Exhibit 10.4

EXCLUSIVE LICENSE AGREEMENT
 

          This Exclusive License Agreement (the Agreement) is made and entered
into this 15 of May 2006 (the "Effective Date") by and between the Regents of
the University of Colorado, a body corporate, having its principal office at 201
Regent Hall, Regent Drive, Boulder, CO 80309 (hereinafter "University") and APRO
Bio Pharmaceutical Corporation, a Utah corporation having its principal office
at 5820 Tolcate Woods Lane, Salt Lake City, Utah 84121 (hereinafter "Licensee").
 
WHEREAS, University is the owner of certain Patent Rights (as later defined
herein) invented by University employee Leland Shapiro, and has the right to
grant licenses under said Patent Rights, and;
 
WHEREAS, Licensee is interested in licensing and further developing the Patent
Rights for commercial applications, and;
 
WHEREAS, University desires to have the Patent Rights developed and
commercialized to benefit the public and is willing to grant a license
hereunder;
 
NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties hereto agree as follows:
 
SECTION 1. DEFINITIONS
 
For the purposes of this Agreement, the following words and phrases shall have
the following meanings:
 
1.1
"Affiliate(s)" shall mean every corporation or entity, which, directly or
indirectly, or throughone or more intermediaries, controls, is controlled by, or
is under common control with Licensee, as well as every officer and director of
any such corporation or entity. For the purposes of this definition, the term
"control" means (a) beneficial ownership of at least fifty percent (50%) of the
voting securities of a business organization with voting securities, or (b) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or business organization without voting securities.

 
1.2
"Fields of Use" shall mean the fields of use identified in Exhibit A.

 
1.3
"Improvement" shall mean any invention, the practice of which would also require
the practice of an invention claimed in or covered by the Patent Rights and
which is a modification of the inventions claimed in or covered by the Patent
Rights, made by Dr. Leland Shapiro, or University researchers working in the
laboratory of Leland Shapiro.

 
 
1.4
"Know-How" shall mean University's proprietary information which has been
created, developed, or fixed in any tangible medium of expression including, but
not limited to, technical information, devices, models, methods, documents, and
materials, and which is directly related to the use of, or esirable for the
practice of, the licensed Patent Rights.

 
 
1.5
"Licensed Process(es)" shall mean any process, art, or method which is covered
in whole or in part by an issued, unexpired claim or a pending claim contained
in the Patent Rights or that incorporates or makes use of Know-How.

 
 
1.6
"Licensed Product(s)" shall mean any:

 
 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
1 of 21
  CU 1085H

 
 
 

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

 

 
(a)
product or part thereof that is covered in whole or in part by an issued,
unexpired claim or a pending claim contained in the Patent Rights or that
incorporates or makes use of Know-How; or

 
 
(b)
product, chemical composition, apparatus, or part thereof that is manufactured
or discovered by using a Licensed Process(es) or is employed to practice a
Licensed Process(es); or

 
 
(c)
product produced, discovered, manufactured or created through the use of any
Licensed Product defined in §1.06(a) or §1.06(b).

 
1.7
"Net Sales" shall mean the total gross receipts for sales of Licensed Products
or practice ofLicensed Processes by or on behalf of Licensee, its Affiliates and
sublicensees, and from leasing, renting, or otherwise making Licensed Products
available to others without sale or other dispositions, whether invoiced or not,
less returns and allowances, packing costs, insurance costs, freight out, taxes
or excise duties imposed on the transaction (if separately invoiced and paid),
and wholesaler and cash discounts in amounts customary in the trade to the
extent actually granted. No deductions shall be made for commissions, or for the
costs of collections. Net Sales shall also include the fair market value of any
non-cash consideration received by Licensee, its Affiliates and sublicensees,
for the sale, lease, or transfer of Licensed Products or Licensed Processes.

 
1.8
"Patent Rights" shall mean all of the following University intellectual property
and any utilityapplications, PCT applications, continuations, improvements and
divisional applications thereof, patents issuing on any of the foregoing and all
reissues, reexaminations or extensions of any of the foregoing, and any and all
foreign patents and patent applications relating to any of the foregoing:

 
 
a.
the United States and foreign patents and/or patent applications and/or
provisional patent applications listed in Exhibit B;

 
 
b.
United States and foreign patents issued from the applications listed in Exhibit
B and from divisionals and continuations of these applications;

 
 
c.
claims of U.S. and foreign continuation-in-part applications, and of the
resulting patents, which are directed to subject matter specifically described
in the U.S. and foreign applications fisted in Exhibit B;

 
 
d.
claims of all foreign patent applications, and of the resulting patents, which
are directed to subject matter specifically described in the United States
patents and/or patent applications described in this Subsection; and

 
 
e.
any reissues of United States patents described in this Subsection.

 
1.9
"Territory" shall mean the geographical area identified in Exhibit A.

 
SECTION 2. GRANT OF LICENSE
 
2.1
University hereby grants and Licensee and Affiliates accept, during the term and
subject tothe terms and conditions of this Agreement

 
 
a.
an exclusive, royalty-bearing license to use the Know-How in the Territory and
within the Fields of Use; and

 

 
Exclusive License Apro Biopharmaceutical ; Inc. Final April 19, 2006 
2 of 21
CU 1085H

 
 
 

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

 
 
 
 
 
b.
an exclusive, royalty-bearing license to University's Patent Rights in the
Territory to make, use, sell, lease, offer to sell, and import any Licensed
Products in the Fields of Use and to practice any Licensed Processes in the
Fields of Use.

