EXHIBIT 10.1
                                                 REDACTED COPY

 
LICENSE AGREEMENT

by and between:

Johnson & Johnson Consumer and Personal Products Worldwide,
a division of Johnson & Johnson Consumer Companies, Inc.

199 Grandview Drive
Skillman, New Jersey

and

Quick-Med Technologies, Inc.

902 NW 4th Street
Gainesville, Florida

WHEREAS, Johnson & Johnson Consumer and Personal Products Worldwide, a division
of Johnson & Johnson Consumer Companies, Inc. (hereinafter "JJCPWW") has an
established business and intellectual property relating to wound *****;

WHEREAS, Quick-Med Technologies, Inc. (LICENSOR) owns and or has exclusive
licenses in patents and patent applications related to bactericidal absorbent
wound dressings as set forth herein,

WHEREAS, Quick-Med Technologies, Inc. and University of Florida Research
Foundation Inc. (hereinafter UFRI) have entered into the Amended and Restated
Exclusive Agreement made effective as of the 21st day of November, 2002,
(hereinafter “UFRI Agreement”) and Quick-Med Technologies, Inc. is the exclusive
licensee, with the right to grant sublicenses to third parties, under Licensed
Patents as set forth herein,

WHEREAS, JJCPWW and LICENSOR desire to enter into this exclusive License
Agreement (hereinafter “Agreement”) under terms and conditions including those
set forth herein below;

NOW, THEREFORE, in consideration of the premises and of the mutual promises and
covenants herein contained, the parties hereto agree as follows:

1.  Definitions:  The following terms, when used with initial capital letters,
shall have the meanings set forth below:
1.1           "Affiliate" shall mean any entity that directly or indirectly
controls, is controlled by, or is under common control with JJCPWW, and for such
purpose "control" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the entity,
whether through the ownership of voting securities, by contract or otherwise.

***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 
-1-

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

 

1.2           "Calendar Quarter" shall mean the usual and customary JJCPWW
calendar quarter, used for internal accounting purposes, of approximately three
(3) months, in which each of the first two months consist of four weeks and the
third month consists of five weeks.

1.3           “Combination Product” shall mean any Licensed Product which is
incorporated into or packaged with any product which is not a Licensed Product.

1.4           “Commercial Sale” shall mean an arms-length transaction and
shipment by JJCPWW, its Affiliates or its sublicensees of a Licensed Product to
an unaffiliated third party.

1.5           “Effective Date” shall mean the date of the last signature set
forth below.

1.6           “Earned Royalty” shall mean the royalty based on Net Sales of the
Licensed Product as set forth in Article 3.6 of this Agreement.

1.7           “First Commercial Sale” shall mean, with respect to any Licensed
Product, the date on which JJCPWW makes its initial Commercial Sale of such
Licensed Product in the Field within the Territory.

1.8           “Intellectual Property” shall mean know-how, Inventions, products,
whether patentable or not, improvements, ideas, proprietary information,
technology and patents, including any and all provisionals, divisions,
continuations, continuations in part, extensions, substitutions, renewals,
registrations, revalidations, reissues or additions, including supplementary
certificates of protection of or to any of the aforesaid patents.

1.9           “Inventions” shall mean any and all works, ideas, designs,
concepts, inventions or improvements.

1.10           “LICENSOR Intellectual Property” shall mean a) all LICENSOR
proprietary Intellectual Property related to or useful in the Licensed Field, b)
any other patent which LICENSOR owns or is empowered to grant a license to
JJCPWW prior to or during the term of this Agreement, the practice of which is
reasonably necessary for JJCPWW to make, have made, use or sell Licensed Product
in the Licensed Field; and c) any other know-how, processes, technical
information, and data, in the possession of LICENSOR prior to or during the Term
of this Agreement, which relates to and may be reasonably necessary in the
commercial practice of, or developed to the stage where it would be reasonably
necessary in the commercial practice of Licensed Product in the Licensed Field.

1.11           “Licensed Field” shall mean Consumer HealthCare  ***** that do
not require a prescription for purchase in the United States of America or
Canada, the sale of which is limited to retail markets and expressly excludes
sale to the institutional healthcare markets, including without limitation,
*****.

1.12           “Licensed Patent Applications” shall include those patent
applications identified in Appendix A and shall further include all
continuations, continuations-in-part, divisions, renewals, reissues,
reexaminations, and extensions  within the Territory related
thereto.  Furthermore, Licensed Patent Applications shall also include each
patent application which LICENSOR owns or is empowered to grant a license to
JJCPWW prior to or during the term of this Agreement, the practice of which is
reasonably necessary for JJCPWW to make, have made, use, sell, offer to sell,
import or otherwise dispose of a Licensed Product within the Territory.

1.13           “Licensed Patents” shall include those patents, patents of
addition and patents of importation within the Territory which relate to and/or
claim priority to Licensed Patent Applications. Furthermore, Licensed Patents
shall also include each patent which LICENSOR owns or is empowered to grant a
license to JJCPWW prior to or during the term of this Agreement, the practice of
which is reasonably necessary for JJCPWW to make, have made, use, sell, offer to
sell, import or otherwise dispose of a Licensed Product within the Territory.
 
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
 
-2-

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

 

 
1.14           “Licensed Intellectual Property" shall include Licensor
Intellectual Property, Licensed Patent Applications and Licensed Patents.

1.15           “Licensed Product(s)” shall ***** , which, but for the licenses
granted under this Agreement, the manufacture, use, sale, offer for sale,
importation or development would (a) infringe at least one Valid Claim of a
Licensed Patent in the Territory, or (b) fall within the scope of at least one
claim of a Licensed Patent Application, as that scope would reasonably be
construed by a court or other governmental agency of competent jurisdiction.

