EXHIBIT 10.23 RESEARCH FUNDING AND OPTION AGREEMENT TABLE OF CONTENTS

EXHIBIT 10.23

RESEARCH FUNDING AND OPTION AGREEMENT

TABLE OF CONTENTS

Page
1. DEFINITIONS ....................................................... 1
1.1 Confidential Information .................................... 1
1.2 Core Patent Rights .......................................... 2
1.3 Field ....................................................... 2
1.4 Jointly Developed Technology ................................ 2
1.5 Licensed Product ............................................ 2
1.6 Principal Investigator ...................................... 3
1.7 Proprietary Property ........................................ 3
1.8 Research Program ............................................ 3
1.9 Scripps Patent Rights ....................................... 3
1.10 Scripps Technology .......................................... 3

2. CONDUCT OF RESEARCH PROGRAM ....................................... 3
2.1 Conduct of Research Program ................................. 3
2.2 Supervision of Research Program ............................. 3
2.3 Reports ..................................................... 4
2.4 Contributions of Parties to Research Program ................ 4

3. OPTION FOR EXCLUSIVE LICENSE ...................................... 5
3.1 Grant of Option ............................................. 5
3.2 Disclosure of Scripps Technology ............................ 5
3.3 Disclosure of Jointly Developed Technology .................. 5
3.4 Option Period ............................................... 5
3.5 Exercise of Option .......................................... 6
3.6 Reservation of Rights ....................................... 6

4. WARRANTIES ........................................................ 6
4.1 Warranty of Title; No Other Warranties ...................... 6
4.2 No Other Warranties ......................................... 6

5. INTERESTS IN INTELLECTUAL PROPERTY ................................ 7
5.1 Title ....................................................... 7
5.2 Governmental Interest ....................................... 7

6. CONFIDENTIALITY AND PUBLICATION ................................... 7
6.1 Confidential Information .................................... 8
6.2 Publications ................................................ 8
6.3 Publicity ................................................... 8

TABLE OF CONTENTS
Page
7. TERM AND TERMINATION .............................................. 8
7.1 Term ........................................................ 8
7.2 Termination by Mutual Agreement ............................. 8
7.3 Termination Upon Default .................................... 8
7.4 Termination Upon Insolvency ................................. 9
7.5 Effect of Expiration or Termination ......................... 9
7.5.1 Termination Upon Default of Optionee .................. 9
7.5.2 Expiration or Termination upon Default of Scripps ..... 9

8. ASSIGNMENT; SUCCESSORS ............................................ 10
8.1 Assignment .................................................. 10
8.2 Binding Upon Successors and Assigns ......................... 10

9. GENERAL PROVISIONS ................................................ 10
9.1 Independent Contractors ..................................... 10
9.2 Arbitration ................................................. 10
9.2.1 Location .............................................. 10
9.2.2 Selection of Arbitrators .............................. 10
9.2.3 Discovery ............................................. 11
9.2.4 Case Management ....................................... 11
9.2.5 Remedies .............................................. 11
9.2.6 Expenses .............................................. 11
9.2.7 Confidentiality ....................................... 11
9.3 Entire Agreement; Modification .............................. 12
9.4 California Law .............................................. 12
9.5 Headings .................................................... 12
9.6 Severability ................................................ 12
9.7 No Waiver ................................................... 12
9.8 Attorneys' Fees ............................................. 12
9.9 Notices ..................................................... 12
9.10 Compliance with U.S. Laws ................................... 13

RESEARCH FUNDING AND OPTION AGREEMENT

This Agreement is entered into this 28th day of October 1996, by and
between THE SCRIPPS RESEARCH INSTITUTE, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Scripps"), a California nonprofit public benefit corporation,
and Acute Therapeutics, Inc. ("Optionee"), a Delaware corporation located at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with respect to the facts set
forth below.

RECITALS

A. Scripps is engaged in scientific biomedical and biochemical
research, including research relating to synthetic pulmonary surfactants, as
more particularly described herein.

B. Optionee is engaged in research and development of synthetic
pulmonary surfactants.

C. Optionee desires to provide certain funding as part of the Scripps
research activities described above.

D. Scripps has the exclusive right to grant a license in and to any
technology developed pursuant to the research program described herein, subject
to any nonexclusive rights of the U.S. Government, resulting from the receipt
by Scripps of U.S. Government funding, to use such technology for its own
purposes.

E. Scripps is willing to grant to Optionee an option to acquire an
exclusive, worldwide right and license to use, enhance and develop technology
arising from the Research Program and develop, market and sell products in the
field described below, all as is more particularly described herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and conditions
outlined herein, Scripps and Optionee hereby agree as follows:

1. DEFINITIONS.

1.1 Confidential Information. The term "Confidential Information" shall
mean any and all proprietary information of Scripps or Optionee which may be
exchanged between the parties at any time and from time to time during the term
hereof. The

fact that a party may have marked or identified as confidential or proprietary
any specific information shall be indicative that such party believes such
information to be confidential or proprietary, but the failure to so ▇▇▇▇
information shall not conclusively determine that such information was or was
not considered confidential information by such party. Information shall not be
considered confidential to the extent that it:

a. Is publicly disclosed through no fault of any party hereto, either
before or after it becomes known to the receiving party; or

b. Was known to the receiving party prior to the date of this
Agreement, which knowledge was acquired independently and not from the other
party hereto (including such party's employees); or

c. Is subsequently disclosed to the receiving party in good faith by a
third party who has a right to make such disclosure; or

d. Has been published by a third party as a matter of right.

1.2 Core Patent Rights. The term "Core Patent Rights" shall mean the
following issued U.S. patents and pending U.S. patent applications: (a) Patent
No. 5,407,914, issued April 18, 1995; Patent No. 5,260,273, issued November 9,
1993; and Patent No. 5,164,369, issued November 17, 1992, and (b) pending patent
applications Serial Nos. [***].

1.3 Field. The term "Field" shall mean use in research or as a
diagnostic, preventative or therapeutic product in humans or vertebrate animals
and shall specifically exclude any agricultural applications or products.

1.4 Jointly Developed Technology. The term "Jointly Developed
Technology" shall mean any information, process, technology and materials
included within the scope of the Research Program which are developed by both
Scripps and Optionee during the term of this Agreement as a result of the
Research Program and which, under principles arising under the patent laws of
the United States of America, would be found jointly owned by both Scripps and
Optionee thereunder.

1.5 Licensed Product. The term "Licensed Product" shall mean any
research, diagnostic, preventative or therapeutic product or process which
cannot be developed, manufactured, used or sold without utilizing Scripps Patent
Rights, any Scripps Technology not otherwise includable within Scripps Patent
Rights or Jointly Developed Technology.

[***] Confidential treatment requested.

1.6 Principal Investigator. The term "Principal Investigator" shall
mean the person identified in Section 2.2 below, together with such replacement
persons selected in accordance with the provisions thereof.

1.7 Proprietary Property. The term "Proprietary Property" shall mean,
with respect to any party hereto, any and all technology, now existing or
hereafter arising, in which such party shall have a proprietary interest,
including without limitation, any idea, data, compound, molecule, cell line,
material, know-how, technique, method, process, use, composition, skill,
Confidential Information, trade secret or configuration of any kind, whether or
not any such information would be enforceable as a trade secret, the copying of
which would be enjoined or restrained by a court as constituting copyright
infringement or unfair competition or would be eligible for protection under the
patent laws of the United States or elsewhere.

1.8 Research Program. The term "Research Program" shall mean the
research program to be undertaken by Scripps under the direction and control of
the Principal Investigator set forth in Section 2.2 hereof.

1.9 Scripps Patent Rights. The term "Scripps Patent Rights" shall mean
the rights arising out of or resulting from (i) any and all U.S. and foreign
patent applications and patents covering Scripps Technology, (ii) the patents
proceeding from such applications, and (iii) all continuations, divisions,
continuations-in-part, reissues, reexaminations, and extensions thereof, so long
as said patents have not been held invalid and/or unenforceable by a court of
competent jurisdiction from which there is no appeal or, if appealable, from
which no appeal has been taken.

1.10 Scripps Technology. The term "Scripps Technology" shall mean any
Proprietary Property of Scripps developed, in whole or in part, in the
performance of the Research Program during the term of this Agreement, including
any intellectual property within the scope of the Research Program developed by
any employee of Scripps during the term of this Agreement while such employee is
rendering services to Optionee as a consultant or otherwise.

2. CONDUCT OF RESEARCH PROGRAM.

2.1 Conduct of Research Program. Scripps hereby agrees to conduct the
Research Program as expressly set forth on Exhibit A attached hereto, as amended
from time to time in accordance with its terms, and subject to the provisions of
this Agreement.

2.2 Supervision of Research Program. Scripps agrees that the Research
Program at Scripps shall be conducted by or under the direct supervision of the
following Principal Investigator: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D. In the event that the
Principal

Investigator leaves Scripps, or terminates his/her involvement in the Research
Program, Scripps shall use its best efforts to find a replacement Principal
Investigator acceptable to Optionee, which acceptance shall not be unreasonably
withheld. In the event that Scripps shall fail to appoint a replacement
Principal Investigator reasonably acceptable to Optionee, Optionee shall have a
right to terminate this Agreement upon delivery to Scripps of written notice of
intent to terminate pursuant to this Section 2.2, which notice must be delivered
to Scripps not less than 30 days nor more than 90 days after delivery by Scripps
to Optionee of the name of the replacement Principal Investigator.

