Stock. Any modification,
amendment or waiver of this Agreement will be effective only if it is in writing
signed by the Company and the Optionee. The failure of any party to enforce at
any time any provision of this Agreement shall not be construed to be a waiver
of that or any other provision of this Agreement.

        4.16    TAX CONSEQUENCES. Some of the federal tax consequences relating
to this Option, as of the date of this Option, are set forth below. THIS SUMMARY
IS NECESSARILY

                                      -19-
<PAGE>

INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

        A.      GRANT OF THE OPTION. The grant of an Option will not result in
the imposition of a tax under the federal income tax laws.

        B.      EXERCISING THE OPTION.

                (1)     NONSTATUTORY STOCK OPTION ("NSO"). The Optionee may
incur regular federal income tax liability upon exercise of a NSO. The Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of the
exercised shares on the date of exercise over their aggregate exercise price. If
the Optionee is an employee or a former employee, the Company will be required
to withhold from the Optionee's compensation or collect from the Optionee and
pay to the applicable taxing authorities an amount in cash equal to a specified
percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver shares if such withholding amounts
are not delivered at the time of exercise.

                (2)     INCENTIVE STOCK OPTION ("ISO"). If this Option qualifies
as an ISO, the Optionee will have no regular federal income tax liability upon
its exercise, although the excess, if any, of the fair market value of the
exercised shares on the date of exercise over their aggregate exercise price
will be treated as an adjustment to alternative minimum taxable income for
federal tax purposes and may subject the Optionee to alternative minimum tax in
the year of exercise. In the event that the Optionee ceases to be an employee
but remains an officer, director or consultant to the Company or its
subsidiaries, any Incentive Stock Option of the Optionee that remains
unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.

        C.      DISPOSITION OF SHARES.

                (1)     NSO. If the Optionee holds shares acquired upon exercise
of an NSO ("NSO Shares") for at least one year, any gain realized on disposition
of the NSO Shares will be treated as long-term capital gain for federal income
tax purposes.

                (2)     ISO. If the Optionee holds shares acquired upon exercise
of an ISO ("ISO Shares") for at least one year after exercise and two years
after the grant date, any gain realized on disposition of the ISO Shares will be
treated as long-term capital gain for federal income tax purposes. If the
Optionee disposes of ISO Shares within one year after exercise or within two
years after the grant date, any gain realized on such disposition will be
treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the fair
market value of the ISO Shares acquired on the date of exercise and the
aggregate exercise price, or (B) the difference between the sale price of such

                                      -20-
<PAGE>

ISO Shares and the aggregate exercise price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.

                (3)     NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If
the Optionee sells or otherwise disposes of any of the ISO Shares acquired
pursuant to an ISO on or before the later of (i) two years after the grant date,
or (ii) one year after the exercise date, the Optionee shall promptly notify the
Company in writing of such disposition. The Optionee agrees that he or she may
be subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

        4.17.   LOCK-UP AGREEMENT; OTHER AGREEMENTS. If requested by the Company
at any time prior to the date, if any, on which the Securities and Exchange
Commission declares effective a registration statement filed by the Company
under the Securities Act of 1933 in connection with an initial public offering
of the Company's securities (the "SEC Effective Date", the Optionee shall
execute a lock-up agreement, in such form as the Committee shall determine,
precluding the Optionee from selling, pledging, hypothecating, selling short or
in any other manner transferring, during a period commencing on or about the SEC
Effective Date and expiring on or about 180 days after the SEC Effective Date,
any ISO Shares or NSO Shares owned by the Optionee as of the SEC Effective Date
or acquired by the Optionee during such 180 day period. Should the Optionee fail
to execute such agreement, the Optionee shall be deemed to be restricted, in the
same manner as the Directors of the Company agree to be restricted from selling
any capital stock of the Company owned by such Directors, from selling,
pledging, hypothecating, selling short or in any other manner transferring,
during a period commencing on the SEC Effective Date and expiring 180 days after
the SEC Effective Date, any ISO Shares or NSO Shares owned by the Optionee as of
the SEC Effective Date or acquired by the Optionee during such 180 day period.

        If requested by the Committee at the time of exercise of any portion or
all of the Options, the Optionee shall execute such other agreements as the
Committee shall identify, provided that such agreements are comparable, in all
material respects, to agreements which other holders of the Company's Common
Stock have been, or will be, requested to execute.

        4.18.   EARLY EXERCISE. Notwithstanding the vesting schedule described
in this Agreement, if the Committee notifies the Optionee in writing that the
Optionee may exercise the Options (or any portion of the Options) during its
term at any time as to shares that have not vested (the "Unvested Shares"), the
Optionee may do so, provided that at the time of such exercise the Optionee
deliver to the Company, in addition to the other exercise documentation required
hereby, an executed copy of a Restricted Stock Purchase Agreement attached as
EXHIBIT B to the Plan, along with its attachments, as applicable (the
"Restricted Stock Agreement"), whereby, among other things, the Optionee agrees
to grant to the Company certain repurchase rights, at cost, with respect to the
Unvested Shares, as more fully set forth therein, which repurchase rights shall
lapse over time with respect to the Unvested Shares in accordance with the
vesting schedule described in this Agreement.

                                      -21-
<PAGE>

        By the Optionee's signature and the signature of the Company's
representative below, the Optionee and the Company agree that this Option is
granted under and governed by the terms and conditions of the Plan and this
Option Agreement. The Optionee has reviewed the Plan and this Option Agreement
in their entirety, has had an opportunity to obtain the advice of counsel prior
to executing this Option Agreement and fully understands all provisions of the
Plan and this Option Agreement. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions relating to the Plan and this Option Agreement. The Optionee further
agrees to notify the Company upon any change in the Optionee's residence
address.

                                      -22-
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                          VYTERIS HOLDINGS, INC.

                                          By:_________________________________

                                          Title:______________________________

                                          OPTIONEE:

                                          ____________________________________

                                      -23-
<PAGE>

                                   APPENDIX A

                            EXERCISE OF STOCK OPTION

        1.      EXERCISE. Pursuant to the provisions of the Stock Option
Agreement entered into as of _____________, 200_ between Vyteris Holdings, Inc.
(the "Company") and the undersigned (the "Agreement"), the undersigned (the
"Purchaser") hereby exercise the Options granted under the terms of the
Agreement (the "Options") to the extent of ________ shares of the Common Stock
of the Company (the "Shares"). The Purchaser delivers to the Company herewith
the following in payment for the Shares:

        o       $_________ in cash

        o       Stock certificates for _____________ shares of Common Stock

        2.      REPRESENTATIONS OF PURCHASER. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions. Unless the
Company is a public corporation which has registered the shares issuable under
the Plan under the Securities Act of 1933, the Purchaser confirms the
representations set forth below:

                The Purchaser is acquiring the Shares for his/her own account
        and the Shares were acquired by him/her for the purpose of investment
        and not with a view to distribution or resale thereof in violation of
        the Securities Act of 1933 (the "Securities Act"). The Purchaser
        understands that none of the Shares has been registered under the
        Securities Act or any other applicable securities laws, and, therefore,
        cannot be resold unless they are subsequently registered under the
        Securities Act and other applicable securities laws or unless an
        exemption from such registration is available. The Purchaser agrees not
        to resell or otherwise dispose of all or any part of the Shares
        purchased by him/her except as permitted by law, including, without
        limitation, any regulations under the Securities Act and other
        applicable securities laws. The Purchaser understands that the Company
        does not have any present intention and is under no obligation to
        register the Shares under the Securities Act and other applicable
        securities laws. The Purchaser further represents that the Purchaser
        understands and agrees that all certificates evidencing any of the
        Shares, whether upon initial issuance or upon any transfer thereof,
        shall bear a legend, prominently stamped or printed thereon, reading
        substantially as follows:

        "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
        THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER
        SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN
        EFFECTIVE REGISTRATION STATEMENT COVERING SUCH

                                      -24-
<PAGE>

        SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE
        SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
        THE COMPANY THAT EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE."

                The Purchaser is able to bear the economic risk of this
        investment including a complete loss of the investment.

        3.      RIGHTS AS SHAREHOLDER. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the Purchaser's exercise of the Options. The Shares so acquired
shall be issued to the Optionee as soon as practicable after exercise of the
Options. No adjustment will be made for a dividend or other right for which the
record date is prior to the date of issuance, except as otherwise provided in
the Plan.

        4.      TAX CONSULTATION. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

        5.      ENTIRE AGREEMENT; GOVERNING LAW. The Plan and Option Agreement
are incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
the State of Delaware.

Date: ___________________                      _____________________________
                                                         Purchaser

                                               _____________________________
                                                          Address

                                               _____________________________
                                                   Social Security Number

                                      -25-
<PAGE>

                                    EXHIBIT B

                             VYTERIS HOLDINGS, INC.
                             2004 STOCK OPTION PLAN

                       RESTRICTED STOCK PURCHASE AGREEMENT

        THIS AGREEMENT is made between [____________] (the "Purchaser") and
Vyteris Holdings, Inc., a Delaware corporation (the "Company"), as of
__________________, 20__.

                                    RECITALS

        A.      Pursuant to the exercise of the stock option granted to
Purchaser under the Company's 2001 Stock Option Plan (the "Plan") on
[____________] and pursuant to the Stock Option Agreement (the "Option
Agreement") dated [____________] by and between the Company and Purchaser with
respect to such grant, which Plan and Option Agreement are hereby incorporated
by reference, Purchaser has elected to purchase _________ of those shares which
have not vested under the vesting schedule set forth in the notice of grant
relating to such grant (the "Unvested Shares"). The Unvested Shares and the
shares subject to the Option Agreement which have vested are sometimes
collectively referred to herein as the "Shares". The description of the terms of
the Purchaser's options as set forth in the Option Agreement is referred to
herein as the Notice of Grant.

        B.      As a condition to Purchaser's election to exercise the Option as
to the Unvested Shares, Purchaser hereby executes and delivers this Restricted
Stock Purchase Agreement, which sets forth certain rights and obligations of the
parties with respect to the Unvested Shares acquired upon exercise of the
Option.

        In consideration of the mutual covenants set forth herein, the parties
hereto hereby agree as follows:

        1.      DEFINED TERMS. Capitalized terms not defined in this Restricted
Stock Purchase Agreement shall have the meanings ascribed to such terms in the
Plan.

        2.      REPURCHASE OPTION.

                (a)     If Purchaser's status as an employee, consultant or
director, as applicable, of the Company and its subsidiaries is terminated for
any or no reason, including for cause or without cause, death or disability, the
Company shall have the right and option to purchase from Purchaser, or
Purchaser's personal representative, as the case may be, all or any portion of
the Purchaser's Then-Unvested Shares (as defined below) as of the date of such
termination at the original exercise price paid by the Purchaser for such Shares
(the "Repurchase Option"). The term "Then-Unvested Shares" as used herein shall
mean that portion of the Unvested Shares that remain unvested on such
termination date in accordance with the vesting schedule set forth in the Notice
of Grant.

