Document:

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                                                                   EXHIBIT 10.10

                               REVISED & RESTATED
                                ROYALTY AGREEMENT

This Royalty Agreement (this "Agreement"), dated as of July 16, 2003 (the
"Effective Date"), is entered into by and between EpiCept Corporation,
successor-in-interest of American Pharmed Labs, Inc., a corporation organized
under the laws of Delaware and having its principal place of business at 270
Sylvan Avenue, Englewood Cliffs, NJ 07632 ("EpiCept") and R. Douglas Cassel,
M.D., an individual with his principal place of business at 4401 Fargreen Road,
Harrisburg, PA 17110 ("Cassel").

WHEREAS:

EpiCept owns the entire right, title and interest in, to and under the
inventions described in U.S. patent application. Serial No. 09/425,925 (the
"'925 application"), entitled, "Local Prevention or Amelioration of Pain from
Surgically Closed Wounds," which issued as U.S. Patent No. 6,383,511 (the "'511
Patent") to Cassel, as the inventor.

For consideration as described herein, Cassel has assigned his entire right,
title and interest in, to and under the inventions described in the '925
application to EpiCept (Exhibit A).

EpiCept and Cassel originally entered into that certain Royalty Agreement, dated
October 6, 1999. EpiCept and Cassel intend and desire that this Agreement amends
and restates the Original Agreement in its entirety and in particular the
parties expressly acknowledge and agree that this Agreement contains a
consulting arrangement with Cassel and, among others, modified and amended
financial provisions and due diligence provisions.

IT IS HEREBY AGREED as follows:

1.0   Definitions

            1.1 Affiliate: The term "Affiliate" means, with respect to any
      person, entity, or any other person or entity that it directly or
      indirectly controls, is under common control with, or is controlled by
      that person or entity. For purposes of this definition, "control"
      (including with correlative meaning, the terms "controlled by" and under
      "common control with"), as used with respect to any person, or entity,
      means the possession, directly or indirectly, of the power to direct or to
      cause the direction of the management and policies of such person or
      entity, whether through the ownership of voting securities, by contract,
      or otherwise.

            1.2 Cassel Technology: The term "Cassel Technology" means all
      copyrightable material, notes, records, inventions, improvements,
      developments, discoveries and trade secrets conceived, made by or
      discovered by Cassel outside of the performances of his services.

            1.3 Effective Date: The term "Effective Date" means the date set
      forth in the preamble to this Agreement.

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            1.4 First Commercial Sale: The term "First Commercial Sale" means,
      after all necessary marketing approvals have been obtained in a relevant
      country, the initial transfer of a Product in such country to a third
      party customer not controlled by EpiCept in exchange for cash or some cash
      equivalent to which a value can be assigned for the purpose of determining
      "Net Sales."

            1.5 Patent: The term "Patent" means the '511 Patent and any other
      patent issued by the U.S. Patent and Trademark Office or any comparable
      foreign authority that results from the '925 application, including,
      without limitation U.S. Patent application Serial No. 10/137,685, filed
      May 3, 2002..

            1.6 Product: The term "Product" means any composition of matter,
      material, device, apparatus, or system developed by EpiCept for the
      treatment of pain from surgically closed wounds, which the making, using,
      offering for sale, sale or importation by an unlicensed third party, would
      infringe one or more issued claims of a Patent.

            1.7 Net Sales: The term "Net Sales" means gross sales of the
      Products invoiced by EpiCept or any of its Affiliates to a third party,
      but not to an Affiliate, and accepted by the third party, less shipping
      costs, returns, allowances, and taxes.

            1.8 Territory: The term "Territory" means a territory consisting of
      the entire world.

            1.9 Royalty Year: The "Royalty Year" shall be a twelve-month
      calendar year ending on December 31, except that the first Royalty Year,
      if the First Commercial Sale of Product should occur during the year, may
      be less than twelve months.

2.0   Royalty

            2.1 Monthly Payment: Within *** business days after the end of each
      calendar month, EpiCept shall pay to Cassel a payment of four thousand
      United States Dollars ($4,000) for a period of three (3) years from the
      Effective Date. Such monthly payments shall be fully creditable against
      future royalty payments to Cassel, provided that no more than *** of the
      total annual payments shall be credited to the royalties payable to Cassel
      in any one Royalty Year.

            2.2 Amount of Royalty: EpiCept shall pay to Cassel, on a
      country-by-country, Product-by-Product basis, a royalty of *** of Net
      Sales of Product per Royalty Year.

            2.3 No Multiple Royalties: No multiple royalties shall be payable in
      the event that any Product or the manufacture, use or sale thereof is
      covered by more than one patent included in the Patent.

            2.4 Payment: EpiCept shall submit a payment to Cassel annually that
      is equal to the royalties due for that Royalty Year, less applicable
      withholding taxes and credits, except that EpiCept shall reserve and hold
      back *** of the royalty payment each Royalty Year to account for returns,
      allowances, and write-offs of customer accounts. The reserved royalty
      payment, adjusted for returns, allowances, and write-offs of customer
      accounts, will be paid

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      with the following Royalty Year's royalty payments. The royalty payments
      to Cassel shall be made within *** days of the end of each Royalty Year in
      which Net Sales occurred. With each royalty payment, EpiCept shall submit
      to Cassel an itemized statement setting forth the amount of Net Sales
      during the Royalty Year and the royalties accrued.

              2.5 Records: The books and records of EpiCept which relate to the
     royalties under this Agreement shall be open for inspection by an
     independent accounting firm appointed by Cassel (subject to the consent of
     EpiCept, such consent not to be unreasonably withheld or delayed) for the
     sole purpose of verifying royalty payments during regular business hours at
     such place or places where such books and records are customarily kept and
     upon suitable written notice, but not more frequently than once each year.
     The relevant records shall be maintained by EpiCept for a period of three
     (3) years after the expiration or termination of this Agreement. The cost
     of any such inspection shall be paid by Cassel. Any books and/or records
     received from EpiCept during the course of any such inspection shall be
     kept confidential.

3.0   Term and Termination

            3.1 Term: The Term of this Agreement shall begin on the Effective
      Date, and unless sooner terminated by the parties as herein provided,
      shall continue in full force and effect, on a country-by-country and
      Product-by-Product basis, until the date of expiration of expiration of
      the last to expire patent within the Patent.

            3.2 Termination:

                  (a)   At Will: *** years after the Effective Date, EpiCept may
                        terminate this Agreement and all of its obligations
                        hereunder at any time upon *** days advance written
                        notice to Cassel, if a patent within the Patent is
                        determined to be invalid and/or unenforceable.

                  (b)   By Mutual Agreement: EpiCept and Cassel may terminate
                        this Agreement at any time by mutual written agreement.

                  (c)   For Breach: Except as set forth in Section 5.6, if
                        either party breaches this Agreement, the non-breaching
                        party, at its option, may terminate this Agreement,
                        provided that the non-breaching party has provided
                        written notice to the breaching party of the breach and
                        the non-breaching party's intention to terminate this
                        Agreement, and the breaching party has failed to cure
                        its breach within ninety (90) days following the date
                        such notice was received by the breaching party.

4.0   Due Diligence

            4.1 Due Diligence: EpiCept by itself, or through its Affiliates or
      licensees, throughout the Term, shall use commercially reasonable efforts
      to proceed with the development and commercialization of Product through a
      program for exploiting the Patent, consistent with reasonable business
      practices and judgments.

