EXHIBIT 10.1
SPONSORED RESEARCH AGREEMENT
THIS AGREEMENT, effective as of the 3rd day of September, 2010, by and between
Omni Bio Operating, Inc., a corporation organized and existing under the laws of
the State of Colorado, and having a business address at 5350 S. Roslyn Street,
Suite 430, Greenwood Village, Colorado 80111 (hereinafter referred to as
“Sponsor”), and THE REGENTS OF THE UNIVERSITY OF COLORADO, a body corporate,
contracting for and on behalf of the University of Colorado Denver, a public
educational institution of the State of Colorado (hereinafter referred to as
“University”).
WITNESSETH:
WHEREAS, the Sponsor desires research services in accordance with the scope of
work described in the attached Appendix A of this Agreement; and
WHEREAS, the performance of such research services is consistent and compatible
with and beneficial to the academic role and mission of the University as an
institution of higher education;
NOW THEREFORE, in consideration of the mutual premises and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto expressly agree as follows:
Article 1 — Definitions
For purposes of this Agreement, the following terms shall have the following
meanings:

1.1  
“Project” shall mean the research services to be performed under this Agreement
as described in Appendix A hereof, under the direction and supervision of
University’s Principal Investigator (hereinafter called the “PI”).

1.2  
“Equipment” is defined as any tangible item of property with a unit cost of
$5,000 or more and an expected useful life of one year or more.

1.3  
“University Intellectual Property” shall mean individually and collectively all
inventions, improvements, and discoveries, which are conceived and/or made in
the performance of Project solely by one or more University personnel.

1.4  
The term “Know-how” shall mean all technical information, trade secrets,
devices, models, things, know-how, methods, documents, materials, and all other
confidential information related to the Project which was developed by the PI.

 

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Article 2 — Research work

2.1  
University will use its reasonable best efforts to conduct the Project in
accordance with the terms and conditions of this Agreement, and will furnish the
facilities necessary to carry out the Project.

2.2  
The Project will be carried out under the direction and supervision of
Dr. Leland Shapiro, the University designated PI.

2.3  
University does not guarantee specific results, and the Project will be
conducted only on reasonable best efforts basis.

2.4  
University will keep accurate financial and scientific records (see Article 5)
relating to the Project and will deliver records via e-mail to Sponsor or its
authorized representative on a bi-annual basis throughout the Term of the
Agreement.

Article 3 — Agreement Duration

3.1  
This agreement shall become effective on September 3, 2010 and shall terminate
the earlier of the completion of the studies or February 28, 2012, unless a
subsequent time extension, supplement, addition, continuation or renewal is
mutually agreed upon in writing between the parties.

Article 4 — Compensation

4.1  
As consideration for the performance by University of its obligations under this
Agreement, and subject to Paragraphs 4.2, 4.3 and 16.1, Sponsor agrees to pay
University a fixed-price total of Eighty Eight Thousand Dollars, ($88,000), in
accordance with the budget described in the attached Appendix B of this
Agreement. Sponsor shall remit not less than Twenty Eight Thousand Dollars
($28,000) of the total contract price on or before September 3, 2010. The
remaining amount of the contract price due under this Agreement shall be paid as
follows:

  (a)  
Thirty Thousand Dollars ($30,000.00) on or before February 01, 2011; and
    (b)  
Thirty Thousand Dollars ($30,000.00) on or before August 31, 2011.

4.2  
If this Agreement is terminated for any reason by Sponsor under Paragraph 16.1,
Sponsor shall, up to a maximum of the amount stated in Paragraph 4.1 hereof,
reimburse University for the total actual and reasonable costs incurred by
University for the Project through the date of termination, including those
costs necessary to implement the early termination of this Agreement and costs
incurred by University as a result of non-cancelable obligations which may
extend beyond the date of such termination.