1.16           “Net Sales” is the amount billed which JJCPWW and/or its
Affiliates actually collect from the sale of the Licensed Product to an
unaffiliated third party, less the following amounts:  (i) discounts, including
cash discounts, or rebates actually allowed or granted, (ii) trade allowances,
(iii) credits or allowances actually granted upon claims or returns regardless
of the party requesting the return, (iv) freight charges paid for delivery, and
(v) taxes or other governmental charges levied on or measured by the invoiced
amount whether absorbed by the billing or the billed party.

1.17           “Stand-alone Licensed Product” shall mean any Licensed Product
that is sold and/or packaged independent of any other product.

1.18            “Territory” shall mean the United States of America and Canada.

1.19           “Valid Claim” is a bona fide, unexpired issued claim of  Licensed
Patent which has not been held invalid or unenforceable by a decision of a court
or other governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, and which has not been admitted
to be invalid.

2.           License and Right of First Offer Grant:
2.1           Subject to the terms and conditions of this Agreement, LICENSOR
grants JJCPWW an exclusive, royalty-bearing license under the LICENSOR
Intellectual Property to make, have made, develop, use, sell, offer for sale,
import or otherwise dispose of, Licensed Product in the Licensed Field, within
the Territory.

2.2           JJCPWW shall have the right to grant sublicenses under this
Agreement to its Affiliates and to third parties for the purpose of
manufacturing Licensed Products for JJCPWW.

2.3           For the avoidance of doubt, under the UFRI Agreement, the UFRI has
reserved the right to have any non-profit research institution use materials
covered under the Licensed Patents solely for their non-commercial educational
and research purposes to meet all applicable governmental requirements governing
the ability to transfer such materials. The licenses granted to JJCPWW, and any
sublicenses that JJCPWW may grant under this Article 2, are and shall be
expressly made subject to those rights reserved by the UFRI under the UFRI
Agreement.

2.4           LICENSOR grants JJCPWW the right of first offer to expand the
Territory of the Agreement.

2.4(a)                 Prior to offering a third party any licenses under the
Licensed Patents in the Field outside of the Territory, LICENSOR shall provide
JJCPWW written notice of its willingness to offer such third party such license,
such notice to be provided at least ninety (90) days prior to offering such
license to such third party. Should JJCPWW elect to expand the Territory upon
receipt of notice by LICENSOR, JJCPWW shall provide LICENSOR with written notice
of its desire to expand the Territory, such notice to be provided not later than
sixty (60) days from receipt of LICENSOR’S notice, at which time the Territory
will be expanded by amendment of this Agreement pursuant to Article 15.8 of this
Agreement.

2.4(b)                 Should JJCPWW, at its sole discretion, elect to expand
the Territory prior to receiving a notice from LICENSOR under Article 2.4(a),
JJCPWW shall provide LICENSOR with written notice of its desire to expand the
Territory, such notice to be provided at least sixty (60) days prior to the date
upon which JJCPWW desires to have the Territory expanded, at which time the
Territory will be expanded by amendment of this Agreement pursuant to Article
15.8 of this Agreement.
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
 
-3-

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

 
 
2.5           Intellectual Property owned by JJCPWW prior to the Effective Date
of this Agreement, or developed solely by JJCPWW subsequent to the Effective
Date of this Agreement, shall remain the sole property of JJCPWW and LICENSOR is
not granted any rights with respect to such Intellectual Property, nor shall
this Agreement be construed in any way to grant any rights to LICENSOR with
respect to such Intellectual Property.

2.6           Other than the express licenses granted to JJCPWW by this
Agreement, JJCPWW is not granted any rights with respect to Intellectual
Property owned by or under control of LICENSOR, nor shall this Agreement be
construed in any way to grant any rights to JJCPWW with respect to such
Intellectual Property.

2.7           It is understood that as of the Effective Date of this Agreement,
the United States Government (through any of its agencies or otherwise) has not
funded research during the course of or under which any of the inventions of the
Licensed Patents were conceived or made, but that it may do so in the future. If
such funding occurs, the United States Government is entitled, as a right, under
the provisions of 35 U.S.C. Sections 202-212 and applicable regulations of Title
37 of the Code of Federal Regulations, to a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced the inventions of
such Licensed Patents for governmental purposes. The license granted under this
Agreement and any sublicense granted by JJCPWW shall be subject to such right.

2.8           In the event that LICENSOR or the UFRI are to receive any
governmental funds that would provide the United States Government with rights
under 35 U.S.C. Sections 202-212 and applicable regulations of Title 37 of the
Code of Federal Regulations, as provided in Article 2.7 of this Agreement,
LICENSOR shall provide JJCPWW with written notice of such funding at least
ninety (90) days prior to the receipt by either LICENSOR or UFRI of such funds.

3.           Milestone and Licensing Fees:
3.1           In consideration for the execution of this Agreement and for the
exclusive license granted under Article 2 herein, JJCPWW shall pay LICENSOR the
non-refundable, non-creditable sum of  *****.

3.2           Upon issuance of the first Licensed Patent within the Territory
containing ***** which, but for the licenses granted to JJCPWW under this
Agreement, would be infringed by the manufacture, use, sale, offer for sale,
importation or development of a Licensed Product, JJCPWW shall pay LICENSOR the
non-refundable, non-creditable sum of *****. For the avoidance of doubt, this
milestone payment shall be only for the first Licensed Patent issued and no
additional payments shall be due for any Licensed Patents issued subsequent to
issuance of the first Licensed Patent.

3.3           Upon the First Commercial Sale of a License Product in the
Licensed Field within the Territory, not later than sixty (60) days after the
date of the first shipment by or on behalf of JJCPWW to an unaffiliated party of
such Licensed Product, JJCPWW shall pay to LICENSOR the non-refundable sum of
*****; provided that, such payment shall be fully creditable towards Earned
Royalties as set forth in Article 3.6 below.