                                      -26-
<PAGE>

                (b)     Upon the occurrence of any such termination, the Company
may exercise its Repurchase Option by delivering personally or by registered
mail, to Purchaser (or his transferee or legal representative, as the case may
be), within ninety (90) days of such termination, a notice in writing indicating
the Company's intention to exercise the Repurchase Option and setting forth a
date for closing not later than thirty (30) days from the mailing or personal
delivery of such notice. The closing shall take place at the Company's
headquarters. At the closing, the holder of the certificates for the
Then-Unvested Shares being transferred shall deliver the stock certificate or
certificates evidencing the Then-Unvested Shares, and the Company shall deliver
the purchase price therefor.

                (c)     At its option, the Company may elect to make payment for
the Then-Unvested Shares to a bank selected by the Company. The Company shall
avail itself of this option by a notice in writing to Purchaser stating the name
and address of the bank, stating the date of closing, and waiving the closing at
the Company's office.

                (d)     If the Company does not elect to exercise the Repurchase
Option conferred above by giving the requisite notice within ninety (90) days
following such termination, the Repurchase Option shall terminate.

        3.      TRANSFERABILITY OF THE SHARES; ESCROW.

                (a)     Purchaser hereby authorizes and directs the secretary of
the Company, or such other person designated by the Company, to transfer the
Then-Unvested Shares as to which the Repurchase Option has been exercised from
Purchaser to the Company.

                (b)     To insure the availability for delivery of Purchaser's
Unvested Shares upon repurchase by the Company pursuant to the Repurchase Option
under Section 2, Purchaser hereby appoints the secretary of the Company, or any
other person designated by the Company, as escrow agent, as the Purchaser's
attorney-in-fact to sell, assign and transfer unto the Company, such Unvested
Shares, if any, repurchased by the Company pursuant to the Repurchase Option and
shall, upon execution of this Agreement, deliver and deposit with the secretary
of the Company, or such other person designated by the Company, the share
certificates representing the Unvested Shares, together with the stock
assignment, duly endorsed in blank, attached hereto as EXHIBIT B-1. The Unvested
Shares and stock assignment shall be held by the secretary or other designee in
escrow, pursuant to the Joint Escrow Instructions of the Company and Purchaser
attached as EXHIBIT B-2 hereto, until the Company exercises its Repurchase
Option as provided in Section 2, until such Unvested Shares are vested, or until
such time as this Agreement no longer is in effect. As a further condition to
the Company's obligations under this Agreement, the spouse of the Purchaser, if
any, shall execute and deliver to the Company the Consent of Spouse attached
hereto as EXHIBIT B-3 if the Committee determines that such a Consent should be
obtained. Upon vesting of the Unvested Shares, the escrow agent shall promptly
upon written request, or periodically without written request, deliver to the
Purchaser the certificate or certificates representing such vested Shares in the
escrow agent's possession belonging to the Purchaser, and the escrow agent shall
be discharged of all further obligations

                                      -27-
<PAGE>

hereunder with respect to those Shares; provided, however, that the escrow agent
shall nevertheless retain such certificate or certificates as escrow agent if so
required pursuant to other restrictions imposed pursuant to this Agreement.

                (c)     The Company, or its designee, shall not be liable for
any act it may do or omit to do with respect to holding the Shares in escrow and
while acting in good faith and in the exercise of its judgment.

                (d)     Purchaser shall not sell, transfer, pledge, hypothecate
or otherwise dispose of any Unvested Shares which remain subject to the
Company's Repurchase Option. Notwithstanding the foregoing, upon prior written
consent of the Company (which consent shall not be unreasonably withheld), the
Purchaser may assign or transfer Unvested Shares for family planning, tax
planning or estate planning, or other such purposes, provided the transferee
agrees to be bound by all obligations of the Purchaser, and the Company is
reasonably satisfied that such obligations remain enforceable against the
transferee.

                (e)     Transfer or sale of the Shares is subject to
restrictions on transfer imposed by any applicable state and federal securities
laws. Any transferee shall hold such Shares subject to all the provisions hereof
and the Exercise Notice executed by the Purchaser with respect to any Unvested
Shares purchased by Purchaser and shall acknowledge the same by signing a copy
of this Agreement.

        4.      OWNERSHIP, VOTING RIGHTS, DUTIES. This Agreement shall not
affect in any way the ownership, voting rights or other rights or duties of
Purchaser, except as specifically provided herein.

        5.      LEGENDS. The share certificate evidencing the Shares issued
hereunder may be endorsed with the legend substantially to the following effect
(in addition to any legend required under applicable state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.

        6.      ADJUSTMENT FOR STOCK SPLIT. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other
change in the Shares which may be made by the Company after the date of this
Agreement.

        7.      NOTICES. Notices required hereunder shall be given in person or
by registered mail to the address of Purchaser shown on the records of the
Company, and to the Company at its headquarters.

                                      -28-
<PAGE>

        8.      SURVIVAL OF TERMS. This Agreement shall apply to and bind
Purchaser and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.

        9.      SECTION 83(B) ELECTION. Purchaser hereby acknowledges that he or
she has been informed that, with respect to the exercise of an Option for
Unvested Shares, an election may be filed by the Purchaser with the Internal
Revenue Service, within 30 days of the purchase of the Shares, electing pursuant
to Section 83(b) of the Code to be taxed currently on any difference between the
purchase price of the Shares and their fair market value on the date of
purchase. In the case of a Nonstatutory Stock Option, this will result in a
recognition of taxable income to the Purchaser on the date of exercise, measured
by the excess, if any, of the fair market value of the Shares, at the time the
Option is exercised, over the purchase price for the Shares. Absent such an
election, taxable income will be measured and recognized by Purchaser at the
time or times on which the Company's Repurchase Option lapses. In the case of an
Incentive Stock Option, such an election will result in a recognition of income
to the Purchaser for alternative minimum tax purposes on the date of exercise,
measured by the excess, if any, of the fair market value of the Shares, at the
time the option is exercised, over the purchase price for the Shares. Absent
such an election, alternative minimum taxable income will be measured and
recognized by Purchaser at the time or times on which the Company's Repurchase
Option lapses. Purchaser is strongly encouraged to seek the advice of his or her
own tax consultants in connection with the purchase of the Shares and the
advisability of filing of the Election under Section 83(b) of the Code. A form
of Election under Section 83(b) is attached hereto as EXHIBIT B-4 for reference.

PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT THE
COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b).

        10.     REPRESENTATIONS. Purchaser has reviewed with his or her own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Purchaser understands that he or she (and not
the Company) shall be responsible for his or her own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement.

        11.     GOVERNING LAW. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of Delaware

        Purchaser represents that he has read this Agreement and is familiar
with its terms and provisions. Purchaser hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
of the Company or any committee thereof with respect to any questions arising
under this Agreement.

                                      -29-
<PAGE>

        IN WITNESS WHEREOF, this Agreement is deemed made as of the date first
set forth above.

                                      VYTERIS HOLDINGS, INC.

                                      By:

                                      Title:

                                      "PURCHASER"

                                      Signature

                                      Printed Name

                                      Soc. Sec. No.

                                       Address

                                      -30-
<PAGE>

                                   EXHIBIT B-1

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

        FOR VALUE RECEIVED I, _______________________, hereby sell, assign and
transfer unto Vyteris Holdings, Inc. (the "Company") _________________________
(__________) shares of the Common Stock of the Company standing in my name on
the books of said corporation represented by Certificate No. _____ herewith and
do hereby irrevocably constitute and appoint __________________ to transfer the
said stock on the books of the Company with full power of substitution in the
premises.

        This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement by and between the Company and the undersigned dated
______________, _____.

Dated: _______________, ____

                                                -----------------------
                                                (signature)

                                                -----------------------
                                                (print name)

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"Repurchase Option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.

                                      -31-
<PAGE>

                                   EXHIBIT B-2

                            JOINT ESCROW INSTRUCTIONS

                                 _________, 200_

[Name and address of Corporate Secretary]

Dear Secretary:

        As Escrow Agent for both Vyteris Holdings, Inc.(the "Company") and the
undersigned purchaser of stock of the Company (the "Purchaser"), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Restricted Stock Purchase Agreement ("Agreement") between
the Company and the undersigned, in accordance with the following instructions:

        1.      In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's Repurchase Option set forth in the Agreement, the Company shall give
to Purchaser and you a written notice specifying the number of shares of stock
to be purchased, the purchase price, and the time for a closing hereunder at the
headquarters of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.

        2.      At the closing, you are directed (a) to date the stock
assignments necessary for the transfer in question, (b) to fill in the number of
shares being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, cancellation of indebtedness, if applicable, or some combination
thereof) for the number of shares of stock being purchased pursuant to the
exercise of the Company's Repurchase Option.

        3.      Purchaser irrevocably authorizes the Company to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of, transfer of
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.

        4.      Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
will deliver to Purchaser a

                                      -32-
<PAGE>

certificate or certificates representing so many shares of stock as are not then
subject to the Company's Repurchase Option. Within 120 days after cessation of
Purchaser's continuous employment by or services to the Company, or any parent
or subsidiary of the Company, you will deliver to Purchaser a certificate or
certificates representing the aggregate number of shares held or issued pursuant
to the Agreement and not purchased by the Company or its assignees pursuant to
exercise of the Company's Repurchase Option.

        5.      If at the time of termination of this escrow you should have in
your possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of the same to Purchaser and shall be
discharged of all further obligations hereunder.

        6.      Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.

        7.      You shall be obligated only for the performance of such duties
as are specifically set forth herein and may rely on and shall be protected in
relying on or refraining from acting on any instrument reasonably believed by
you to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in
good faith, and any act done or omitted by you pursuant to the advice of your
own attorneys shall be conclusive evidence of such good faith.

        8.      You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

        9.      You shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.

        10.     You shall not be liable for the outlawing of any rights under
the Statute of Limitations with respect to these Joint Escrow Instructions or
any documents deposited with you.

        11.     You shall be entitled to employ such legal counsel (which may be
counsel to the Company) and other experts as you may deem necessary to properly
advise you in connection with your obligations hereunder, you may rely upon the
advice of such counsel, and you may cause the Company to pay such counsel
reasonable compensation therefor.

        12.     Your responsibilities as Escrow Agent hereunder shall terminate
if you shall cease to be an officer or agent of the Company or if you shall
resign by written notice to the Company. In

                                      -33-
<PAGE>

the event of any such termination, the Company shall have the right, in its sole
discretion, to appoint a successor Escrow Agent.

        13.     If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

        14.     It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

        15.     Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other address as a party may
designate by ten days' advance written notice to each of the other parties
hereto.

                               VYTERIS Holdings, Inc.
                               [Insert current address of the Company]
                                                  Attn:

                               PURCHASER: [Insert name and address]

                               ESCROW AGENT: [Insert name and address]

        16.     By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.

        17.     This instrument shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and permitted assigns.

                                      -34-
<PAGE>

        18.     These Joint Escrow Instructions shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
Delaware.

                                                 VYTERIS HOLDINGS, INC.

                                                 BY:

                                                 ITS:

                                                 PURCHASER

                                                 --------------------
                                                  signature

                                                 --------------------
                                                  printed name

                                                 ESCROW AGENT

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

                                      -35-
<PAGE>

                                   EXHIBIT B-3

                                CONSENT OF SPOUSE

        I, ____________________, spouse of [_____________], have read and
approve the foregoing Agreement. In consideration of granting of the right to my
spouse to purchase shares of Vyteris Holdings, Inc. as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.