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5.0   Consulting Arrangements

            5.1 Services and Compensation:

                  (a)   Cassel agrees to provide general scientific consulting
                        services for EpiCept and in particular, EpiCept expects
                        such services to involve the development and
                        commercialization of Product ("Services") for a period
                        of three (3) years from the Effective Date ("Consulting
                        Term as defined herein below), with each twelvemonth
                        (12) month period designated a Consulting Year. EpiCept
                        agrees to give Cassel three (3) days advance notice of
                        EpiCept's need for Cassel to perform the Services, and
                        Cassel agrees to perform such Services upon EpiCept's
                        request, unless Cassel has a valid excuse in which case
                        the parties shall agree to a mutually acceptable date
                        for Cassel to perform such Services.

                  (b)   During the Consulting Term, EpiCept agrees to pay to
                        Cassel *** per day (each day being eight (8) hours) for
                        the performance of the Services. Such payment shall be
                        made within *** business days after receipt of a
                        detailed invoice by EpiCept. Such invoice shall include
                        a description of the Services performed by Cassel and
                        the number of hours of Service. In any Consulting Year
                        that EpiCept does not use Cassel's Services for ***
                        days, EpiCept shall, within *** days after the end of
                        such year, pay to Cassel the difference between the
                        amount paid to Cassel up to that date and the ***. For
                        purposes of clarity, EpiCept. shall pay to Cassel a
                        minimum of *** per Consulting Year for Services during
                        the Consulting Term, regardless of whether or not
                        EpiCept has utilized Cassel's Services during any
                        Consulting Year.

            5.2 Confidentiality:

                  (a)   "Confidential Information" means any and all proprietary
                        information, technical data, trade secrets or know-how
                        provided by EpiCept to Cassel, as well as any
                        information, data, trade secrets or know-how developed
                        by Cassel in the course of providing the Services to
                        EpiCept whether provided in written, oral, graphic,
                        visual, video, computer or other form, including, but
                        not limited to, research and product plans, products,
                        services, customer lists and customers (including, but
                        not limited to, customers of EpiCept on whom Cassel
                        called or with whom Cassel became acquainted during the
                        Consulting Term), markets, developments, inventions,
                        processes, formulas, technology, marketing, finances or
                        other business information.

                  (b)   Cassel shall not, during or subsequent to the Consulting
                        Term, use Confidential Information for any purpose
                        whatsoever other than the performance of the Services on
                        behalf of EpiCept, or disclose Confidential Information
                        to any third party. It is understood and agreed that

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                        Confidential Information also includes such information
                        received during Cassel's initial consulting agreement
                        with EpiCept. Cassel agrees that Confidential
                        Information shall remain the sole property of EpiCept.
                        Cassel further agrees to take all reasonable precautions
                        to prevent any unauthorized disclosure of Confidential
                        Information. Notwithstanding the above, Cassel's
                        obligation under this Section 5.2 (b) relating to
                        Confidential Information shall not apply to information:

                              (i) which is already known to Cassel (other than
                        under an obligation of confidentiality), at the time of
                        disclosure by EpiCept to the extent that Cassel has
                        documentary evidence to that effect;

                              (ii) which is generally available to the public or
                        otherwise part of the public domain at the time of its
                        disclosure to Cassel;

                              (iii) which becomes generally available to the
                        public or otherwise part of the public domain after its
                        disclosure or development, as the case may be, and other
                        than through any act or omission of Cassel in breach of
                        Cassel's confidentiality obligations under this
                        Agreement;

                              (iv) which is subsequently lawfully disclosed to
                        Cassel by a third party who had no obligation to EpiCept
                        not to disclose such information to others;

                              (v) which is approved for release by EpiCept in
                        writing.

                  (c)   Cassel shall not, during the Consulting Term, improperly
                        use or disclose any proprietary information or trade
                        secrets of any former or current employer or other
                        person or entity with which Cassel has an agreement or
                        duty to keep in confidence information acquired by
                        Cassel in confidence and that Cassel shall not bring
                        onto the premises of EpiCept any unpublished document or
                        proprietary information belonging to such employer,
                        person or entity unless consented to in writing by such
                        employer, person or entity.

                  (d)   Cassel recognizes that EpiCept has received and in the
                        future will receive from third parties their
                        confidential or proprietary information subject to a
                        duty on EpiCept's part to maintain the confidentiality
                        of such information and to use it only for certain
                        limited purposes. Cassel agrees that Cassel owes EpiCept
                        and such third parties, during the Consulting Term and
                        thereafter, a duty to hold all such confidential or
                        proprietary information in the strictest confidence and
                        not to disclose it to any person, firm or corporation or
                        to use it except as necessary in carrying out the
                        Services for EpiCept consistent with EpiCept's agreement
                        with such third party.

                  (e)   Upon the termination of the Consulting Term, or upon
                        EpiCept's earlier request, Cassel shall deliver to
                        EpiCept all of EpiCept's property relating

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                        to, and all tangible embodiments of, Confidential
                        Information in Cassel's possession or control.

                  (f)   The obligations of Cassel under this Section 5.2 shall
                        continue in full force and effect for three (3) years
                        after termination of Cassel's performance of the
                        Services.

            5.3 Ownership:

                  (a)   Cassel agrees that all copyrightable material, notes,
                        records, inventions, improvements, developments,
                        discoveries and trade secrets (collectively,
                        "Inventions") conceived, made or discovered by Cassel in
                        performing the Services, solely or in collaboration with
                        others, during the Consulting Term relating to the
                        business of EpiCept shall be the sole property of
                        EpiCept. In addition, to the extent allowed by law, any
                        Inventions which constitute copyrightable subject matter
                        shall be considered "works made for hire", as that term
                        is defined in the United States Copyright Act. Cassel
                        further agrees to assign (or cause to be assigned) and
                        does hereby assign fully to EpiCept all such Inventions
                        and any copyrights, patents or other intellectual
                        property rights relating thereto.

                  (b)   Upon termination of the Consulting Term, or upon
                        EpiCept's earlier request, Cassel shall deliver to
                        EpiCept all of EpiCept's property relating to, and all
                        tangible embodiments of, Inventions in Cassel's
                        possession or control.

                  (c)   Cassel agrees to assist EpiCept, or its designee, at
                        EpiCept's expense, to obtain and from time to time
                        enforce and defend EpiCept's rights in the Inventions
                        and any copyrights, patents or other intellectual
                        property rights relating thereto in any and all
                        countries, and to execute all documents reasonably
                        necessary for EpiCept to do so.

                  (d)   Cassel agrees that if in the course of performing the
                        Services, Cassel incorporates into any Inventions
                        developed hereunder any invention, improvement,
                        development, concept, discovery or other proprietary
                        information owned by Cassel or in which Cassel has an
                        interest ("Item"), EpiCept is hereby granted and shall
                        have a non-exclusive, royalty-free, perpetual,
                        irrevocable, worldwide license to make, have made,
                        modify, reproduce, display. use and sell such Item as
                        part or in connection with such inventions.

            5.4 Option to Cassel Technology: Cassel hereby grants to EpiCept an
      exclusive option to obtain an exclusive, worldwide license to any Cassel
      Technology. Cassel shall provide to EpiCept a written notice of any such
      Cassel Technology and a summary detailing any such Cassel Technology.
      EpiCept shall have the right to exercise its option under this Section 5.4
      within *** months of receipt of the written notification and summary by
      written notice to Cassel indicating that EpiCept is exercising its option,
      whereupon the parties shall

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      negotiate in good faith the terms and conditions for an agreement for a
      *** month negotiation period, extendible upon mutual agreement. If EpiCept
      does not exercise its option(s) within the *** month option period or
      enter into a definitive agreement with Cassel within the *** month
      negotiation period or any agreed upon extension period, Cassel shall have
      no further obligation to EpiCept regarding any such Cassel Technology,
      provided, however, that EpiCept's failure to exercise its option or enter
      a definitive agreement with respect a particular Cassel Technology shall
      not affect EpiCept' s exclusive option to obtain an exclusive license for
      any other Cassel Technology. Cassel shall not enter into any negotiations
      or agreement with a third party during the *** month option period or any
      particular negotiation period, whichever is longer.