3.4           If the First Commercial Sale of a Licensed Product in the Licensed
Field in the Territory does not occur by *****, JJCPWW shall pay to LICENSOR not
later than *****, the non-refundable sum of *****; provided that, such payment
shall be fully creditable towards Earned Royalties as set forth in Article 3.6
below.

3.5           If the First Commercial Sale of  ***** constituting a Licensed
Product in the Licensed Field within the Territory has not occurred by *****,
JJCPWW shall pay to LICENSOR not later than *****, the non-refundable sum
of  ***** in order to maintain the exclusive license granted under Article 2 of
this Agreement with respect to *****; provided that, such payment shall be fully
creditable towards Earned Royalties as set forth below in Article 3.6. Should
JJCPWW elect, at its sole discretion, not to pay the sum of  ***** as provided
in this Article 3.5, LICENSOR shall have the right, at its sole discretion,
either to convert the license with respect to  ***** to non-exclusive, or to
terminate the license with respect to *****, by providing JJCPWW with written
notice not later than *****.  Termination or conversion of the license to
non-exclusive shall be effective upon receipt by JJCPWW of LICENSOR’S written
notice. Should LICENSOR elect to convert the license with respect to ***** to
non-exclusive, the Earned Royalties due under Article 3.6 below with respect to
***** shall be reduced by *****.  For the avoidance of doubt, failure to make
the First Commercial Sale of  ***** or payment of the ***** under this Article
3.5 shall not convert the exclusive license with respect to ***** to a
non-exclusive license and Earned Royalties shall not be reduced by ***** with
respect to *****.
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-4-

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

 
 
 
    3.6           Earned Royalty Payments:  In further consideration for the
license granted to JJCPWW under Article 2 herein, for the term of this Agreement
JJCPWW shall pay LICENSOR, on a quarterly basis pursuant to Article 3.7 below,
an Earned Royalty based on Net Sales of the Licensed Product as set forth in
this Article 3.6.  Furthermore, no multiple Earned Royalties shall be payable
because the Licensed Product is covered by more than one of the Licensed
Patents. Prior to payment of Earned Royalties under this Article 3.6, any fees
paid by JJCPWW under Articles 3.3, 3.4 or 3.5 shall be fully credited against
any such Earned Royalties.

3.6(a)           Royalty Payment Rate:
3.6(a)(i)  JJCPWW shall pay to LICENSOR a royalty of  ***** percent of the first
***** of combined Net Sales of Stand-alone Products and the prorated share of
the Net Sales of Combination Products in any calendar year.

3.6(a)(ii)  JJCPWW shall pay to LICENSOR a royalty of  ***** percent of the
combined Net Sales of Stand-alone Licensed Products and the prorated share of
the Net Sales of Combination Licensed Products in excess of  ***** of combined
Net Sales in any calendar year.

3.6(b)           Combination Products:  Total Net Sales of Combination Products
shall be prorated prior to calculation of royalty payments to reflect the actual
amount of Net Sales of Combination Products attributable to the Licensed
Product. For example, if total Net Sales of Combination Products is one-million
dollars ($1,000,000.00) and the amount of such Net Sales of the Combination
Product attributable to the Licensed Product utilized in the Combination Product
is five-hundred thousand dollars ($500,000.00), the royalty payment due will be
based upon a prorated Net Sales of five-hundred thousand dollars ($500,000.00).

3.7         Payment Terms:  All royalty payments are due not later than the
sixtieth (60th) day following the end of each Calendar Quarter. All payments
will be made to LICENSOR within ten (10) business days of their due date and
will be made via wire transfer or company check as determined by JJCPWW, unless
specified otherwise.

3.8         Minimum Royalties and Net Sales:  The parties acknowledge that there
are ***** royalties required to be paid by JJCPWW to LICENSOR in order to
maintain the exclusivity of the rights granted under this Agreement; provided
only that, should Net Sales of Licensed Products in any calendar year following
the first full calendar year following the First Commercial Sale of Licensed
Product in the Licensed Field within the Territory fail to reach *****, LICENSOR
shall have the right to notify JJCPWW of its intent to convert the exclusive
license granted under this Agreement to a non-exclusive license. LICENSOR shall
provide JJCPWW written notice of its intent to convert the exclusive license to
non-exclusive, such notice to be provided not later than sixty (60) days after
receipt of JJCPWW’s written report of Net Sales of the Licensed Product at the
end of any calendar year following the first full calendar year following the
First Commercial Sale of Licensed Product in the Licensed Field in the
Territory. Should LICENSOR notify JJCPWW of its intent to convert the exclusive
license to a non-exclusive license under this Article 3.8, JJCPWW shall have the
right, at its sole discretion, to pay any deficit between Earned Royalties
accrued for actual Net Sales in any such calendar year and Earned Royalties
payable on Net Sales of *****, such payment to be made not later than ninety
(90) days from receipt of notice from LICENSOR. Should LICENSOR fail to provide
JJCPWW written notice of its intent to convert the exclusive license to
non-exclusive within such sixty (60) day period, the license shall remain
exclusive throughout the remainder of the respective calendar year. Should
LICENSOR provide written notice within the sixty (60) day period in any
respective calendar year following the first full calendar year following the
First Commercial Sale of Licensed Product in the Licensed Field in the Territory
of its intent to convert the exclusive license to non-exclusive, and should
JJCPWW elect not to pay the deficit of Earned Royalties as described in this
Article 3.8, then LICENSOR shall have the right to convert the exclusive license
to non-exclusive, in which case, Earned Royalties due under Article 3.6 of this
Agreement shall be reduced by *****.