 
2..2
All Know-How due under this Agreement shall be delivered to Licensee prior to or
on theEffective Date in written, oral or other form of communication. No
additional Know-How shall be due after the Effective Date.

 
2.3
This Agreement confers no license or rights by implication, estoppel, or
otherwise under any patent applications or patents of University other than
licensed Patent Rights regardless of whether such patents are dominant or
subordinate to licensed Patent Rights.

 
SECTION 3. IMPROVEMENTS & INDEPENDENT INVENTIONS
 
3.1
Improvements: In the event that University develops any improvements to the
inventions claimed in the Patent Rights or to any other preexisting patent
application or patent that is dominated by the Patent Rights, then each such
improvement or addition will be considered part of this Agreement for no
additional consideration.

 
3.2
Independent Inventions:

 
 
a.
Provided that Leland Shapiro is at the time obligated to assign intellectual
property to University and is involved as an employee, board member, consultant
to or 10% or greater shareholder of Licensee, in the event that Leland Shapiro
or anybody working in a laboratory under the supervision or direction of Leland
Shapiro, makes any invention in the Field of Use, the practice of which would
not require the practice of an invention claimed in or covered by the Licensed
Patent Rights ("Independent Invention"), then provided such Independent
Invention is not subject to any prior contractual or legal obligations, the
University hereby grants to Licensee an exclusive option ("Option") to obtain
the exclusive, worldwide, commercial rights to each Independent Invention on
terms and conditions to be negotiated in good faith by the parties following the
exercise by Licensee of the Option. In addition, Licensee shall have such
further rights to future Independent Inventions as may be set forth in the
sponsored research agreement described in Exhibit E to be entered into between
the Parties.

 
 
b.
University shall disclose each Independent Invention to Licensee in reasonable
written detail after the University's Technology Transfer Office receives
notification from the inventor(s) that such Independent Invention has been made,
and Licensee shall have ninety (90) days (the "Option Period") following receipt
of such invention disclosure to exercise the Option with respect to such
Independent Invention by delivering to University written notice indicating that
Licensee desires to exercise the Option. Upon such notice, the parties shall
negotiate in good faith for a period of up to sixty (60) days commercially
reasonable terms and conditions for a license under the intellectual property
rights relating to such Independent Invention

 
 
 

 
SECTION 4. SUBLICENSING
 
4.1
Upon prior written approval by University, such approval not to be unreasonable
withheld,Licensee may sublicense to one or more third parties, the rights
granted in Section 2 subject to the following limitations:

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19,2006      
 3 of 21
    CU1085H

 
 

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

 
 

 
 
a.
Licensee agrees that any sublicenses granted by it shall impose restrictions and
conditions upon sublicensees equivalent in scope to those imposed upon Licensee;

 
 
b.
Licensee agrees that, in the event University terminates this Agreement pursuant
to Subsection 13,2(b), any sublicenses granted, in University's sole discretion,
shall be directly enforceable by University;

 
 
c.
Licensee agrees that any sublicenses granted shall adequately protect
University's security and property interest in University's Know-How and Patent
Rights; and

 
 
d.
Any sublicenses granted by Licensee shall provide only for cash consideration
from sublicensees unless University has expressly consented otherwise in writing
in advance. Any sublicenses made in other than arm's-length transactions, the
value of the transaction attributed under this Section to such a transaction
shall be that which would have been received in an arm's-length transaction,
based on a like transaction at that time.
 
For purposes of this Agreement, the term "sublicense" shall mean the license by
Licensee to a third party of all or a portion of the intellectual property
rights licensed to it by University hereunder in consideration of payments from
such sublicensee to Licensee, and shall not include Licensee's engagement of or
joint venture with subcontractors to perform various services for Licensee in
connection with its development of the Licensed Products and Licensed Processes,
including, but not limited to, laboratory work, pre-clinical and clinical
testing, assistance with the regulatory approval process, manufacturing,
marketing and other similar product development services provided that such
services are for the sole benefit of Licensee and such third party does not have
any independent use of the Patent Rights or Know-How. Licensee agrees to assume
all obligations for protecting the University's security and property interest
in University's Know-How and Patent Rights in any such joint venture work
consistent with the terms of this Agreement.

 
 
4.2
Licensee agrees to forward to University a copy of each fully executed
sublicenseagreement postmarked within thirty (30) days of the execution of such
agreement.

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
 4of 21
CU1085H

 
 

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

 

SECTION 5. RETAINED RIGHTS  5.1Government Rights:
 
 
a.
Notwithstanding any use of descriptive terms within this Agreement such as
"exclusive", this Agreement is subject to all of the terms and conditions of
Title 35 U.S.C. §§ 200-204, et seq., ("Bayh-Dole Act") and 37 C.F.R. 401, as
such may be amended.

 
 
b.
Further, Licensee agrees to take all reasonable action necessary to enable
University to satisfy its obligations hereunder.

 
5.2
University Rights:

 
 
a.
University shall have the right to practice the Patent Rights and Know-How for
its own research and education, including sponsored research, which right shall
be transferable to other nonprofit or educational institutions; provided that
University takes reasonable steps to prevent the commercial use of any products
or processes resulting from such research and education and to avoid the loss of
any patent rights as a result of such activities.