Dated: _______________, ___

                                             -----------------------
                                              Signature of Spouse

                                             -----------------------
                                             (Print name)

                                      -36-
<PAGE>

                                   Exhibit B-4

                          ELECTION UNDER SECTION 83(B)

                      OF THE INTERNAL REVENUE CODE OF 1986

        The undersigned taxpayer hereby makes an election pursuant to Section
83(b) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Regulations"), and in connection with this election supplies
the following information:

1.      The name, address and taxpayer identification number of the undersigned
are:

                [Name]
                [Address]
                Social Security Number:  ___-__-____

2.      The election is being made with respect to ________ shares of [stock]
(the "Stock") of Vyteris Holdings, Inc., a Delaware corporation (the "Company").

3.      The date on which the Stock was transferred to the undersigned was
_______________. The taxable year for which this election is being made is
calendar year ____.

4.      The property is subject to the following restrictions:

                The above-mentioned shares may not be transferred and are
                subject to forfeiture under the terms of an agreement between
                the taxpayer and the Company. These restrictions lapse upon the
                satisfaction of certain conditions contained in such agreement.

                Disposition of the Stock is also subject to restrictions imposed
                under applicable federal and state securities laws regulating
                the transfer of unregistered securities.

5.      The fair market value of the Stock at the time of transfer (determined
without regard to any lapse restriction, as defined in ss.1.83-3(i) of the
Regulations) was $___________.

6.      The undersigned paid $ ___ for the Stock. Therefore, $______ (the full
fair market value of the Stock stated above less the amount paid by the
undersigned) is includible in the undersigned's gross income as compensation for
services.

                                      -37-
<PAGE>

7.      A copy of this election has been furnished to the Company [and to the
transferee of the Stock, if different from the taxpayer] as required by
ss.1.83-2(d) of the Regulations.

Dated:  ________________                  ___________________________
                                          [taxpayer signature]

                                      -38-
<PAGE>

                 INSTRUCTIONS FOR FILING SECTION 83(B) ELECTION

        Attached is a form of election under section 83(b) of the Internal
Revenue Code. If you wish to make such an election, you should complete, sign
and date the election and then proceed as follows:

1. Execute three counterparts of your completed election (plus one extra
counterpart for each person other than you, if any, who receives property that
is the subject of your election), retaining at least one photocopy for your
records.

2. Send one counterpart to the Internal Revenue Service Center with which you
will file your Federal income tax return for the current year (e.g., Holtsville,
Delaware for New Jersey residents) via certified mail, return receipt requested.
THE ELECTION SHOULD BE SENT IMMEDIATELY, AS YOU ONLY HAVE 30 DAYS FROM THE GRANT
DATE WITHIN WHICH TO MAKE THE ELECTION - NO WAIVERS, LATE FILINGS OR EXTENSIONS
ARE PERMITTED.

3. Deliver one counterpart of the completed election to the Company for its
files.

4. If anyone other than you (e.g., one of your family members) will receive
property that is the subject of your election, deliver one counterpart of the
completed election to each such person.

5. Attach one counterpart of the completed election to your Federal income tax
return for this year when you file that return next year.

                                      -39-<PAGE>

                                  EXHIBIT 10.4
                                  ------------

                               Sublease Agreement

<PAGE>

                               SUBLEASE AGREEMENT

        THIS SUBLEASE AGREEMENT ("Sublease") is entered into as of the 10th day
of November, 2000 by and between Becton, Dickinson and Company, a New Jersey
corporation ("Sublessor"), having an office at 1 Becton Drive, Franklin Lakes,
New Jersey 07417, and Drug Delivery Technologies, Inc., a Delaware corporation
("Sublessee"), having an office at 535 Madison Avenue, New York, New York 10022.

        WHEREAS, Lincoln Fair Lawn Associates, a New Jersey general partnership
(the "Prime Landlord") and Sublessor entered into that certain Lease Agreement
dated June 23, 1987, as amended by that certain First Amendment to Lease dated
November 19, 1991, as amended by that certain Second Amendment to Lease dated
June 10, 1996 (as it may be further amended from time to time hereafter, the
"Prime Lease"), a copy of which is attached hereto as EXHIBIT A and made a part
hereof, for certain premises located in a building at 13-01 Pollitt Drive, Fair
Lawn, New Jersey, as more particularly described in the Prime Lease (the
"Subleased Premises");

        WHEREAS, Sublessor and Sublessee have agreed and desire to enter into a
sublease with respect to the Subleased Premises, all upon the terms and
conditions of this Sublease.

        NOW THEREFORE, in consideration of the foregoing recitals and for good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

                1.      SUBLEASE. Sublessor hereby subleases to Sublessee and
Sublessee hereby subleases from Sublessor, the Subleased Premises in accordance
with the terms and conditions herein set forth.

                2.      TERM. The term of this Sublease shall commence on the
date first set forth above and, unless sooner terminated as provided elsewhere
herein, shall terminate on September 29, 2006 (the "Term").

                3.      RENT.

                (a)     BASE RENT. Sublessee shall pay to Sublessor as monthly
rent for use of the Subleased Premises a sum equal to the fixed monthly rent
payable by Sublessor under the Prime Lease (including any renewal term thereof)
("Base Rent"). Base Rent shall be payable in advance on the first day of each
month, without deduction or set-off. Sublessee, without notice, demand,
deduction or set-off whatsoever, shall make payments of Base Rent to Sublessor
in such manner and place as Sublessor may direct in writing. If any rental
payment date falls on a day of the month other than the first day of such month
or if any rental payment is for a period which is shorter than one month, then
the rental for any such fractional month shall be a proportionate amount of a
full calendar month's rental based on the proportion that the number of days in
such fractional month bears to the number of days in the calendar month during
which such fractional month occurs. All other payments or adjustments required
to be made under the terms of this Sublease that require proration on a time
basis shall be prorated on the same basis.

<PAGE>

                (b)     ADDITIONAL RENT. Sublessee shall also pay, at such times
and in such manner as provided for in the Prime Lease, the pro rata share of the
estimated annual cost of taxes, insurance, repairs and replacements to the
exterior of the Subleased Premises and other items attributable to the Subleased
Premises that Sublessor is obligated to pay as "additional rent" under the Prime
Lease ("Additional Rent"). Sublessee shall not be obligated to pay, as
Additional Rent, the cost of depreciation or amortization of any leasehold
improvements constructed by the Prime Landlord during the term of the Prime
Lease for the benefit of the tenant of the Subleased Premises, such payments
being the obligation of Sublessor for the remainder of the Term.

                (c)     LATE PAYMENTS. In the event that installments of rent or
any other payments of money that may be due under this Sublease are not received
by Sublessor within ten (10) days after the applicable due date, there shall be
added to such payment, and simultaneously due and owing, a late charge equal to
four (4(cent)) cents for each dollar of each payment so in arrears, and if not
paid within thirty (30) days after due, interest shall accrue and be payable at
a rate equal to five (5%) percent above the prime rate then charged by Chase
Manhattan Bank as it is changed from time to time. The parties hereby agree that
inasmuch as the exact amount of the costs to be incurred by Sublessor in the
event of late payment by Sublessee of any of the sums due hereunder are
difficult to ascertain, such late charge represents a fair and reasonable
estimate of the costs Sublessor will incur by reason of late payment by
Sublessee.

                4.      USE OF SUBLEASED PREMISES. Sublessee shall use the
Subleased Premises in furtherance of any research, development, creation,
manufacture and/or distribution related to drug delivery systems and/or drug
development activities, or such other uses as may be authorized by agreement of
the parties hereto and the Prime Landlord (the "Permitted Uses"). Sublessee
shall, at Sublessee's sole cost and expense, comply with all applicable federal,
state and local laws, including, without limitation, all applicable
environmental laws, ordinances or other regulations and shall obtain, and
maintain and comply with during the Term all necessary permits or licenses
applicable to Sublessee's Permitted Uses of the Subleased Premises. Sublessee
will make no installations, alterations, additions or improvements (other than
artwork, furniture or trade fixtures mounted or installed in the ordinary course
of business) to the Subleased Premises, except with the prior written consent of
the Prime Landlord and the prior written consent of the Sublessor (such consent
not to be unreasonably withheld) and otherwise in compliance with the provisions
of the Prime Lease. Sublessee shall maintain the Subleased Premises in a clean
and safe manner and in as good repair as the same are turned over to it,
ordinary wear and tear and damage by the elements excepted.

                5.      INSURANCE.

                (a)     As required by Section 8 below, the Sublessee, at its
sole cost and expense, shall maintain, in addition to any insurance provided by
Prime Landlord under the Prime Lease, the insurance required of Tenant pursuant
to Paragraph 6 of the Prime Lease, including, without limitation, broad form
contractual liability coverage, in compliance with the provisions thereof.

                (b)     In addition, Sublessee, at its sole cost and expense,
shall maintain property damage insurance for all risks covering all fixtures and
leasehold improvements in or about the

                                      -2-
<PAGE>

Subleased Premises with companies reasonably acceptable to Sublessor licensed to
do business in the State of New Jersey, and which hold a "General Policyholders
Rating" of at least A Minus as set forth in the most current issue of "Best's
Insurance Guide."

                (c)     Each such policy of insurance shall name each of Prime
Lessor and Sublessor as additional insureds, as their interests may appear.
Sublessee shall deliver to Sublessor certificates evidencing the existence,
amounts and endorsements of the insurance described in subsections (a) and (b)
above not later than the date of execution of this Sublease. No such policy
shall be cancelable or subject to reduction of coverage or other modification
except after thirty (30) days' prior written notice to Sublessor. Sublessee
shall, at least (30) days prior to the expiration of any such policy, furnish
Sublessor with a renewal or "binder" thereto, in the absence of which Sublessor
may order such insurance and charge the cost thereof to Sublessee, which amount
shall be deemed additional rent hereunder and shall be payable by Sublessee upon
demand.

                6.      DEFAULT.

                (a)     The following events shall be considered events of
default by Sublessee hereunder:

                        (1)     Sublessee shall fail to pay any installment of
rent hereby reserved and such failure shall continue for a period of 5 days
after written notice of default is given by Sublessor to Sublessee.

                        (2)     Sublessee shall fail to comply with any term,
provision or covenant of this Sublease of the Prime Lease, other than the
payment of rent, and shall not cure such failure within 20 days after written
notice thereof to Sublessee.

                        (3)     Sublessee shall become insolvent, or shall make
a transfer in fraud of creditors or shall make an assignment for the benefit of
creditors or shall be adjudged a bankrupt or insolvent in proceedings filed
against Sublessee or shall file a voluntary petition in bankruptcy.

                        (4)     A receiver or trustee shall be appointed for all
or substantially all of Sublessee's assets.

                        (5)     Sublessee shall desert or vacate any substantial
portion of the Subleased Premises, or cease to operate for more than 20 days
without the express written permission of Sublessor.

                (b)     Upon the occurrence of any of such events of default,
Sublessor shall have the option to pursue any one or more of the following
remedies without notice or demand whatsoever:

                        (1)     Terminate this Sublease, in which event
Sublessee shall immediately surrender the Subleased Premises to Sublessor, and,
if Sublessee fails so to do, Sublessor may, without prejudice to any other
remedy that it may have for possession or arrearages in rent or rent for the
remainder of the Term, enter upon and take possession of the

                                      -3-
<PAGE>

Subleased Premises and expel or remove Sublessee and any other person who may be
occupying said Subleased Premises or any part thereof, by force if necessary,
without being liable for prosecution or any claim of damages therefor; and
Sublessee agrees to pay to Sublessor on demand the amount of all loss and damage
that Sublessor may suffer by reason of such termination, whether through
inability to relet the Subleased Premises on satisfactory terms or otherwise.