            5.5 Reports: Cassel agrees that Cassel will from time to time during
      the Consulting Term or any extension thereof (as mutually agreed upon by
      the parties in writing) keep EpiCept advised as to Cassel's progress in
      performing the Services hereunder and that Cassel shall, as requested by
      EpiCept, prepare written reports with respect thereto. It is understood
      that the time required in the preparation of such written reports shall be
      considered time devoted to the performance of the Services by Cassel.
      Reports prepared by Cassel shall be the sole property of Cassel.

            5.6 Conflicting Obligations: Cassel certifies that Cassel has no
      outstanding agreement or obligation that is in conflict with any of the
      provisions of this Agreement, or that would preclude Cassel from complying
      with the provisions hereof, and further certifies that Cassel shall not
      enter into any such conflicting agreement during the Consulting Term or
      any extension thereof.

            5.7 Term and Termination for Consulting Arrangements:

                  (a)   Cassel's obligation to perform the Services and
                        EpiCept's obligation to compensate Cassel for the
                        Services shall commence on the Effective Date and end
                        three (3) years from the Effective Date ("Consulting
                        Term"). For purposes of clarity, the Consulting Term
                        shall commence on the Effective Date and end thirty-six
                        (36) months after the Effective Date.

                  (b)   Cassel may terminate the consulting arrangement between
                        Cassel and EpiCept set forth in this Section 5 by giving
                        *** days prior written notice thereof.

                  (c)   EpiCept and Cassel may terminate the consulting
                        arrangement between Cassel and EpiCept set forth in this
                        Section 5 at anytime by mutual written agreement.

                  (d)   EpiCept may terminate the consulting arrangement between
                        Cassel and EpiCept set forth in this Section 5
                        immediately and without prior written notice or
                        opportunity to cure if Cassel refuses or is unable to
                        perform the Services or is in breach of any material
                        provision of this Section 5.

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                  (e)   Upon termination of the consulting arrangement between
                        Cassel and EpiCept set forth in this Section 5, all
                        rights and duties of the parties hereunder shall cease
                        except:

                              (i) in the event that the consulting arrangement
                        between Cassel and EpiCept is terminated by EpiCept,
                        EpiCept shall be obliged to pay, within *** days after
                        receipt of Cassel's final statement, all undisputed
                        amounts owing to Cassel for unpaid Services and related
                        expenses, if any, in accordance with Section 5.1 hereof;
                        and

                              (ii) Sections 5.2, 5.3 and 6.7 shall survive
                        termination of this Section 5 of this Agreement.

6.0   Miscellaneous

            6.1 Sports Medicine and Rehabilitation: EpiCept acknowledges that
      Cassel is free to pursue with any interested third party sports medicine
      and/or rehabilitation.

            6.2 No Implied Licenses: No license rights to the Patent or any
      Inventions shall be created hereunder by implication, estoppel or
      otherwise and nothing herein shall be construed to grant to Cassel any
      rights or licenses under the Patent or Inventions.

            6.3 Notice: Any notices required or permitted to be given under this
      Agreement shall be deemed given if communicated in the English language
      and delivered to the party to be notified at its address shown below or at
      such other address as may be furnished from time to time by the party to
      be notified to the notifying party in writing either (a) by registered air
      mail, postage prepaid, which notice shall be effective five (5) days after
      the date of mailing or (b) in person, by telefax (with proof of
      transmission and confirmation by first-class mail postage paid), or
      overnight courier, which notice shall be effective on the business day
      immediately following the date of such delivery.

            If to Cassel, addressed to:        R. Douglas Cassel, M.D.
                                               4401 Fargreen Road
                                               Harrisburg, P0A 17110

            With a copy to:                    Jered L. Hock
                                               Metzger, Wickersham
                                               3211 North Front Street
                                               P.O. Box 5300
                                               Harrisburg, PA 17110

            If to EpiCept:                     EpiCept Corporation
                                               270 Sylvan Avenue
                                               Englewood Cliffs, NJ 07632
                                               Attn.: Jack V. Talley, Chief
                                               Executive Officer

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            6.4 Entire Agreement: This Agreement and exhibit hereto set forth
      the entire agreement and understanding between the parties regarding the
      Patent, and supercedes and replaces any and all prior arrangements and
      understandings relating to such matters, including the Original Agreement.
      None of the terms of this Agreement may be modified except as set forth in
      writing and signed by Cassel and EpiCept.

            6.5 Amendments: This Agreement may only be amended by a written
      agreement signed by both parties.

            6.6 Waiver: A waiver by either party of any term or condition of
      this Agreement in any one instance shall not be deemed to be a waiver of
      such term or condition for any similar instance in the future or any
      subsequent breach thereof. No delay or failure by either party to exercise
      any right, power, or remedy hereunder shall constitute a waiver thereof,
      nor shall any single or partial exercise of any right, power, or remedy
      preclude other or further exercise thereof or the exercise of any other
      right power, ore remedy.

            6.7 Severability: The invalidity of any provision or part of this
      Agreement shall not affect the validity of this Agreement in its entirety
      nor any provision or part thereof. In the event any provisions of this
      Agreement are judged legally invalid, they shall automatically be severed
      herefrom and the remaining provisions shall continue in full force and
      effect, provided that should such invalidity substantially alter the
      rights of either Party, the Parties shall promptly renegotiate in good
      faith the severed provisions of this Agreement.

            6.8 Assignment: This Agreement may not be assigned by Cassel. This
      Agreement may be assigned by EpiCept provided that such assignee agrees in
      writing to be bound by the terms and provisions of this Agreement or is so
      bound by operation of law. Any purported assignment in violation of the
      provisions of this paragraph shall be null and void.

            6.9 No Agency, Partnership, or Joint Venture: Nothing in this
      Agreement shall be deemed to make the parties partners, joint venturers,
      or agents of one another. No party to this agreement shall have the power
      to bind or obligate the other. Cassel shall perform the Services hereunder
      as an independent contractor. Cassel acknowledges and agrees that Cassel
      is obligated to report as income all compensation received by Cassel
      pursuant to this Agreement, and Cassel agrees to indemnify EpiCept and
      hold it harmless to the extent of any obligation imposed on EpiCept (i) to
      pay withholding taxes or similar items or (ii) resulting from Cassel's
      being determined not to be an independent contractor.

            6.10 Survival. Sections 5.2, 5.3 and 6.7 shall survive termination
      of this Agreement.

            6.11 Governing Law: This Agreement shall be deemed to have been made
      in the State of New Jersey, and shall be governed and construed in
      accordance with the laws of New Jersey.

            6.12 Counterparts. This Agreement may be executed in two (2)
      counterparts, whereby each party may execute a duplicate original thereof,
      and each counterpart shall have

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      the same force and effect as an original and shall constitute an
      effective, binding agreement on the part of each of the undersigned.

                           [SIGNATURE PAGE TO FOLLOW]

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IN WITNESS HEREOF, the parties have executed this Agreement as of the date first
written above.

EpiCept Corporation                           R. Douglas Cassel, M.D.

By: /s/ JACK V. TALLEY                        By: /s/ R. DOUGLAS CASSEL
    ---------------------------------             ------------------------------
    Jack V. Talley                                R. Douglas Cassel, M.D.
    Chief Executive Officer  7/18/03                                7/22/03

                                      -11-<PAGE>

                                                                   EXHIBIT 10.11

                              SUBLICENSE AGREEMENT

            This Sublicense Agreement (this "Agreement"), dated as of August 27,
1999, is entered into by and between EPITOME PHARMACEUTICALS LIMITED, a
corporation organized under the laws of Nova Scotia, Canada and having its
principal place of business at 5162 Duke Street, Suite 501, Halifax, NS B3J 1N7
Canada ("Sublicensor") and AMERICAN PHARMED LABS, INC., a corporation organized
under the laws of Delaware and having its principal place of business at 270
Sylvan Avenue, Englewood Cliffs, New Jersey 07632 ("Sublicensee").