 
 
b.
University shall have the right to publish any information included in the
Patent Rights and the Know-How provided that University takes reasonable steps
to avoid the loss of any patent rights as a result of University exercising its
rights under this Paragraph. University shall provide Licensee with ten (10)
days' advance notice of any such publication, including a copy of the
information proposed to be published.

 
SECTION 6. FEES & ROYALTIES
 
6.1
As consideration for the disclosure of University's Know-How as well as the
licenses andrights under University's Patent Rights,

 
 
a.
Licensee agrees to pay to University an annual, nonrefundable minimum royalty as
set forth in Exhibit C. The minimum annual royalty is due and payable on first
business day of each calendar year and may be credited against any earned
royalties due for Net Sales made that year;

 
 
b.
Licensee agrees to pay University royalties as set forth in Exhibit C;

 
6.2
No multiple royalties shall be payable because any Licensed Products or Licensed

 
Processes are covered by more than one of the Patent Rights.
 
6.3
On sales of Licensed Products by Licensee to sublicensees or on sales made in
other than arm's-length transactions, the value of the Net Sales attributed
under this Section to such a transaction shall be that which would have been
received in an arm's-length transaction, based on a like transaction at that
time.

 
 
6.4
Payment Due Date:

 
 
a.
Unless otherwise provided herein, all payments required under this Agreement
shall be due within thirty (30) days of written notice from University.

 
 
b.
Payments past due shall bear interest at the rate of one and one-half percent (1
1/2%) per month compounded, or the maximum interest rate allowed by applicable
law, whichever is less.

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
5 of 21
     CU1085H

 
 

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

 

SECTION 7. REPORTS, RECORDS, AND AUDITS  7.1 Reports:
 
 
a.
Licensee shall, without request by University, within sixty (60) days following
the

 
 
end of each fiscal quarter of Licensee and sixty (60) days following the end of
Licensee's fiscal year, render to University written reports of the Net Sales of
Licensed Products and/or Licensed Processes subject to royalty hereunder made
during the prior three (3) month period and shall simultaneously pay to
University the royalties due on such Net Sales, if any, in United States
Dollars. Licensee shall not be required to provide any such reports during the
period prior to its initial sale of Licensed Products and/or Licensed Processes.

 
 
b.
Minimum annual royalties, if any, which are due University for any fiscal year,
shall be paid by Licensee along with the written report due under this Agreement
with respect to such fiscal year.

 
 
c.
Unless otherwise agreed to by the Parties, the written report shall be in the
substantially the same form as Exhibit D.

 
 
7.2
Records:

 
 
a.
Licensee shall keep accurate records and shall compel its Affiliates and
sublicensees to keep accurate records, in sufficient detail to reflect its
operations under this Agreement and to enable the royalties accrued and payable
under this Agreement to be determined.

 
 
b.
Such records shall be retained for at least three (3) years after the close of
the period to which they pertain, or for such longer time as may be required to
finally resolve any question or discrepancy raised by University.

 

 
7.3
Audits:

 
 
a.
Upon the request of University, with reasonable notice, but not more frequently
than once a year, Licensee shall permit an independent public accountant
selected and paid by University to have access during regular business hours to
such records as may be necessary to verify the accuracy of royalty payments made
or payable hereunder.

 
 
b.
Said accountant shall disclose information acquired to University only to the
extent that it should properly have been contained in the royalty reports
required under this Agreement.

 
 
c.
If an inspection shows an underreporting or underpayment in excess of five
percent (5%) for any twelve (12) month period, then Licensee shall reimburse
University for the cost of the inspection and pay the amount of the underpayment
including any interest as required by this Agreement.

 
 
SECTION 8. CONFIDENTIAL INFORMATION
 
8.1
Both University and Licensee (hereinafter, "Party" or "Parties") shall
vigilantly protect theconfidential information related to the Patent Rights and
Know-How from disclosure to third parties; and no such disclosure shall be made
without the disclosing Party's written permission.

 
 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
6 of 21
     CU1085H

 
 

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

 

 
8..2
All written documents containing confidential information and other material in
tangible formreceived by either Party under this Agreement shall remain the
property of the disclosing Party, and such documents and materials, together
with copies of excerpts thereof, shall promptly be returned to disclosing Party
upon request, except one copy may be retained for archival purposes.

 
8.3
Licensee acknowledges that University is subject to the Colorado Open Records
Act(C.R.S. § 24-72-201, et seq.). All plans and reports marked "Confidential"
shall be treated by University as confidential to the extent permitted under §
24-72-204.

 
SECTION 9. LICENSEE DUE DILIGENCE OBLIGATIONS
 
9.1
Licensee shall use commercially reasonable efforts to bring Licensed Products
andLicensed Processes to market through a thorough, vigorous and diligent
program for      exploitation of the Patent Rights, to develop internal or
external manufacturing capabilities, to continue active, diligent marketing
efforts, and to satisfy the needs of such market with the Licensed Products and
Licensed Processes throughout the life of this Agreement.

 
9.2 
Licensee acknowledges and agrees to the performance and diligence milestones
defined inExhibit E provided however that specific dates for such milestones may
be adjusted if required due to developments beyond the reasonable control of
Licensee. No changes to the dates of such milestones will be made without the
consent, which will not be unreasonably denied, of University.