 

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4.3  
If this Agreement is terminated for any reason by University under
Paragraph 16.1, Sponsor shall, subject to the provision hereafter and
Paragraph 8, reimburse University for those actual and reasonable costs in
Appendix B incurred by University for the Project through the date of
termination; provided that in no event shall such costs exceed the amount stated
in Paragraph 4.1 hereof and such costs shall not include any charges or expenses
incurred to implement the early termination or as a result of non-cancelable
obligations of the University which may extend beyond the date of such
termination. In addition, the University shall supply a final report to Sponsor
for all data, summaries, and information to date related to sponsorship of
research to date of termination and any data, summaries or information realized
after termination of sponsorship as a result of sponsorship.

4.4  
All payment checks shall be made payable to University of Colorado Denver. The
Tax I.D. Number is 84-6000555. All payment checks shall be forwarded to the
following address:

Grants and Contracts, #101470-LS
F428, P.O. Box 238
Denver, Colorado 80291-0238
Article 5 — Reporting Requirements

5.1  
University will provide reports on the progress of Project in accordance with
the following schedule:

     
Progress report
  For the periods ending every three months from the effective date of this
Agreement (with the report to be delivered within 45 days of the ending of the
period).
Final report
  Within 90 days of the termination of this Agreement

The progress report will indicate the work completed (e.g. work performed and
data in summary form and report of detailed data and raw data), and the work
(experiments) to be performed during the next reporting period, any problems
encountered and the proposed solution for each problem. Additionally, the report
will provide the relevant data collected, and whether any of the specific aims
of the work were not initiated and if so, the reason. The PI shall meet or
participate in a phone conference with the Sponsor at the University on an every
6-month basis during the course of the Project to review progress and future
activities.
Article 6 — Publications and Academic Rights

6.1  
Sponsor recognizes that because University is a public institution of higher
education and engages only in research that is compatible with its academic role
and mission, the results of University research may be publishable. Sponsor
agrees that University personnel engaged in Project shall be permitted to
present

 

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at symposia, national or regional professional meetings, and to publish in
journals, theses or dissertations, or otherwise of their own choosing, methods
and results of Project, provided, however, that Sponsor shall have been
furnished a copy of any proposed publication no later than thirty days (30 days)
prior to public distribution (which may be waived at Sponsor’s discretion) to a
journal, editor, or other third party.
  6.2  
University shall own all right, title and interest in and to any and all
copyrights or copyrightable material, including software programs, first
produced, composed, or fixed in any tangible medium of expression in the
performance of work under this Agreement, and University shall have the sole
right to determine the disposition of all or any thereof. The University agrees
to forward to Sponsor all copyright registrations.

Article 7 — Confidential Information

7.1.  
The parties may wish, from time to time, in connection with work contemplated
under this Agreement, to disclose confidential information to each other
(“Confidential Information”). Each party will use reasonable efforts to prevent
the disclosure of the other party’s Confidential Information to third parties,
other than third parties under the same or similar confidentiality requirements
as detailed in this agreement for a period of five (5) years from receipt
thereof, provided that the recipient party’s obligation hereunder shall not
apply to information that:

  a.  
is already in recipient party’s possession at the time of disclosure thereof;
    b.  
is or later becomes part of the public domain through no fault of recipient
party;
    c.  
is received from a third party having no obligations of confidentiality to
disclosing party; or
    d.  
is independently developed by the recipient party.

7.2  
In the event that information is required to be disclosed as required by law,
the party required to make disclosure shall notify the other to allow that party
to assert whatever exclusions or exemptions may be available to it under such
law or regulation. In addition, the party required to make such a disclosure
shall disclose only that information that is required by law or regulation.

7.3  
Sponsor acknowledges that University is subject to the Colorado Public Records
Act (C.R.S. §§ 24-72-201 et seq.). All Confidential Information of Sponsor shall
be treated by University as confidential, as set forth in this Article 7, to the
extent permitted under §§ 24-72-204. If University is required by Colorado
Public Records Act (C.R.S. §§ 24-72-201 et seq.) to disclose any Sponsor
Confidential Information, (i) the University will use

 

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reasonable best efforts to notify Sponsor in advance of such disclosure, and
Sponsor shall have been given the opportunity to oppose such disclosure by
University by seeking a protective order or other appropriate remedy; (ii)
University shall disclose only that portion of Confidential Information legally
required to be disclosed; and (iii) University shall exercise all reasonable
efforts to maintain the confidential treatment of Confidential Information.
  7.4  
Confidential Information shall be clearly marked by the disclosing party with
the legend, “CONFIDENTIAL INFORMATION” or another appropriate proprietary
legend. If disclosed orally, the party (not necessarily an employee) making the
disclosure shall be responsible for clearly informing the recipient’s party, in
writing within thirty (30) days, of the confidentiality of the information
disclosed or ensure that the receiving party is under non-disclosure agreement.