2.3 Reports.

a. Scripps agrees that within sixty (60) days following the last day of
each calendar year during the term of this Agreement, Scripps shall furnish
Optionee with a written report summarizing the results of the research included
within the scope of the Research Program during the immediately preceding
calendar year conducted by Scripps, including but not limited to all data,
conclusions, results, observations and a detailed description of all procedures.

b. Optionee agrees that within sixty (60) days following the last day
of each calendar year during the term of this Agreement, Optionee shall furnish
Scripps with a written report summarizing the results of the research and
development included within the scope of the Research Program during the
immediately preceding calendar year which Optionee believes constitutes Jointly
Developed Technology, including but not limited to all data, conclusions,
results, observations and a detailed description of all procedures.

c. All such information submitted to Optionee by Scripps, and all such
information submitted to Scripps by Optionee, as a result of the Research
Program under this Agreement is deemed Confidential Information of Scripps, and
shall be kept confidential by Optionee, and shall be used by Optionee only for
the purpose of evaluating whether or not to exercise an option to obtain a
license pursuant to Section 3 hereof, as and when such option is exercisable in
accordance with the terms hereof. Optionee shall not, during the term or after
the termination hereof, use or disclose any of the Confidential Information,
unless and until (i) permitted to do so pursuant to the terms of any license
agreement entered into by Optionee after exercise of option for such technology
or (ii) such information no longer comes within the definition of "Confidential
Information" hereunder and otherwise becomes available as public information.

2.4 Contributions of Parties to Research Program. Contributions in the
form of financial support, equipment, personnel, technology and other necessary
components for the conduct of the Research Program shall be made by the parties
in accordance with the terms set forth on Exhibit B attached to this Agreement.

3. OPTION FOR EXCLUSIVE LICENSE.

3.1 Grant of Option.

a. It is the intention of the parties hereto that the Proprietary
Property which is the subject of the option described in this Section 3 is
available to Optionee, under the specific terms hereof, on an
application-by-application basis, where each application is with respect to a
specific field. It is the further intention of the parties hereto that Optionee
shall elect to exercise its option from time to time and at multiple times
during the term hereof, as and when Scripps makes the disclosure of each
application of Proprietary Property (whether Scripps Technology, Scripps Patent
Rights covering Scripps Technology, or Scripps' rights in Jointly Developed
Technology). The statement of general intention described in this subparagraph
is qualified in its entirety by the specific provisions of this Section 3.

b. Subject to the terms of this Agreement, Scripps hereby grants to
Optionee an exclusive option to acquire an exclusive worldwide license to make,
have made, sell or use Licensed Products, with exclusive rights of sublicense,
in the Field. Each such license shall be to a specific application of Scripps
Technology, Scripps Patent Rights covering Scripps Technology, or Scripps'
rights in Jointly Developed Technology, as more particularly described in the
disclosure (Sections 3.2 or 3.3). Such option shall be for the period (Section
3.4) and exercised as (Section 3.5) more particularly described below.

3.2 Disclosure of Scripps Technology. As soon as reasonably possible,
either upon conception or reduction to practice, as the case may be, of each and
every application of Scripps Technology, Scripps shall disclose the same in
writing to Optionee. Such disclosure shall contain sufficient detail to enable
Optionee to evaluate the advisability of exercising the option granted hereunder
with respect to such application. All such disclosures shall be maintained in
confidence by Optionee.

3.3 Disclosure of Jointly Developed Technology. As soon as reasonably
feasible, either upon conception or reduction to practice, as the case may be,
of each and every application of Jointly Developed Technology, Optionee shall
disclose the same in writing to Scripps. Such disclosure shall contain
sufficient detail to enable Scripps to evaluate whether such technology is, in
fact, within the definition of Jointly Developed Technology. If Scripps, in the
exercise of its good faith discretion, acknowledges that all or some of such
technology as so described by Optionee falls within the definition of Jointly
Developed Technology, then Scripps shall deliver to Optionee a written notice
describing the Jointly Developed Technology and Scripps' intent to license the
same to Optionee if Optionee exercises its option.

3.4 Option Period. Optionee shall have a period of one hundred eighty
(180) days from receipt of the disclosure from Scripps described in Section 3.2
above

or from the notice from Scripps described in Section 3.3 within which to
exercise its option to obtain a license in the Field to a particular application
of Scripps Technology or to Scripps' rights to a particular application of
Jointly Developed Technology pursuant to Section 3.1.

3.5 Exercise of Option. Optionee shall exercise its option to obtain a
license hereunder by delivering to Scripps a written notice within the option
period which specifies the particular application of Scripps Technology and
related Scripps Patent Rights or application of Jointly Developed Technology for
which the option is being exercised. Optionee and Scripps shall have a period of
ninety (90) days from the date of exercise of option by Optionee within which to
agree upon the royalty rate and commercial development obligations, all as is
more particularly set forth in the form of License Agreement attached hereto as
Exhibit C. The royalty rate shall be determined by the parties in accordance
with Exhibit D hereto. The specific application of Scripps Technology and
related Scripps Patent Rights, if any, or specific application of Jointly
Developed Technology which is the subject of such License Agreement will be as
set forth in the notice delivered by Scripps and described in Section 3.2 above
or Section 3.3, respectively. The "Field" in such License Agreement shall be no
broader than the Field defined herein.

3.6 Reservation of Rights. Scripps reserves the right to use any
Scripps Technology or Jointly Developed Technology that may be subject to an
option pursuant to this Agreement or covered by a license granted hereunder
solely for Scripps' own educational and research purposes and the educational
and research purposes of any other nonprofit organization, provided that such
nonprofit organization is not using or disclosing the Scripps Technology or
Jointly Developed Technology for research or development purposes for a
for-profit entity, without Scripps or such other nonprofit organization being
obligated to pay Optionee any royalties or other compensation related thereto.

4. WARRANTIES.

4.1 Warranty of Title: No Other Warranties. Scripps hereby warrants and
represents that it has the full right and power to enter into this Agreement and
grant the option of Article 3 to Optionee.

4.2 No Other Warranties. SCRIPPS MAKES NO WARRANTIES CONCERNING THE
RESEARCH PROGRAM OR ANY SCRIPPS TECHNOLOGY, SCRIPPS PATENT RIGHTS OR JOINTLY
DEVELOPED TECHNOLOGY WHICH MAY BE SUBJECT TO THIS AGREEMENT. WITHOUT LIMITING
THE FOREGOING, SCRIPPS DOES NOT REPRESENT OR WARRANT THAT IT WILL SUCCESSFULLY
COMPLETE THE RESEARCH PROGRAM OR THAT, IF COMPLETED, THE RESEARCH PROGRAM WILL
RESULT IN SCRIPPS TECHNOLOGY WHICH WILL BE SUBJECT TO AN OPTION HEREUNDER OR
WHICH OPTIONEE WILL DESIRE TO LICENSE. SCRIPPS MAKES NO EXPRESS OR IMPLIED
WARRANTY, INCLUDING

BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AS TO ANY LICENSED PRODUCT. SCRIPPS MAKES NO WARRANTY OR REPRESENTATION
AS TO THE VALIDITY OR SCOPE OF ANY SCRIPPS PATENT RIGHTS OR THAT ANY LICENSED
PRODUCT WILL BE FREE FROM ANY INFRINGEMENT OF PATENTS OF THIRD PARTIES, OR THAT
NO THIRD PARTIES ARE IN ANY WAY INFRINGING SCRIPPS PATENT RIGHTS.

5. INTERESTS IN INTELLECTUAL PROPERTY.

5.1 Title.

a. Scripps shall retain such ownership and title to Scripps Technology
and Scripps Patent Rights as Scripps shall have, subject to the option of
Optionee set forth herein. Scripps shall, in the good faith exercise of its
discretion, undertake reasonable efforts to preserve and maintain its ownership
and title as Scripps deems appropriate. Ownership of and title to Jointly
Developed Technology shall be vested jointly in Scripps and Optionee, with each
owning an undivided one-half interest therein.

b. In the event Optionee does not exercise its option hereunder to
obtain an exclusive license with respect to Scripps' rights in and to any
specific application of Jointly Developed Technology, Optionee hereby assigns to
Scripps all of Optionee's right, title and interest in and to such Jointly
Developed Technology, and Optionee shall have no further rights with respect
thereto, other than a right to receive from Scripps fifty percent (50%) of the
net royalty income received by Scripps with respect to such application, as and
when received. As used herein, "net royalty income" shall mean the gross
royalties and other license fees received under any such license agreement, less
all Scripps out-of-pocket expenses incurred in connection with the licensing of
such Jointly Developed Technology (including without limitation fees of
accountants, attorneys and other consultants engaged in connection with such
licensing).

5.2 Governmental Interest. Optionee and Scripps acknowledge that
Scripps has received and expects to continue to receive funding from the United
States Government in support of Scripps' research activities. Optionee
acknowledges and agrees that its rights and obligations pursuant to this
Agreement with respect to Scripps Technology and Scripps Patent Rights, and to
Scripps' rights to Jointly Developed Technology, as applicable, shall be
subject to Scripps' obligations and the rights of the United States Government,
if any, which arise or result from Scripps' receipt of research support from the
United States Government.