      3.9           Technical Support Assistance by LICENSOR: Upon prior mutual
agreement of the parties, LICENSOR shall provide, and JJCPWW shall fund, certain
technical support assistance activities in conjunction with the development of
Licensed Products in the Field within the Territory. Prior to initiation of any
technical support assistance, the nature, scope and funding of such technical
support assistance must be agreed upon in writing by the parties and set forth
in a formal agreement executed by a duly authorized representative of each
party.
 
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-5-

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

 
 
4.           Reduction or Suspension of Royalty Payments:
4.1         If upon the fourth anniversary of the Effective Date of this
Agreement Licensed Intellectual Property does not include  ***** within the
Territory containing  ***** covering the manufacture, use or sale of a Licensed
Product(s), but Licensed Intellectual Property includes ***** within the
Territory containing at least *****, the scope of which would reasonably be
construed by a court or other governmental agency of competent jurisdiction to
cover the manufacture, use or sale of a Licensed Product, JJCPWW shall have the
right to withhold  ***** of Earned Royalty payments due pursuant to Article 3.6
of this Agreement with respect to the Licensed Product(s) sold in such country
and to maintain such withheld payments in escrow. JJCPWW shall be obligated to
pay the remaining ***** of Earned Royalty payments as set forth in Article 3.6
of this Agreement.

4.2  If upon the fifth anniversary of the Effective Date of this Agreement
Licensed Intellectual Property does not include  ***** within the Territory
containing ***** covering the manufacture, use or sale of a Licensed Product(s),
(a) JJCPWW’s Earned Royalty payments in such country with respect to the
Licensed Product(s) will be suspended until such time as ***** within the
Territory containing  ***** covering the manufacture, use or sale of a Licensed
Product(s) is issued, at which time JJCPWW’s obligation to make Earned Royalty
pursuant to Article 3.6 of this Agreement shall be reinstated, and (b) payments
held in escrow pursuant to Article 4.1 shall be released to JJCPWW and LICENSOR
shall have no rights to receive such escrowed payments.

4.3      If at any time during the term of this Agreement Licensed Intellectual
Property does not include either  ***** containing ***** covering the
manufacture, use or sale of a Licensed Product(s), or a Licensed Patent
Application within the Territory containing at least *****, the scope of which
would reasonably be construed by a court or other governmental agency of
competent jurisdiction to cover the manufacture, use or sale of a Licensed
Product, (a) JJCPWW’s obligation to make Earned Royalty payments in such country
with respect to the Licensed Product(s) shall be suspended and (b) payments held
in escrow pursuant to Article 4.1 shall be released to JJCPWW and LICENSOR shall
have no rights to receive such escrowed payments.

4.4         For the avoidance of doubt, suspension of JJCPWW’s obligation to pay
Earned Royalties pursuant to Articles 4.2 or 4.3 shall not suspend or otherwise
terminate any of the rights or licenses granted to JJCPWW in Licensed
Intellectual Property under this Agreement, further provided that; should all of
the Licensed Patents and License Patent Applications expire, become abandoned or
be held invalid or unenforceable by a decision of a court or other governmental
agency of competent jurisdiction that is unappealable or unappealed within the
time allowed for appeal, JJCPWW shall be granted a perpetual, royalty-free right
and license within the Territory to utilize LICENSOR Intellectual Property to
make, have made, develop, use, sell, offer for sale, import or otherwise dispose
of products.

4.5           Notwithstanding Article 3.6 above, in the event JJCPWW determines
that it must make royalty or other payments to one or more unaffiliated third
parties in connection with any licenses or agreements entered into by JJCPWW
subsequent to the Effective Date of this Agreement in order for JJCPWW to make,
have made, develop, use, sell, offer for sale, import or otherwise dispose of,
Licensed Product in the Licensed Field, within the Territory, JJCPWW shall be
entitled to a reduction in Earned Royalties payable to LICENSOR equal to any
such unaffiliated third-party royalty actually paid, but in no event to a rate
of less than ***** of the normal rates as described in Article 3.6 above.

4.6           If (a) a court or other governmental agency of competent
jurisdiction renders an appealable decision ruling that each of the contested or
reexamined claims of any of the Licensed Patents covering a Licensed Product is
invalid or unenforceable, and the decision is appealed, and (b) no other
Licensed Patent contains a Valid Claim covering a Licensed Product, and (c) no
other Licensed Patent Application within the Territory contains at least one
claim, the scope of which would reasonably be construed by a court or other
governmental agency of competent jurisdiction to cover the manufacture, use or
sale of a Licensed Product, then JJCPWW shall have the right to place Earned
Royalties due in an interest-bearing escrow account during the pendency of
appeal.  If, on appeal, the decision is reversed, then LICENSOR shall be
entitled to all monies placed in such escrow account, together with accrued
interest thereon.  If the appellate court or other appropriate body affirms the
invalidity decision of the lower court or governmental agency, or if a timely
appeal from such decision is not or cannot be filed, then JJCPWW shall
thereafter have a fully paid-up license and shall be entitled to all monies
placed in the escrow account, together with accrued interest thereon.

4.7         If LICENSOR, or a third party to whom LICENSOR has granted any
rights or licenses permitting a third party to sell Licensed Products within the
Field and within the Territory, including without limitation rights under  *****
and *****, and any patent that may be issued in the Territory with respect to
all continuations, continuations-in-part, divisions, renewals, reissues,
reexaminations, and extensions thereof, sells or uses, or causes to be sold or
used, Licensed Products in the Licensed Field in the Territory, in addition to
any remedies or relief provided for under this Agreement for breach of contract,
JJCPWW’s obligation with respect to Earned Royalty payments under this Agreement
shall be terminated and JJCPWW shall be granted a perpetual, royalty-free right
and license within the Territory to utilize Licensed Intellectual Property to
make, have made, develop, use, sell, offer for sale, import or otherwise dispose
of products.
 
