ex10_7.htm


    RESEARCH
AGREEMENT

    


    BY
AND BETWEEN

    


    ZNOMICS,
INC.

    


    AND

    


    THE
UNIVERSITY OF UTAH

    


    This
Research Agreement ("Agreement") is entered into and effective as of May 6,
2008, (the "Effective Date") by and between Znomics, Inc., a Nevada corporation,
(Tax ill # 52-2340974) having its principal place of business at 2611 SW 3rd Ave,
Suite 200 Portland, Oregon 97201, ("Sponsor") and the University of Utah, a body
politic and corporate of the State of Utah, ("University").

     

    RECITALS

     

    WHEREAS,
Sponsor wishes to have certain research services performed in accordance with
the scope of work outlined in this Agreement; and

     

    WHEREAS,
the performance of such research is consistent, compatible and beneficial to the
academic role and mission of University as an institution of higher
education;

     

    WHEREAS,
University is qualified to provide such research services; and

     

    WHEREAS,
As a benefit of funding such research, University is willing to grant to Sponsor
an exclusive option to license inventions made during the course of such
research in accordance with Section 10.4 below.

     

    NOW,
THEREFORE, for and in consideration of the mutual covenants, conditions and
undertakings herein set forth, the parties agree as follows:

     

    AGREEMENT

     

    1.           Scope of Work;
Performance.

     

    a.           General. University
agrees to perform for Sponsor certain research

     

    ("Research")
described in the Scope of Work set forth in Appendix A, which is attached hereto
and incorporated herein by this reference. The Scope of Work may be modified
from time to time by mutual Agreement of the Principal Investigator (as defined
below) and Sponsor.

     

    b.           Records. University
will 'l'\rill keep accurate financial records and will require

     

    that
Principal Investigator and other personnel assisting in the Research
maintain accurate scientific records relating to the Research and will make such
scientific records and other records available to Sponsor or Sponsor's
authorized representative throughout the term of this Agreement during normal
business hours upon reasonable notice; provided financial records shall only be
available to the extent necessary to document personnel effort required under
this Agreement. It
is understood that

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

    


    such
records shall include detailed, witnessed laboratory notebooks sufficient to
document any inventions made in the course of the Research. Upon request by
Sponsor and at Sponsor's expense, University agrees promptly to provide copies
of all such materials to Sponsor, in whatever condition maintained by the
Principal Investigator and his staff.

     

    c.           Other Research.
Sponsor understands that University may be involved in

    similar
research through facility other than Principal
Investigator, on behalf of itself and others.

     

    2.           Period of
Performance. The Project period under this Agreement is intended to
commence

     

    on the
Effective Date and continue for twelve (12) months thereafter (the "Project
Period"), The Budget Period shall cover the entire Project Period (the "Initial
Term"). This Agreement may be extended for additional periods of performance
beyond the Initial Term, upon written approval by Sponsor and
University,

     

    3.           Compensation and
Payment.

     

    3.1           Compensation. Sponsor
shall pay to University the amounts set forth on Appendix A

     

    for
performance of the Research under this Agreement (the "Compensation") on a fixed
price basis, Invoices will be submitted to: Richard Sessions, Znomics Inc., 2611
SW 3m Ave., Suite
200, Portland Oregon, 97201

     

    3.2           Payment. Sponsor
shall pay the Compensation in accordance with the schedule listed

     

    on
Appendix A. Any
overpayment with respect to cost reimbursement will be returned to the
Sponsor. Compensation checks shall be payable to "The University of Utah" and
shall be delivered to:

     

    GARY S.
GLEDHILL UNIVERSITY OF UTAH RESEARCH ACCOUNTING

     

    201
PRESIDENT'S CIRCLE, ROOM 406 8AL T LAKE CITY UTT
84112-9020

     

    4.           Technical
Supervision.

     

    4,1           Supervision by
Sponsor. The person with primary responsibility for supervision
of

     

    the
performance of the Research on behalf of Sponsor shall be Dr. Steve Kurtz, or
such other person as may be designated by Sponsor, who shall have primary
responsibility for technical supervision of the Project.