 
9.3
Licensee agrees to use commercially reasonable efforts to develop a sublicensing
programto commercialize Licensed Products and Licensed Processes in any Field of
Use or Territory that Licensee decides not to exploit for its own benefit.

 
SECTION 10. PATENT ADMINISTRATION
 
10.1
Licensee shall reimburse University within thirty (30) days from the Effective
Date twentythousand dollars ($20,000) representing all patent expenses incurred
by University prior to the Effective Date.

 
10.2
Licensee Rights:

 
 
a.
Licensee shall control the preparation, filing, prosecution, and maintenance of
any and all patent applications or patents included in the Patent Rights on or
after the Effective Date and shall furnish copies of relevant patent-related
documents to University. Licensee shall provide University with advance written
notice of its plans to file or prosecute any such patent applications or
patents. University shall cooperate with Licensee in providing any additional
scientific and other information reasonably necessary for Licensee to prepare,
file, prosecute and maintain such patent applications and patents.

 
 
(i)
University shall have thirty (30) business days to review and comment on
patent-related documents prior to the filing of said documents.

 
 
b.
Licensee may request that University assume primary responsibility for all
patent activities, including all costs, associated with the perfection and
maintenance of Patent Rights. Licensee shall provide University with sixty (60)
days' advance written notice of such request. In the event University agrees to
such request:

 
 
 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
7 of 21
     CU1085H

 
 

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

 

 

 
(i)
University's patent counsel shall keep Licensee advised as to the status of the
Patent Rights by providing Licensee, in a timely manner prior to their due date,
with copies of all official documents and correspondence relating to the
prosecution, maintenance, and validity of the Patent Rights.

 

 
(ii)
University shall consult with Licensee in such prosecution and maintenance,
shall diligently seek Licensee's advice on all matters pertaining to the Patent
Rights, shall diligently seek strong and broad claims under the Patent Rights,
and shall not abandon prosecution of any patent application without first
notifying Licensee sixty (60) days prior to any bar date, of University's
intention and reason therefore, and providing Licensee with reasonable
opportunity to assume responsibility for prosecution, maintenance and associated
costs of such patents and patent applications.

 
 
c.
No claims of the Patent Rights shall be modified, deleted, or abandoned by
Licensee or its patent counsel without the express, prior written approval of
University, such approval shall not be unreasonably withheld or delayed.

 
 
(i)
Licensee's obligations under this Subsection shall include, without limitation,
an obligation to inform University in a timely manner that Licensee will not
pursue patents in any foreign countries where patent protection may be available
such that University may prosecute patents in such countries if University so
desires.

 
 
(ii)
If University pursues such foreign patent protection, then from that time
forward all such subject patent applications and any patents arising there from
shall no longer be considered Patent Rights under this Agreement and Licensee
shall forfeit all rights under this Agreement to such patent applications and
any patents arising there from. University shall be responsible for all costs
associated with those patent applications and patents it decides to pursue and
maintain.

 
 
d.
At any time, University may provide Licensee with thirty (30) days' advance
written notice that University wishes to resume control, at Licensee's expense,
of the preparation, filing, prosecution, and maintenance of any and all patent
applications or patents included in the Patent Rights. If University elects to
resume such responsibilities, Licensee agrees to cooperate fully with
University, its attorneys, and agents in the preparation, filing, prosecution,
and maintenance of any and all patent applications or patents and to provide
University with complete copies of any and all documents or other materials that
University deems necessary to undertake such responsibilities.

 
 
 
SECTION 11. PATENT ENFORCEMENT
 
11.1
University and Licensee agree to inform the other Party promptly in writing of
anysuspected infringement of the Patent Rights by a third party. Licensee shall
have, for a period of 120 days from the date of any notice of infringement of
the Patent Rights, the first right to institute suit against such third party
and any recovery or settlement shall be applied first to defray the unreimbursed
costs and expenses (including reasonable attorneys' fees) incurred by Licensee
in the action, second to pay University an amount equal to the Sublicensing
Royalty that University would otherwise be entitled to at that time pursuant to
Exhibit C to this Agreement if the amount remaining after the reimbursement of
costs and expenses was treated as Sublicensing revenue, and third any remaining
balance shall be paid to Licensee.

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
 8 of 21
CU I0851-1

 
 

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

 

 
 
11.2
Thereafter, University and Licensee shall each have the right to institute an
action forinfringement of the Patent Rights against such third party in
accordance with the following:

 
 
a.
If both University and Licensee agree to institute suit jointly, the suit shall
be brought in both their names, the out-of-pocket costs thereof shall be borne
equally, and any recovery or settlement, after the reimbursement of costs and
expenses (including reasonable attorneys' fees incurred in the action, shall be
shared equally.

 
 
b.
University and Licensee shall agree to the manner in which they shall exercise
control over such suit. Each Party, at its option, may be represented by
separate counsel of its own selection, the fees for which shall be paid by
University.

 
 
c.
In the absence of an agreement to institute a suit jointly, University may, but
is not obligated to, institute suit, and at its option, join Licensee as a
plaintiff. If University decides to institute suit, it shall notify Licensee in
writing.