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-6-

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

 
 
5.           JJCPWW Record Keeping and Reports:
5.1         JJCPWW shall keep accurate books and records of the Net Sales of the
Licensed Product, and of all payments due LICENSOR hereunder.  JJCPWW shall
deliver to LICENSOR written reports of Net Sales of the Licensed Product during
the preceding Calendar Quarter, on or before the sixtieth day following the end
of each Calendar Quarter.  Such report shall include a calculation of the Earned
Royalty due and, subject to the provisions of Articles 6.1, 11.2 and 16.2, shall
be accompanied by the monies due.  The Earned Royalty payable on Net Sales of
the Licensed Product outside the U.S. shall be estimated for each Calendar
Quarter, and adjusted at the end of each Calendar Year to reflect actual Net
Sales and the Earned Royalty payable thereon.

5.2           LICENSOR shall have the right after thirty (30) days advance
written notice to JJCPWW, at its own expense, to nominate an independent
accountant acceptable to and approved by JJCPWW (which approval shall not be
unreasonably withheld) who shall have access to JJCPWW’s records during
reasonable business hours for the sole purpose of verifying the royalties
payable as provided for in this Agreement for the preceding calendar year, but
this right may not be exercised more than once in any calendar year.  LICENSOR
shall solicit or receive only information relating solely to the accuracy of the
royalty report and the royalty payments made according to this
Agreement.  JJCPWW shall be entitled to withhold approval of an accountant which
LICENSOR nominates unless the accountant shall agree to sign a confidentiality
agreement with JJCPWW which shall obligate such accountant to hold the
information it receives from JJCPWW in confidence, except for information
necessary for disclosure to LICENSOR to establish the accuracy of the royalty
reports.  If the audit reveals a discrepancy on the accounting exceeding 5%,
JJCPWW shall pay for the cost of the independent audit, subject to reasonable
substantiation thereof (i.e., cost and discrepancy).

6.           Currency and Royalty Transfer:   Earned Royalties based on sales in
any country shall be paid in United States Dollars.  The rate of exchange for
such payments from sales in a foreign country shall be the same rate as that
used for internal JJCPWW financial accounting purposes, in accordance with
generally accepted accounting principles, as reported in JJCPWW’s books.  The
payment of Earned Royalties shall be made payable to LICENSOR and sent to the
address set forth for LICENSOR in Article 12.3 of this Agreement.

7.           Assignment:   JJCPWW may assign this Agreement or any rights and
obligations contemplated herein to an Affiliate of JJCPWW, or to a company
acquiring substantially all of the assets of JJCPWW to which this Agreement
relates as a result of a merger, acquisition or business reorganization, or to a
third party in the event that all or substantially all of the assets of JJCPWW
are transferred as a result of a merger, acquisition or business reorganization,
without the consent of LICENSOR, upon giving thirty (30) day prior written
notice thereof to LICENSOR.  Any such assignment shall be subject to the terms
of this Agreement.  In all other instances, neither party shall assign this
Agreement, any portion thereof or any rights granted hereunder without the prior
written consent of the other party.  Subject to the foregoing, this Agreement
shall bind and inure to the benefit of the respective parties hereto, and their
respective heirs, officers, directors, representatives, agents, successors,
assigns, distributors, suppliers, vendors and customers.

8.           Enforcement:
8.1           In the event either party to this Agreement becomes aware or gains
knowledge of any activity by a third party to this Agreement which may be
reasonably construed as constituting an infringement of a Valid Claim in a
License Patent in the Field, such party shall notify the other party of such
activity within sixty (60) days of becoming aware of such activity.

8.2           LICENSOR shall have the right, but not the obligation, to commence
legal action at its own expense to defend or prosecute infringements relating to
the Licensed Patents in the Field.  Any settlement, consent judgment or other
voluntary final disposition of the suit may be entered into with the consent of
JJCPWW, which consent shall not be unreasonably withheld or delayed.  The total
cost of any action commenced solely by LICENSOR shall be borne by LICENSOR, and
LICENSOR shall retain any recovery or damages derived therefrom.

8.3           Should LICENSOR fail to successfully defend or prosecute
infringements according to Article 8.2, or enter into a settlement, consent
judgment or other voluntary disposition of suit, whereby a third party is
permitted to practice under a License Patent, JJCPWW shall be entitled to reduce
Earned Royalty payments to an amount equivalent to any royalty payment required
to be paid by a third party, or terminate Earned Royalty payments in the event
no payments are required to be paid by a third party.

8.4           In the event LICENSOR elects not to commence legal action as
provided in Article 8.2 within ninety (90) days of receiving or providing notice
of third party activity according to Article 8.1, JJCPWW shall have the option,
at its sole discretion, and the right, but not the obligation, at its sole
expense and with counsel of its own choice, to enforce the Licensed Patents
against any infringer, including the right to file suit for patent infringement
naming LICENSOR as a party, and the right to settle such suit with LICENSOR’s
consent, which consent shall not be unreasonably withheld or delayed; or to
suspend Earned Royalty payments until such time as LICENSOR commences legal
action.  LICENSOR shall permit the use of its name in all such suits, sign all
necessary papers, and do all reasonable things necessary, at JJCPWW’s expense,
to facilitate the prosecution of such infringement suits.  JJCPWW shall incur no
liability to LICENSOR as a consequence of such litigation, the conduct of such
litigation or any unfavorable decision resulting from it, including any decision
holding any of the Licensed Patents invalid or unenforceable.
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-7-

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

 
 
 
    8.5           If JJCPWW undertakes the enforcement or defense of the
Licensed Patents by litigation, JJCPWW may withhold up to ***** of the Earned
Royalties otherwise thereafter due LICENSOR under Article 3.6 above and apply
this withheld amount toward reimbursement of its expenses, including reasonable
in-house and outside counsel attorneys’ fees, in connection with such
litigation.  Any recovery of damages by JJCPWW for any such suit shall be
applied first in satisfaction of any unreimbursed expenses and legal fees of
JJCPWW relating to the suit, and next toward reimbursement of LICENSOR for any
royalties withheld pursuant to this Article 8.5.  JJCPWW and LICENSOR shall
share in equal amounts the balance remaining from any recoveries, by way of
judgment, award, decree or settlement resulting from such suit.