                                    RECITAL:

            Sublicensor is the licensee of certain United States patent
applications, and foreign counterparts of such patent applications, covering the
topical use of tricyclic anti-depressants as topical analgesics for neuralgia
and Sublicensor is willing to grant an exclusive sublicense in such technology
to Sublicensee pursuant to terms and conditions hereinafter set forth.

            NOW, THEREFORE, in consideration of the premises set forth herein
and such good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      1.1 Affiliate. The term "Affiliate" means, with respect to any person or
entity, any other person or entity that directly or indirectly controls, is
under common control with or is controlled by that person or entity. For
purposes of this definition, "control" (including, with correlative meaning, the
terms "controlled by" and "under common control with"), as used with respect to
any person or entity, means the possession, directly or indirectly, of the power
to direct or to cause the direction of the management and policies of such
person or entity, whether through the ownership of voting securities, by
contract or otherwise.

      1.2 Effective Date. The term "Effective Date" means the date set forth in
the preamble to this Agreement.

      1.3 Excluded Field of Use. ***

      1.4 Field of Use. ***

      1.5 First Commercial Sale. The term "First Commercial Sale" means the
initial transfer by Sublicensee of a Licensed Product to a third party customer
in exchange for cash or some cash equivalent to which value can be assigned for
the purposes of determining Net Sales.

      1.6 Frome Patent Application. The term "Frome Patent Application" means
that certain United States patent application more particularly described as
U.S. Patent Appl. No.

                                       1
<PAGE>

08/531,760 (abandoned), Dr. Bruce M. Frome, "The Preparation of Topical Regional
Compositions for the Relief of Pain."

      1.7 Licensed Product. The term "Licensed Product" means any composition of
matter, material, device, apparatus or system within the Field of Use utilizing
any Patent Rights.

      1.8 Net Sales. ***

      1.9 Other Technology. The term "Other Technology" means any technology
acquired by or licensed to Sublicensee or any of its Affiliates other than
pursuant to this Agreement.

      1.10 Patent Rights. The term "Patent Rights" means any rights to any of
the patent applications listed on Exhibit A attached hereto, together with all
patents issued pursuant to such applications.

      1.11 PTO. The term "PTO" means the United States Patent and Trademark
Office.

      1.12 Territory. The term "Territory" means a territory consisting of the
entire world.

                                   ARTICLE II

                               GRANT OF SUBLICENSE

      2.1 Exclusive, Worldwide Sublicense.

            (a) Right and Sublicense. Sublicensor hereby grants to Sublicensee
the exclusive right and sublicense under the Patent Rights to make, use,
develop, sell, market and otherwise dispose of Licensed Products in the Field of
Use during the term hereof throughout the Territory, subject to all of the terms
and conditions of this Agreement.

            (b) Sublicense. Sublicensor also grants to Sublicensee the right to
grant sublicenses of any right and sublicense under Section 2.1(a) hereof to
third parties (including Affiliates of Sublicensee) provided that (i) any such
sublicense agreement is consistent with the terms and provisions of this
Agreement; (ii) Sublicensee remains fully liable for the performance of its
obligations hereunder; (iii) Sublicensee notifies Sublicensor of any grant of a
sublicense and provides to Sublicensor upon Sublicensor's request a copy of any
sublicense agreement; and (iv) Sublicensor consents to such sublicense, which
consent Sublicensor will provide so long as it obtains the approval of Dalhousie
University ("Dalhousie").

      2.2 Improvements.

            (a) Sublicensor's Improvements. All right, title and interest in and
to any improvements of the Patent Rights invented solely by Sublicensor,
Dalhousie and/or any of their respective Affiliates ("Sublicensor Parties")
after the Effective Date (any such improvements, the "Sublicensor Improvements")
shall remain the exclusive property of the Sublicensor (or Dalhousie, as the
case may be).

            (b) Sublicensee's Improvements or Joint Improvements. All right,
title and interest in and to any improvements of the Patent Rights in the Field
of Use invented after the

                                       2
<PAGE>

Effective Date (I) solely by (i) Sublicensee, (ii) any of Sublicensee's
Affiliates or (iii) any permitted sublicensee hereunder ("Sublicensee Parties")
or (II) jointly by any of the Sublicensor Parties and any of the Sublicensee
Parties, shall be the joint property of Sublicensee and Sublicensor.

            (c) Other Technology. In the event Sublicensee desires to use, sell,
lease, or rent a product, information or material derived from a combination of
Patent Rights and Other Technology, Sublicensor will (i) not unreasonably
withhold its consent to a request by Sublicensee to reduce the royalty payable
to Sublicensor by up to *** because of payments (the total of which are greater
than or equal to the amount of royalty reduction requested) it would have to
make to obtain rights to use Other Technology in combination with the Patent
Rights and (ii) negotiate in good faith with Sublicensee if Sublicensee requests
a reduction in the royalty payable to Sublicensor by more than *** because of
payments (the total of which are greater than or equal to the amount of royalty
reduction requested) it would have to make to obtain rights to use Other
Technology in combination with the Patent Rights.

      2.3 Excluded Field of Use. Notwithstanding anything herein to the
contrary, Sublicensee acknowledges and agrees that Sublicensee has no right or
sublicense under the Patents Rights in any Excluded Field of Use. Sublicensor
grants to Sublicensee a right of first refusal to an exclusive sublicense of the
Patent Rights in any Excluded Field of Use that the Sublicensor desires to
sublicense to a third party, such right of first refusal to be exercised within
60 days of Sublicensee receiving written notice from Sublicensor of the terms
and conditions of a proposed sublicense which it is willing to accept, by
Sublicensee providing written notice within such period that it agrees to enter
into a sublicense with Sublicensor on such terms and conditions.

      2.4 Best Efforts. Sublicensee shall use its commercially reasonable best
efforts to exploit the commercial potential of the Patent Rights. No less than
every three month anniversary following the Effective Date, Sublicensee shall
report in writing to Sublicensor on the progress made toward commercializing the
Patent Rights. If no reasonable effort is being made by Sublicensee to
commercialize the Patent Rights for a continuous period of six (6) months, then
the Sublicensor may provide written notice of default for the cure of which
Sublicensee shall have an additional sixty (60) days. If such default is not
cured by Sublicensee, Sublicensor may thereafter terminate this Agreement upon
written notice to Sublicensee.

                                   ARTICLE III

                             PAYMENTS AND ROYALTIES

      3.1 Initial Payment. Sublicensee shall make an initial payment to
Sublicensor of $25,000 (U.S.) ("Initial Payment") on the Effective Date.

      3.2 Additional Payments. ***

      3.3 Royalties.

            (a) Computation. In consideration of the sublicense granted by
Sublicensor to Sublicensee hereunder, Sublicensee shall pay to Sublicensor a
yearly royalty on an annual basis in an amount equal to *** of Sublicensee's Net
Sales to the extent such Net Sales in the aggregate are equal to or less than
***; to the extent such Net Sales in the aggregate are greater

                                       3
<PAGE>

than ***, such royalty shall thereafter be *** of Sublicensee's Net Sales. For
purposes of this Section 3.3, (i) the first year shall be measured by the period
commencing on the First Commercial Sale and ending on the day immediately
preceding the first anniversary of the First Commercial Sale and (ii) each
subsequent year shall be measured by the period commencing on the applicable
anniversary of the First Commercial Sale and ending on the day immediately
preceding the next anniversary of the First Commercial Sale (each such year, a
"Royalty Year").

            (b) Accounting; Audit, Records.