 
 
d.
Licensee's failure to notify University in writing within thirty (30) days after
the date of University's notice pursuant to 11.2(c) above, that it will join in
enforcing the Patent Rights pursuant to the terms hereof, shall be deemed
conclusively to be Licensee's assignment to University of all rights, causes of
action, and damages resulting from any such alleged infringement. University
shall bear the entire cost of such litigation and shall be entitled to retain
the entire amount of any recovery or settlement.

 
 
e.
In the absence of an agreement to institute a suit jointly, and if University
does not notify Licensee of its intent to pursue legal action within ninety (90)
days, as provided in Subsections 11.1 — 11.2, Licensee may again have the right
to institute suit. In such event, Licensee shall bear the entire cost of such
litigation and any recovery or settlement shall be applied first to defray the
unreimbursed costs and expenses (including reasonable attorneys' fees) incurred
by Licensee in the action, second to pay University an amount equal to the
Earned Royalty that University would otherwise be entitled to pursuant to
Exhibit C to this Agreement if the amount remaining after the reimbursement of
costs and expenses was treated as Net Sales, and third any remaining balance
shall be paid to Licensee.

 
 
f.
If Licensee undertakes to defend the Patent Rights by litigation, Licensee may
deduct from its royalty payments to University with respect to the Patent Rights
subject to suit an amount not exceeding fifty (50%) of Licensee's expenses and
costs of such action, including reasonable attorney's fees, provided however,
that such reduction shall not exceed fifty percent (50%) of the total royalty
due to University for each calendar year.

 
11.3
In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the Patent Rights shall be brought against Licensee
or raised by way of counterclaim or affirmative defense in an infringement suit
brought by Licensee under this Section, pursuant to this Agreement and the
provisions of Title 35 U.S.C. § 29 or other statutes, Licensee may:

 
 
a.
defend the suit in its own name, at its own expense, and on its own behalf for
presumably valid claims in the Patent Rights;

 
 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19,
2006                                                                               
9 of 21
       CU1085H
 
 

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

 

 
 
 
b.
in any such suit, ultimately to enjoin infringement and to collect for its use,
damages, profits, and awards of whatever nature recoverable for such
infringement consistent with this Section; and

 
 
c
settle any claim. or suit for declaratory judgment involving the Patent Rights,
except that Licensee shall have no right to deny the validity of any patent,
patent claim, or patent application included in the Patent Rights in any
compromise or settlement of any claim or suit for declaratory judgment without
the express prior written consent of University; provided however, that
University shall have the first right to take such actions described in this
Subsection and shall have a continuing right to intervene in such suit. Licensee
shall take no action to compel University either to initiate or to join in any
such declaratory judgment action.

 
 
d.
If Licensee elects not to defend against such declaratory judgment action,
University, at its option, may do so at its own expense and shall be entitled to
retain the entire amount of any recovery or settlement.

 

 
11.4
In all cases, Licensee agrees to keep University reasonably apprised of the
status andprogress of any litigation.

 
 
SECTION 12. WARRANTIES, INDEMNIFICATIONS, AND INSURANCE
 
12.1
Representations. University is the owner of the Patent Rights and has full right
and authority to enter into this Agreement.

 
12.2
Negation of Warranties:

 
 
a.
UNIVERSITY MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO
USE, SALE, OR OTHER DISPOSITION BY LICENSEE, SUBLICENSEE(S), OR THEIR VENDEES OR
OTHER TRANSFEREES OF LICENSED PRODUCTS OR LICENSED PROCESSES INCORPORATING OR
MADE BY USE OF THE PATENT RIGHTS. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OR SALE OF
SUCH PRODUCTS OR PROCESSES WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK,
SERVICE MARK, OR OTHER RIGHTS.

 
 
b.
Notwithstanding anything in this Agreement to the contrary, nothing in this
Agreement shall be construed as:

 
 
(i).
A warranty or representation by University as to rights in Know-How or the
validity or scope of any of the Patent Rights;

 
 
(ii).
A warranty or representation that the Patent Rights or anything made, used, sold
or otherwise disposed of under the License will or will not infringe patents,
copyrights or other rights of third parties; or

 
 
(iii).
An obligation to furnish any know-how or technology not agreed to in this
Agreement, to bring or prosecute actions or suits against third parties for
infringement (except to the extent described in Subsections 11.1 — 11.2), or to
provide any services other than those specified in this Agreement.

 

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19,
2006                                                                               
10 of 21
       CU1085H
 
 

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

 
 

 
12.2
Indemnification: Licensee shall indemnify, defend, and hold University, its
regents, employees, students, officers, agents, Affiliates, and representatives
harmless from and against all liability, demands, damages, losses, and expenses
(including reasonable attorney fees) (collectively, "Claims"), for death,
personal injury, illness, property damage, noncompliance with applicable laws
and any other claim, proceeding, demand, expense and liability of any kind
whatsoever in connection with or arising out of:

 
 
a.
the use by or on behalf of Licensee, its sublicensees, Affiliates, directors,
officers, employees, or third parties of any Patent Rights;

 
 
b.
the design, manufacture, production, distribution, advertisement, consumption,
sale, lease, sublicense or use of any Licensed Product(s), Licensed Process(es)
or materials by Licensee, or other products or processes developed in connection
with or arising out of the Patent Rights; or

 
 
c.
any right or obligation of Licensee under this Agreement.