8.6           In the event JJCPWW contests the validity of any Licensed Patents,
JJCPWW shall continue to pay Earned Royalties and make other payments pursuant
to this Agreement with respect to that License Patent as if such contest were
not underway until the Licensed Patent is adjudicated invalid or unenforceable
by a court of last resort.

9.           Patent Prosecution and Maintenance:
9.1           LICENSOR is solely responsible for the continued prosecution of
any pending patent applications included in the Licensed Patents, as well as the
prosecution of patent applications subsequently filed pursuant to Article 9.2
below.  LICENSOR shall also be solely responsible for the issuance of such
applications after allowance.  JJCPWW shall not be obligated to pay or reimburse
LICENSOR for costs or attorney fees in any interference, opposition or
post-issuance proceeding in which the Licensed Patents may become involved.

9.2           LICENSOR shall not abandon, withdraw, allow to expire or
discontinue prosecution of any of the Licensed Patents without first consulting
with JJCPWW.

9.3           LICENSOR shall pay all government fees in any country required to
maintain the Licensed Patents within the Territory.

9.4           Upon written request by JJCPWW, such request not to be made more
than once in any consecutive six month period, LICENSOR shall provide JJCPWW
with a report listing each issued, unexpired U.S. patent included in the
Licensed Patents, a listing of the each pending U.S. patent application included
in the Licensed Patents; and the status of each pending U.S. application
included in the Licensed Patents.

10.           LICENSOR Representations and Warranties:
10.1           LICENSOR expressly warrants and represents that a) it either owns
all of the right, title and interest in and to the Licensed Patents, or has the
exclusive rights in the Licensed Patents necessary to grant the licenses under
this Agreement; b)  it is empowered to grant the licenses and release granted
herein; c)  it has no outstanding encumbrances or agreements, including any
agreements with academic institutions, universities, whether written, oral or
implied, which would be inconsistent with the licenses and release granted
herein; and d) it is unaware of any information which would raise a substantial
question of the validity of any of the Licensed Patents or Licensed Patent
Applications.

10.2           LICENSOR covenants on behalf of itself, and any of its
affiliates, not to assert any claim, or join, file, prosecute, institute or
maintain any legal action, in law or equity, including but not limited to the
institution of any suit or arbitration against JJCPWW, its affiliates or a party
which acquires all right, title and interest in the business related to this
Agreement, with respect to ***** and *****, or any patent that may be issued in
the Territory with respect to all continuations, continuations-in-part,
divisions, renewals, reissues, reexaminations, and extensions thereof. LICENSOR
further agree that this covenant shall be binding upon any party to which it may
grant rights in, or transfer ownership of, and that it will be liable for any
damages to JJCPWW due to any such third party actions.

10.3             LICENSOR warrants that it will not sell or use, or cause to be
sold or used, Licensed Products within the Field and within the Territory, and
that it will not grant any rights or licenses to any third part permitting such
third party to sell or use Licensed Products within the Field and within the
Territory. For the avoidance of doubt, this Article 10.3 includes, without
limitation, rights under ***** and *****, or any patent that may be issued in
the Territory with respect to all continuations, continuations-in-part,
divisions, renewals, reissues, reexaminations, and extensions thereof.

11.            Term and Termination
11.1           The Agreement shall continue in effect until the expiration of
the last to expire of Licensed Patents that include a Valid Claim that covers a
Licensed Product.  Expiration of this Agreement shall not relieve either party
of any payment or other obligation that has accrued under the terms of this
Agreement prior to such expiration. Upon expiration of the Agreement, JJCPWW and
its Affiliates shall have the non-exclusive, royalty-free right to continue
using any know-how that may be developed by LICENSOR prior to the expiration of
this Agreement.

                 11.2           JJCPWW may terminate this Agreement at any time
during the term of this Agreement upon ninety (90) days prior written notice to
LICENSOR, and such termination shall become effective at the end of the ninety
(90) day period.

11.3           Either party may terminate this Agreement upon ninety (90) days
written notice for any material breach or default of the other party.  Such
termination shall become effective at the end of the ninety (90) day period
unless during such period the party in breach or default cures such breach or
default. Notwithstanding the preceding sentence, from the date either party
notifies the other party that it wishes to commence a proceeding in accordance
with the dispute resolution procedures set forth herein, the running of the
ninety (90) time period referred to in this paragraph for curing a breach shall
be suspended with respect to the subject matter of the dispute, claim or
controversy.
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-8-

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

 

 
12.           Effect of Termination
12.1           Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either Party from any obligation that accrued
prior to the effective date of such termination.

12.3           JJCPWW shall have the right to sell off any of such Licensed
Product in its inventory and will be obligated to pay to LICENSOR all royalties
due on such Licensed Products sold.