                  (i) Within sixty (60) days after the end of each Royalty Year,
Sublicensee shall submit to Sublicensor an itemized statement setting forth the
amount of Net Sales during such Royalty Year and the royalties accrued thereon.
Acceptance by Sublicensor of such statement and the payment described in Section
3.3(c) hereof for any Royalty Year shall not, however, preclude Sublicensor from
thereafter questioning the accuracy thereof. During the term hereof and for a
period of three (3) years thereafter, Sublicensee will keep and maintain books
of account and records of transactions which relate to this Agreement, which
books and records, together with supporting documentation, shall, during such
period, be open for inspection by Sublicensor or its representatives during
regular business hours and upon reasonable notice, but not more frequently than
once every six (6) months.

                  (ii) In the event that any audit undertaken by Sublicensor in
accordance with its rights hereunder discloses that, with respect to any period
of one (1) or more Royalty Years, Sublicensee paid to Sublicensor, pursuant to
this Article III, royalties equal to only *** or less of the royalties which
were actually due to Sublicensor in respect of any such period, Sublicensee
shall reimburse Sublicensor for all reasonable out-of-pocket costs incurred by
Sublicensor in connection with such audit and shall pay Sublicensor the amount
of any such underpayment.

            (c) Payment. Sublicensee shall submit, along with the statement
described in Section 3.3(b) hereof, a payment to Sublicensor equal to the
royalties due for such Royalty Year in accordance with such Section less ***
("Holdback Amount"). Within *** days after the end of such Royalty Year,
Sublicensee shall submit to Sublicensor an itemized statement setting forth any
recalculation of Net Sales (the "Net Sales Recalculation") for such Royalty Year
and the amount of the Holdback Amount, if any, due Sublicensor as a result of
such Net Sales Recalculation. In no event shall Sublicensor be liable for any
Net Sales Recalculation for any given Royalty Year in excess of the Holdback
Payment.

            (d) Interest on Overdue or Unpaid Royalties. In the event that (i)
Sublicensee fails to make any royalty payment within the applicable time period
set forth in this Article III or (ii) Sublicensor's audit pursuant to Section
3.3(b)(ii) discloses an underpayment of royalties of more than *** in respect of
any such time period, each such overdue or unpaid royalty payment shall earn
interest at a rate of *** per annum, calculated from the date that such overdue
or unpaid royalty payment should have been made by Sublicensee in accordance
with this Article III.

            (e) Minimum Royalties. With respect to the first Royalty Year,
Sublicensee shall pay to Sublicensor as a guaranteed minimum royalty payment
("Guaranteed Royalty") the amount of ***. Each Royalty Year thereafter, the
Guaranteed Royalty shall increase by *** to a maximum Guaranteed Royalty of ***.
Each such payment shall be paid to Sublicensor in accordance with Section 3.3(c)
hereof.

                                       4
<PAGE>

            (f) Advance Royalty. Within thirty (30) days of the First Commercial
Sale, as an advance on future royalties, Sublicensee shall pay Sublicensor ***
("Advance Royalty Payment"). All royalties owed by Sublicensee to Sublicensor in
accordance with this Section 3.3 shall be credited against the Advance Royalty
Payment until the total amount of all royalties owed exceeds such Advance
Royalty Payment. In the event of the termination of this Agreement in accordance
with Sections 12.1 or 12.2 hereof, Sublicensor shall remit to Sublicensee within
thirty (30) days of the effective date of such termination any uncredited amount
of the Advance Royalty Payment.

      3.4 Termination of Agreement. Except for the Initial Payment,
Sublicensee's payment obligations pursuant to this Article III are subject to
termination of this Agreement in accordance with Sections 12.1 or 12.2 hereof.

      3.5 Maintenance Payments. In the event that there has been no First
Commercial Sale by the end of the fourth year following the Effective Date,
Sublicensor may at its option terminate this Agreement unless Sublicensee agrees
to pay a maintenance fee of $50,000; if there has been no First Commercial Sale
by the end of the fifth year following the Effective Date, Sublicensor may at
its option terminate this Agreement unless Licensee agrees to pay a maintenance
fee of $100,000. At the end of each subsequent year where there has been no
First Commercial Sale, Sublicensor's option to terminate shall arise and
Sublicensee's ability to forestall termination on payment of a fee shall be
twice that paid in the previous year (e.g., $100,000 in the fifth year, $200,000
in the sixth year, and so on).

                                   ARTICLE IV

        MILESTONES; PATENT COSTS; RESEARCH GRANT; ADDITIONAL FORMULATIONS

      4.1 Milestones. Within *** days of each of the milestone events set forth
on Exhibit B hereto, Sublicensee shall pay Sublicensor the milestone payment
amount set forth on Exhibit B.

      4.2 Patent Prosecution and Maintenance. Sublicensor acknowledges and
agrees that Dalhousie shall prepare, file, prosecute and maintain all patent
applications and patents relating to the Patent Rights in the United States,
Canada, European Union ("EU"), Japan, Finland, Norway, Sweden, Denmark, China
and Australia, and in any other foreign country designated by Sublicensee.
Sublicensee shall reimburse Dalhousie for reasonable costs and expenses it shall
have incurred after the Effective Date in so preparing, filing, prosecuting and
maintaining such patents and patent applications, including attorneys' fees, the
costs of any interference proceedings, reexaminations, or any other ex parte or
inter partes administrative proceeding before patent offices, taxes, annuities,
issue fees, working fees, maintenance fees and renewal charges; provided,
however, that (i) Sublicensee shall not be responsible for any costs or expenses
incurred by any person or entity (including Dalhousie) with respect to any
Patent Rights sublicensed by Sublicensor in the Excluded Field of Use to a third
party ("Third Party Excluded Use Sublicensee") and (ii) all payments received by
Sublicensor from any Third Party Excluded Use Sublicensee for prosecution or
maintenance of the Patent Rights shall be deducted against the costs and
expenses to be reimbursed by Sublicensee pursuant to this Section 4.2.

      4.3 Research Grant. Sublicensee agrees to provide Sublicensor with the
amount of *** with the understanding that Sublicensor will fund research to be
conducted by Dr. J. Sawynok on improvements (the "Sawynok Improvements") to the
Patents Rights. Such amount shall be payable to Sublicensor in semi-annual
installments of ***, with the first installment due

                                       5
<PAGE>

six months following the Effective Date. Notwithstanding Section 2.2 hereof, the
term "Patents Rights" shall include the Sawynok Improvements.

      4.4 Additional Formulations. ***

      4.5 Termination of Agreement. Sublicensee's payment obligations pursuant
to this Article IV are subject to termination of this Agreement in accordance
with Sections 12.1 or 12.2 hereof.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

      5.1 Sublicensor's Representations. Sublicensor represents and warrants to
the Sublicensee that (a) the Sublicensor is a valid licensee of all Patent
Rights, (b) the Sublicensor has the legal right to grant to the Sublicensee each
and every right and sublicense of the Patent Rights granted hereunder, (c) no
approvals or consents of any third party (except Dalhousie, which consent has
been obtained by Dalhousie and delivered to Sublicensee) or governmental entity
are necessary with respect to the execution and performance by the Sublicensor
of all transactions and actions contemplated by this Agreement, and (d) to the
best of the Sublicensor's knowledge, the manufacture, marketing, use and sale of
the Licensed Products commercially by the Sublicensor after the Effective Date
and the use of the Patent Rights in the manufacture of Licensed Products will
not infringe the patents or patent applications of third parties and no claim of
any such infringement has been made by any third party.