     

    4.2           Supervision by
University. The person with primary responsibility for supervision
of

     

    the
performance of the Research on behalf of University shall be Dr. Nikolaus Trede
(the “Principa1 Investigator"). No other person shall replace or substitute for
him/her in the supervisory responsibilities hereunder without the prior written
approval of both University and Sponsor, which may be granted or withheld at
each Party's sole discretion; provided in the event
Principal Investigator becomes unavailable, the parties will cooperate in good
faith to appoint a mutually acceptable replacement principal investigator or if
a replacement is not available, terminate this Agreement.

     

    
      
        
        

      

      
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    5.           Reporting
Requirements. University shall provide written reports to Sponsor on the
progress

     

    of the
performance of Research as outlined or required in the Scope of Work. A final
"Written report shall be furnished to Sponsor upon completion of the Research
within 60 days (If the last day of the project period and after the final
payment has been received.

     

    6.           Equipment; Material
Transfer. All equipment, instruments and materials purchased or
used

    by
University in connection with performance of the Research shall at all times
remain under the sole control and ownership of University. In order for each
Party to conduct its activities and research related to the Research, the
Parties may transfer to each other certain biological materials from time to
time during the Research. In the case of the
University transfer of materials to Sponsor, Sponsor agrees that all materials
obtained from University shall be used solely for the purpose of conducting the
Research and any intellectual property arising from Sponsor's activities shall
be subject to the terms of this agreement, including, without limitation the
Option provisions set forth in Section 10.4. Any transfer of Sponsor material to
University shall be outside the scope of this Agreement and shall be subj ect to
the provisions of the Material Transfer Agreement attached hereto as Appendix
B.

    7.           Publication and
Confidentiality; Publicity.

     

    7.1           Publication. In
furtherance of University's role as a public institution of higher

     

    education,
it is necessary that significant results of research activities be reasonably
available for publication by the University, and Sponsor acknowledges that
University may publish the results of research conducted in connection with this
Agreement.

     

    Notwithstanding
the foregoing, University and Principal Investigator each agree not to publish
the results of research conducted in connection with this Agreement (the
"Results"), without the prior written consent of Sponsor, until the expiration
of six (6) months following the first to occur of either the termination of this
Agreement or submission of the Final Report required under Section 4 hereof. In
the event either of University or Principal Investigator wishes to publish the
Results pursuant to this Section 7.1, University and Principal Investigator each
agree to provide to Sponsor written notice of such intent to publish and a draft of such
publication. Sponsor shall have sixty (60) days after receipt of the draft
publication to request in writing the removal of portions deemed by Sponsor to
contain confidential or patentable material owned by Sponsor, or to request a
delay in submission of the draft for
publication pending Sponsor's application for patent protection. University and
Principal Investigator shall have no obligation to delay publication of the
draft for longer than six (6) months following delivery of University and
Principal Investigator's notice to Sponsor of intent to publish. If University
and Principal Investigator do not receive Sponsor's written response to the
notice of intent to publish within the thirty (30) day period, then Sponsor
shall be deemed to have consented to such publication. Information supplied to
University and Principal Investigator by Sponsor and identified by Sponsor as
proprietary information shall not be included in any material published by
University and Principal Investigator without prior written consent of
Sponsor.

     

    7.2           Confidentiality.
Company acknowledges that University is a government entity and

     

    thus
subject to the Utah Government Records Access Management Act, Section 63-2-101
et seq., Utah Code Ann. (1997 and Supp. 2005), as amended ('"GRAMA") and Section
53B-16-301 et seq., Utah Code Ann. (1997 and Supp. 2005). Pursuant to GRAMA and
Section 53B-16-301 et seq., this

     

    
      
         


      

      
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    Agreement,
and confidential information provided pursuant hereto, may be subject to public
disclosure. Any person who provides University will records that such person
believes should be protected from disclosure for business reasons must, pursuant
to Section 63-2-308
of GRAM A and Section 53B-16-304, provide to University, along with such
records, a written claim of business confidentiality and a concise statement of
reasons supporting such claim. Except as expressly provided herein, each Party
agrees not to disclose any terms of this Agreement to any third party
without the consent of the other party, except as required by securities or
other applicable laws, to prospective or actual investors or business partners,
or such party's accountants, attorneys and other professional
advisors.