Article 8 — Patents and Inventions

8.1  
All rights and title and interest to University Intellectual Property and
Know-How under this Project shall belong to University, unless otherwise agreed
to between the parties (see for example Appendix C). For University Intellectual
Property that results from this Project and is new, distinct and not directly
related to previously licensed University intellectual property, the Sponsor
shall have a fully executed and paid-up, non-transferrable, non-exclusive
license with an option to negotiate for an exclusive license. For University
Intellectual Property that results from this Project and which is covered by
previously licensed University intellectual property, University shall amend the
license with Sponsor to include said University Intellectual Property for no
additional consideration other than the relevant and applicable terms of the
license.

 

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8.2  
Expenses and Control of Patent Filing, Prosecution and Maintenance. The expense
of filing, prosecuting and maintaining further patents and patent applications
directed to the Project or technology, including continuation-in-part patent
applications thereof and additional foreign filings shall be paid by Sponsor and
controlled by Sponsor. All intellectual property management will be determined
by Sponsor. (See Appendix C for royalty payment agreements regarding Graft
Rejection including diabetes treatment, as well as other licensed technologies).
Sponsor shall not be required to pay more than one royalty payment covered by
this SRA and those agreements referenced in Appendix C. In the event that
Sponsor ceases support for the preparation, prosecution or maintenance of
intellectual property as a result of the Project, and the University desires to
continue the preparation, prosecution or maintenance of such intellectual
property, University shall have the right to pursue such preparation,
prosecution or maintenance at its own expense and as such take over control of
such preparation, prosecution or maintenance. Sponsor shall notify University
within 60 days of any pending final deadline which could result in a loss of
rights. These rights include all activities pertaining to patent prosecution,
such as application preparation, office action response, filing of foreign
applications, formalities requirements to prevent abandonment and payment of
maintenance fees, if Sponsor withholds approval of any intellectual property as
a result of the Project. Patents which are obtained or maintained by University
at its own expense shall be excluded from the scope of this agreement.

8.3  
The parties mutually acknowledge that the United States government, as a matter
of statutory right under Code of Federal Regulations, 37 CFR, Part 401, “Rights
to Inventions Made by Non-Profit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements”, holds or may hold a
non-exclusive license and certain other rights under patents on inventions made
as a consequence of research whose funding includes funds supplied by the United
States government. In the event that the United States government has such
rights or in the future is found to have such rights with respect to all or any
new inventions or discoveries, any license contemplated or granted under this
Agreement, even if termed “exclusive” license, shall be understood to be subject
to the rights of the United States government, without any effect on the
parties’ remaining obligations, as set forth in the license or in this
Agreement.

8.4  
Nothing in Article 8 shall be construed as granting Sponsor expressly, by
implication, or estoppel any rights or licenses to use inventions, improvements
or discoveries not conceived and/or made in the performance of the Project,
except for those rights or licenses granted to Sponsor (see Appendix C) or under
any patents not falling under the definition of University Intellectual property
including patents, inventions and discoveries which may dominate University
Intellectual Property and which may be owned or controlled by the Regents of the
University of Colorado, the University Technology Corporation or any entity
related thereto.

 

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Article 9 — Liability, Indemnification, and Insurance

9.1  
University hereto agrees to be responsible and assume liability for its own
wrongful or negligent acts or omissions, or those of its officers, agents or
employees to the full extent allowed by law.