                        (2)     Enter upon and take possession of the Subleased
Premises and expel or remove Sublessee and any other person who may be occupying
said Subleased Premises or any part thereof, by force if necessary, without
being liable for prosecution or any claim for damages thereof, and relet the
Subleased Premises and receive the rent therefor; and Sublessee agrees to pay to
Sublessor on demand any deficiency that may arise by reason of such reletting.

                        (3)     Enter upon the Subleased Premises, by force if
necessary, without being liable for prosecution or any claim for damages
therefor, and do whatever Sublessee is obligated to do under the terms of this
Sublease, and Sublessee agrees to reimburse Sublessor on demand for any expenses
which Sublessor may incur in thus effecting compliance with Sublessee's
obligations under this Sublease, and Sublessee further agrees that Sublessor
shall not be liable for any damages resulting to the Sublessee from such action,
whether caused by the negligence of Sublessor or otherwise.

                (c)     Pursuit of any of the foregoing remedies shall not
preclude pursuit of any of the other remedies provided for herein or any other
remedies provided by law, all of which may be enforced cumulatively, nor shall
pursuit of any remedy provided for herein constitute a forfeiture or waiver of
any rent due to Sublessor hereunder or of any damages accruing to Sublessor by
reason of the violation of any of the terms, provisions and covenants herein
contained. Failure by Sublessor to enforce one or more of the remedies herein
provided upon any event of default shall not be deemed or construed to
constitute a waiver of such default, or of any other violation or breach of any
of the terms, provisions and covenants herein contained.

                (d)     The parties expressly intend by the foregoing to create
a reversionary interest in Sublessor to the end that this instrument be in all
respects construed as a true sublease, and the parties hereto waive the
provisions or operation of any law or legal doctrine to the extent inconsistent
herewith.

                (e)     Except as otherwise provided herein, with respect to any
breach of this Agreement by Sublessee described in subsection 6(a) above, if
Sublessor reasonably believes, after a reasonable time period, that Sublessee
will not cure such breach within the period provided therefor, Sublessor shall
have the right to cure such breach within such period, and Sublessee shall
reimburse Sublessor for all of Sublessor's reasonable costs incurred in
connection with such cure.

                7.      INDEMNIFICATION.

                (a)     SUBLESSEE'S INDEMNIFICATION OBLIGATIONS. Sublessee shall
indemnify, hold harmless and defend, at Sublessee's expense, Sublessor and Prime
Landlord, their respective shareholders, directors, officers, employees and
agents (collectively, the "Sublessor's

                                      -4-
<PAGE>

Indemnitees) from and against any and all actions, claims, demands and expenses
(including without limitation reasonable attorneys' fees and costs) relating,
directly or indirectly, to the use and occupancy of the Subleased Premises by
Sublessee or Sublessee's employees, agents or invitees during the Term, or to
any breach or default in the performance of any obligation on Sublessee's part
to be performed under the terms of the Prime Lease or of this Sublease, or
arising from any negligence of Sublessee, or any of Sublessee's agents, servants
or employees, unless the same were caused by the willful or grossly negligent
acts of the Sublessor's Indemnitee seeking such indemnity.

                (b)     SUBLESSOR'S INDEMNIFICATION OBLIGATIONS. Sublessor shall
indemnify, hold harmless and defend, at Sublessor's expense, Sublessee, its
shareholders, directors, officers, employees and agents (other than Sublessor or
any affiliate thereof) (collectively, the "Sublessee Indemnitees") from and
against any and all actions, claims, demands and expenses (including without
limitation reasonable attorneys' fees and costs) relating, directly or
indirectly, to the use of the Subleased Premises by Sublessor or Sublessor's
employees, agents or invitees prior to the commencement of the Term, or any
other obligations of Sublessor as tenant under the Prime Lease prior to the
commencement of the Term.

                8.      COMPLIANCE WITH PRIME LEASE. This Sublease (including
the length of the Term hereof) is subject and subordinate to all terms,
covenants and conditions of the Prime Lease. Except as otherwise specifically
set forth herein, Sublessee shall perform and observe and be bound by all of the
terms, covenants and conditions of the Prime Lease with respect to the Subleased
Premises as if it were the Tenant and Sublessor were the Landlord; PROVIDED,
HOWEVER, that Sublessee shall have no obligation to make any payments of Base
Rent to the Prime Landlord under the Prime Lease. Except as otherwise provided
herein, Sublessee shall have all of the rights, privileges and obligations of
the tenant under the Prime Lease (including, without limitation, rights to
occupy additional space in the Building and to purchase the building where the
Subleased Premises are located from the Prime Landlord). Sublessor and Sublessee
shall be required to promptly provide the other with any and all notices
received by them or any agent thereof from the Prime Landlord or any agent
thereof with respect to the Prime Lease or the use or occupancy of the Subleased
Premises by Sublessee or Sublessor. Sublessor shall not amend or otherwise
modify the Prime Lease without the prior written consent of Sublessee.

                9.      INSPECTION; COMPLIANCE. Sublessor shall have the right
to enter the Subleased Premises at any time, in the case of an emergency, and
otherwise at reasonable times and upon reasonable prior notice, for the purpose
of inspecting the condition of the Subleased Premises and for verifying
compliance by Sublessee with this Sublease and all applicable laws, and to
employ experts and/or consultants in connection therewith and/or to advise
Sublessor with respect to Sublessee's activities, including, but not limited to,
the installation, operation, use, monitoring, maintenance, or removal of any
hazardous substance or storage tank on or from the Subleased Premises. The costs
and expenses of any such inspections shall be paid by Sublessor, unless (i) a
default or breach of this Sublease, a material violation of Applicable Law, or a
material contamination of the Subleased Premises, was caused or was contributed
to in substantial and material part by Sublessee is found to exist or be
imminent, or (ii) the foregoing inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In the case of any event described in clauses (i) and (ii)

                                      -5-
<PAGE>

in this Section 9, Sublessee shall, upon request, reimburse Sublessor for the
reasonable costs and expenses of such inspections.

                10.     TERMINATION. Any permitted termination of the Prime
Lease by its terms by Prime Lessor shall automatically terminate this Sublease
effective as of the Prime Lease termination.

                11.     SECURITY MEASURES. Sublessee hereby acknowledges that
the rent paid hereunder does not include the cost of guard service or other
security measures, and that Sublessor shall have no obligation whatsoever to
provide same.

                12.     HOLDOVER TENANCY. Sublessee has no right to retain
possession of the Subleased Premises or any part thereof beyond the expiration
or earlier termination of this Sublease.

                13.     SUBORDINATION OF SUBLEASE. This Sublease is and shall at
all times be subject and subordinate to the Lease.

                14.     CONSENT OF PRIME LESSOR. This Sublease is expressly
contingent upon the written consent hereto, as evidenced below, of Prime Lessor,
as required by the Prime Lease. In the event such consent is not obtained, this
Sublease shall be null and void, and thereafter neither party hereto shall bear
any obligation hereunder to the other.

                15.     NOTICES. All notices, demands, consents, approvals,
requests and instruments or documents by this Sublease required or permitted to
be given to or served upon the Sublessor or the Sublessee shall be in writing.
Any such notice, demand, consent, approval, request, instrument or document
shall be delivered by hand, or sent by overnight courier or express delivery
service or by certified mail, return receipt requested, addressed at the address
set forth below, or at such other address as either party shall designate by
notice, as follows:

                If to Sublessor:

                Becton, Dickinson and Company
                1 Becton Drive
                Franklin Lakes, New Jersey 07417-1880
                Attention: Director, Corporate Facilities Engineering

                with a copy to:

                Becton, Dickinson and Company
                1 Becton Drive
                Franklin Lakes, New Jersey 07417-1880
                Attention: General Counsel

                                      -6-
<PAGE>

                If to Sublessee:

                Drug Delivery Technologies, Inc.
                535 Madison Avenue
                New York, New York 10022
                Attention: Donald F. Farley

                with a copy to:

                Kirkpatrick & Lockhart LLP
                1251 Avenue of the Americas
                New York, New York 10020-1104
                Attention: Stephen R. Connoni, Esq.

Any notice so served shall be deemed served upon receipt if delivered by hand,
and otherwise shall be deemed served two (2) business days following posting
thereof or delivery thereof to the overnight courier or express delivery service

                16.     GENERAL.

                (a)     ASSIGNMENT. This Sublease shall bind and inure to the
benefit of the parties hereto and to their respective heirs, personal
representatives and assigns. Sublessee shall not assign its interest in this
Sublease, nor shall it subsublease any portion of the Subleased Premises,
without the prior written consent of the Prime Landlord and Sublessor, such
consent not to be unreasonably withheld, conditioned or delayed.

                (b)     ENTIRE AGREEMENT; SEVERABILITY. This Sublease contains
the entire agreement between the parties with respect to the subject matter
hereof and shall not be modified in any manner except by an instrument in
writing executed by the Sublessor and the Sublessee. The invalidity of any
portion hereof shall not affect the force and effect of the remaining valid
provisions of this Sublease.

                (c)     PERMITTED ACTS. Any act by Prime Lessor permitted
pursuant to the Lease shall be deemed a permitted act by Sublessor pursuant to
this Sublease, and Sublessee shall respond to same as if Sublessor were the
acting party.

                (d)     HEADINGS. The headings and subheadings hereof are
inserted for convenience of reference only and shall not affect the
interpretation of this Sublease.

                (e)     GOVERNING LAW. This Sublease shall be construed and the
legal relations hereunder of the parties bound hereby will be determined,
according to the internal laws of the State of New Jersey without regard to
choice of law principles thereof.

                (f)     COUNTERPARTS. This Sublease may be executed in several
counterparts, each - of which will be deemed to be an original.

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                            [SIGNATURE PAGE FOLLOWS]

                                      -7-
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have set their hands as of the
day and year first above written.

                                         SUBLESSOR:

                                         BECTON, DICKINSON AND COMPANY

                                         By:      /s/ James J. Bialek
                                                  -------------------

                                         Title : ATTORNEY-IN-FACT

                                         SUBLESSEE:

                                         DRUG DELIVERY TECHNOLOGIES, INC.

                                         By:      /s/ Donald F. Farley
                                                  --------------------

                                         Title:   Chairman

                                      -8-
<PAGE>

                                    EXHIBIT A

                                   PRIME LEASE

                                  SEE ATTACHED

                                      -9-
<PAGE>

        THIS LEASE AGREEMENT, made and entered into this 23rd day of June, 1987,
by and between LINCOLN FAIR LAWN ASSOCIATES, a general partnership of the State
of New Jersey, with offices located at 235 Moore Street, Hackensack, New Jersey
07601, as Landlord, and BECTON DICKINSON AND COMPANY, a New Jersey corporation,
with offices located at One Becton Drive, Franklin Lakes, New Jersey 07417-1880,
as Tenant;

                              W I T N E S S E T H:

        FOR VALUE RECEIVED, it is hereby agreed that:

        1.      The Landlord by these presents does hereby lease and rent to the
Tenant, and said Tenant hereby agrees to lease and take upon the terms and
conditions set forth herein approximately 27,000 square feet in a building
located at 13-01 Pollitt Drive, Fair Lawn, New Jersey (said space being shown on
the plan attached hereto and marked Exhibit "A") together with non-exclusive
rights to use the 30 spaces in the parking lot adjacent to the building.