     

    
      7.3    Publicity. Except as
required by law or in the normal course of business identification, neither
University nor Sponsor shall issue any press release or make any other written
statements in connection with work performed under this Agreement intended for
use in the public media in a manner suggesting any endorsement by the other,
without approval of such other party, which approval shall not be unreasonably
withheld. Both Sponsor and University, however, shall acknowledge Sponsor's
support of the Research under this Agreement in scientific publications and
other scientific communications. In any other statements, the parties shall
describe the scope and nature of their participation accurately and
appropriately.

    

     

    8.           Indemnification.

     

    8.1           Indemnification by
University. University is a government entity and is subject to
the

     

    Utah
Governmental Immunity Act, Section 63-30d-101 seq., Utah Code Ann. (1997 and
Supp. 2005), as amended (the "Act"). Subject to the Act, University shall
indemnify, defend and hold harmless Company, its directors, officers, agents and
employees against any actions, suits, proceedings, liabilities and damages to
the extent caused by the negligent acts or omissions of University, its
officers, agents or employees in connection with the performance of University's
obligations under this Agreement. Nothing in this Agreement shall be construed
as a waiver of any rights or defenses applicable to University under
the Act, including without limitation, the provisions of Section 63-30d-604
regarding limitation of judgments.

     

    8.2           Indemnification by
Sponsor. Sponsor shall indemnify, defend and hold harmless

    University,
its directors, officers, agents and employees against any actions, suits,
proceedings, liabilities and damages that may result from the negligent acts or
omissions of Sponsor, its officers, agents or employees in connection with this
Agreement.

     

    9.           Compliance With Laws.
In performance of the Research, Sponsor and University shall

     

    comply
with all applicable federal, state and local laws, codes, regulations, rules and
orders.

     

    10.           Patents and
Inventions.

     

    10.1
Ownership.
Subject to the rights granted to Sponsor herein, the University shall own all
right, title and interest in all inventions and improvements (whether or not
patentable) conceived or reduced to practice by University or University
personnel in the performance of the Research (hereinafter collectively
"Invention") and may, at its election, file all patent applications relating
thereto. Patent rights to inventions that are made jointly by employees of
University and Sponsor (collectively, "Joint Inventions") shall be owned
jointly. For purposes of this Section 10.1 whether


    
      
         


      

      
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    an
invention is made "jointly" shall be determined under principles of inventorship
in accordance \\rith applicable patent law, and ''joint ownership" means that,
subject to the terms of the License Agreement, each party is free to exploit
such patent rights and authorize others to do so, with no obligation to obtain
consent of the other or to account to the other party for profits or
otherwise.

     

    10.2
Notice.
University shall notify Sponsor promptly in writing of all discoveries and
inventions disclosed to University by Principal
Investigator or other University personnel under his supervision that arise out
of or in connection with the Research during the term of this Agreement and one
(l) year thereafter and provide Sponsor with a suitable description and other
information reasonably requested by Sponsor for the purpose of evaluating such
discovery or invention for purposes of the option in Section 10.4 below. The
filing for, prosecution of applications and maintenance of patents on such
inventions shall be handled in accordance with the License
Agreement.

     

    10.3
Assignments.
University shall obtain appropriate written agreements from all personnel
involved in the Research, including without limitation the Principal
Investigator, such agreements shall require that all discoveries and inventions
first conceived or reduced to practice as a result of or in connection with the
Research shall be reported promptly and assigned to University. Principal
Investigator and other University faculty, staff and students performing the
Research, agree that they will not collaborate with others not employed by
University (other than Sponsor) in performing the Research, without Sponsor's
prior written consent.