6. CONFIDENTIALITY AND PUBLICATION.

6.1 Confidential Information. The parties agree that during the term of
and any subsequent extension of this Agreement and for a period of five (5)
years after it terminates or for as long as any Confidential Information not
otherwise includable within Scripps Patent Rights is being utilized within a
Licensed Product, whichever is longer, a party receiving Confidential
Information of another party will not use or intentionally disclose such
Confidential Information to any third party without the prior written consent of
the disclosing party.

6.2 Publications. Optionee acknowledges that it is the general policy
of Scripps to encourage publication of research results in technical or
scientific journals; and subject to Scripps meeting its disclosure obligations
under Section 3.2, Optionee agrees that Scripps shall have a right to publish in
accordance with its general policy. Prior to such publication, Scripps shall
submit to Optionee copies of proposed publications which contain subject matter
relating to Scripps Technology or Jointly Developed Technology and afford
Optionee a period of thirty (30) days to review the publication. Upon written
request by Optionee prior to the expiration of such thirty (30) day period and
provided that Optionee shall have exercised its option to one or more
applications included within the subject matter of such publication, Scripps
shall delay any such publication for up to sixty (60) days from the date of such
request to allow for the preparation and filing of a patent application.

6.3 Publicity. Except as otherwise provided herein or required by law,
no party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to this Agreement or to any license granted
hereunder, or to the performance thereunder, without the prior written approval
of the other parties, which approval shall not be unreasonably withheld.

7. TERM AND TERMINATION.

7.1 Term. Unless terminated sooner, the initial term of this Agreement
shall commence on the date set forth above and shall continue for a period of
two (2) years, and thereafter, this Agreement shall be renewable for additional
periods of one (1) years each upon mutual agreement of the parties.

7.2 Termination by Mutual Agreement. This Agreement may be terminated
at any time upon the mutual written agreement of the parties. In the absence of
an agreement to the contrary, no such termination shall have the effect of
relieving Optionee of its monetary obligations to fund the Research Program
which shall have accrued up and to the date of such termination.

7.3 Termination Upon Default. Any one or more of the following events
shall constitute an event of default hereunder: (i) the failure of a party to
pay any

amounts when due hereunder and the expiration of thirty (30) days thereafter;
and (ii) the failure of a party to perform any obligation required of it to be
performed hereunder, and the failure to cure within sixty (60) days after
receipt of notice from the other party specifying in reasonable detail the
nature of such default. Upon the occurrence of an event of default, the
non-defaulting party may deliver to the defaulting party written notice of
intent to terminate, such termination to be effective upon the date set forth in
such notice. Such termination rights shall be in addition to and not in
substitution for any other remedies that may be available to the non-defaulting
party serving such notice against the defaulting party. Termination pursuant to
this Section 7.3 shall not relieve the defaulting party of liability and damages
to non-defaulting party for breach of this Agreement. Waiver by any party of a
single default or a succession of defaults shall not deprive such party of any
right to terminate this Agreement arising by reason of any subsequent default.

7.4 Termination Upon Insolvency. This Agreement may be terminated as to
any party ("Insolvent Party") by another party giving written notice of
termination to the Insolvent Party upon the filing of bankruptcy or bankruptcy
of the Insolvent Party or the appointment of a receiver of any of the Insolvent
Party's assets, or the making by the Insolvent Party of any assignment for the
benefit of creditors, or the institution of any proceedings against the
Insolvent Party under any bankruptcy law. Termination shall be effective upon
the date specified in this notice.

7.5 Effect of Expiration or Termination.

7.5.1 Termination Upon Default of Optionee. Upon the termination of
this Agreement by reason of a default by Optionee, neither party shall have any
further rights or obligations with respect to this Agreement, other than the
obligation of Optionee to make any and all final payments accrued prior to the
date of termination and the obligation of the parties to make all reports
required hereunder. Upon such termination of this Agreement, the parties shall
continue to abide by their non-disclosure obligations as described in Section
6.1 and each party hereto shall fulfill any other obligations incurred prior to
such termination. Any such termination of this Agreement shall not constitute
the termination of any license or any other agreements between the parties which
are then in effect except as expressly provided therein.

7.5.2 Expiration or Termination upon Default of Scripps. Upon the
expiration of this Agreement at its regularly scheduled expiration date, or upon
a termination of this Agreement on account of a default by Scripps, then Scripps
shall make the disclosures required by Section 3.2 for Scripps Technology
conceived or reduced to practice up to the date of said expiration or
termination; and Optionee shall have the right to exercise its option with
respect to said Scripps Technology in accordance with the schedule and
procedures specified in Sections 3.4 and 3.5 above. Additionally, each party
shall perform all other obligations up to the date of said expiration or
termination; and the parties shall continue

to abide by their non-disclosure obligations described in Section 6.1; and any
previously existing license agreements or other agreements between the parties
shall continue in effect.

8. ASSIGNMENT: SUCCESSORS.

8.1 Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party except to a successor in
interest to all or substantially all of the business assets of assigning party,
whether by way of a merger, consolidation, sale of all or substantially all of
the assigning party's assets, change of control or similar transaction.

8.2 Binding Upon Successors and Assigns. Subject to the limitations on
assignment set forth herein, this Agreement shall be binding upon and inure to
the benefit of any successors in interest and assigns of Scripps and Optionee.
Any such successor to or assignee of a party's interest shall expressly assume
in writing the performance of all the terms and conditions of this Agreement to
be performed by such party.

9. GENERAL PROVISIONS.

9.1 Independent Contractors. The relationship between Scripps and
Optionee is that of independent contractors. Scripps and Optionee are not joint
venturers, partners, principal and agent, master and servant, employer or
employee, and have no other relationship other than independent contracting
parties. Scripps and Optionee shall have no power to bind or obligate each
other in any manner, other than as is expressly set forth in this
Agreement.

9.2 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), and the procedures set forth below. In the
event of any inconsistency between the Rules of AAA and the procedures set forth
below, the procedures set forth below shall control. Judgment upon the award
rendered by the arbitrators may be enforced in any court having jurisdiction
thereof.

9.2.1 Location. The location of the arbitration shall be in the City of
Philadelphia.

9.2.2 Selection Arbitrators. The arbitration shall be conducted by a
panel of three neutral arbitrators who are independent and disinterested with
respect to the parties, this Agreement, and the outcome of the arbitration. Each
party shall appoint one neutral arbitrator, and these two arbitrators so
selected by the parties shall then select the third arbitrator. If one party
has given written notice to the other party as to the

identity of the arbitrator appointed by the party, and the party thereafter
makes a written demand on the other party to appoint its designated arbitrator
within the next ten days, and the other party fails to appoint its designated
arbitrator within ten days after receiving said written demand, then the
arbitrator who has already been designated shall appoint the other two
arbitrators.

9.2.3 Discovery. Unless the parties mutually agree in writing to some
additional and specific pre-hearing discovery, the only pre-hearing discovery
shall be (a) reasonably limited production of relevant and non-privileged
documents, and (b) the identification of witnesses to be called at the hearing,
which identification shall give the witness's name, general qualifications and
position, and a brief statement as to the general scope of the testimony to be
given by the witness. The arbitrators shall decide any disputes and shall
control the process concerning these pre-hearing discovery matters. Pursuant to
the Rules of AAA, the parties may subpoena witnesses and documents for
presentation at the hearing.

9.2.4 Case Management. Prompt resolution of any dispute is important to
both parties; and the parties agree that the arbitration of any dispute shall be
conducted expeditiously. The arbitrators are instructed and directed to assume
case management initiative and control over the arbitration process (including
scheduling of events, pre-hearing discovery and activities, and the conduct of
the hearing), in order to complete the arbitration as expeditiously as is
reasonably practical for obtaining a just resolution of the dispute.

9.2.5 Remedies. The arbitrators may grant any legal or equitable
remedy or relief that the arbitrators deem just and equitable, to the same
extent that remedies or relief could be granted by a state or federal court,
provided however, that no punitive damages may be awarded. No court action may
be maintained seeking punitive damages. The decision of any two of the three
arbitrators appointed shall be binding upon the parties.

9.2.6 Expenses. The expenses of the arbitration, including the
arbitrators' fees, expert witness fees, and attorney's fees, may be awarded to
the prevailing party, in the discretion of the arbitrators, or may be
apportioned between the parties in any manner deemed appropriate by the
arbitrators. Unless and until the arbitrators decide that one party is to pay
for all (or a share) of such expenses, both parties shall share equally in the
payment of the arbitrators' fees as and when billed by the arbitrators.

9.2.7 Confidentiality. Except as set forth below, the parties shall
keep confidential the fact of the arbitration, the dispute being arbitrated, and
the decision of the arbitrators. Notwithstanding the foregoing, the parties may
disclose information about the arbitration to persons who have a need to know,
such as directors, trustees, management

employees, witnesses, experts, investors, attorneys, lenders, insurers, and
others who may be directly affected. Additionally, if a party has stock which is
publicly traded, the party may make such disclosures as are required by
applicable securities laws. Further, if a party is expressly asked by a third
party about the dispute or the arbitration, the party may disclose and
acknowledge in general and limited terms that there is a dispute with the other
party which is being (or has been) arbitrated. Once the arbitration award has
become final, if the arbitration award is not promptly satisfied, then these
confidentiality provisions shall no longer be applicable.