        2.      The term of this lease shall be for 60 months commencing the
date on which Landlord delivers to Tenant possession of that portion of the
building presently occupied by Anderson Jacobson, Inc., as provided in Article
19 hereof. The parties shall execute an addendum to this lease acknowledging the
date of commencement of its term (the "Commencement Date").

        3.      Beginning with six months after the Commencement Date, as
defined in Article 2, Tenant agrees to pay Landlord a fixed minimum rental
payable in equal monthly installments of $22,368.08 on the first day of each and
every month in advance This rent shall apply notwithstanding the actual square
foot area of the demised premises as measured by either party. During the period
of the first six months after the Commencement Date, there shall be no fixed
minimum rental due and payable. In the event the Commencement Date is other than
the first day of a month, rental, for said partial months, when due, shall be
prorated. In the event that installments of rent or any other payments of money
which may be due under this lease are not received by Landlord within ten (10)
days after the applicable due date, there shall be added to such payment, and
simultaneously due and owing, a late charge equal to four (4(cent)) cents for
each dollar of each payment so in arrears, and if not paid within thirty (30)
days after due, interest shall accrue and be payable at a rate equal to five
(5%) percent above the prime rate then charged by Chase Manhattan Bank as it is
changed from time to time.

        Said rental payments together with all other payments required hereunder
shall be payable to Landlord at:

                        235 Moore Street
                        Hackensack, New Jersey 07601

        until further notice from Landlord.

        4.      In addition to the fixed minimum rental set forth in Paragraph 3
above, Tenant agrees to pay periodically within ten days of written demand by
Landlord the following, beginning with the Commencement Date:

                                      -10-
<PAGE>

                a.      Tenant's pro rata share, 70.32%, of all taxes levied
against the entire building and land of which the demised premises are a part.

                The term "taxes" shall mean and include all taxes, assessments
        and other governmental charges, general and special, ordinary and
        extraordinary, of any kind and nature whatsoever, applicable to the
        premises, including but not limited to assessments for public
        improvements or benefits which shall, during the term hereof, be laid,
        assessed, levied, imposed upon, or become due and payable and a lien
        upon the premises or any part thereof, but excluding franchise, estate,
        inheritance, succession, capital, levy, transfer, income or excess
        profits tax imposed upon Landlord; provided, if, at the time during the
        term of this lease, under the laws of the State of New Jersey or any
        political subdivision thereof in which the premises are or may be
        situated, a tax or excise on rents or other tax, however described, is
        levied or assessed by the State of New Jersey or such political
        subdivision against Landlord on account of the rent expressly reserved
        hereunder, as a substitute in whole or in part for taxes assessed or
        imposed by the State of New Jersey or such political subdivision on land
        and buildings, or on land or buildings, such tax or excise on rents or
        other tax shall be included within the definition "taxes," but only to
        the extent of the amount thereof which is lawfully assessed or imposed
        upon Landlord and which was so assessed or imposed as a direct result of
        Landlord's ownership of this lease, or of the rent accruing under this
        lease.

                b.      Tenant's pro rata share, 70.32%, of the cost incurred by
        Landlord in maintaining the insurance required by Paragraph 5 hereof.

                Tenant shall also be responsible for the cost of any and all
        utilities, including electric, water, sewer, gas and/or oil consumed at
        the leased premises, all of which shall be separately metered.

        5.      Landlord shall, at its sole cost and expense, keep all buildings
and improvements located on the demised premises insured with a broad-form fire
insurance policy, extended coverage, in an amount equal to the full insurable
value thereof. Landlord shall periodically increase the insurance coverage to
reflect increases in full insurable value.

                (a)     If the demised premises shall be partially damaged by
        fire or other cause without the fault or neglect of Tenant, Tenant's
        servants, employees, agents, visitors, or licensees, the damage shall be
        repaired by and at the expense of Landlord and the fixed minimum rent
        until such repairs shall be made shall be apportioned according to the
        part of the demised premises which is usable by Tenant. But if such
        partial damage is due to the fault or neglect of Tenant, Tenant's
        servants, employees, agents, visitors or licensees, without prejudice to
        any other rights and remedies of Landlord and, without prejudice to the
        rights of subrogation of Landlord's insurer, the damage shall be
        repaired by Landlord but there shall be no apportionment or abatement of
        rent. No penalty shall accrue for any delay which may arise by reason of
        adjustment of insurance on the part of Landlord and for any delay on
        account of "labor troubles" or any other cause, similar or dissimilar,
        beyond Landlord's control. Tenant shall give immediate notice to
        Landlord in case of fire in the demised premises. If the demised
        premises are totally or substantially damaged or are rendered wholly or
        substantially untenantable by fire or other cause, and if Landlord

                                      -11-
<PAGE>

        shall decide not to restore or not to rebuild the same, or if the
        building shall be substantially damaged so that Landlord shall decide to
        demolish it or to rebuild it or to remodel it (whether or not the
        demised premises have been damaged), then or in any of such events,
        Landlord may, within 90 days after such fire or other cause, give Tenant
        a notice in writing of such decision, and thereupon the term of this
        lease shall expire by lapse of time upon the third day after such notice
        is given, and Tenant shall vacate the demised premises and surrender the
        same to Landlord. If Tenant shall not be in default under this lease,
        then, upon the termination of this lease, under the conditions provided
        for in the sentence immediately preceding, Tenant's liability for rent
        shall cease as of the day following the casualty.

                (b)     No damage, compensation or claims shall be payable by
        Landlord for inconvenience, loss of business or annoyance arising from
        any repair or restoration of any portion of the demised premises or of
        the building except for rent abatement as provided in (a) above.

        6.      The Tenant, at its sole cost, shall maintain, in addition to the
insurance provided by Landlord under Paragraph 5 above:

                (a)     General public liability insurance against claims for
        injury or death or property damage occurring upon, in or about the
        demised premises or the adjoining streets or passageways in such limits
        as Landlord may reasonably re-quire for personal injury to any one
        person and to any number of persons arising out of one accident and for
        property damage. General public liability insurance limits of
        $1,000,000/$2,000,000 and property damage insurance limits of $250,000
        are deemed reasonable as of the date hereof.

                (b)     The Tenant will be responsible for all damage to plate
        and window glass in the demised premises.

                (c)     All insurance shall be effected under policies issued by
        insurers of recognized responsibility authorized to do business in the
        State of New Jersey and shall name Landlord and Tenant and any
        institutional mortgagee, as their interest may appear, as the insured.
        Upon the execution of this lease Tenant shall deliver to Landlord a
        binder evidencing the required coverage and shall deliver an original
        policy or certificate of insurance within 15 days of execution and
        thereafter not less than 10 days prior to the expiration dates of
        expiring policies, originals of the policies or certificates evidencing
        the same shall be delivered by Tenant to Landlord except that whenever
        the demised premises shall be mortgaged by the Landlord, such policies
        of insurance shall be lodged with the holder of the mortgage lien and
        certified copies shall be delivered to the Landlord. Each such policy
        shall, to the extent obtainable, contain a provision that such policy
        shall not be canceled or modified without at least 10 days prior written
        notice to the Landlord and to any mortgagee named therein.

                (d)     Landlord and Tenant each hereby waive any and all rights
        of recovery against the other for loss of or damage to such waiving
        party or its property or the

                                      -12-
<PAGE>

        property of others under its control where such loss or damage is
        insured against under any insurance policy in force at the time of such
        loss or damage.

                (e)     Upon the default of the Tenant in effecting any such
        insurance or procuring or delivering the policies therefor as directed
        by the Landlord, or in paying the premiums therefor and any and all
        charges incidental thereto when the same become payable, or in procuring
        and delivering to the Landlord renewals of expired policies as provided
        above, the Landlord may procure any such insurance and/or pay the
        premiums and other charges incidental thereto, and any and all amounts
        so paid by Landlord shall be additional rent hereunder to be added to
        the next installment of rent thereafter to become due and the Land-lord
        shall have all rights and remedies including summary proceedings, with
        respect to the same as with respect to rent.

        7.      Throughout the term of this lease, Landlord shall be responsible
for all structural and roof repairs and shall maintain the exterior of the
premises including landscaped and parking areas and driveways in good condition
and repair. With regard to repairs and replacements to the exterior of the
premises, including landscaped and parking areas and driveways, but excluding
structural and roof repairs, Tenant shall reimburse Landlord, within ten days
after written demand, for 70.32% of the reasonable cost of all such repairs and
replacements.

                Tenant agrees, throughout the term of this lease, to take good
care of the demised premises and fixtures and the appurtenances therein and
shall make, at its own expense, repairs and replacements required to keep the
demised premises and fixtures in good working order and condition. Tenant shall
maintain, at its own expense, all light bulbs, fluorescent tubes and lighting
fixtures in the demised premises, including all component parts such as
starters, ballasts, and lenses or grills. All repairs made by Tenant shall be at
least equal in quality to the original work. Tenant shall not make any
installations, alterations, additions or improvements in or to the demised
premises without first obtaining Landlord's written consent thereto, and shall
make the same and all repairs only between such hours and by such contractors or
mechanics as may be approved in writing by Landlord. All alterations,
decorations, installations, additions or improvements upon the demised premises
made by either party (including but not limited to paneling, partitions,
railings and the like), except Tenant's movable trade fixtures and furniture,
shall, unless Landlord elects otherwise (by notice in writing to Tenant given
not less than 20 days prior to the expiration or other termination of this lease
or of any renewal or extension thereof) become the property of Landlord and
shall remain upon, and be surrendered with, said premises, as a part thereof, at
the end of said term or renewal term, as the case may be.

        8.      In the event the entire premises shall be appropriated or taken
under the power of eminent domain by any public or quasi-public authority, this
Agreement shall terminate and expire as of the date of such taking and Tenant
shall thereupon be released from any further liability hereunder.

                In the event that either a portion of the premises or the
building of which the premises are a part is condemned or taken by eminent
domain proceedings so as to render the premises substantially unusable, then in
such event Tenant shall have the right to cancel and terminate this Agreement as
of the date of such taking upon giving to Landlord notice in writing of such
election within 30 days after the receipt by Tenant from Landlord of written
notice of

                                      -13-
<PAGE>

such appropriation or taking. Landlord agrees that it will give written notice
to Tenant immediately upon appropriation or taking hereunder. Any taking or
appropriation by eminent domain proceedings shall be deemed to render the
premises substantially unusable hereunder if such appropriation or taking
results in Tenant's inability to use the premises in the manner in which and for
the purposes for which it has been used or can be used under this Agreement. In
the event of such cancellation, Tenant shall thereupon be released from any
further liability under this Lease Agreement.