     

    10.4
Option. In
consideration of Sponsor's support of University in performance of the Research,
University hereby grants to Sponsor an option (the "Option") to obtain an
exclusive, worldwide license, with the right to sublicense,
under the patent rights with respect to University Inventions and/or Joint
Inventions (together, "Inventions"). University shall also provide access to all
information, know-how, biological materials or other subject matter reasonably
necessary for the practice of such Inventions. Sponsor may exercise the Option
by giving University notice of its desire to exercise the Option, on, or prior
to, the date that is six (6) months after the University has provided written
notice to Sponsor of any such Invention ("Option Period"). Upon exercise of the
Option in writing by Sponsor, the parties will meet within thirty (30) days to
begin negotiating the terms of the license in accordance vdth
the terms set forth on Appendix C. The parties agree to negotiate in good faith
and that any license agreement will be consistent with the terms set forth on
Appendix C. In the event the Option is not exercised within the Option Period,
the University shall be free to license the Invention to others, on terms no
more favorable than those set forth 011 Appendix C, at the University's sale
discretion with no further obligation to the Sponsor. In the event the
University shall abandon its rights to any such Invention prior to exercise of
said Option, University shall assign to Sponsor all of the University's rights,
title and interest therein.

     

    10.5
Warranty.
University represents and warrants that, subject to Sponsor's Option under
Section 10.4 and rights granted to Sponsor pursuant to the License Agreement and
joint ownership rights of Sponsor, University owns all right, title and interest
in and to each Invention disclosed to University, and that University has the
right to grant to Sponsor the Option and license to such Inventions contemplated
under Section 10.4 above and the License Agreement.

     

    11.           Relationship of
Parties. In assuming and performing the obligations of this
Agreement,

    University
and Sponsor are each acting as independent parties and neither shall be
considered or

     

    
      
         


      

      
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    represent
itself as a joint venturer, partner, agent or employee of the other. Neither
party shall use the name or any trademark of the other party in any advertising,
sales promotion or other publicity matter without the prior written approval of
the other party.

     

    12.           Term; Termination.
This Agreement may be terminated by
either party at any time and from

    time
to
time, by giving written notice thereof to the other party. Such
termination shall be effective thirty (30) days after receipt of such notice.
Termination shall not relieve either party of any obligation or liability
accrued hereunder prior to such termination, or rescind or give rise to any
right to rescind any
payments made prior to the time of such termination, provided that, if
University terminates this Agreement prior to the end of the Project Period,
University shall repay Sponsor any amounts paid by Sponsor for work that has not
been completed and/or supplies that have not been purchased upon the date
University gives notice of such termination.

     

    13.           Uncontrollable
Forces. Neither Sponsor nor University shall be considered to be in
default

    of this
Agreement if delays in or failure of performance shall be due to uncontrollable
forces the effect of which, by the exercise of reasonable diligence, the
nonperforming party could not avoid. The term "'uncontrollable forces" shall
mean any event which results in the prevention or delay of performance by a
party of its obligations under this Agreement and which is beyond the control of
the nonperforming party. It includes, but is
not limited to, fire, flood, earthquakes, storms, lightning, epidemic, war,
riot, civil disturbance, sabotage, inability to procure permits, licenses, or
authorizations from any state, local, or federal agency or person for any of the
supplies, materials, accesses, or services required to be provided by either
Sponsor or University under this Agreement, strikes, work slowdowns or other
labor disturbances, and judicial restraint.

     

    14.           Miscellaneous.

     

    14.1
Assignment.
This Agreement may not be assigned by Sponsor without the prior written consent
of University, except to
a party that succeeds to all or substantially all of Sponsor's business
or assets relating to this Agreement whether by sale, merger, operation of law
or otherv.ise; provided that such assignee or transferee promptly agrees in writing to be
bound by the terms and conditions of this Agreement.

     

    14.2
Entire
Agreement. This Agreement, with its attachments, constitutes the entire
agreement between the parties regarding the subject matter hereof and supersedes
any other written or oral understanding of the parties. This Agreement may not
be modified except by written instrument executed by both parties. It is
understood that this Agreement and the License Agreement are independent and
termination of either agreement shall not operate to terminate or otherwise
effect the rights and obligations of the parties under the other
agreement.