 
With respect to Licensee's indemnification provided for in this Section 12.3,
the following provision shall apply, Licensee shall (i) receive prompt
notification from University in writing of any such Claims, (ii) have full
authority, information and assistance from University to defend such Claims, and
(iii) have sole control over the defense of such Claims and all negotiations for
the compromise or settlement thereof.
 
12.3
Insurance: Licensee shall obtain general liability insurance, including product
liability insurance, on such terms and in such amounts as are reasonable and
customary within its industry.

 
SECTION 13. DURATION, TERMINATION, AND CONVERSION
 
13.1
This Agreement shall become effective as of the Effective Date and shall expire
on theexpiration date of the last to expire patents within Patent Rights.

 
13.2
Termination of Agreement:

 
a.  Licensee may terminate this Agreement at any time on sixty (60) days written
notice to University, if Licensee:
 
 
(i).
pays all amounts due as well as all non-cancelable costs to University through
the termination date;

 
 
(ii).
submits a final report of the type described in Section 7;

 
 
(iii).
returns any confidential materials provided to Licensee by University in
connection with this Agreement;

 
 
(iv).
suspends its use and sales of the Licensed Product(s) and Licensed Process(es);
provided however, that subject to making the payments required by Section 6 and
the reports required by Section 7, Licensee may, for a period of ninety (90)
days after the effective date of such termination, sell all Licensed Products
which may be in inventory; and

 
 
(v).
provides University the right to access any regulatory information filed with
any U.S. or foreign government agency with respect to Licensed Products and
Licensed Processes.

 

 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
 11 of 21
CU1085H

 
 

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

 
 
 
 
b.
University may terminate this Agreement in the event that:
 
Licensee fails to pay University any amounts when due to University hereunder
and Licensee fails to make such payment within thirty (30) days written notice;

 
 
(ii).
Licensee becomes insolvent, files a petition in bankruptcy, or has such a
petition filed against it and such petition is not dismissed within sixty (60)
days of the filing date, or

 
 
(iii).
Licensee is in breach or default of this Agreement .other than those occurrences
listed in this Subsection and Licensee fails to cure the breach or default
within thirty (30) days of written notice of the breach or default unless such
breach or default is of a character that cannot be cured within thirty (30)
days, in which event, Licensee shall not be deemed to be in default hereunder
unless it fails to diligently commence and pursue action to cure such default
during such thirty day period. Events constituting a breach or default shall
include, but are not limited to, the following:

 
 
(a)
failure by Licensee to meet any material due diligence requirement of Exhibit E;
in this event, University retains the right to convert this Agreement to a
non-exclusive Agreement,

 
 
(b)
operation, manufacture, use of or sale of the Licensed Products or Licensed
Processes outside the Fields of Use or Territory;

 
 
(c)
failure to keep adequate records or permit inspection or audit.

 
 
c.
The exclusive license granted by this Agreement shall immediately revert to
University upon Licensee's dissolution, liquidation, insolvency, or bankruptcy.
The exclusive license shall NOT pass to a trustee in bankruptcy or be held as an
asset of said bankrupt.

.
SECTION 14. GENERAL
 
14,1
Assignment: This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Parties hereto, However, Licensee may
not assign its rights in this Agreement without prior written approval by
University, such approval not to be unreasonably withheld or delayed.

 
14.2
Notice: Notice hereunder shall be deemed sufficient if given by registered mail,
postage prepaid, and addressed to the Party to receive such notice at the
address given below, or such other address as may hereafter be designated by
notice in writing.

 
University:
License Administrator
Office of Technology Transfer
University of Colorado, 588 SYS Suite 390, 4001 Discovery Drive Boulder, CO
80309-0589
Licensee:
APRO Bio Pharmaceutical Corporation Atten: David Floor, Secretary
5820 Toicate Woods Lane
Salt Lake City, Utah 84121

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
 12 of 21
CU1085H

 
 

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

 
 

 
14.3
Use of Names and Marks: Licensee agrees not to identify University in any
promotional advertising, press releases, sales literature or other promotional
materials to be disseminated to the public or any portion thereof without
University prior written consent in each case, except that Licensee may state
that it has a license for the Patent Rights from University. Licensee further
agrees not to use the name of University or any University faculty member,
inventor, employee or student or any trademark, service mark, trade name,
copyright or symbol of University, without the prior written consent of the
University, entity or person whose name is sought to be used, which consent
shall not be unreasonably withheld or delayed.

 
14.4
Marking: Licensee agrees to:

 
 
a.
Cause Licensed Products or the product of Licensed Processes sold under this
license to be marked with the notice of the patent numbers or patent pending, as
may be appropriate.

 
 
b.
Comply with all laws and regulations of the United States and any other country
as appropriate concerning or controlling the import or export of the Licensed
Products, data, software, laboratory prototypes or other commodities. University
makes no representation that a license or consent for export will not be
required by applicable governmental agencies, or if required, that it will be
issued.

 
 
c.
Comply with all applicable statutes, regulations, and guidelines, including
applicable governmental regulations, policies and guidelines in its use of any
University- supplied materials. Licensee agrees not to use the materials for
research involving human subjects or clinical trials in the United States
without complying with 21 C.F.R. Part 50 and 45 C.F.R. Part 46 (as those
regulations may be amended from time to time). Licensee agrees not to use the
materials for research involving human subjects or clinical trials outside of
the United States without notifying University in writing, of such research or
trials and complying with the applicable regulations of the appropriate national
control authorities. Written notification to University of research involving
human subjects or clinical trials outside of the United States shall be given no
later than sixty (60) days prior to commencement of such research or trials.