      5.2 Third Party License Agreements. Sublicensor represents and warrants to
the Sublicensee that Sublicensee has received true, correct and complete copies
of all license and sublicense agreements to which Sublicensor is a party
relating in any way to the Patent Rights (collectively, the "Third Party License
Agreements"). On and after the Effective Date, Sublicensor agrees to provide
Sublicensee with any modifications, cancellations, terminations, amendments or
other changes to any Third Party License Agreements within ten (10) days of such
modification, cancellation, termination, amendment or other change.

      5.3 Mutual Representations. The Sublicensor and the Sublicensee each
represents and warrants to the other that it has the full power and authority to
enter into this Agreement and carry out the transactions and activities
contemplated hereby.

      5.4 Sublicensee's Representations. The Sublicensee represents and warrants
to the Sublicensor that no approvals or consents of any third party or
governmental entity are necessary with respect to the execution and performance
by the Sublicensee of this Agreement.

      5.5 Maintenance of Representations. Each party hereby covenants and agrees
to maintain at all times throughout the term of this Agreement the truth and
accuracy, in every material respect, of each representation and warranty made by
such party in this Article V. In the event that at any time during the term of
this Agreement, any representation or warranty set forth in this Article V shall
be inaccurate in any material respect (as if such representation or warranty
were made at such time), the party making such inaccurate representation or
warranty (the "Representing Party") shall (i) give notice to the other party of
such inaccuracy within ten (10) days thereof and (ii) remedy such inaccuracy
within sixty (60) days from such notice, so that such inaccurate representation
or warranty is again accurate in all material respects. In the event that

                                       6
<PAGE>

such inaccuracy is not cured within such sixty (60) day period, the Representing
Party shall be deemed to be a breaching party that has failed to cure its breach
for purposes of Section 12.2(g) hereof.

                                   ARTICLE VI

                            CONFIDENTIAL INFORMATION

      6.1 Non-Disclosure of Confidential Information. Neither the Sublicensor
nor the Sublicensee shall disclose to any third party or use except in
furtherance of this Agreement any confidential information disclosed by the
other party or its Affiliates in connection with the Agreement, except that
either party may disclose such confidential information to the extent necessary
to comply with an order of a court or a government agency provided that the
disclosing party shall use its reasonable best efforts to notify the other party
of the disclosing party's intention to make the disclosure, and shall provide
the other party with a copy of the court or government agency's order, identify
precisely the confidential information the disclosing party intends to disclose,
and cooperate with the other party in devising reasonable measures to protect
the confidentiality of such information including, but not limited to, obtaining
a protective order from the court or government agency that issued the order to
disclose.

      6.2 Return of Confidential Information. Upon the termination of this
Agreement for any reason prior to the expiration of its term, each party shall
return to the other party all confidential information received pursuant to or
in connection with this Agreement.

      6.3 Non-Confidential Information. Neither party shall be under any
obligation with respect to information of the other party, which the party
receiving the information can demonstrate, preferably by reference to documents:

            (a) through no act or failure on the part of the party receiving the
information or the inspector, becomes known or available to the public;

            (b) is known by the party receiving the information or by the
inspector prior to its receiving such information from the other party; or

            (c) is furnished to the party receiving the information or to the
inspector by any person not legally precluded from making disclosure of the
information without restriction.

                                   ARTICLE VII

                               PATENT INFRINGEMENT

      7.1 Patent Infringement. In the event of infringement of any of the Patent
Rights which occurs in the field of the sublicense granted to the Sublicensee
under this Agreement, the Sublicensee shall provide notice to the Sublicensor
within thirty (30) days after the Sublicensee becomes aware of such infringement
or of facts suggesting that infringement is occurring. The Sublicensor shall
have the right, which it may or may not exercise in its discretion, to institute
litigation or take any other action in connection with a suspected infringement
of the Patent Rights or otherwise with respect to the Licensed Products. The
Sublicensee shall cooperate with all reasonable requests for assistance with
such litigation or other action. Nothing in this Article VII shall be construed
as preventing or restricting the Sublicensor from taking any action that it

                                       7
<PAGE>

deems, in its sole discretion, to be necessary or appropriate to defend, assert,
or protect the Patent Rights against the actions of any infringer.

      7.2 Action By Sublicensee. If Sublicensor fails to bring or defend any
action, claim or proceeding concerning the Patent Rights within twenty (20) days
after receiving notice of such action, claim or proceeding, which would, in
Sublicensee's reasonable opinion, prejudice Sublicensee's rights hereunder,
Sublicensee may notify Sublicensor of its intention to commence or defend any
such action, claim or proceeding. If Sublicensor, within ten (10) days after
receiving such notice, delivers to Sublicensee a notice of its intention to
bring or defend any such action, claim or proceeding, Sublicensee shall not
bring or defend such action, claim or proceeding. If, however, Sublicensee does
not receive such notice from Sublicensor within such ten (10) day period,
Sublicensee shall thereafter have the ability, at its own cost and expense, to
commence or defend such action, claim or proceeding in its name and/or in the
name of Sublicensor. In such event, Sublicensee shall keep Sublicensor
reasonably notified of the progress of such action, claim or proceeding and
Sublicensor, at the request of Sublicensee, shall cooperate at its own cost and
expense in all reasonable respects with Sublicensee in connection therewith.

      7.3 Judgment; Settlement. The party that is bringing or defending any
action, claim or proceeding in accordance with Sections 7.1 or 7.2 hereof shall
have the right, with the consent of the other party (which consent shall not be
unreasonably withheld), to (a) consent to entry of any judgment or (b) settle
with any third party to such action, claim or proceeding.

      7.4 Recovery. Any settlement or other recovery received in accordance with
Sections 7.1 or 7.2 hereof (including, without limitation, pursuant to a
judgment or court order) shall be applied as follows: (i) first, to the costs
and expenses of the party prosecuting or defending such action; (ii) second, to
the costs and expenses of the cooperating (non-litigating) party; and (iii)
lastly, to the extent of any excess proceeds, such proceeds shall constitute Net
Sales for purposes of Article III hereof. Notwithstanding the foregoing, any
non-compensatory damages recovered, such as punitive or treble damages, shall be
divided evenly between Sublicensor and Sublicensee when either Sublicensor or
Dalhousie defends against the infringement; in the event that Sublicensee
defends against the infringement pursuant to Section 7.2 hereof, any
non-compensatory damages shall be allocated as follows: *** to Sublicensee and
*** to Sublicensor; provided, however, that non-compensatory damages shall not
constitute Net Sales, regardless of the party defending against the
infringement. Sublicensor agrees to pay to Dalhousie any amounts due to
Dalhousie for any such settlement or other recovery in accordance with the terms
of the license agreement between Dalhousie and Sublicensor.

      7.5 Indemnity for Claims of Infringement.

            (a) Subject to and limited by the terms of Section 7.5(b) hereof,
Sublicensor shall indemnify, defend and hold harmless the Sublicensee, its
Affiliates, its successors and assigns, and their directors, officers,
employees, agents and representatives from and against any loss, damage, cost or
expense of any kind or nature (including reasonable attorneys' and other
professionals' fees and expenses) incurred as a result of or in responding to
any demand, claim, action, proceeding or suit that is brought or threatened to
be brought against any of them by any third party and that asserts a claim of
patent infringement arising from such third party's assertion of the ownership
or co-ownership of rights in or to or related to the Patent Rights or Licensed
Products.