     

    14.3
Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties, their successors and permitted assigns.

     

    14.4
Notices. Except
as provided in Section 3 hereof regarding payment of invoices, any notice or
other communication required or permitted to be given to either party hereto
shall be in writing and shall be deemed to have been properly given and
effective: (a) on the date of delivery if delivered in person during recipient's
normal business hours; or (b) on the date of delivery if delivered by courier,
express mail service or first-class mail, registered or certified, return
receipt

     

    
      
        
        

      

      
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    requested.
Such notice shall be sent or delivered to the respective addresses given below,
or to such other address as either party shall designate by written notice given
to the other party as follows:

    


    In the
case of University

     

    
    

     

    
      	Technical	Contractual
	
              Nikolaus
      S. Trede, M.D. University of Utah

              School
      of Medicine 30N.1900ERm2A152 Salt Lake City Utah
    84108

            	
              UNIVERSITY
      OF UTAH

              OFFICE
      OF SPONSORED PROJECTS 1471 Federal Way

              SALT
      LAKE CITY, UT 84102 Attn: Todd B.
      Nilsen, J.D.

            
	 	 
	Technical	Contractual
	
              Stephen
      E. Kurtz, Ph.D. Znomics, Inc.

              2611
      SW 3rd
      Avenue, Portland, OR 97201

            	
              Richard
      A. Sessions, M.B.A. Znomics, Inc.

              2611
      SW 3rd
      Avenue Suite 200

              Portland,
      Oregon 9720 I

            


    

     

    In the
case of Sponsor:

     

    14.5
Order of
Precedence. In the event of any conflict, inconsistency or discrepancy
amount, the Agreement and any other documents listed below shall be resolved by
giving precedence in the following order.

     

    a.           This
Agreement including the Exhibits hereto

     

    b.           Purchase
Order issued by Sponsor. In the event a purchase order is issued

    under
this Agreement and such purchase order contains standardized terms and
conditions, the terms and conditions of this Agreement shall supercede and
replace all such purchase order standardized terms and conditions.

     

    14.6
Governing Law and
Disputes. This Agreement shall be interpreted and construed in accordance
with the laws of the State of Utah, without application of any principles of
choice of taws. Disputes that cannot be resolved by Sponsor and University shall
be determined by a court of competent jurisdiction in the State of
Utah.

     

    14.7
Nonwaiver. A
waiver by either party of any breach of this Agreement shall not be binding upon
the waiving party unless such waiver is in writing. In the event of a written
waiver, such a waiver shall not affect the waiving party's rights with respect
to any other or further breach.

     

    14.8
Use of Name.
Sponsor may not use the name of University in any news release or advertising or
any publications directed to the general public without written approval of
University.


    
      
         


      

      
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    14.9  Attorney Fees. The
prevailing Party in any action or suit to enforce the terms or conditions of
this Agreement shall be entitled to recover its costs of court and reasonable
attorneys' fees incurred in enforcing the
terms or conditions of this Agreement.

     

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

     

    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized representatives effective as ofthe day and year fIrst written
above.

    


    
      	
              ZNOMICS,
      INC.

              “SPONSOR”

               

              By:
      /s/ Richard A.
      Sessions

              Signature

              Name:
      Richard A. Sessions, M.B.A.

              Title:
      Chief Executive Officer

               

               

              Date:
      May 6, 2008

            	
              UNIVERSITY
      OF UTAH

              “UNIVERSITY”

               

              By:
      /s/ Brent K.
      Brown

              Signature

              Name:
      Brent K. Brown, Esq.

              Title:
      Director,

              Office
      of Sponsored Projects

               

              Date:
      May 8, 2008

            


    

     

    ACKNOWLEDGMENT

     

    As an
employee of the University and not as a party to this Agreement, I have read
this Agreement and understand, accept and will abide by the terms and conditions
of this Agreement.

    


    
      	
               
      

            	
              By:
      /s/ Nikolaus S. Trede

            


    

    
      	
               
      

            	
              Nikolaus
      S. Trede, M.D.