9.3 Entire Agreement; Modification. This Agreement sets forth the
entire agreement and understanding between the parties as to the subject matter
hereof. There shall be no amendments or modifications to this Agreement, except
by a written document which is signed by both parties.

9.4 California Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.

9.5 Headings. The headings for each article and section in this
Agreement have been inserted for the convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.

9.6 Severability. Should any one or more of the provisions of this
Agreement be held invalid or unenforceable by a court of competent jurisdiction,
it shall be considered severed from this Agreement and shall not serve to
invalidate the remaining provisions thereof. The parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by them when entering this
Agreement may be realized.

9.7 No Waiver. Any delay in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and
signed waiver as to a particular matter for a particular period of time.

9.8 Attorneys' Fees. In the event of a dispute among the parties hereto
or in the event of any default hereunder, the party prevailing in the resolution
of any such dispute or default shall be entitled to recover its reasonable
attorneys' fees and other costs incurred in connection with resolving such
dispute or default.

9.9 Notices. Any notices required by this Agreement shall be in
writing, shall specifically refer to this Agreement and shall be sent by
registered or certified airmail, postage prepaid, or by telefax, telex or cable,
charges prepaid, or by overnight

courier, postage prepaid, and shall be forwarded to the respective addresses
set forth below unless subsequently changed by written notice to the other
party:

FOR SCRIPPS: The Scripps Research Institute
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President, Technology Development
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇

FOR OPTIONEE: Acute Therapeutics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇

Notice shall be deemed delivered upon the earlier of (i) when received, (ii)
three (3) days after deposit into the mail, (iii) the date notice is sent via
telefax, telex or cable, or (iv) the day immediately following delivery to
overnight courier (except Sunday and holidays).

9.10 Compliance with U.S. Laws. Nothing contained in this Agreement
shall require or permit Scripps or Optionee to do any act inconsistent with the
requirements of any United States law, regulation or executive order as the same
may be in effect from time to time.

IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives as of the date set forth above.

SCRIPPS: OPTIONEE:

THE SCRIPPS RESEARCH INSTITUTE ACUTE THERAPEUTICS, INC.

By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: (Signature illegible)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

Title: Senior Vice President Title: President/CEO

EXHIBIT A
EXPERIMENTAL PROPOSAL
EFFICACY OF KL4-SURFACTANT IN MODELS OF
PULMONARY INJURY

[***]

EXHIBIT B
EFFICACY OF KL4-SURFACTANT IN MODELS OF
PULMONARY SURFACTANT
BUDGET

[***]

[***] Confidential treatment requested.

EXHIBIT C

LICENSE AGREEMENT

by and between

THE SCRIPPS RESEARCH INSTITUTE,
a California nonprofit
public benefit corporation

and

ACUTE THERAPEUTICS, INC.,
a Delaware corporation

TABLE OF CONTENTS

1. Definitions .......................................................... 1
1.1 Affiliate ..................................................... 2
1.2 Confidential Information ...................................... 2
1.3 Core Patent Rights ............................................ 2
1.4 Field ......................................................... 2
1.5 Licensed Product .............................................. 2
1.6 Net Sales ..................................................... 2
1.7 Scripps Patent Rights ......................................... 3
1.8 Scripps Technology ............................................ 3

2. License Terms and Conditions ......................................... 3
2.1 Grant of License .............................................. 3
2.2 Royalties ..................................................... 3
2.2.1 Percentage Royalty ............................................ 3
2.3 Combination Products .......................................... 3
2.3.1 Definition of Combination Product ............................. 4
2.3.2 Royalty Payable on Combination Products ....................... 4
2.4 Quarterly Payments ............................................ 4
2.4.1 Sales by Licensee ............................................. 4
2.4.2 Sales by Sublicensees ......................................... 4
2.5 Term of License ............................................... 5
2.6 Sublicense .................................................... 5
2.7 Aggregate Royalties ........................................... 5
2.8 Duration of Royalty Obligations ............................... 6
2.9 Reports ....................................................... 6
2.10 Records ....................................................... 6
2.11 Foreign Sales ................................................. 7
2.12 Foreign Taxes ................................................. 7

3. Patent Matters ....................................................... 7
3.1 Patent Prosecution and Maintenance ............................ 7
3.2 Information to Licensee ....................................... 8
3.3 Patent Costs .................................................. 8
3.4 Ownership ..................................................... 8
3.5 Scripps Right to Pursue Patent ................................ 8
3.6 Licensee's Right to Pursue Patent ............................. 8
3.7 Infringement Actions .......................................... 9
3.7.1 Prosecution of Infringements .................................. 9
3.7.2 Reasonable Assistance ......................................... 9

TABLE OF CONTENTS

3.7.3 Control ....................................................... 9
3.7.4 Allocation of Recovery ........................................ 9
4. Obligations Related to Commercialization ............................. 10
4.1 Commercial Development Obligation ............................. 10
4.2 Governmental Approvals and Marketing of Licensed Products ..... 10
4.3 Indemnity ..................................................... 10
4.4 Patent Marking ................................................ 11
4.5 No Use of Name ................................................ 11
4.6 U.S. Manufacture .............................................. 11
4.7 Foreign Registration .......................................... 11

5. Limited Warranty ..................................................... 11

6. Interests in Intellectual Property Rights ........................... 11
6.1 Preservation of Title ......................................... 12
6.2 Royalty-free License to Improvements .......................... 12
6.3 Governmental Interest ......................................... 12
6.4 Reservation of Rights ......................................... 12

7. Confidentiality and Publication ...................................... 12
7.1 Treatment of Confidential Information ......................... 12
7.2 Publications .................................................. 12
7.3 Publicity ..................................................... 12

8. Term and Termination ................................................. 13
8.1 Term .......................................................... 13
8.2 Termination Upon Default ...................................... 13
8.3 Termination Upon Bankruptcy or Insolvency ..................... 13
8.4 Rights Upon Expiration ........................................ 14
8.5 Rights Upon Termination ....................................... 14
8.6 Work-in-Progress .............................................. 14

9. Assignment; Successors ............................................... 14
9.1 Assignment .................................................... 14
9.2 Binding Upon Successors and Assigns ........................... 15

10. General Provisions .................................................. 15
10.1 Independent Contractors ....................................... 15

TABLE OF CONTENTS

10.2 Arbitration ................................................... 15
10.2.1 Location ...................................................... 15
10.2.2 Selection of Arbitrators ...................................... 15
10.2.3 Discovery ..................................................... 15
10.2.4 Case Management ............................................... 16
10.2.5 Remedies ...................................................... 16
10.2.6 Expenses ...................................................... 16
10.2.7 Confidentiality ............................................... 16
10.3 Entire Agreement; Modification ................................ 16
10.4 California Law ................................................ 17
10.5 Headings ...................................................... 17
10.6 Severability .................................................. 17
10.7 No Waiver ..................................................... 17
10.8 Name .......................................................... 17
10.9 Attorneys' Fees ............................................... 17
10.10 Notices ....................................................... 17
10.11 Compliance with U.S. Laws ..................................... 18

iii

LICENSE AGREEMENT

This License Agreement is entered into and made effective as of this
day of , 19_, by and between THE SCRIPPS RESEARCH INSTITUTE, a California
nonprofit public benefit corporation ("Scripps") located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Acute Therapeutics, Inc. a Delaware
corporation ("Licensee") located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ with
respect to the facts set forth below.

RECITALS

A. Scripps is engaged in fundamental scientific biomedical and
biochemical research including research relating to synthetic pulmonary
surfactants.

B. Licensee is engaged in research and development of synthetic
pulmonary surfactants for use in humans and vertebrate animals.

C. Scripps has disclosed to Licensee certain technology described
in , a copy of which is attached hereto as Exhibit A and incorporated
herein by reference (the " ").

D. Scripps has the exclusive right to grant a license to the technology
described in , subject to certain rights of the U.S. Government to use such
technology for its own purposes, resulting from the receipt by Scripps of
certain funding from the U.S. Government.

E. Scripps desires to grant to Licensee, and Licensee wishes to
acquire, an exclusive worldwide right and license to the technology described in
the and to certain patent rights and know-how of Scripps with respect
thereto, subject to the terms and conditions set forth herein, with a view to
developing and marketing [diagnostic and/or therapeutic] products within the
Field (as defined below).

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, Scripps and Licensee hereby agree as follows:

1. Definitions. Capitalized terms shall have the meaning set forth

below.

1.1 Affiliate. The term "Affiliate" shall mean any entity which
directly or indirectly controls, is controlled by or is under common control
with Licensee. The term "control" as used herein means the possession of the
power to direct or cause the direction of the management and the policies of an
entity, whether through the ownership of a majority of the outstanding voting
securities or by contract or otherwise.

1.2 Confidential Information. The term "Confidential Information" shall
mean any and all proprietary or confidential information of Scripps or Licensee
which may be exchanged between the parties at any time and from time to time
during the term of this Agreement. Information shall not be considered
confidential to the extent that it:

a. Is publicly disclosed through no fault of any party hereto, either
before or after it becomes known to the receiving party; or

b. Was known to the receiving party prior to the date of this
Agreement, which knowledge was acquired independently and not from the other
party hereto (or such party's employees); or

c. Is subsequently disclosed to the receiving party in good faith by a
third party who has a right to make such disclosure; or

d. Has been published by a third party as a matter of right.