9.2  
Notwithstanding any other provision of this Agreement to the contrary, no term
or condition of this Agreement shall be construed or interpreted as a waiver,
either express or implied, of any of the immunities, rights, benefits or
protection provided to the Regents under governmental immunity laws from time to
time applicable to the Regents, including, without limitation, the Colorado
Governmental Immunity Act (CRS Section 24-10-101 through 24-10-120).

9.3  
Sponsor shall indemnify, save and hold harmless University, its employees and
agents, against any and all claims by third parties for damages, liability and
court awards including costs, expenses, incurred as a result of any act or
omission by the Sponsor, or its employees, agents, Subcontractors, or assignees
pursuant to the terms of this Agreement. Additionally, Colo. Rev. Stat.
Section 23-20-100 states that the Colorado Attorney General must represent the
University in all actions. Provided that any such representation arises out of
Sponsor’s indemnification obligations under this Section 9.3, Sponsor agrees to
indemnify University for the reasonable cost of the representation by the
Colorado Attorney General.

9.4  
Each party warrants and represents that it has adequate liability insurance for
the protection of itself and its officers, employees, and agents, while acting
within the scope of their employment by the party.

9.5  
No liability hereunder shall result to a party by reason of delay in performance
caused by force majeure, that is, circumstances beyond the reasonable control of
the party, including, without limitation, acts of God, fire, flood, war, civil
unrest, or shortage of or inability to obtain material as equipment.

Article 10 — Equipment

10.1  
All equipment purchased by University under the terms of this Agreement shall
become the property of University upon acquisition.

Article 11 — Independent Contractor

11.1  
In the performance of all services hereunder, neither party is authorized or
empowered to act as agent for the other for any purpose and shall not on behalf
of the other enter into any contract, warranty, or representation as to any
matter. Neither party shall be bound by the acts or conduct of the other.

 

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Article 12 — Compliance with Laws

12.1  
Each party agrees that it will comply with all applicable federal, state and
local laws, codes, regulations, rules, securities regulations and orders in the
performance and direction of the work contemplated under this Agreement.

Article 13 — Governing Law

13.1  
This Agreement shall be governed and construed in accordance with the laws of
the State of Colorado and any and all disputes arising hereunder shall be
resolved in the courts of the State of Colorado; provided, however, that any
patent question or controversy shall be resolved in the courts having
jurisdiction over the patent or patents in question and in accordance with the
laws applicable to such patent or patents.

Article 14 — Assignment

14.1  
Neither party shall assign or transfer any interest in this Agreement, nor
assign any claims for money due or to become due during this Agreement without
the prior written approval of the other party, which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, Sponsor will not breach
this agreement if it assigns this agreement to a successor in interest or
assignee of all the business or assets of the Sponsor to which this agreement
pertains and notify University of the same.

Article 15 — Use of Name

15.1  
Each party agrees not to include the name or any logotypes or symbols of the
other party or the names of any researchers at such institutions in any
advertising, sales promotion or other publicity matter without the prior written
approval of the other party. However, nothing in this Article or elsewhere in
this Agreement is intended to restrict either party from disclosing the
existence, nature, Project title, name of Sponsor and any additional matters
required by law for example securities law to be disclosed, or from including
those items of information in the routine reporting of its activities.

Article 16 — Term and Termination

16.1  
This Agreement may be terminated by either party upon written notice delivered
to the other party at least forty-five (45) days prior to the intended date of
termination. Termination of this Agreement, however effectuated, shall not
release the parties from their rights and obligations under Articles 4, 6, 8, 9,
15, and 20. Either party shall have the right, at its option, to cancel and
terminate this Agreement in the event that the other party shall become involved
in insolvency, dissolution, bankruptcy or receivership proceedings affecting the
operation of its business or in the event that the other party shall discontinue
its business for any reason.