                                       8
<PAGE>

            (b) In the event that Sublicensee or its assignee becomes the
defendant in any court, arbitration or other proceeding or action alleging
infringement of a third party's patent rights as a result of the exercise of
Sublicensee's rights hereunder (except where such infringement is based solely
on Other Technology) (a "Third Party Action"), then from such event going
forward Sublicensee or its assignee may withhold in escrow *** of the royalty
payments due Sublicensor under this Agreement until such proceeding or action
has been finally adjudicated or resolved by an unappealable judgment or order
(the "Escrowed Indemnification Amount"). If such judgment or order:

                  (i) discontinues or dismisses the Third Party Action, or if
Sublicensee incurs no monetary liability as a result of such judgment or order,
then Sublicensee or its assignee shall be indemnified the legal costs and
expenses of its defense of such proceeding or action out of the Escrowed
Indemnification Amount and, if the Escrowed Indemnification Amount is
insufficient to indemnify it completely, Sublicensee or its assignee shall be
entitled to withhold and apply *** of all subsequent royalty payments due
Sublicensor hereunder until the indemnification is complete; or

                  (ii) awards monetary damages against Sublicensee, then
Sublicensee or its assignee shall be indemnified all of its (x) monetary damages
and (y) legal costs and expenses incurred in defense of such proceeding or
action ((x) and (y) collectively, the "Defense Costs") out of the Escrowed
Indemnification Amount and, if the Escrowed Indemnification Amount is
insufficient to indemnify it completely, Sublicensor within ninety (90) days of
such judgment or order shall reimburse Sublicensee *** of all royalties accrued
(but only to the extent, if applicable, not yet received by Sublicensee pursuant
to the Escrow Indemnification Amount) over the last three (3) Royalty Years
prior to the entry of such judgment or order (the "Reimbursed Royalty Payments")
to the extent necessary to indemnify Sublicensee or its assignee for all of the
Defense Costs. If the Reimbursed Royalty Payments do not completely indemnify
Sublicensee for all of the Defense Costs, Sublicensee or its assignee shall be
entitled to withhold and apply *** of all subsequent royalty payments due
Sublicensor hereunder until the indemnification is complete.

            (c) Notwithstanding anything in Section 7.5(b) hereof to the
contrary, (i) any amount of the Escrowed Indemnification Amount in excess of the
indemnification entitled by Sublicensee or its assignee herein shall be paid to
Sublicensor within one hundred and twenty (120) days of such judgment or order
and (ii) in no event shall Sublicensee or its assignee withhold and/or apply to
any indemnification herein any royalty payment due Sublicensor with respect to
any Royalty Year commencing on or after six (6) years from the date of such
judgment or order.

      7.6 Rights of Dalhousie. Sublicensor may transfer, by written notice to
Sublicensee and Dalhousie, all of its rights (but not its obligations, including
without limitation, under Section 7.5 hereof) under this Article VII to
Dalhousie.

                                  ARTICLE VIII

                    PROHIBITION AGAINST USE OF PARTIES' NAMES

      Neither party will use the name, logo, insignia, or symbols of the other
party, or any variation or combination thereof, or the name of any officer,
director or employee of the other party, for any purpose whatsoever without the
other party's prior written consent; provided,

                                       9
<PAGE>

however, that either party shall be deemed to have granted its consent to any
request by the other party to use such name, logo, insignia or symbol if such
party fails to respond to such request within ten (10) business days of its
receipt of such a request.

                                   ARTICLE IX

                            ASSIGNMENTS AND TRANSFERS

      9.1 Transfers Generally. Except as provided in this Article IX, the
Sublicensee shall not be permitted to assign or transfer any of its rights,
obligations or duties under this Agreement without the express written consent
of the Sublicensor. The Sublicensor shall be permitted to assign or transfer any
or all of its rights, obligations or duties under this Agreement, without any
requirement of consent, provided that the net worth of such assignee or
transferee is at least as great and its financial condition is at least as sound
as the net worth and financial condition of Sublicensor as of the date hereof.

      9.2 Exceptions. Notwithstanding anything to the contrary contained herein,
the Sublicensee may assign its rights and obligations under this Agreement to
any one or more of its Affiliates, and its or their successors and assigns,
provided that the net worth of such assignee is at least as great, and its
financial condition is at least as sound, as the net worth and financial
condition of the assigning party. In addition, the Sublicensee (and any
permitted assignee) may assign its rights and obligations under this Agreement
to any successor by way of merger, consolidation or acquisition of substantially
all of such party's assets associated with its Patent Rights or License Products
business. Upon any permitted assignment, the Sublicensee's agreement to perform
all of its obligations hereunder through the effective date of the assignment
shall nevertheless continue until expressly released by the Sublicensor, which
release shall not be unreasonably withheld.

                                    ARTICLE X

                                     MARKING

      Prior to the issuance of patents, Sublicensee will mark Licensed Products
made, sold, or otherwise disposed of by it under the sublicense granted in this
Agreement with the words "Patent Pending," and following the issuance of one or
more patents, with the numbers of such patents.

                                   ARTICLE XI

                               EXPORT CONTROL LAWS

      This Agreement is made subject to any restrictions concerning the export
of products or technical information from the United States of America which may
be imposed from time to time by the government of the United States of America.
Furthermore, each party hereto agrees that it will not export, directly or
indirectly, any technical information acquired from the other under this
Agreement or any products using such technical information to any country for
which the United States government or any agency thereof at the time of export
requires an export license or other governmental approval, without first
obtaining the written consent to do so from the Department of Commerce or other
agency of the United States government when required by an applicable statute or
regulation.

                                       10
<PAGE>

                                   ARTICLE XII

                              TERM AND TERMINATION

      12.1 Term. The term of this Agreement shall commence on the Effective
Date, and unless sooner terminated as herein provided, shall end on the date on
which the last to expire of the Patent Rights covering the Licensed Products
expires.

      12.2 Termination. This Agreement may be terminated prior to the expiration
of its term:

            (a) if mutually agreed by the parties in writing;

            (b) by either party, within three (3) months of the Effective Date
if toxicology or other issues cause or threaten to cause excessive expenses in
the development of the Patent Rights;

            (c) by either party, prior to the revival of the Frome Patent
Application by the PTO;

            (d) by either party, prior to submission to the FDA of a NDA with
respect to any Patent Rights due to inefficacy or lack of commercial feasibility
of such technology;

            (e) by Sublicensee, in the event that the Frome Patent Application
or any revival thereof is not an U.S. approved final patent within five (5)
years of the Effective Date;

            (f) by Sublicensee, at any time after payment to Sublicensor of a
termination fee of ***; or

            (g) in the event of the breach of this Agreement by either party, at
the option of the non-breaching party, provided that the non-breaching party has
provided written notice to the breaching party of the breach and the
non-breaching party's intention to terminate the Agreement, and the breaching
party has failed to cure its breach within sixty (60) days following the date
such notice was sent to the breaching party. Notwithstanding anything in this
Agreement to the contrary, in the event that Sublicensor is the breaching party
that has failed to cure its breach, Sublicensee shall continue to hold and
exercise the rights granted to it under this Agreement upon payment to Dalhousie
of such monies as are owed to it by Sublicensor and upon performance to
Dalhousie of the obligations, monetary and otherwise, previously owed to
Sublicensor under this Agreement.

      12.3 Disposition of Patent Rights. Upon the expiration or termination of
this Agreement in accordance with Sections 12.1 or 12.2 (except 12.2(g) if
Sublicensor is the breaching party) hereof, all rights in and to the sublicense
granted hereunder shall immediately revert to and become the property of the
Sublicensor.

      12.4 Survival. Except as otherwise provided herein, any provision of this
Agreement with respect to the subject matter described in this Article XII shall
continue in effect after the expiration of the term of, or termination of, this
Agreement to the extent necessary to permit the complete fulfillment or
discharge of any obligation that so continues:

                                       11
<PAGE>

            (a) Any Sublicensee obligation to maintain records that relate to
any period ending on or before the expiration or termination of this Agreement;

            (b) Sublicensor's right to receive or recover, and the Sublicensee's
obligation to pay, any amounts due the Sublicensor under this Agreement that had
accrued and were earned at any time on or prior to its expiration or
termination;

            (c) Any agreement, including the provisions of Article VI hereof, in
effect at the time of such expiration or termination with respect to
confidential information of any party to this Agreement;

            (d) Any cause of action or claim or remedy of the Sublicensor or the
Sublicensee arising from any breach of or failure to perform any obligation
under this Agreement that occurred on or prior to the date of termination;

            (e) Sublicensor's indemnification obligations pursuant to Section
7.5 hereof;

            (f) The representations and warranties of any party that are
contained in Article V of this Agreement; and

            (g) Any right, duty or obligation of either party hereto which is
expressly stated elsewhere in this Agreement to survive the expiration or
termination hereof.