1.3 Core Patent Rights. The term "Core Patent Rights" shall mean the
following issued U.S. patents and pending U.S. patent applications: (a) Patent
No. 5,407,914, issued April 18, 1995; Patent No. 5,260,273, issued November 9,
1993; and Patent No. 5,164,369, issued November 17, 1992; and (b) pending patent
applications Serials Nos. [***].

1.4 Field. The term "Field" shall mean use in research or as a
diagnostic or therapeutic product in humans or vertebrate animals and shall
specifically exclude any agricultural applications or products.

1.5 Licensed Product. The term "Licensed Product" shall mean any
product or process which cannot be developed, manufactured, used or sold without
(i) infringing one or more claims under Scripps Patent Rights or (ii) utilizing
any part of Scripps Technology not otherwise includable within Scripps Patent
Rights.

1.6 Net Sales. The term "Net Sales" shall mean the gross amount
actually received by Licensee, or its Affiliates and sublicensees, or any of
them, on all sales of Licensed Products, less (i) prepaid freight and (ii) sales
taxes or other governmental charges actually paid in connection with sales of
Licensed Products (but excluding what is commonly known as income taxes). Sales
of Licensed Products by Licensee, or an Affiliate or

[***] Confidential treatment requested.

sublicensee of Licensee to any Affiliate or sublicensee which is a reseller
thereof shall be excluded, and only the subsequent sale of such Licensed
Products by Affiliates or sublicensees of Licensee to unrelated parties shall
be deemed Net Sales hereunder.

1.7 Scripps Patent Rights. The term "Scripps Patent Rights" shall mean
rights arising out of or resulting from (i) any and all U.S. and foreign patent
applications and patents covering Scripps Technology, (ii) the patents
proceeding from such applications, (iii) all claims of continuations-in-part
directed solely to subject matter specifically described in Scripps Technology,
and (iv) divisionals, continuations, reissues, reexaminations, and extensions of
any patent or application set forth in (i)-(iii) above, so long as said patents
have not been held invalid and/or unenforceable by a court of competent
jurisdiction from which there is no appeal or, if appealable, from which no
appeal has been taken.

1.8 Scripps Technology. The term "Scripps Technology" shall mean so
much of the technology as is proprietary to Scripps disclosed in ( ), a
copy of which is attached as Exhibit A hereto and incorporated herein by
reference, together with materials, information and know-how related thereto
[as described on ____________________] whether or not the same is eligible for
protection under the patent laws of the United States or elsewhere, and whether
or not any such processes technology, or information related thereto, would be
enforceable as a trade secret or copying of which would be enjoined or
restrained by a court as constituting unfair competition.

2. License Terms and Conditions.

2.1 Grant of License. Scripps hereby grants to Licensee an exclusive,
worldwide license, including the right to sublicense, to Scripps Technology and
under Scripps Patent Rights, to develop, to make, to have made, to use, to
modify, to market, to sell and to otherwise dispose of Licensed Products in the
Field, subject to the terms of this Agreement.

2.2 Royalties.

2.2.1 Percentage Royalty. As consideration for the license granted
pursuant to Section 2.1 hereof, Licensee shall pay to Scripps a continuing
royalty on a country-by-country basis in the amount of (i) ____ percent ( %) of
Licensed Products which cannot be made, used or sold in such country without or
more valid claims under Scripps Patent Rights and (ii) ____ percent ( %) of Net
Sales of all other Licensed Products.

2.3 Combination Product.

2.3.1 Definition of Combination Product. As used herein, the term
"Combination Product" shall mean a Licensed Product which cannot be
manufactured, used or sold without infringing Scripps Patent Rights or utilizing
Scripps Technology licensed hereunder, and infringing or utilizing one or more
patents or proprietary technology or know how of (i) Licensee, (ii) a third
party which has licensed the same to Licensee pursuant to an agreement between
Licensee and such third party, or (iii) Scripps under a license agreement other
than this Agreement (referred to herein as "other licensed rights").

2.3.2 Royalty Payable on Combination Products. The royalty payable on
Combination Products shall be the royalty rate set forth in Section 2.2.1 above
based on a pro rata portion of Net Sales of Combination Products in accordance
with the following formula:

A
X = -
B, where

X = the pro rata portion of Net Sales
attributable to Scripps Patent Rights or
other Scripps Technology licensed herein
(expressed as a percentage), and

A = the fair market value of the component in
the Combination Product utilizing Scripps
Technology licensed hereunder, and

B = A plus the fair market value of all other
components in the Combination Product using
other licensed rights.

The fair market values described above shall be determined by the parties hereto
in good faith. In the absence of agreement as to the fair market value of all of
the components contained in a Combination Product, the fair market value of each
component shall be determined by arbitration in accordance with the provisions
of Section 10.2 hereof.

2.4 Quarterly Payments.

2.4.1 Sales by Licensee. With regard to Net Sales made by Licensee or
its Affiliates, royalties shall be payable by Licensee quarterly, within sixty
(60) days after the end of each calendar quarter, based upon the Net Sales of
Licensed Products during such preceding calendar quarter, commencing with the
calendar quarter in which the first commercial sale of any Licensed Product is
made.

2.4.2 Sales by Sublicensees. With regard to Net Sales made by
sublicensees of Licensee or its Affiliates, royalties shall be payable by
Licensee quarterly,

within ninety (90) days after the end of each calendar quarter, based upon the
Net Sales of Licensed Products by such sublicensee during such preceding
calendar quarter, commencing with the calendar quarter in which the first
commercial sale of any Licensed Product is made by such sublicensee.

2.5 Term of License. Unless terminated sooner in accordance with the
provisions of this Agreement, the term of this license shall expire when the
last of the royalty obligations set forth has expired. Notwithstanding the
foregoing, if applicable government regulations require a shorter term and/or a
shorter term of exclusivity than provided for herein, then the term of this
License Agreement shall be so shortened or this License Agreement shall be
amended to provide for a non-exclusive license, and, in such event, the parties
shall negotiate in good faith to reduce appropriately the royalties payable as
set forth under the section heading "Royalties" hereof.

2.6 Sublicense. Licensee shall have the sole and exclusive right to
grant sublicenses to any party with respect to the rights conferred upon
Licensee under this Agreement, provided, however, that any such sublicense shall
be subject in all respects to the restrictions, exceptions, royalty obligations,
reports, termination provisions, and other provisions contained in this
Agreement and shall not exceed the scope of the license granted to Licensee
hereunder. Promptly after execution of any sublicense agreement, Licensee shall
give written notice to Scripps of the grant of such sublicense and details of
the following material terms: (i) the name of the sublicensee, (ii) the duration
of the sublicense, (iii) the Scripps Patent Rights and Scripps Technology that
are the subject of the sublicense, and (iv) the commercialization obligations
imposed upon the sublicensee. Licensee shall pay Scripps, or cause its Affiliate
or sublicensee to pay Scripps, the same royalties on all Net Sales of such
Affiliate or sublicensee the same as if said Net Sales had been made by
Licensee. Each Affiliate and sublicensee shall report its Net Sales to Scripps
through Licensee, which Net Sales shall be aggregated with any Net Sales of
Licensee for purposes of determining the Net Sales upon which royalties are to
be paid to Scripps.

2.7 Aggregate Royalties. In the event that a percentage of sublicense
income or royalties are paid by the Licensee, an Affiliate or a sublicensee to
an unaffiliated third party or to Scripps under a separate agreement in respect
of a Licensed Product ("Additional Royalties") for which royalties are also due
to Scripps pursuant to this Agreement, then the following provisions shall apply
(either separately or jointly, as applicable):

(a) if the Licensed Product is or was claimed in whole or in part, in
one or more of the Core Patent Rights and the Additional Royalties are due
pursuant to a license agreement between Scripps and Licensee that is executed
pursuant to that certain Research Funding and Option Agreement of even date
herewith between Scripps and Licensee (such licenses are collectively referred
to herein as "Other Research Licenses"):

(i) until the expiration of the last to expire of the Core Patent
rights, the royalties under this Agreement shall be reduced such that the
aggregate royalties due under this Agreement and the Other Research Licenses do
not exceed Two and One-Half percent (2.5 %) of Net Sales of the Licensed
Product;

(ii) after the expiration of the last to expire of the Core Patent
Rights, the royalties under this Agreement shall be increased such that the
aggregate royalties due under this Agreement and the Other Research Licenses do
not exceed Seven percent (7%) of Net Sales of the Licensed Product.

(b) if the Licensed Product is or was claimed in whole or in part in
one or more of the Core Patent Rights and the Additional Royalties are due under
any license with a third party or any other license agreement between Licensee
and Scripps, or if the Licensed Product is or was not claimed in any of the Core
Patent Rights, then the royalties under this Agreement shall be reduced by the
amount of the payments due to the third party or Scripps under such license
agreements, subject to a maximum reduction of fifty percent (50%) of the
royalties due hereunder.

2.8 Duration of Royalty Obligations. The royalty obligations of
Licensee as to each Licensed Product shall terminate on a country-by-country
basis concurrently with the expiration of the last to expire of Scripps Patent
Rights utilized by or in such Licensed Product in each such country or, with
respect to Licensed Products not utilizing any Scripps Patent Rights, ten (10)
years after the date of first commercial sale of such Licensed Product in such
country.

2.9 Reports. Licensee shall furnish to Scripps at the same time as
each royalty payment is made by Licensee, a detailed written report of Net Sales
of the Licensed Products and the royalty due and payable thereon, including a
description of any offsets or credits deducted therefrom, on a
product-by-product and country-by-country basis, for the calendar quarter upon
which the royalty payment is based.