 

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16.2  
The failure of Sponsor to make the required payments to the University as
outlined in Article 4 and Appendix B, within thirty (30) calendar days after
such payments are due shall constitute a default of this Agreement by Sponsor
and University shall notify Sponsor of the same. A default by Sponsor shall
relieve the University, at its choice, of any and all of its obligations or
duties under this Agreement and shall also divest Sponsor of all of its rights
under this Agreement. However, Sponsor default of this Agreement shall not
relieve Sponsor of its obligations under this Agreement, including but not
limited to its obligations to pay the University plus eight percent (8%)
interest. By exercising its rights under this default provision, the University
does not waive any rights it may have to pursue and collect unpaid monies owed
to the University by Sponsor under this Agreement. Furthermore, should the
University prevail in its pursuit of unpaid monies from Sponsor, the parties
agree that Sponsor will be responsible for all of the University’s collection
costs, and court fees associated with pursuing such action.

Article 17 — Changes, Modifications, and Amendments

17.1  
This Agreement constitutes the entire agreement between the parties. Neither
party shall be bound by any agreement, covenants or warranties made by its
agents or employees, or any other persons, either oral or written, unless such
agreements, covenants and warranties shall be reduced to writing and signed by
the authorized officer of such party and shall expressly refer to this Research
Agreement. The failure of either of the parties at any time or times to require
performance by the other of any provisions hereof shall in no manner affect the
right of the first-mentioned party thereafter to enforce the same. The waiver by
either of the parties of any breach of any provision hereof shall never be
construed to be a waiver of any succeeding breach of such provision or a waiver
of the provisions itself.

17.2  
If any provision of this Agreement is judicially determined to be void or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain in full force and effect. Either
party may request that a provision otherwise void or unenforceable be reformed
so as to be valid and enforceable to the maximum extent permitted by law.

 

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Article 18 — Notices

18.1  
All notices required by this Agreement shall be by written instrument executed
by the parties hereto and shall be directed to the following individuals:

         
For the University:
  Original to:   Leland Shapiro, M.D., F.A.C.P.
 
      Associate Professor of Medicine
 
      Denver Veterans Affairs Medical Center
 
      1055 Clermont Street, Box 111L
 
      Denver, CO 80220
 
       
 
      (303) 399-8020 (X2837)
 
      (303) 393-4692
 
       
 
  Copy to:   Harlan L. Ray
 
      Contracts Manager
 
      Grants and Contracts, MS F-428
 
      Anschutz Medical Campus, Building 500
 
      P.O. Box 6508
 
      Aurora, CO 80045-0508
 
      303-724-0090
 
      303-724-0814 (fax)
 
       
For Sponsor:
  Original to:   Edward C. Larkin
 
      Chief Operating Officer
 
      Omni Bio Pharmaceutical, Inc
 
      5350 South Roslyn, Suite 430
 
      Greenwood Village, CO 80111
 
      (303)-867-3415
 
      (303)-867-3416 (fax)
 
       
 
  Copy to:   Roberta J. Hanson
 
      Faegre & Benson, LLP
 
      1700 Lincoln Street
 
      Suite 3200
 
      Denver, CO 80203
 
      (303)-607-3766
 
      (303)-607-3600

Article 19 — Order of Precedence

19.1  
In the event of any inconsistency between this Agreement and any other
attachments or documents, this Agreement shall control.

 

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INTENTIONALLY LEFT BLANK

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date set forth herein by their duly authorized representatives.

                  Omni Bio Operating, Inc.   THE REGENTS OF THE UNIVERSITY OF
COLORADO, a body corporate, contracting for and on behalf of the University of
Colorado Denver    
 
               
By:
      By:        
 
               
Name:
      Name:        
 
               
Title:
      Title:        
 
               
Date:
      Date:        
 
               
 
                        Principal Investigator    
 
               
 
      By:        
 
               
 
      Name:   Leland Shapiro    
 
      Title:   Associate Professor of Medicines    
 
      Date:        
 
               

 