13           Dispute Resolution
13.1         Any controversy or claim arising out of or relating to this
Agreement or the validity, inducement, or breach thereof, shall be settled by
arbitration before a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) then
pertaining, except where those rules conflict with this provision, in which case
this provision controls.  The parties hereby consent to the jurisdiction of the
federal district court for the district in which the arbitration is held for the
enforcement of this provision and the entry of judgment on any award rendered
hereunder.  Should such court for any reason lack jurisdiction, any court with
jurisdiction shall enforce this clause and enter judgment on any award.  The
arbitrator shall be an attorney who has at least fifteen (15) years of
experience with a law firm or corporate law department of over twenty five (25)
lawyers or was a judge of a court of general jurisdiction.  The arbitration
shall be held in New York, New York and in rendering the award the arbitrator
shall apply the substantive law of New Jersey, (except where that law conflicts
with this clause), except that the interpretation and enforcement of this
arbitration provision shall be governed by the Federal Arbitration Act.  The
arbitrator shall be neutral, independent, disinterested, and impartial and shall
abide by The Code of Ethics for Arbitrators in Commercial Disputes approved by
the AAA.  Within forty five (45) days of initiation of arbitration, the parties
shall reach agreement upon and thereafter follow procedures assuring that the
arbitration will be concluded and the award rendered within no more than eight
months from selection of the arbitrator.  Failing such agreement, the AAA will
design and the parties will follow procedures that meet such a time
schedule.  Each party has the right before or, if the arbitrator cannot hear the
matter within an acceptable period, during the arbitration to seek and obtain
from the appropriate court provisional remedies such as attachment, preliminary
injunction, replevin, etc., to avoid irreparable harm, maintain the status quo
or preserve the subject matter of the arbitration.  THE ARBITRATOR SHALL NOT
AWARD ANY PARTY PUNITIVE, EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES, AND
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES.  NO PARTY
MAY SEEK OR OBTAIN PREJUDGMENT INTEREST OR ATTORNEYS’ FEES OR COSTS.

13.2           Prior to commencement of arbitration, the parties must attempt to
mediate their dispute using a professional mediator from AAA, the CPR Institute
for Dispute Resolution, or like organization selected by agreement or, absent
agreement, through selection procedures administered by the AAA.  Within a
period of forty-five (45) days after the request for mediation, the parties
agree to convene with the mediator, with business representatives present, for
at least one session to attempt to resolve the matter.  In no event will
mediation delay commencement of the arbitration for more than forty-five (45)
days absent agreement of the parties or interfere with the availability of
emergency relief.

13.3           All disputes arising out of or related to this Agreement, or the
breach thereof, whether based on contract, tort, statute, or other theory of
liability (“Disputes”), shall be resolved in accordance with this Article
13.  It is the intent of the parties that all disputes relating in any way to
this Agreement should be resolved in accordance with this Article 13, including
disputes that may involve the parent companies, subsidiaries, and affiliates
under common control of any Party.

13.4         Notwithstanding anything to the contrary contained in this Article
13, in the event of any breach or threatened breach of this Agreement by either
party that the other party believes in good faith will cause irreparable harm
and damage to it, such party may seek an injunction and/or restraining order
restraining such breach or threatened breach by the other party and such other
remedies which shall be available to it in equity.

13.4           Except as provided in Article 13.1 above, the validity and
interpretation of this Agreement and the legal relations of the parties to it
shall be governed by the internal laws of the state of New Jersey.

14.            Trademarks:
14.1           JJCPWW shall have the right to market the Licensed Product under
its own trademarks and tradenames and shall own any new trademarks it creates or
elects to use in connection with the marketing or sales of Licensed
Products.  LICENSOR is not granted nor should this Agreement be construed to
grant any rights to LICENSOR with respect to JJCPWW.

14.2           JJCPWW is not granted nor should this Agreement be construed to
grant any rights to JJCPWW under the NIMBUS trademark or other trademarks owned
by LICENSOR.
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-9-

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

 

 
15.           Taxes:
15.1           JJCPWW will make all payments to Licensor under this Agreement
without deduction or withholding for taxes except to the extent that any such
deduction or withholding is required by law in effect at the time of payment.

15.2           Any tax required to be withheld on amounts payable under this
Agreement will promptly be paid by JJCPWW on behalf of Licensor to the
appropriate governmental authority, and JJCPWW will furnish Licensor with proof
of payment of such tax.  Any such tax required to be withheld will be an expense
of and borne by Licensor.

15.3           JJCPWW and Licensor will cooperate with respect to all
documentation required by any taxing authority or reasonably requested by JJCPWW
to secure a reduction in the rate of applicable withholding taxes.

15.4           If JJCPWW had a duty to withhold taxes in connection with any
payment it made to Licensor under this Agreement but JJCPWW failed to withhold,
and such taxes were assessed against and paid by JJCPWW, then Licensor will
indemnify and hold harmless JJCPWW from and against such taxes (including
interest).  If JJCPWW makes a claim under this Section 15.4, it will comply with
the obligations imposed by Article 15.2 as if JJCPWW had withheld taxes from a
payment to Licensor.

16.           Miscellaneous Provisions:
16.1           Business Decisions:  All business decisions, including without
limitation the design, manufacture, sale, price and promotion of the Licensed
Product, shall be within the sole discretion of JJCPWW.

16.2         Confidentiality and Publicity: Neither party shall disclose the
financial terms of this Agreement to an unaffiliated third party without the
prior written approval of the other party, except for legal, financial,
accounting or other similar advisors who have a need to know any of such terms
and agrees to keep them confidential.  The confidentiality obligations of the
parties under this Article 15 shall not extend to disclosure which is required
by any governmental agency or regulatory body, court order or otherwise required
by law, or to the extent required to preserve, exercise or enforce rights under
this Agreement.  Furthermore, neither party will originate any publicity, news
release, or other public announcement, written or oral, whether to the public
press, to stockholders, or otherwise, relating to this Agreement, to any
amendment hereto or to performance hereunder or the existence of an arrangement
between the parties without the prior written approval of the other party.