2.10 Records. Licensee shall keep, and cause its Affiliates and
sublicensees to keep, full, complete and proper records and accounts of all
sales of Licensed Products in sufficient detail to enable the royalties payable
on Net Sales of each Licensed Product to be determined. Scripps shall have the
right to appoint an independent certified public accounting firm approved by
Licensee, which approval shall not be unreasonably withheld, to audit the
records of Licensee, its Affiliates and sublicensees as necessary to verify the
royalties payable pursuant to this Agreement. Licensee, its Affiliates and
sublicensees shall pay to Scripps an amount equal to any additional royalties to
which Scripps is entitled as disclosed by the audit, plus interest thereon at
the rate of one and one-half percent (1.5%) per month. Such audit shall be at
Scripps' expense; provided, however, that if the audit discloses that Scripps
was underpaid royalties with respect to any Licensed Product by at least five
percent (5%) for any calendar quarter, then Licensee, its Affiliates or
sublicensee, as the case

may be shall reimburse Scripps for any such audit costs. Scripps may exercise
its right of audit as to each of Licensee, its Affiliates or sublicensees no
more frequently than once in any calendar year. The accounting firm shall
disclose to Scripps only information relating to the accuracy of the royalty
payments. Licensee, its Affiliates and sublicensees shall preserve and maintain
all such records required for audit for a period of three (3) years after the
calendar quarter to which the record applies.

2.11 Foreign Sales. The remittance of royalties payable on sales
outside the United States shall be payable to Scripps in United States Dollar
equivalents at the official rate of exchange of the currency of the country from
which the royalties are payable, as quoted in the Wall Street Journal for the
last business day of the calendar quarter in which the royalties are payable. If
the transfer of or the conversion into the United States Dollar equivalents of
any such remittance in any such instance is not lawful or possible, the payment
of such part of the royalties as is necessary shall be made by the deposit
thereof, in the currency of the county where the sale was made on which the
royalty was based to the credit and account of Scripps or its nominee in any
commercial bank or trust company of Scripps' choice located in that country,
prompt written notice of which shall be given by Licensee to Scripps.

2.12 Foreign Taxes. Any tax required to be withheld by Licensee under
the laws of any foreign country for the accounts of Scripps shall be promptly
paid by Licensee for and on behalf of Scripps to the appropriate governmental
authority, and Licensee shall use its best efforts to furnish Scripps with proof
of payment of such tax together with official or other appropriate evidence
issued by the applicable government authority. Any such tax actually paid on
Scripps' behalf shall be deducted from royalty payments due Scripps.

3. Patent Matters.

3.1 Patent Prosecution and Maintenance. From and after the date of this
Agreement, the provisions of this Section 3 shall control the prosecution and
maintenance of any patent included within Scripps Patent Rights. Subject to the
requirements, limitations and conditions set forth in this Agreement, Scripps
shall direct and control (i) the preparation, filing and prosecution of the
United States and foreign patent applications within Scripps Patent Rights
(including any interferences and foreign oppositions) and (ii) maintain the
patents issuing therefrom. Scripps shall select the patent attorney, subject to
Licensee's written approval, which approval shall not be unreasonably withheld.
Both parties hereto agree that Scripps may, at its sole discretion, utilize
Scripps' Office of Patent Counsel in lieu of outside counsel for patent
prosecution and maintenance described herein, and the fees and expenses incurred
by Scripps with respect to work done by such Office of Patent Counsel shall be
paid as set forth below. Licensee shall have will rights of consultation with
the patent attorney so selected on all matters relating to Scripps Patent
Rights. Scripps shall use its best efforts to implement all reasonable
requests made by Licensee with regard to the preparation, filing,

prosecution and/or maintenance of the patent applications and/or patents within
Scripps Patent Rights.

3.2 Information to Licensee. Scripps shall keep Licensee informed with
regard to the patent application and maintenance processes. Scripps shall
deliver to Licensee copies of all patent applications, amendments, related
correspondence, and other related matters.

3.3 Patent Costs. Licensee acknowledges and agrees that Scripps does
not have independent funding to cover patent costs, and that the license granted
hereunder is in part in consideration for Licensee's assumption of patent costs
and expenses as described herein. Licensee shall pay for all expenses incurred
by Scripps pursuant to Section 3.1 hereof. In addition, Licensee agrees to
reimburse Scripps for all patent costs and expenses paid or incurred by Scripps
to date in connection with Scripps Patent Rights licensed hereunder. Licensee
agrees to pay all such past and future patent expenses directly or to reimburse
Scripps for the payment of such expenses within sixty (60) days after Licensee
receives an itemized invoice therefor. In the event Licensee elects to
discontinue payment for the filing, prosecution and/or maintenance of any patent
application and/or patent within Scripps Patent Rights, any such patent
application or patent shall be excluded from the definition of Scripps Patent
Rights and from the scope of the license granted under this Agreement, and all
rights relating thereto shall revert to Scripps and may be freely licensed by
Scripps. Licensee shall give Scripps at least sixty (60) days' prior written
notice of such election. No such notice shall have any effect on Licensee's
obligations to pay expenses incurred up to the effective date of such election.

3.4 Ownership. The patent applications filed and the patents obtained
by Scripps pursuant to Section 3.1 hereof shall be owned solely by Scripps,
assigned to Scripps and deemed a part of Scripps Patent Rights.

3.5 Scripps Right to Pursue Patent. If at any time during the term of
this Agreement, Licensee's rights with respect to Scripps Patent Rights are
terminated, Scripps shall have the right to take whatever action Scripps deems
appropriate to obtain or maintain the corresponding patent protection at its own
expense. If Scripps pursues patents under this Section 3.5, Licensee agrees to
cooperate fully, including by providing, at no charge to Scripps, all
appropriate technical data and executing all necessary legal documents.

3.6 Licensee's Right to Pursue Patent. If subsequent to filing a
patent application on an invention within the Scripps Patent Rights, Scripps
elects not to direct and control the prosecution or maintenance of such patent
application or ensuing patent Scripps shall give Licensee notice thereof within
a reasonable period prior to allowing such patent application or patent to lapse
or become abandoned or unenforceable and Licensee may direct and control
prosecution or maintenance of such patent application or patent at its expense
and its exclusive benefit. If subsequent to filing of a United States patent
application,

Scripps chooses not to file in foreign countries, Scripps shall inform Licensee
within six (6) months of the United States filing date and shall permit Licensee
to effect such foreign filings not made by Scripps at Licensee's sole expense.

3.7 Infringement Actions.

3.7.1 Prosecution of Infringements. Scripps and Licensee shall promptly
notify the other in writing if any infringement of the Scripps Patent Rights by
a third party is discovered or comes to its attention. Provided Licensee shall
have supplied Scripps with reasonable evidence of infringement of Scripps Patent
Rights by a third party, Licensee shall have the right, at Licensee's sole
expense to bring suit against the infringer for infringement of the Scripps
Patent Rights. In the event that Licensee has not caused such infringement to
terminate (for whatever cause) or initiated legal proceedings against the
infringer within three (3) months following receipt or giving of notice pursuant
to this Section 3.7, Scripps shall have the right (but not the obligation), at
Scripps's sole expense, to bring suit against the infringer for infringement of
the Scripps Patent Rights.

3.7.2 Reasonable Assistance. In the event either party hereto shall
initiate or carry on legal proceedings to enforce the Scripps Patent Rights
against an alleged infringer, as provided herein, the other party hereto shall
render reasonable assistance to and cooperate with the party initiating or
carrying on such proceedings.

3.7.3 Control. In the event that either party shall institute suit or
other legal proceedings to enforce the Scripps Patent Rights, it shall have sole
control of such suit and the other party shall be entitled to be represented in
any such suit by counsel of its choosing, at its sole expense. Licensee shall
not discontinue or settle any such proceedings brought by it without obtaining
the concurrence of Scripps (which concurrence shall not be unreasonably
withheld) and giving Scripps a timely opportunity to continue such proceedings
in its own name, under its sole control, and at this sole expense. In the event
Scripps does not concur in such settlement, it must continue such proceeding in
its own name, under its sole control and expense within three (3) months of
being given notice by Licensee of its desire to settle or Licensee shall be
entitled to settle without Scripps's concurrence.

3.7.4 Allocation of Recovery. All damages, settlements and awards made
or obtained in connection with any suit or other legal proceeding under this
Section 3.7 shall be shared among the parties as follows:

(a) The party initiating the suit shall first be reimbursed for all
costs and expenses of such suit or legal proceeding; in the event that the suit
or other legal proceeding is initiated by Licensee but is later assumed, under
Section 3.7.3, by Scripps, Licensee shall first be reimbursed its costs and
expenses and then Scripps shall be reimbursed its costs and expenses of such
proceeding.

(b) If the Licensee initiated the suit and prosecuted it to its
conclusion, Licensee shall be entitled to retain the balance of any damages,
settlements and awards, less the royalty on such amounts due Scripps in
accordance with Article 2.

(c) In all other circumstances other than that described in Section
3.7.4(b) above, Scripps and Licensee shall divide the balance of any damages,
settlements and awards 60% to Scripps and 40% to Licensee.