      12.5 Sales after Termination. Upon termination or expiration of this
Agreement for any reason, Sublicensee shall have the right for a period of ***
days to sell or otherwise dispose of any inventory of Licensed Products (i)
which it, its Affiliates or its permitted sublicensees has in its possession
(subject to the obligation to pay royalty on the Net Sales thereof pursuant to
Section 3.3 hereof) or (ii) for which it has acquired constituent materials that
cannot be returned without costs exceeding in the aggregate ***.

                                  ARTICLE XIII

                           JOINT DEVELOPMENT AGREEMENT

      The parties agree to negotiate, execute and deliver in good faith a joint
development agreement with respect to the Licensed Products within three (3)
months of the Effective Date. In the event that such joint development agreement
is not fully executed and delivered within three (3) months of the Effective
Date, either party may terminate this Agreement with no further obligations or
liabilities to the other party hereunder.

                                   ARTICLE XIV

                                  MISCELLANEOUS

            14.1 Notice. Any notice given pursuant to this Agreement shall be in
writing and, except as otherwise expressly provided herein, shall be deemed to
have been duly delivered when it actually is delivered in person or by facsimile
transmission; seven days after it is mailed by certified or registered mail,
postage and mailing expense prepaid; and one day after it is sent by overnight
express mail or by overnight courier service (such as FedEx or DHL), postage or
shipping expense prepaid and designated for next-day delivery; and, if given or
rendered to:

                                       12
<PAGE>

Licensor, addressed to:         Epitome Pharmaceuticals Limited
                                5162 Duke Street, Suite 501
                                Halifax, Nova Scotia
                                B3J lN7
                                Canada
                                Attention: President or Chief Operating Officer
                                Facsimile Number: (902) 492-0013

with a copy to:                 Slone & Munro
                                5162 Duke Street, Suite 501
                                Halifax, Nova Scotia
                                B3J lN7
                                Canada
                                Attention: Mr. Andrew J.M. Munro
                                Facsimile Number: (902) 492-0013

                                       13
<PAGE>

or if given or rendered to Licensee, addressed to:

                                American Pharmed Labs, Inc.
                                270 Sylvan Avenue
                                Englewood Cliff, New Jersey 07632
                                Attention: President
                                Facsimile: (201) 837-0200

with a copy to:                 Epstein Becker & Green, P.C.
                                250 Park Avenue
                                New York, New York 10177-0077
                                Attention: Lowell S. Lifschultz, Esq.
                                           or Mark A. Polemeni, Esq.
                                Facsimile: (212) 661-0989

Either party may specify a different address by notice in writing in accordance
with this Section 14.1.

      14.2 Bankruptcy. Sublicensor acknowledges that this Agreement constitutes
a license for "intellectual property" as that term is defined in Section 365(n)
of the U.S. Bankruptcy Code and all provisions of that Section shall apply in
the event of Sublicensor's bankruptcy.

      14.3 Entire Agreement, Amendment. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and has priority over any and all agreements, documents, verbal consents or
understandings previously made between the parties with respect to the subject
matter hereof. None of the terms of this Agreement shall be amended or modified
except as set forth in a writing signed by both the Sublicensor and the
Sublicensee.

      14.4 Waiver. A waiver by any party of any term or condition of this
Agreement in any one instance shall not be deemed or construed to be a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach thereof. No failure by a party to take action against default
or breach of this Agreement shall constitute a waiver of such party's right to
enforce any provision of this Agreement or to take action against such default
or breach or against any subsequent default or breach. All rights, remedies,
undertaking, obligations, and agreements contained in this Agreement shall be
cumulative and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement of any party.

      14.5 Severability. If, and solely to the extent that, any provision of
this Agreement shall be invalid or unenforceable, or shall render this entire
Agreement invalid or unenforceable, such offending provision shall be of no
effect and shall not affect the validity of the remainder of this Agreement or
of any of its other provisions.

      14.6 No Agency, Partnership or Joint Venture. Nothing in this Agreement
shall be deemed to appoint or authorize the Sublicensee to act as an agent of
the Sublicensor or to assume or incur any liability or obligation in the name of
or on behalf of the Sublicensor. Additionally, nothing in this Agreement shall
be construed to constitute a partnership or joint venture between the parties.

                                       14
<PAGE>

      14.7 Headings. Headings in this Agreement are included for ease of
reference only and shall have no effect on the meaning or interpretation of this
Agreement.

      14.8 Singular/Plural. Whenever in the context it appears appropriate, each
term stated either in the singular or the plural shall include both the singular
and the plural.

      14.9 Applicable Law/Jurisdiction. All disputes arising out of the
validity, interpretation or application of this Agreement shall be submitted to
the courts of competent jurisdiction sitting in the County and State of New
York. This Agreement shall be interpreted and construed in accordance with the
laws of Delaware, without reference to its conflicts of laws provisions.

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

      14.11 No Third-Party Beneficiaries. The provisions of this Agreement are
for the exclusive benefit of the parties hereto and, except as specifically set
forth herein, no other person, firm, institution or other entity shall have any
right or claim against any party to this Agreement by reason of such provisions
or shall be entitled to enforce any such provision against any party.

      14.12 Harmonization. Notwithstanding anything to the contrary in this
Agreement, Sublicensee acknowledges that Sublicensor agrees and is bound to
convey to Sublicensee only those rights available to it under its license
agreement with Dalhousie, a copy of which is attached hereto as Exhibit C.

                              * * * * * * * * * * *

                  [remainder of page left intentionally blank]

                                       15
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

                                         SUBLICENSOR:

                                         EPITOME PHARMACEUTICALS LIMITED

                                         By: /s/ ANDREW J.M. MUNRO
                                            -----------------------------------
                                         Print Name: Andrew J.M. Munro
                                         Title: Director

                                         SUBLICENSEE:

                                         AMERICAN PHARMED LABS, INC.

                                         By: /s/ PETER GOLIKOV
                                            -----------------------------------
                                         Print Name: Peter Goikov
                                         Title: President

                                       16
<PAGE>

                                    EXHIBIT A

                                 PATENTS RIGHTS

      U.S. Patent Appl. No. 08/531,760, Dr. Bruce M. Frome, titled "The
      Preparation of Topical Regional Compositions for the Relief of Pain,"
      filed on September 22, 1995.

      U.S. Patent Appl. No. 09/081,709, Drs. J. Sawynok, M.J. Esser and A.R.
      Reid, titled "Use of Antidepressants for Local Analgesia," filed on May
      19, 1998.

All pending and issued reissues, revivals, re-examinations, divisions,
continuations, continuations-in-part, renewals, extensions and additions
thereto, and all foreign counterparts and applications for foreign counterparts
of the foregoing; provided, however, that continuations-in-part are limited to
improvements to the subject matter of the claims in the patent applications
above that are developed or reduced to practice by Dr. Sawynok or her
collaborators during the term of and for three months following the Research
Grant described in Section 4.3 hereof and which Dalhousie has the right to grant
to Epitome.

                                       17
<PAGE>

                                    EXHIBIT B

                           MILESTONE PAYMENT SCHEDULE

                                       ***

                                       18
<PAGE>

                                    EXHIBIT C

                           DALHOUSIE LICENSE AGREEMENT

                                       ***

                                       19

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