                If this Lease Agreement is terminated in either manner
hereinabove provided, the fixed monthly advance rental for the last month of
Tenant's occupancy shall be prorated and Landlord agrees to refund to Tenant any
such fixed rental paid in advance. Unless local law shall permit the payment of
a damage award to be made directly to tenant for loss of its interest, then the
entire damage award of the condemnation proceedings shall be paid to Landlord
but Landlord shall, and hereby does, assign to Tenant out of any award paid to
Landlord the greater of the following two amounts:

                (a)     Such portion thereof, if any, as shall be determined in
        such condemnation proceedings to be the value of Tenant's interest and
        business, or

                (b)     If Tenant shall have made improvements or alterations in
        the premises after the date hereof and shall have not yet fully
        amortized its expenditures for such improvements or alterations, a sum
        equal to the unamortized portion of any such expenditures.

        9.      Subject to Paragraph 19 hereof, the taking of possession of the
demised premises shall be conclusive evidence, as against Tenant, that Tenant
accepts the same in "as is" condition and that said premises and the building of
which the same form a part were in good and satisfactory condition at the time
such possession was so taken.

        10.     The Landlord covenants that the Tenant, upon payment of the rent
and additional rent above reserved, upon the due performance of the covenants
and agreements herein contained, shall and may at all times during the term
hereby granted peaceably and quietly have, hold and enjoy the demised premises
for the term of this lease. This covenant shall not be personal but shall run
with the land and be binding upon any transferee, successor or assign of the
Landlord.

        11.     The following events shall be considered events of default by
Tenant hereunder:

                (a)     Tenant shall fail to pay any installment of rent hereby
        reserved and such failure shall continue for a period of 5 days after
        written notice of default is given by Landlord to Tenant.

                (b)     Tenant shall fail to comply with any term, provision or
        covenant of this lease, other than the payment of rent, and shall not
        cure such failure within 30 days after written notice thereof to Tenant.

                (c)     Tenant shall become insolvent, or shall make a transfer
        in fraud of creditors or shall make an assignment for the benefit of
        creditors or shall be adjudged a

                                      -14-
<PAGE>

        bankrupt or insolvent in proceedings filed against Tenant or shall file
        a voluntary petition in bankruptcy.

                (d)     A receiver or trustee shall be appointed for all or
        substantially all of Tenant's assets.

                (e)     Tenant shall desert or vacate any substantial portion of
        the leased premises, or cease to operate for more than 30 days without
        the express written permission of Landlord.

                Upon the occurrence of any of such events of default, Landlord
shall have the option to pursue any one or more of the following remedies
without notice or demand whatsoever:

                (a)     Terminate this lease, in which event Tenant shall
        immediately surrender the premises to Landlord, and if Tenant fails so
        to do, Landlord may, without prejudice to any other remedy which it may
        have for possession or arrearages in rent or rent for the remainder of
        the lease term, enter upon and take possession of the leased premises
        and expel or remove Tenant and any other person who may be occupying
        said premises or any part thereof, by force if necessary, without being
        liable for prosecution or any claim of damages therefor; and Tenant
        agrees to pay to Landlord on demand the amount of all loss and damage
        which Landlord may suffer by reason of such termination, whether through
        inability to relet the leased premises on satisfactory terms or
        otherwise.

                (b)     Enter upon and take possession of the leased premises
        and expel or remove Tenant and any other person who may be occupying
        said premises or any part thereof, by force if necessary, without being
        liable for prosecution or any claim for damages therefor, and relet the
        premises and receive the rent therefor; and Tenant agrees to pay to
        Landlord on demand any deficiency that may arise by reason of such
        reletting.

                (c)     Enter upon the leased premises by force if necessary,
        without being liable for prosecution or any claim for damages therefor,
        and do whatever Tenant is obligated to do under the terms of this lease,
        and Tenant agrees to reimburse Landlord on demand for any expenses which
        Landlord may incur in thus effecting compliance with Tenant's
        obligations under this lease, and Tenant further agrees that Landlord
        shall not be liable for any damages resulting to the Tenant from such
        action whether caused by the negligence of Landlord or otherwise.

                Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided for herein or any other remedies
provided by law, all of which may be enforced cumulatively, nor shall pursuit of
any remedy provided for herein constitute a forfeiture or waiver of any rent due
to Landlord hereunder or of any damages accruing to Landlord by reason of the
violation of any of the terms, provisions and covenants herein contained.
Failure by Landlord to enforce one or more of the remedies herein provided upon
any event of default shall not be deemed or construed to constitute a waiver of
such default, or of any other violation or breach of any of the terms,
provisions and covenants herein contained.

                                      -15-
<PAGE>

        12.     The Tenant may not assign this lease or let or underlet the
whole or any part of said premises without obtaining in advance the written
consent of Landlord, which shall not be unreasonably withheld; provided,
however, that any portion of the demised premises may be occupied by an
affiliate or subsidiary of the Tenant without requiring procurement of the
Landlord's consent hereunder, so long as Tenant remains liable for the
performance of all of its obligations hereunder.

        13.     Tenant represents that it has dealt with no broker other than
Alexander Summer and Company incident to the negotiations and execution of this
lease.

        14.     The Tenant may make alterations, additions or improvements to
the leased premises without the consent of Landlord only if such alterations,
additions or improvements do not require structural changes in the leased
premises, or do not lessen the value of the leased premises. In the event any
alterations, additions or improvements to be made require structural changes,
the same shall only be made upon the Tenant obtaining the prior written consent
of the Landlord, which consent the Landlord shall not unreasonably withhold,
provided the same do not lessen the value of the leased premises or does not
change the basic design and/or utility of the building. Landlord agrees, if
consent is requested by Tenant, to advise Tenant of its decision within 15 days.
Failure of the Landlord to give such written advice within 15 days shall be
deemed consent by the Landlord to the proposed alterations, additions or
improvements. All such alterations, additions or improvements shall be only in
conformity with applicable governmental and insurance company requirements and
regulations applicable to the leased premises. Tenant shall hold and save
Landlord harmless and indemnify Landlord against any claim for damages or injury
in connection with any of the foregoing work which Tenant may make as
hereinabove provided.

                Nothing herein contained shall be construed as a consent on the
part of the Landlord to subject the estate of the Landlord to liability under
the mechanic's lien law of the State of New Jersey, it being expressly
understood that the Landlord's estate shall not be subject to such liability.

        15.     It is agreed that the Tenant shall assume all risk of damage to
its property, equipment and fixtures occurring in or about the demised premises,
whatever the cause of such damage or casualty, and that, in any event, the
Landlord shall not be liable for any damage or injury to property or person
caused by or resulting from steam, electricity, gas, water, rain, ice or snow,
or any leak or flow from or into any part of said building, or from any damage
or injury resulting or arising from any other cause or happening whatsoever;
unless said damage or injury is caused as a direct result of the sole gross
negligence of the Landlord, its employees, agents or subcontractors.

        16.     This lease shall be subject and subordinate at all times to the
lien of any institutional mortgages now or hereafter placed on the land and
building and leased premises without the necessity of any further instrument or
act on the part of Tenant to effectuate such subordination, but Tenant covenants
and agrees to execute and deliver upon demand such further instrument or
instruments evidencing such subordination of the lease to the lien of any such
institutional mortgage as shall be desired by a mortgagee or proposed mortgagee
or by any per-son.

                                      -16-
<PAGE>

        17.     Tenant agrees at any time and from time to time upon not less
than ten (10) business days' prior notice by Landlord or any mortgagee to
execute, acknowledge and deliver to Landlord or such mortgagee, as the case may
be, or any other party specified by Landlord or such mortgagee, a statement in
writing certifying that this lease is unmodified and in full force and effect
(or if there have been modifications, that the same is in full force and effect
as modified and stating the modifications) and the dates to which the rent and
other charges have been paid in advance, if any, and stating whether or not to
the best knowledge of the signer of such certificate Tenant or Landlord is in
default in performance of any covenant, agreement or condition contained in this
lease, and, if so, specifying each such default of which the signer may have
knowledge, it being intended that any such statement delivered pursuant to this
paragraph may be relied upon by any prospective purchaser of the fee or any
mortgagee hereof or any assignee of any mortgage.

        18.     a. Tenant shall, at Tenant's own expense, comply with the
Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et seq. and the
regulations promulgated thereunder ("ECRA") as the same may relate to Tenant's
occupancy. Tenant shall, at Tenant's own expense, make all submissions to,
provide all information to, and comply with all requirements of, the Bureau of
Industrial Site Evaluation ("the Bureau") of the New Jersey Department of
Environmental Protection ("NJDEP") relating to Tenant's occupancy. Should the
Bureau or any other division of NJDEP determine that a cleanup plan be prepared
and that a cleanup be undertaken because of any spills or discharges of
hazardous substances or wastes at the demised premises which occur prior to or
during the term of this lease as a result of the activities of the Tenant and
its employees, agents or invitees, then Tenant shall, at Tenant's own expense,
prepare and submit the required plans and financial assurances, and carry out
the approved plans. At no expense to Landlord, Tenant shall promptly provide all
information requested by Landlord for preparation of non-applicability
affidavits and, where applicable, shall promptly sign such affidavits when
requested by Landlord. Tenant shall indemnify, defend and save harmless Landlord
from all fines, suits, procedures, claims and actions of any kind arising out of
or in any way connected with any spills or discharges of hazardous substances or
wastes at the demised premises which occur during the term of this lease as a
result of the activities of the Tenant and its employees, agents or invitees;
and from all fines, suits, procedures, claims and actions of any kind arising
out of Tenant's failure to provide all information, make all submissions and
take all actions required by the ECRA Bureau or any other division of NJDEP as a
result of Tenant's occupancy. Tenant's obligations and liabilities under this
paragraph shall continue so-long as Landlord remains responsible for any spills
or discharges of hazardous substances or wastes as a result of Tenant's
activities at the demised premises which occur during the term of this lease.

                b.      Tenant shall promptly supply to Landlord all reports and
        notices made by Tenant pursuant to the Hazardous Substance
        Discharge--Reports and Notices Act, N.J.S.A. 13:1K-15 et seq. and the
        regulations promulgated thereunder ("Reports and Notices Act").

                c.      Tenant shall promptly furnish to Landlord true and
        complete copies of all documents, submissions and correspondence
        provided by Tenant to the Bureau and all documents, re-ports, directives
        and correspondence provided by the Bureau to Tenant.

                                      -17-
<PAGE>

        Tenant shall also promptly furnish to Landlord true and complete copies
        of all sampling and test results obtained from samples and tests taken
        at and around the premises.

                d.      As a condition precedent to Tenant's right to sub-lease
        the premises or to assign the lease, Tenant shall have received from the
        Bureau either (i) a non-qualified approval of Tenant's negative
        declaration or (ii) a non-applicability letter, for which Tenant shall
        promptly apply pursuant to ECRA. If this condition shall not be
        satisfied, then Landlord shall have the right to withhold consent to
        sublease or assignment.

                e.      The provisions of this Article 18 shall also apply to
        Tenant's activities which occurred prior to the Commencement Date as
        they may affect that portion of the demised premises which Tenant
        occupied pursuant to its lease with the Landlord dated May 15, 1981.

        19.     Anything in this lease to the contrary notwithstanding, Tenant
agrees that Tenant shall look solely to the estate and property of Landlord in
the property in which the leased premises is located, and subject to the prior
rights of any Mortgagee of the property, for the collection of any judgment (or
other judicial process) requiring the payment of money by Landlord in the event
of any default or breach by Landlord with respect to any of the terms, covenants
and conditions of this lease to be observed and/or performed by Landlord, and no
other assets of Landlord shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies.