4. Obligations Related to Commercialization.

4.1 Commercial Development Obligation. In order to maintain the license
granted hereunder in force, Licensee shall use reasonable efforts and due
diligence to develop Scripps Technology and Scripps Patent Rights which are
licensed hereunder into commercially viable Licensed Products, and thereafter
to produce and sell reasonable quantities of Licensed Products. Licensee shall
keep Scripps generally informed as to Licensee's progress in such development,
production and sale, including its efforts, if any and only to the extent it may
do so without breaching the terms of any confidentiality agreement, to
sublicense Scripps Technology and Scripps Patent Rights. Licensee shall deliver
to Scripps a semi-annual written report and such other reports as Scripps may
reasonably request. The parties hereto acknowledge and agree that achievement of
the milestones described in Exhibit C attached hereto on or before the dates set
forth therein shall be evidence of compliance by Licensee with its commercial
development obligations hereunder for the time periods specified in Exhibit C.
In the event Scripps has a reasonable basis to believe that Licensee is not
using reasonable efforts and due diligence as required hereunder, upon notice by
Scripps to Licensee which specifies the basis for such belief, Scripps and
Licensee shall negotiate in good faith to attempt to mutually resolve the issue.
In the event Scripps and Licensee cannot agree upon any matter related to
Licensee's commercial development obligations, the parties agree to utilize
arbitration pursuant to Section 10.2 hereof in order to resolve the matter. If
the arbitrator determines that Licensee has not complied with its obligations
hereunder, and such default is not fully cured within sixty (60) days after the
arbitrator's decision, Scripps may terminate Licensee's rights under this
Agreement.

4.2 Governmental Approvals and Marketing of Licensed Products.
Licensee shall be responsible for obtaining all necessary governmental approvals
for the development, production, distribution, sale and use of any Licensed
Product, at Licensee's expense, including, without limitation, any safety
studies. Licensee shall have sole responsibility for any warning labels,
packaging and instructions as to the use of Licensed Products and for the
quality control for any Licensed Product.

4.3 Indemnity. Licensee hereby agrees to indemnify, defend and hold
harmless Scripps and any parent, subsidiary or other affiliated entity of
Scripps and their trustees, officers, employees, scientists and agents from and
against any liability or expense arising from any product liability claim
asserted by any party as to any Licensed Product or

any claims arising from the use of any Scripps Patent Rights or Scripps
Technology pursuant to this Agreement. Such indemnity and defense obligation
shall apply to any product liability or other claims, including without
limitation, personal injury, death or property damage, made by employees,
subcontractors, sublicensees, or agents of Licensee, as well as any member of
the general public. Licensee shall use its best efforts to have Scripps and, if
requested in writing by Scripps, any parent, subsidiary or other affiliated
entity of Scripps and their trustees, officers, employees, scientists and agents
named as additional insured parties on any product liability insurance policies
maintained by Licensee its Affiliates and sublicensees applicable to Licensed
Products.

4.4 Patent Marking. To the extent required by applicable law, Licensee
shall ▇▇▇▇ all Licensed Products or their containers in accordance with the
applicable patent marking laws.

4.5 No Use of Name. The use of the name "The Scripps Research
Institute", "Scripps", or any variation thereof in connection with the
advertising or sale of Licensed Products is expressly prohibited.

4.6 U.S. Manufacture. To the extent required by applicable United
States laws, if at all, Licensee agrees that Licensed Products will be
manufactured in the United States, or its territories, subject to such waivers
as may be required, or obtained, if at all, from the United States Department of
Health and Human Services, or its designee.

4.7 Foreign Registration. Licensee agrees to register this Agreement
with any foreign governmental agency which requires such registration, and
Licensee shall pay all costs and legal fees in connection therewith. In
addition, Licensee shall assure that all foreign laws affecting this Agreement
or the sale of Licensed Products are fully satisfied.

5. Limited Warranty. Scripps hereby represents and warrants that it has
full right and power to enter into this Agreement and grant the licenses to
Licensee granted herein. SCRIPPS MAKES NO OTHER WARRANTIES CONCERNING SCRIPPS
PATENT RIGHTS OR SCRIPPS TECHNOLOGY COVERED BY THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AS TO SCRIPPS PATENT RIGHTS, SCRIPPS TECHNOLOGY OR ANY
LICENSED PRODUCT. SCRIPPS MAKES NO WARRANTY OR REPRESENTATION AS TO THE VALIDITY
OR SCOPE OF SCRIPPS PATENT RIGHTS, OR THAT ANY LICENSED PRODUCT WILL BE FREE
FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING SCRIPPS PATENT
RIGHTS OR SCRIPPS TECHNOLOGY COVERED BY THIS AGREEMENT.

6. Interests in Intellectual Property Rights.

6.1 Preservation of Title. Scripps shall retain full ownership and
title to Scripps Technology, and Scripps Patent Rights licensed hereunder and
shall preserve and maintain such full ownership and title, subject to Licensee
fully performing all of its obligations under this Agreement.

6.2 Royalty-free License to Improvements. Licensee hereby grants to
Scripps a non-exclusive, royalty-free license to any improvement to Scripps
Technology developed by Licensee, to use for its own noncommercial research
purposes or grant to other nonprofit institutions for their non-commercial
research purposes.

6.3 Governmental Interest. Licensee and Scripps acknowledge that
Scripps has received, and expects to continue to receive, funding from the
United States Government in support of Scripps' research activities. Licensee
and Scripps acknowledge and agree that their respective rights and obligations
pursuant to this Agreement shall be subject to Scripps' obligations and the
rights of the United States Government, if any, which arise or result from
Scripps' receipt of research support from the United States Government,
including without limitation, the grant by Scripps to the United States a
non-exclusive, irrevocable, royalty-free license to Scripps Technology and
Scripps Patent Rights licensed hereunder for governmental purposes.

6.4 Reservation of Rights. Scripps reserves the right to use for any
non-commercial research purposes and the right to allow other nonprofit
institutions to use for any non-commercial research purposes (provided that such
nonprofit institutions are not using or disclosing the Scripps Technology and
Scripps Patent Rights for research or development purposes on behalf of a
for-profit entity) any Scripps Technology and Scripps Patent Rights licensed
hereunder, without Scripps or such other institutions being obligated to pay
Licensee any royalties or other compensation.

7. Confidentiality and Publication.

7.1 Treatment of Confidential Information. The parties agree that
during the term of this Agreement, and for a period of three (3) years after
this Agreement terminates, a party receiving Confidential Information of the
other party will (i) maintain in confidence such Confidential Information to the
same extent such party maintains its own proprietary industrial information,
(ii) not disclose such Confidential Information to any third party without prior
written consent of the other party and (iii) not use such Confidential
Information for any purpose except those permitted by this Agreement.

7.2 Publications. Licensee agrees that Scripps shall have a right to
publish in accordance with its general policies.

7.3 Publicity. Except as otherwise provided herein or required by law,
no party shall originate any publication, news release or other public
announcement,

written or oral, whether in the public press, stockholders' reports, or
otherwise, relating to this Agreement or to any sublicense hereunder, or to the
performance hereunder or any such agreements, without the prior written approval
of the other party, which approval shall not be unreasonably withheld.
Scientific publications published in accordance with Section 7.2 of this
Agreement shall not be construed as publicity governed by this Section 7.3.

8. Term and Termination.

8.1 Term. Unless terminated sooner in accordance with the terms set
forth herein, this Agreement, and the license granted hereunder, shall terminate
as provided in Section 2.6 hereof.

8.2 Termination Upon Default. Any one or more of the following events
shall constitute an event of default hereunder: (i) the failure of a party to
pay any amounts when due hereunder and the expiration of thirty (30) days
after receipt of a written notice requesting the payment of such amount; (ii)
the failure of a party to perform any material obligation required of it to be
performed hereunder, and the failure to cure within sixty (60) days after
receipt of notice from the other party specifying in reasonable detail the
nature of such default; and, (if applicable) (iii) any material default by
Licensee under the Research Funding and Option Agreement dated October 28, 1996
between Scripps and Licensee and the failure to cure within thirty (30) days
after receipt of notice from the other party specifying in reasonable detail the
nature of such default. Upon the occurrence of any event of default, the
non-defaulting party may deliver to the defaulting party written notice of
intent to terminate, such termination to be effect the upon the date set forth
in such notice.

Such termination rights shall be in addition to and not in substitution
for any other remedies that may be available to the non-defaulting party.
Termination pursuant to this Section 8.2 shall not relieve the defaulting party
from liability and damages to the other party for breach of this Agreement.
Waiver by either party of a single default or a succession of defaults shall not
deprive such party of any right to terminate this Agreement arising by reason of
any subsequent default.

8.3 Termination Upon Bankruptcy or Insolvency. This Agreement may be
terminated by Scripps giving written notice of termination to Licensee upon
occurrence of any of the following events:

(a) Licensee is dissolved or any assignment is made of the Licensee's
business for the benefit of creditors;

(b) A receiver, or similar officer, is appointed to take charge of a
substantial part of the Licensee's assets; or

(c) Any petition in bankruptcy is filed by the Licensee or any petition
in bankruptcy is filed against the Licensee and which is not dismissed within
ninety (90) days.