 
14.5 
Compliance with the Law: Licensee shall comply with all commercially material
local, state, federal, and international laws and regulations relating to its
obligations under this Agreement regarding the development, manufacture, use,
and sale of Licensed Products and Licensed Processes.

 
14.6 
Choice of Law: This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado.

 
14.7 
Dispute Resolution: In the event of any dispute arising out of or relating to
this Agreement, the affected Party shall promptly notify the other Party
("Notice Date"), and the Parties shall attempt in good faith to resolve the
matter.

 
 
a.
Any disputes not so resolved shall be referred to senior executives, who shall
meet at a mutually acceptable time and location within thirty (30) days of the
Notice Date and shall attempt to negotiate a settlement.

 
 
b.
If the senior executives fail to meet within thirty (30) days of the Notice
Date, or if the matter remains unresolved for a period of sixty (60) days after
the Notice Date,

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
  13 of 21
CU1085H

 
 

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

 

the Parties hereby irrevocably submit to the jurisdiction of a court of
competent jurisdiction in the State of Colorado, and, by execution and delivery
of this Agreement, each (i) accepts, generally and unconditionally, the
jurisdiction of such court and any related appellate court, and (ii) irrevocably
waives any objection it may now or hereafter have as to the venue of any such
suit, action or proceeding brought in such court or that such court is an
inconvenient forum.
 
14.8
Merger and Modification of Agreement: The terms and provisions contained in this
Agreement constitute the entire Agreement between the Parties and shall
supersede all previous communications, representations, agreements or
understandings, either oral or written, between the Parties hereto with respect
to the subject matter hereof, and no agreement or understanding varying or
extending this Agreement will be binding upon either Party hereto, unless in
writing which specifically refers to this Agreement, signed by duly authorized
officers or representatives of the respective Parties, and the provisions of
this Agreement not specifically amended thereby shall remain in full force and
effect according to their terms.

 
14.9
Severability; The provisions and clauses of this Agreement are severable, and in
the event that any provision or clause is determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability will not in any way affect the validity or enforceability of
the remaining provisions and clauses hereof.

 
14.10
Scope: This Agreement does not establish a joint venture, agency or partnership
between the Parties, nor create an employer - employee relationship.

 
14.11
Preservation of Immunity: The Parties agree that nothing in this Agreement is
intended or shall be construed as a waiver, either express or implied, of any of
the immunities, rights, benefits, defenses or protections provided to University
under governmental or sovereign immunity laws from time to time applicable to
University, including, without limitation, the Colorado Governmental Immunity
Act (C.R.S. § 24-10-101, et seq.) and the Eleventh Amendment to the United
States Constitution.

 
14.12
Headings: Headings are included herein for convenience only and shall not be
used to construe this Agreement.

 
14.13
The provisions of Sections 6 and 10, and Subsections 7.1, 7.2, 12.1, 12.2, 13.1,
14.3, 14.6 — 14.9, and 14.11, and any other provision of this Agreement that by
its nature is intended to survive, shall survive any termination or expiration
of this Agreement.

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
14 of 21
CU1085H

 
 

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

 

IN WITNESS WHEREOF the parties hereto have caused this Agreement, to be executed
in duplicate by their respective duly authorized officers.
 
 
 

 
University: /s/ David N. Allen
Licensee:   /s/ David Floor
By:  David N. Allen
By:  David Floor
   
Title: Associate VP for Technology Transfer
Title: Executive VP
Date:  19 April ’06
Date: 5/15/06
Office of Technology Transfer
APRO Bio Pharmaceutical Corporation
University of Colorado
5820 Tolcate Woods Lane
Suite 390, 4001 Discovery Drive
 
588 SYS
Salt Lake City, Utah 84121
Boulder, CO 80309-0589
 
Approved as to Legal Sufficiency:
 
By: /s/ Kristin Diamond
 
Title:  Asst. Univ. Counsel
 
Date: 19 April ‘06
 

 
 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
15 of 21
CU1085H

 
 

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

 

EXCLUSIVE LICENSE AGREEMENT
 
EXHIBIT A
 
FIELDS OF USE and TERRITORY
 
- Fields of use:   treatment of bacterial infections; and all research, studies,
testing, preclinical and clinical testing and developments relating to internal,
topical or other treatment of bacterial infections, including the treatment of
(i) Anthrax, (ii) Mycobacterium Tuberculosis (TB) and other Mycobacteria and
(iii) Bacterial Pneumonia, and further including the cutaneous anthrax cream .
 
Territory:   worldwide.
 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
 16 of 21
CU1085H

 
 

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

 

EXHIBIT B
PATENT RIGHTS
 
 
 
1.
"Inhibitors Of Serine Protease Activity And Their Use In Methods And
Compositions For Treatment Of Bacterial Infections" PCT/USO4/27711, filed August
26, 2004

 
 
2.
"Inhibitors Of Serine Protease Activity And Their Use In Methods And
Compositions For Treatment Of Bacterial Infections" United States Patent
Application US 10/925,051, filed August 26, 2004

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
17 of 21
CU1085H

 
 

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

 

 
EXHIBIT C
 
ROYALTIES
 
In accordance with Section 6, Licensee shall pay the following royalties to
University:
 
    Minimum annual royalty:
Twenty five thousand dollars ($25,000) payable on each anniversary of the
Effective Date commencing with the fifth anniversary of the Effective Date. The
minimum annual royalty shall be deductible from any earned royalties due the
University.
   