        20.     All notices, demands and requests required under this lease
shall be in writing. All such notices, demands and requests shall be sent by
United States certified mail, return receipt requested, postage prepaid, or by
messenger, addressed as hereinafter provided and shall be effective when
received by, or delivery refused by, the addressee:

                      To Tenant:                   Becton Dickinson and Company
                                                   Consumer Products Division
                                                   One Becton Drive
                                                   Franklin Lakes, NJ 07417-1880

                      with copy by regular mail:   Becton Dickinson and Company
                                                   Critichem Division
                                                   One Becton Drive
                                                   Franklin Lakes, NJ 07417-1880

                      additional copy by           Becton Dickinson and Company
                      regular mail to:             Consumer Products Division
                                                   One Becton Drive
                                                   Franklin Lakes, NJ 07417-1880
                                                   Attention: Law Department

                      To Landlord:                 Lincoln Fair Lawn Associates
                                                   235 Moore Street
                                                   Hackensack, NJ 07601

                                      -18-
<PAGE>

        Landlord or Tenant may from time to time change the address for receipt
of notice by giving notice thereof to the other in accordance with the
provisions of this paragraph.

        21.     On the Commencement Date of this lease, the lease between
Lincoln Fair Lawn Associates, as landlord, and Becton Dickinson, Inc., Consumer
Products Division, as tenant, dated May 15, 1981 for 10,051 square feet in the
same building shall be deemed to have been terminated, automatically; except
that Tenant shall pay to Landlord all money due thereunder to the Commencement
Date.

        22.     This lease contains the entire agreement between the parties and
shall not be modified in any manner except by an instrument in writing executed
by the parties. If any term or provision of this lease, or the application
thereof, to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this lease, or the application of such term or
provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and each term and
provision of this lease shall be valid and be enforced to the fullest extent
permitted by law.

        IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written to this Lease Agreement.

WITNESS:                                    LINCOLN FAIR LAWN ASSOCIATES

                                            By: _________________________

ATTEST:                                     BECTON DICKINSON AND COMPANY

/s/ Raymond P. Ohlmuller                    By: /s/ Paul Creager
------------------------                        ----------------
RAYMOND P. OHLMULLER                            PAUL CREAGER
Assistant Secretary                             Group President

                                      -19-
<PAGE>

                            FIRST AMENDMENT TO LEASE

        AGREEMENT MADE November 19, 1991, by and between LINCOLN FAIR LAWN
ASSOCIATES, a New Jersey general partnership, with its office at 235 Moore
Street, Hackensack, New Jersey 07601 ("Landlord") and BECTON DICKINSON AND
COMPANY, a New Jersey corporation, with its office located at 1 Becton Drive,
Franklin Lakes, New Jersey 07417-1880 ("Tenant");

                                    RECITALS:

        1.      Landlord and Tenant entered into a certain Lease Agreement dated
June 23, 1987 (the "Lease") for certain premises located in a building at 13-01
Pollitt Drive, Fair Lawn, New Jersey; and

        2.      Landlord and Tenant intend to extend the term of the Lease and
to amend certain other provisions.

        NOW, THEREFORE, in consideration of the mutual promises hereby contained
and other good and valuable consideration, it is mutually agreed as follows:

        1.      The Recitals as set forth hereinabove are hereby incorporated
into this Agreement and made a part hereof.

        2.      Paragraph 2 of the Lease is hereby amended to extend the term
for an additional five (5) years, beginning on February 1, 1993 and ending on
January 31, 1998.

        3.      Paragraph 3 of the Lease is hereby amended to provide that the
fixed minimum rental shall be payable in equal monthly installments of
$18,038.33 on the first day of each and every month in advance, beginning on
February 1, 1993 and for the remaining term of the Lease.

        4.      Paragraph 18 of the Lease is hereby amended to add the following
subparagraphs:

                        "f.     If Tenant is responsible for spills and/or
                discharges on the premises during its occupancy of the premises
                pursuant to this lease, Tenant further agrees to make an
                appropriate submission to the NJDEP pursuant to ECRA, which
                submission may include, but not be limited to, an application
                for an administrative consent order ("ACO") in the event that
                Landlord shall seek to sell the premises. Further, Tenant agrees
                that it shall furnish a surety bond, Letter of Credit or such
                other financial security which would guarantee the
                implementation of any potential cleanup at the premises, as
                required by the NJDEP, and to further diligently prosecute any
                required ECRA submissions including execution of any and all
                necessary documents. As with all other aspects of any ECRA
                application by Tenant respecting Tenant's use and occupancy of
                the premises, Tenant shall bear all costs' in connection with
                same, and perform all other acts necessary or required by the
                NJDEP.

<PAGE>

                        "g.     In the event the Tenant shall have failed to
                comply in any respect over which it has control with the terms
                and conditions of this Section 18, then upon such failure to
                comply, and only in the event that NJDEP does not permit the
                premises to be occupied by another tenant, it shall be deemed
                the Tenant has remained in possession of the premises; and shall
                be considered as a holdover tenant. These rights are in addition
                to any other rights and remedies the Landlord may have under law
                with respect to such holdover tenancy."

        5.      A new Paragraph 25 is hereby added to the Lease, and it shall
read as follows:

                        "25.    a.      Beginning with the first day of the
                month next following the execution of this Agreement, Tenant
                covenants and agrees to pay Landlord, as additional rent, the
                sum of one twelfth (1/12th) of its pro rata share of estimated
                annual cost of repairs and replacements to the exterior of the
                premises as described in Paragraph 7 of this Lease, taxes and
                insurance, in advance, on the first day of each calendar month
                of the lease. Landlord intends to give Tenant written notice
                once a year of the amount of estimated monthly payments for
                repair and replacements, taxes and insurance, and Tenant will
                pay these amounts monthly without further notice or billing. In
                the event that such annual costs for any calendar year during
                the term hereof shall exceed the estimated sum, Tenant shall pay
                its pro rata share of any such excess within thirty (30) days
                from written notice by Landlord to Tenant. In the event the
                total estimated payments for the year exceed Tenant's share of
                the actual costs, Landlord shall credit such excess amount
                against the next due payments of fixed rent and additional rent.
                Within ninety (90) days after the end of each calendar year
                Landlord shall furnish Tenant with a statement in reasonable
                detail of the actual costs for the preceding calendar year
                showing computation of Tenant's pro rata share of the excess.
                Said statement shall be rebuttable evidence of the actual amount
                of costs of the Property as well as the amount, if any, due from
                Tenant. No further evidence shall be required of Landlord by
                Tenant prerequisite to the making of any payment to Landlord by
                Tenant as contemplated in this paragraph; provided, however, the
                Tenant shall be provided with reasonable documentation setting
                forth the costs of Landlord for same upon request thereof by
                Tenant. Tenant shall have the right to inspect the applicable
                accounting records of Landlord at the office of Landlord's
                managing agent upon reasonable prior notice. Any payments to be
                made hereunder shall be made by Tenant within ten (10) days from
                the date of billing from Landlord. Payments for partial year
                shall be prorated. However, Landlord will have the right to bill
                Tenant for its pro rata share of repairs, replacements, taxes
                and insurance when incurred if they exceed the estimated annual
                budget for that category, and the budget and monthly estimated
                payments shall be adjusted accordingly, if necessary.

                                b.      Tenant shall have the right, at any
                reasonable time upon ten (10) days' prior written notice to
                Landlord, to have its representative audit and examine
                Landlord's books and records at the office of Landlord's
                managing agent in New Jersey relating to such costs within one
                year after Tenant has received the annual statement of such
                actual charges. All these costs shall be audited and

                                      -21-
<PAGE>

                examined at the same time. If such audit shall disclose a
                liability of Landlord to reimburse Tenant for overcharges of ten
                (10%) percent or more of the total original charge, Landlord
                shall promptly pay to Tenant the reasonable cost of such audit
                and the amount of the deficiency plus interest from the date
                such excess shall have been refunded to Tenant at the same rate
                of interest as provided in Paragraph 2 of Lease. After one year
                from the date Tenant has received the annual statement of such
                annual charges, Tenant shall be deemed, automatically and
                conclusively, to have approved and accepted such charges, unless
                Tenant has conducted an audit and has notified Landlord in
                writing, within the one-year period, that it contests the
                charges and sets forth specific items and the amount which it
                contends is incorrect."

        6.      Paragraph 19 of the Lease is hereby deleted as Tenant now
occupies the Anderson Space.

        7.      Paragraph 20 of the Lease is hereby amended to delete it in its
entirety.

        8.      Except as herein amended or modified, all of the terms and
provisions of the Lease shall remain in full force and effect. In the event of
any conflict between the provisions of this Agreement and the original Lease,
the provisions of this Agreement shall govern and prevail.

        9.      This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

        IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and sealed on the date first above written.

WITNESS:                                 LINCOLN FAIR LAWN ASSOCIATES

/s/ Mitchell W. Marcus                   By: /s/ Stanley H. Marcus
----------------------                       ---------------------
Mitchell W. Marcus                           Stanley H. Marcus, General Partner

ATTEST:                                  BECTON DICKINSON AND COMPANY

/s/ Raymond P. Ohlmuller                 By: /s/ D. Cheatham
------------------------                     ---------------
Raymond P. Ohlmuller                          D. Cheatham
Vice President and Secretary                  Vice President and Treasurer

                                       -3-
<PAGE>

                            SECOND AMENDMENT TO LEASE

        THIS SECOND AMENDMENT TO LEASE dated June 10, 1996, by and between
LINCOLN FAIR LAWN ASSOCIATES, a New Jersey general partnership with its offices
at 235 Moore Street, Hackensack, New Jersey 07601 (hereinafter referred to as
"Landlord"), and BECTON DICKINSON AND COMPANY, a New Jersey corporation, with an
address at 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880 (hereinafter
referred to as "Tenant");

                                    RECITALS:

        1.      Landlord and Tenant have executed and delivered a certain Lease
Agreement dated June 23, 1987, as amended by a First Amendment To Lease dated
November 19, 1991 (hereinafter together referred to as the "Lease") for certain
premises located in a building at 13-01 Pollitt Drive, Fair Lawn, New Jersey
(hereinafter referred to as "demised premises").

        2.      Landlord and Tenant desire to amend the Lease to extend the term
and modify certain other provisions,

        NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

        1.      The Recitals set forth above are hereby incorporated into this
Amendment with the same force and effect as if they had been set forth at length
herein.

        2.      The Lease is hereby amended to extend the term for an additional
eight (8) years and eight (8) months, beginning on February 1, 1998 and ending
on September 30, 2006 (hereinafter referred to as the "Extended Term").

        3.      The fixed minimum monthly rental for the period from February 1,
1993 to and including September 30, 1996 will remain $18,038.33, but such rent
for the period from October 1, 1996 to and including September 30, 1997 will be
$17,125.00 and for the period from October 1, 1997 to and including January 31,
1998 will be $18,558.42.

        4.      The fixed minimum rental to be paid monthly by Tenant in advance
on the first day of each and every month during the entire Extended Term will be
$18,558.42.