8.4 Rights Upon Expiration. Neither party shall have any further rights
or obligations upon the expiration of this Agreement upon its regularly
scheduled expiration date with respect to this Agreement, other than the
obligation of Licensee to make any and all reports and payments for the final
quarter period. Provided, however, that upon such expiration, each party shall
be required to continue to abide by its nondisclosure obligations as described
in Section 7.1, and Licensee shall continue to abide by its obligation to
indemnify Scripps as described in Section 4.3 and by its obligations under
Section 6.2 hereof.

8.5 Rights Upon Termination. Notwithstanding any other provision of
this Agreement, upon any termination of this Agreement prior to the regularly
scheduled expiration date of this Agreement, the license granted hereunder shall
terminate. Except as otherwise provided in Section 8.6 of this Agreement with
respect to work-in-progress, upon such termination, Licensee shall have no
further right to develop, manufacture or market any Licensed Product, or to
otherwise use any Scripps Patent Rights or any Scripps Technology not otherwise
includable therein. Upon any such termination, Licensee shall promptly return
all materials, samples, documents, information, and other materials which were
provided to Licensee by Scripps. Any such termination shall not relieve either
party from any obligations accrued to the date of such termination. Upon such
termination, each party shall be required to abide by its nondisclosure
obligations as described in Section 7.1, and Licensee shall continue to abide by
its obligations to indemnify Scripps as described in Section 4.3.

8.6 Work-in-Progress. Upon any such early termination of the license
granted hereunder in accordance with this Agreement, Licensee shall be entitled
to finish any work-in-progress and to sell any completed inventory of a Licensed
Product covered by such license which remain on hand as of the date of the
termination, so long as Licensee pays to Scripps the royalties applicable to
said subsequent sales in accordance with the terms and conditions as set forth
in this Agreement, provided that no such sales shall be permitted after the
expiration of six (6) months after the date of termination.

9. Assignment; Successors.

9.1 Assignment. Neither this Agreement nor any rights granted hereunder
may be assigned or transferred by Licensee except (i) to an Affiliate of
Licensee, (ii) to any entity with which it may merge or consolidate, or to which
it may transfer all or substantially all of its assets or business to which this
Agreement relates or (iii) as expressly permitted hereunder, without the prior
written consent of Scripps.

9.2 Binding Upon Successors and Assigns. Subject to the limitations on
assignment herein, this Agreement shall be binding upon and inure to the benefit
of any successors in interest and assigns of Scripps and Licensee. Any such
successor or assignee of Licensee's interest shall expressly assume in writing
the performance of all the terms and conditions of this Agreement to be
performed by Licensee.

10. General Provisions.

10.1 Independent Contractors. The relationship between Scripps and
Licensee is that of independent contractors. Scripps and Licensee are not joint
venturers, partners, principal and agent, master and servant, employer or
employee, and have no other relationship other than independent contracting
parties. Scripps and Licensee shall have no power to bind or obligate each other
in any manner, other than as is expressly set forth in this Agreement.

10.2 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), and the procedures set forth below. In the
event of any inconsistency between the Rules of AAA and the procedures set forth
below, the procedures set forth below shall control. Judgment upon the award
rendered by the arbitrators may be enforced in any court having jurisdiction
thereof.

10.2.1 Location. The location of the arbitration shall be in the City
of Philadelphia.

10.2.2 Selection of Arbitrators. The arbitration shall be conducted by
a panel of three neutral arbitrators who are independent and disinterested with
respect to the parties, this Agreement, and the outcome of the arbitration. Each
party shall appoint one neutral arbitrator, and these two arbitrators so
selected by the parties shall then select the third arbitrator. If one party has
given written notice to the other party as to the identity of the arbitrator
appointed by the party, and the party thereafter makes a written demand on the
other party to appoint its designated arbitrator within the next ten days, and
the other party fails to appoint its designated arbitrator within ten days after
receiving said written demand, then the arbitrator who has already been
designated shall appoint the other two arbitrators.

10.2.3 Discovery. Unless the parties mutually agree in writing to some
additional and specific pre-hearing discovery, the only pre-hearing discovery
shall be (a) reasonably limited production of relevant and non-privileged
documents, and (b) the identification of witnesses to be called at the hearing,
which identification shall give the witness's name, general qualifications and
position, and a brief statement as to the general scope of the testimony to be
given by the witness. The arbitrators shall decide any disputes

and shall control the process concerning these pre-hearing discovery matters.
Pursuant to the Rules of AAA, the parties may subpoena witnesses and documents
for presentation at the hearing.

10.2.4 Case Management. Prompt resolution of any dispute is important
to both parties; and the parties agree that the arbitration of any dispute shall
be conducted expeditiously. The arbitrators are instructed and directed to
assume case management initiative and control over the arbitration process
(including scheduling of events, pre-hearing discovery and activities, and the
conduct of the hearing), in order to complete the arbitration as expeditiously
as is reasonably practical for obtaining a just resolution of the dispute.

10.2.5 Remedies. The arbitrators may grant any legal or equitable
remedy or relief that the arbitrators deem just and equitable, to the same
extent that remedies or relief could be granted by a state or federal court,
provided however, that no punitive damages may be awarded. No court action may
be maintained seeking punitive damages. The decision of any two of the three
arbitrators appointed shall be binding upon the parties.

10.2.6 Expenses. The expenses of the arbitration, including the
arbitrators' fees, expert witness fees, and attorney's fees, may be awarded to
the prevailing party, in the discretion of the arbitrators, or may be
apportioned between the parties in any manner deemed appropriate by the
arbitrators. Unless and until the arbitrators decide that one party is to pay
for all (or a share) of such expenses, both parties shall share equally in the
payment of the arbitrators' fees as and when billed by the arbitrators.

10.2.7 Confidentiality. Except as set forth below, the parties shall
keep confidential the fact of the arbitration, the dispute being arbitrated, and
the decision of the arbitrators. Notwithstanding the foregoing, the parties may
disclose information about the arbitration to persons who have a need to know,
such as directors, trustees, management employees, witnesses, experts,
investors, attorneys, lenders, insurers, and others who may be directly
affected. Additionally, if a party has stock which is publicly traded, the party
may make such disclosures as are required by applicable securities laws.
Further, if a party is expressly asked by a third party about the dispute or
the arbitration, the party may disclose and acknowledge in general and limited
terms that there is a dispute with the other party which is being (or has been)
arbitrated. Once the arbitration award has become final, if the arbitration
award is not promptly satisfied, then these confidentiality, provisions shall no
longer be applicable.

10.3 Entire Agreement: Modification. This Agreement sets forth the
entire agreement and understanding between the parties as to the subject matter
hereof. There shall be no amendments or modifications to this Agreement, except
by a written document which is signed by both parties.

10.4 California Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.

10.5 Headings. The headings for each article and section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.

10.6 Severability. Should any one or more of the provisions of this
Agreement be held invalid or unenforceable by a count of competent jurisdiction,
it shall be considered severed from this Agreement and shall not serve to
invalidate the remaining provisions thereof. The parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by them when entering this
Agreement may be realized.

10.7 No Waiver. Any delay in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.

10.8 Name. Whenever there has been an assignment or a sublicense by
Licensee as permitted by this Agreement, the term "Licensee" as used in this
Agreement shall also include and refer to, if appropriate, such assignee or
sublicensee.

10.9 Attorneys' Fees. In the event of a dispute between the parties
hereto or in the event of any default hereunder, the party prevailing in the
resolution of any such dispute or default shall be entitled to recover its
reasonable attorneys' fees and other costs incurred in connection with resolving
such dispute or default.

10.10 Notices. Any notices required by this Agreement shall be in
writing, shall specifically refer to this Agreement and shall be sent by
registered or certified airmail, postage prepaid, or by telefax, telex or cable,
charges prepaid, or by overnight courier, postage prepaid and shall be
forwarded to the respective addresses set forth below unless subsequently
changed by written notice to the other party:

For Scripps The Scripps Research Institute
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Technology Development
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇

For Licensee: Acute Therapeutics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇

Notice shall be deemed delivered upon the earlier of (i) when received, (ii)
three (3) days after deposit into the mail, or (iii) the date notice is sent via
telefax, telex or cable, (iv) the day immediately following delivery to
overnight courier (except Sunday and holidays).

10.11 Compliance with U.S. Laws. Nothing contained in this Agreement
shall require or permit Scripps or Licensee to do any act inconsistent with the
requirements of any United States law, regulation or executive order as the same
may be in effect from time to time.

IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives as of the date set forth above.

SCRIPPS: LICENSEE:

THE SCRIPPS RESEARCH INSTITUTE

By: By:

▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

Title: Senior Vice President Title:

EXHIBIT D TO THE RESEARCH AGREEMENT

Royalty Rates
[***]

[***] Confidential treatment requested.

(letterhead of The Scripps Research Institute)

February 26, 1997

▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Ph.D.
Acute Therapeutics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

VIA FEDERAL EXPRESS

Re: TSRI/Acute Therapeutics, Inc. Research Funding and Option
Agreement

Dear ▇▇▇:

This is to confirm our understanding that the commencement date for
the initial term as set forth in Section 7.1 of the above-identified
Agreement shall be changed from October 28, 1996 to March 1, 1997. Pleas
acknowledge ATI's agreement to this change by signing where indicated
below and returning one copy of this letter to my office.

Sincerely,

(sig of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

DAB:af

Agreed:

(sig of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Ph.D.)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Ph.D.

cc: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

EXHIBIT 10.23 RESEARCH FUNDING AND OPTION AGREEMENT TABLE OF CONTENTS

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