    Earned royalty:
Four percent (4%) of Net Sales.
 
Milestone royalties per indication, other than Anthrax which is specifically
excluded, are as follows:
 
 
Upon the completion of any preclinical testing, including animal testing, for
any Licensed Product, Licensee shall pay thirty thousand dollars ($30,000),
within thirty (30) days of completion of such preclinical trial. There shall be
no subsequent fee for any additional or supplemental preclinical testing.
 
 
Upon the completion of any phase I clinical trial for any Licensed Product,
Licensee shall pay a one-time fee of fifty thousand dollars ($50,000) within
sixty (60) days of completion of such clinical trial.
Upon the completion of any phase II clinical trial for any Licensed Product,
Licensee shall pay a one-time fee of one hundred thousand dollars ($100,000)
within sixty (60) days of completion of such clinical trial.
 
 
Upon the completion of any phase Ill clinical trial for any Licensed Product,
Licensee shall pay a one-time fee of two hundred thousand dollars ($200,000)
within sixty (60) days of completion of such clinical trial.
 
 
Upon approval from the United States Food and Drug Administration (FDA), or
foreign equivalent, of any Licensed Product, Licensee shall pay three hundred
thousand dollars ($ 300,000) within sixty (60) days of such approval.
 
Sublicensing royalties as follows:
 
 
Thirty percent (30%) of all Sublicensing revenue received during the first year
after the Effective Date.
 
 
Twenty-Five percent (25%) of all Sublicensing revenue received during the second
year after the Effective Date.
 
 
 

 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
18 of 21
CU1085H

 
 

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

 

 
 
Expiration of Royalties:
Twenty percent (20%) of all Sublicensing revenue received during the third year
after the Effective Date and each year thereafter until this Agreement is
terminated or expires.
 
All royalties payable hereunder (minimum royalties, earned royalties and
sublicensing royalties) with respect to each Licensed Product or Licensed
Process shall expire and terminate on the respective expiration date of the
Patent Rights applicable to each such Licensed Product or Licensed Process.

 

 
Exclusive License Apro Biopharmaceutical, Inc. Final April 19, 2006 
19 of 21
CU1085H

 
 

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

 

EXHIBIT D
 
FORM OF ROYALTY REPORT
 
 
Licensee: ____________________________________________
Case No.:  _______________________________________
Inventor:  ____________________________________________
Patent No.  _______________________________________
Period Covered: From:  __________________________________
Through:  _________________________________________
Prepared By:  _________________________________________
Date:  ____________________________________________
Approved By:  ________________________________________
Date:  ____________________________________________

                                           
 
If license covers several major product lines, please prepare a separate report
for each line. Then combine all product lines into a summary report.
 
A discussion of the progress and results, as well as ongoing plans, with respect
to the Licensed Products and/or Licensed Processes, see § 6.01, is attached.
 

 Report Type:    ____  Single Product Line Report: ______________________      
   ____  Multiproduct Summary Report  Page 1 of   ___  Pages          ____
 Product Line Detail   Line: _______  Trademark: _______  Pages _______        
   

                
 

Country
Gross
Sales
* Less:
Allowances
Net
Sales
Royalty
Rate
Period Royalty Amount
This Year
Last Year
U.S.A.
           
Canada
           
Europe
                                                                   
Japan
           
Other:
                                                                   
TOTAL:
           

 
Sublicense Fees this quarter: $ ____ (attach page showing names, addresses, and
telephone numbers; and amount of fees received; territory; field of use)
 
Total Royalty: $ ____
 
The following royalty forecast is non-binding and for University internal
planning purposes only:
 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19,2006        
20 of 21
       CU 1085 H

 
 

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

 

EXHIBIT E
 
PERFORMANCE MILESTONES
 
Milestones are defined for the first indication
 
Pre Clinical testing
4Q/07
Phase Ill initiation
40/09
FDA submission
4Q/11
Market launch
4Q/13

 
 
DILIGENCE MILESTONES
 
   1.   Company shall deliver to University:
 
 
(a)
within forty-five (45) days of the Effective Date, a comprehensive business plan
that describes the Company's technology commercialization strategy, including
product development plans and timelines, marketing strategies, and plans for
obtaining necessary financing. The business plan shall include forecasts showing
the funds, personnel, and time budgeted and planned for development of the
Intellectual Property Rights and Know- How; and

 
 
(b)
within thirty (30) days of the Effective Date, evidence that Company has secured
funding commitments of three hundred thousand dollars ($ 300,000)

 
2.         Company shall negotiate with the University and enter into a
sponsored research agreement for the benefit of Dr. Leland Shapiro which shall
include a requirement to initiate a program to perform animal toxin testing for
an amount not less than sixty-five thousand dollars ($65,000) within thirty (30)
days of the Effective Date.
 
3.         From its inception through that date which is twelve (12) months of
Effective Date, the Company shall have raised a minimum of nine hundred thousand
dollars ($900,000) in debt or equity capital.
 
 
 

Exclusive License Apro Biopharmaceutical, Inc. Final April 19,2006        
21 of 21
       CU 1085 H

 
 

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

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