16.3          Notices:  All notices hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, one day after delivery
to a nationally recognized overnight delivery service, charges prepaid, three
days after sent by registered or certified mail, postage prepaid, or when
receipt is confirmed if by, facsimile or other telegraphic means:

In the case of LICENSOR:
Quick-Med Technologies, Inc.
902 NW 4th Street
Gainesville, Florida 32601
Fax: 561-416-1390
Attn: Nam H. Nguyen, Chief Financial Officer
 
                 
In the case of JJCPWW:
Johnson & Johnson Consumer and Personal Products Worldwide, a Division of
Johnson & Johnson Consumer Companies, Inc.
199 Grandview Drive
Skillman, New Jersey
Attn: Richard D'Souza, Chief Technology Officer

With a copy to:

Chief Patent Counsel
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933

Such addresses may be altered by written notice given in accordance with this
Article 15.3.
 
 
 
***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
 
-10-

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

 
16.4           Force Majeure:      Any delays in or failures of performance by
either party under this Agreement shall not be considered a breach of this
Agreement if and to the extent caused by occurrences beyond the reasonable
control of the party affected, including but not limited to:  acts of God; acts,
regulations or laws of any government; strikes or other concerted acts of
workers; fires; floods; explosions; riots; wars; rebellions; and sabotage; and
any time for performance hereunder shall be extended by the actual time of delay
caused by such occurrence.

16.5            LICENSOR Bankruptcy:  All rights and licenses granted under or
pursuant to this Agreement by LICENSOR to JJCPWW are for all purposes of Article
365(n) of Title 11, U.S. Code (the “Bankruptcy Code”), licenses of rights to
“intellectual property” as defined in the Bankruptcy Code.  The parties agree
that JJCPWW, as a licensee of such rights under this Agreement, shall retain and
may fully exercise all of its rights and elections under the Bankruptcy
Code.  LICENSOR agrees during the term of this Agreement to create and maintain
current copies or, if not amenable to copying, detailed descriptions or other
appropriate embodiments, of all such licensed intellectual property.  If a case
is commenced by or against LICENSOR under the Bankruptcy Code, then, unless and
until this Agreement is rejected as provided in the Bankruptcy Code, LICENSOR
(in any capacity, including debtor-in-possession) and its successors and assigns
(including, without limitation, a Bankruptcy Code trustee) shall either perform
all of the obligations provided in this Agreement to be performed by LICENSOR or
provide to JJCPWW all such intellectual property (including all embodiments
thereof) held by LICENSOR and such successors and assigns, as JJCPWW may elect
in a written request, immediately upon such request.  If a Bankruptcy Code case
is commenced by or against LICENSOR, this Agreement is rejected as provided in
the Bankruptcy Code and JJCPWW elects to retain its rights hereunder as provided
in the Bankruptcy Code, then LICENSOR (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without
limitation, a Bankruptcy Code trustee) shall provide to JJCPWW all such
intellectual property (including all embodiments thereof) held by LICENSOR and
such successors and assigns immediately upon JJCPWW’s written request therefor.
All rights, powers and remedies of JJCPWW provided under this Article are in
addition to and not in substitution for any and all other rights, powers and
remedies now or hereafter existing at law or in equity(including, without
limitation, the Bankruptcy Code) in the event of any such commencement of a
bankruptcy proceeding by or against LICENSOR.  JJCPWW, in addition to the
rights, powers and remedies expressly provided herein, shall be entitled to
exercise all other such rights and powers and resort to all other such remedies
as may now or hereafter exist at law or in equity (including the Bankruptcy
Code) in such event.

16.6          Relationship of Parties: The parties hereto are entering into this
Agreement as independent contractors, and nothing herein is intended or shall be
construed to create between the parties a relationship of principal and agent,
partners, joint venturers or employer and employee.  Neither party shall hold
itself out to others or seek to bind or commit the other party in any manner
inconsistent with the foregoing provisions of this Article.

16.7  Severability: If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under any applicable present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, then (a) such provision will be fully
severable; (b) this Agreement will be construed and enforced as if such illegal,
invalid, or unenforceable provision had never been a part hereof; (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid, or unenforceable provision or by
its severance herefrom; and (d) in lieu of such illegal, invalid, or
unenforceable provision, the parties hereto will negotiate in good faith and add
as part of this Agreement a valid and enforceable provision as similar in
substance to such illegal, invalid, or unenforceable provision as may be
possible.

16.8         Integration: It is the mutual desire and intent of the parties to
provide certainty as to their future rights and remedies against each other by
defining the extent of their mutual undertakings as provided herein.  The
parties have in this Agreement incorporated all representations, warranties,
covenants, commitments and understandings on which they have relied in entering
into this Agreement and, except as provided for herein, neither party has made
any covenant or other commitment to the other concerning its future
action.  Accordingly, this Agreement constitutes the entire agreement and
understanding between the parties with respect to the matters contained herein,
and there are no prior oral or written promises, representations, conditions,
provisions or terms related thereto other than those set forth in this
Agreement.  The parties may from time to time during the term of this Agreement
modify any of its provisions by mutual agreement in writing.

16.9           LICENSOR and JJCPWW acknowledge and agree that they have been
represented by or have had the opportunity to be represented by competent
counsel with respect to this Agreement, that they have reviewed the terms of
this Agreement and that they enter into this Agreement with full knowledge and
understanding of its terms.

16.10        Headings: The inclusion of headings in this Agreement is for
convenience only and shall not affect the construction or interpretation hereof.

This Agreement is signed on the dates set forth below by duly authorized
representatives of JJCPWW and Quick-Med Technologies, Inc., respectively.

Quick-Med Technologies, Inc.
Johnson & Johnson Consumer and Personal Products Worldwide, a Division of
Johnson & Johnson Consumer Companies, Inc.

By:           J. Ladd
Greeno                                           By:           Richard
D'Souza                                                      
J. LADD
GREENO                                                                           RICHARD
D'SOUZA
          Chief Executive Officer                  Chief Technology Officer

Date:           February 24,
2010                                                                      
Date:           March 5, 2010 

***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 
-11-

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

 
 

 
APPENDIX A
LICENSED PATENTS

*****

***** This material has been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 
-12-

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