        5.      A new Paragraph 26 is hereby added to the Lease, as follows:

                "26. Upon expiration of the term of the Extended Term, Tenant
        shall have the right and option to extend the term of the Lease for one
        period of five (5) years. The right and option to extend the term of the
        Lease shall be subject to and contingent upon each and every of the
        conditions set forth hereinafter. Tenant's right and option to extend
        the term of the Lease shall be exercisable by Tenant giving written
        notice of the exercise of the right and option to Landlord at least nine
        (9) months prior to the expiration of the Extended Term. In the event
        Tenant fails to give written notice of its intention to exercise its
        right and option as

                                       -4-
<PAGE>

        provided above within the stated time period, Tenant's right and option
        to extend the term of the Lease shall (upon the date by which written
        notice should have been received by Landlord) be deemed to have been
        waived by Tenant and shall be of no further force or effect. In the
        event Tenant exercises its right and option in accordance with the
        provisions hereof, the term of the Lease shall be extended accordingly,
        and all references contained in the Lease to the term shall be construed
        to refer to the original term of the Lease, as extended, whether or not
        specific reference is made thereto in the Lease. Unless otherwise
        expressly provided to the contrary, the option term of the Lease shall
        be upon the same terms, conditions and covenants as set forth in the
        Lease and this Amendment except that there- shall be no further right or
        option to extend the term of the Lease. It is important to Landlord that
        it know whether or not the option is exercised by Tenant so that it may
        seek a replacement tenant to avoid loss of rent, and, there-fore, the
        time within which the option must be exercised is hereby made of the
        essence. The right and option to extend the term of the Lease shall be
        subject to and contingent upon each and every one of the following
        conditions:

                (i)     The Lease is in full force and effect;

                (ii)    Tenant shall not be in default under any of the terms,
        provisions, covenants and conditions of the Lease; and

                (iii)   In lieu of the fixed minimum rental set forth in this
        Amendment, the fixed minimum rental to be paid by Tenant monthly during
        the option period shall be $22,650.67 per month."

        6.      A new Paragraph 27 is hereby added to the Lease as follows:

                "27.    A.      In the event Landlord intends to lease any space
        ("Additional Space") in the property in which the demised premises is
        located during the term of this Lease as extended pursuant to Paragraph
        26 hereof, Landlord shall give written notice of such intention to
        Tenant, and during the thirty (30) day period after Tenant's receipt of
        the notice, Tenant will have the exclusive right to negotiate with
        Landlord to lease the Additional Space on such terms and provisions as
        Landlord and Tenant may agree (the "New Lease"); provided, however, that
        all non-monetary provisions shall be consistent with this Lease and the
        term and option periods shall be co-terminus with this Lease, and the
        option to extend the term must be exercised only simultaneously with the
        option set forth in Paragraph 26 hereof. Also, the New Lease shall
        contain a provision making a default under this lease a simultaneous
        default under the New Lease, and, upon execution of the New Lease, this
        Lease shall be deemed to have been amended, automatically, to provide
        that a default under the New Lease shall be a simultaneous default under
        this lease. In the event the New Lease has not been agreed upon and
        executed by Tenant and delivered to Landlord within the later of (i)
        same thirty (30) day period or (ii) ten (10) days after Tenant has
        received a written New Lease which conforms to the agreement between
        Landlord and Tenant, then Tenant's right to lease the Additional Space
        will terminate,

                                       -5-
<PAGE>

        automatically. In the event Tenant accepts and executes the New Lease,
        Landlord shall execute and return to Tenant a copy of the New Lease
        within three (3) days after its receipt thereof.

                B.      In the event the New Lease is not agreed upon by
        Landlord and Tenant, or in the event the New Lease is agreed upon by
        Landlord and Tenant- but not executed by Tenant and delivered to
        Landlord, as herein provided, then during the period of nine (9) months
        after Tenant's right to enter into a New Lease, as provided in Paragraph
        27.A. hereof, has terminated, Landlord shall have the right to lease the
        Additional Space to any tenant on any terms. However in the event
        Landlord does not sign a new lease with a tenant within the said nine
        (9) month period, then Tenant's rights and Landlord's obligations, as
        set forth in Paragraph 27.A: hereof will be revived and apply again.

                C.      Time shall be of the essence with regard to all time
        periods in this Paragraph 27.

                D.      The provisions of this Paragraph 27 shall separately
        apply to any amount of Additional Space which Landlord intends to lease
        during the term hereof as extended hereby."

        7.      A New Paragraph 28 is hereby added to the Lease as follows:

                "28.    A.      In the event Landlord intends to sell the
        property in which the demised premises is located (the "Property")
        during the term of this Lease and before Landlord makes any solicitation
        or listing of the property for sale, Landlord shall submit to Tenant a
        proposal (the "Proposal") setting forth the sales price. Tenant shall
        have twenty (20) business days (excluding Saturday, Sunday and legal
        holidays) days from its receipt of the Proposal to accept the Proposal
        by signing it and returning it to the Landlord, which shall be received
        by the Landlord within the same ten-day period. Within five (5) days
        thereafter, Landlord will submit to Tenant an Agreement of Sale (the
        "Agreement") consistent with the Proposal and providing for the
        following and such other terms and conditions as are customary for such
        a transaction: (i) a ten (10%) percent refundable deposit on signing to
        be held by Landlord's attorney in an interest-bearing trust account with
        interest to be paid to the party receiving the deposit, (ii) a
        forty-five (45) day contingency period to permit Tenant to make such
        engineering and/or environmental inspections to its sole satisfaction,
        verify that ISRA has been complied with by Landlord, and review the
        status of title to its satisfaction with the right to terminate the
        contract within such period and receive its deposit and interest without
        any further obligation by Landlord or Tenant, and (iii) Landlord's
        agreement to use its best efforts to have other tenant's cooperate with
        Tenant so that it can perform its inspections; however, said forty-five
        (45) day period will be extended, automatically, for a period of time
        equal to such period during which the lack of cooperation of the other
        tenants prevented or hindered Tenant from completing its inspections.
        Closing will take place thirty (30) days after the end of the forty-five
        (45) day period. Tenant will sign the

                                       -6-
<PAGE>

        Agreement and send it to Landlord, together with the deposit within five
        (5) days after Tenant's receipt. Landlord will immediately sign and
        return one fully executed copy of the Agreement to Tenant. The failure
        of Tenant to accept and execute the Proposal and Agreement in the manner
        herein provided shall be deemed, automatically and irrevocably, an
        election by Tenant to reject the Proposal and to terminate its right to
        purchase the demised premises, subject to Paragraph 28.B. below.

                B.      In the event the Proposal and Agreement are not accepted
        by Tenant as herein provided, Landlord shall have the right to sell the
        Property to any other person or entity for any price and terms it
        desires during a period of one (1) year after the date the Proposal was
        originally submitted. If Landlord has not sold and conveyed title to the
        Property within that one year period, then Tenant's right of first
        refusal will apply again in the same manner. However, in the event
        Landlord intends to sell the Property to another party at any time prior
        to two (2) months after the Tenant's right has terminated and the sales
        price is more than ten (10%) percent less than the sales price contained
        in the Proposal, Landlord shall give Tenant written notice of its
        intention to sell to another party and set forth the new terms. Tenant
        shall then have the option to purchase in the same manner and on the
        same terms and conditions as set forth in the second notice and with the
        same procedures as set forth in paragraph A of this Paragraph 28.

                C.      A foreclosure sale by a mortgagee which holds a mortgage
        on the Property or a conveyance of title to the Property by a deed in
        lieu of foreclosure will not give Tenant the right to purchase the
        Property pursuant. to this Paragraph 28, but such foreclosure or deed in
        lieu of foreclosure will not extinguish Tenant's right to Purchase the
        Property pursuant to this Paragraph 28 thereafter, provided that this
        Lease is in full force and effect and Tenant is not in default of the
        terms, provisions, covenants and conditions of this Lease.

                D.      Time shall be of the essence with regard to all time
        periods in this Paragraph 28."

        8.      Paragraph 16 of the Lease is hereby deleted entirely and the
following is substituted in its place:

                "16.    This Lease is and shall be subject and subordinated to
        the lien of the mortgage now affecting the demised premises, at the date
        hereof, and to any mortgage or mortgages hereafter made affecting the
        demised premises, and to all renewals, modifications, consolidations,
        replacements, or extensions thereof, irrespective of the time of
        recording such mortgage, provided that such mortgagees agree in a
        written document, in a form attached hereto as Exhibit "A" with regard
        to the mortgage about to be executed and delivered to Valley National
        Bank and substantially the same substantive provisions with regard to
        future mortgages, that Tenant's occupancy and all rights pursuant to
        this lease shall not be disturbed nor terminated so long as Tenant is
        not in default of its obligations hereunder beyond any cure periods."

                                       -7-
<PAGE>

        9.      Paragraph 6 of the Lease is hereby amended to provide that all
insurance shall not name Landlord and any mortgagee as insureds, but shall
include contractual liability covering insuring Tenant's indemnity obligations
under this Lease.

        10.     A new Paragraph 29 is hereby added to the Lease as follows:

                "29.    Without limiting Tenant's obligation to provide, pay
        for, and maintain insurance pursuant to Paragraph 6 of this Lease, and
        except as is caused by the negligence, acts of omission or commission on
        the part of Landlord or any of its agents, contractors, servants,
        employees, licensees or invitees, Tenant covenants and agrees that it
        will indemnify, defend and hold harmless Landlord against and from all
        liabilities, obligations, damages, penalties, claims, costs, charges and
        expenses, including without limitation reasonable attorney's fees, which
        may be imposed upon or incurred by Landlord by reason of any of the
        following occurrences during the term of this Lease as extended pursuant
        to Paragraph 26:

                (i)     Tenant's use or occupancy of the demised premises or any
        part thereof;

                (ii)    Negligence, or acts of omission or commission on the
        part of the Tenant or any of its agents, contractors, servants,
        employees, licensees or invitees;

                (iii)   A failure on the part of Tenant to perform or comply
        with any of the covenants, agreements, terms or conditions contained in
        this Lease on its part to be performed or complied with.

                Landlord shall promptly notify Tenant of any such claim asserted
        against it and shall promptly send to Tenant copies of all papers or
        legal process served upon it in connection with an action or proceeding
        brought against Landlord by reason of any such claim."

        11.     The parties will execute a memorandum, in recordable form,
stating Tenant's rights to lease and/or purchase the property as provided
herein, which memorandum may be recorded at Tenant's expense.

        12.     Except as otherwise specifically provided herein, all of the
terms and provisions of the Lease shall continue in full force and effect. In
the event of any conflict between the provisions of this Amendment and the
Lease, the provisions of this Amendment shall govern and prevail.

        This Amendment shall be binding upon and shall be for the benefit of the
parties hereto and their respective successors and assigns.

        Executed on the date first above written.

                                       -8-
<PAGE>

WITNESS:                                LANDLORD:
                                        LINCOLN FAIR LAWN ASSOCIATES

/s/ M. Robert Poley                     By: /s/ Stanley H. Marcus
-------------------                         ---------------------
M. Robert Poley                             Stanley H. Marcus, General Partner

ATTEST:                                 TENANT:
                                        BECTON DICKINSON AND COMPANY

/s/ Dean J. Paranicas                   By: /s/ Raymond P. Ohlmuller
---------------------                       ------------------------
Dean J. Paranicas                           Raymond P. Ohlmuller
Assistant Secretary                         Vice President and Secretary

                                       -9-

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