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Appendix A
RESEARCH PROPOSAL FOR OMNI BIO OPERATING, INC.
Proposed studies:
Background.
The goal of this project is to study the effects of an abundant human blood
protein, alpha-1-antitrypsin (AAT), on cytokine production by human pancreatic
islet cells, and the ability of AAT to protect these cells from induced
toxicity. These in vitro experiments are designed to model the destruction of
human islet cell commonly observed in Type 1 Diabetes and determine if AAT will
protect these islet cells from induced toxicity. Our laboratory will collaborate
with Dr. Subbiah Pugazenthi at the VA Medical Center in Denver, who regularly
procures human pancreatic islet cells from a donor bank consortium. We will also
assess the effects of synthetic serine protease inhibitors, heat-inactivated
AAT, and other candidate molecules for protective effects on human islet cells
in the laboratory. Various techniques will be used to evaluate the effects of
AAT on islet viability (toxicity), as well as intracellular cytokine production
and intracellular transduction events.
A. Proposed Work for in vitro Experiments
Several distinct studies will be performed to examine whether AAT protects islet
cells, and the mechanism by which AAT protection occurs.

1.  
Does AAT affect cytokine production from stimulated human islet cell cultures?
Human islet cells will be stimulated with Cytomix, a mixture of pro-inflammatory
cytokines including TNFa, IFNg, and IL-1b. Cytomix will also be added to cell
cultures that are co-cultured with up to 2 mg/mL AAT. Synthetic serine protease
inhibitors and heat-inactivated AAT will also be tested for effects on cytokine
production. Culture supernatants from cells incubated up to 48hr will be
analyzed for cytokine production using Quansys multiplex ELISA analyses. In
related experiments, similarly treated cells may also be analyzed for
intracellular cytokine production using flow cytometry.
  2.  
Does AAT protect human islet cell cultures from induced toxicity?
     
The islet cell destruction observed in Type 1 Diabetes can be simulated in in
vitro experiments by the addition of Streptozotocin (5 mM) to islet cell
cultures, with Streptozotocin-induced cell death expected after approximately 48
hr of incubation. We will treat human islet cells with up to 2 mg/mL AAT in the
absence or presence of Streptozotocin. Synthetic serine protease inhibitors and
heat-inactivated AAT will also be tested for effects on toxicity. Cell-free
supernatants will be collected at various time points and evaluated for cell
toxicity using a lactate dehydrogenase (LDH) toxicity assay.
  3.  
How does AAT affect apoptosis?
     
In Type I diabetes, islet cells are presumably destroyed by programmed cell
death (apoptosis). There are several signaling pathways which, upon induction,
ultimately lead to apoptosis. To examine the mechanism by which AAT may protect
islet cells from induced apoptosis, human islet cells will be incubated with
Streptozotocin in the presence or absence of AAT. Cells will be collected at
various time points and lysates examined by Western blot analysis. Several
proteins important for apoptotic pathways will be analyzed, including activated
(cleaved) Caspase 3, Caspase 7, and PARP, and phosphorylated STAT-1. Cells may
also be examined using flow cytometry for progression of apoptosis.

 

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Appendix B
Funding allocation table:

          Item   US Dollars  
Salary support for Professional research assistant
       
-Base salary
    33,000  
-Benefits (30%)
    11,000  
 
       
AAT + stimuli/reagents
    7,000  
 
       
Islet cell procurement costs for in vitro studies in collaboration with
Dr. Subbiah Pugazenthi
    7,500  
 
       
Islet cell cytokine measurements + Western blot analyses + flow cytometry for
intracellular cytokines and analysis of viability/intracellular signaling.
    11,341  
 
       
Total direct costs
    69,841  
 
     
Indirect costs (26%)
    18,159  
 
     
Total funding
    88,000  
 
     

 

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Appendix C
1) Executed license agreement of 2008 directed to Graft Rejection/Islet cell
transplant
2) Executed license agreement of 2006 directed to Bacterial Infections,
3) Executed license agreement revised in 2008 directed to Viral Infections,
Actin-mediated conditions and Compositions having no significant serine protease
inhibitor activity (see Appendix B of license agreement)

 

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Appendix D
Letter Dated June 03, 2003 regarding Transfer of U.S. Patent Application
No. 09/518,081, entitled “Methods and Compositions Useful for Inhibiting
Apoptosis” (CUTTO File 9023H) from the University of Colorado Technology
Transfer Office to Dr. Leland Shapiro

 

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