            


    

    
      	
               
      

            	
              Principal
      Investigator

            


    


    
      
         


      

      
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    APPENDIX
A

     

    SCOPE
OF WORK and BUDGET

     

    Znomics,
Inc. ("Znomics") I
Nikolaus Trede, MD, PhD.

    Research
Plan March 27, 2008

     

    Project Overview: Utah and
Znomics will enter into collaborative research agreement with the laboratory
of Dr. Nikolaus Trede of Utah ('"Trede Lab") to develop medicines that treat
human disease including T-cell leukemia, autoimmune diseases, and complications
of transplantation. The associated licensing agreement and consulting contract
are contained in separate documents.

     

    I.           Deliverables:

     

    The Trede
lab will conduct screens of small molecule compound libraries using zebrafish as
a model system to identify hits that specifically ablate T cells. Znomics will
work in
collaboration with Dr. Trede to develop these screening hits into lead
compounds. The Trede Lab and Znomics will exchange research data and biweekly
progress updates.

     

    The Trede
Lab will provide the following deliverable items and research
services:

     

    
      	
              1)  

            	
              Dr.
      Trede will consult with Znomics to select a diverse panel of compounds for
      screening using zebrafish in the Trede
Lab.

            


    

     

    
      	
              2)  

            	
              The
      Trede Lab will screen not less than 25,000 compounds, in single
      compound arrays from the Utah! NPS Library or other libraries using
      appropriate zebrafish T cell assays as mutually
      agreed by the parties.

            


    

     

    
      	
              3)  

            	
              The
      Trede Lab will work to develop appropriate zebrafish T cell assays
      including monoclonal antibodies. Znomics will have research use of anti -
      T cell antibodies that may be developed by Dr.
  Trede.

            


    

     

    
      	
              4)  

            	
              The
      Trede Lab will retest up to 24
      primary hit compounds in zebrafish to reconfirm and determine a dose
      response for each.

            
	 	 
	5)
       	The
      Trede Lab will perform cell cycle analysis for all compound hits from item
      4.


    

     

    
      	
              6)  

            	
              The
      Trede Lab will perform cell culture assays using 4 different T cell lines,
      B cell and kidney cell lines for hits that pass the cell cycle validation
      screen.

            


    

     

    
      	
              7)  

            	
              The
      Trede Lab will test hits in the Rag2:Bcl2 and p52-/- background zebrafish
      as needed.

            


    

     

    
      	
              8)  

            	
              The
      structures of confirmed hits in the Utah NPS Library will be validated
      by mass spectroscopy at Utah.

            


    

     

    
      
         

      

      
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              9)  

            	
              The
      Trede Lab will test the effects of up to 3 selected hits for their
      activity against T cells in vivo in mice as mutually agreed by the
      parties. This work does not include zenograft
  studies.

            


    

     

    
      	
              10)  

            	
              The
      structures of all hits and any associated data will be transmitted to
      Znomics by the Trede Lab for hit to lead work in
      consultation with Dr. Trede. These hits will include all of Dr.
      Trede's previously identified ChemBridge hits and all the hits from
      screening not less than 25 thousand new compounds from the Utah/NPS
      Library or other libraries, as mutually agreed by the parties, using
      appropriate zebrafish T cell assays. The licensing agreement between Utah
      and Znomics describes the process for licensing compounds developed under
      this collaboration.

            


    

     

    II. Effort: Dr Trede will allocate
the following effort to accomplish the deliverables set forth in Section
I above:

     

    
      	
              1)  

            	
              3.5
      FTEs from the Trede lab, with supervision and management of the project by
      Dr. Trede

            


    

     

    III. Timing: Dr. Trede will
accomplish deliverables 1-4 in section I above with the personnel and
supplies outlined in section II above in six (6) months. Deliverables 4-10 will
be completed within twelve (12) months of the effective date.

     

    IV. Payment: Sponsor will pay
University a total of $233,883 (inclusive of all FTE and supply

    fees)
as
follows:

     

    
      	
              ·  

            	
              Research
      Fee: Znomics will pay University an initial payment of $33,175 upon
      execution of this Agreement and receipt of an invoice from the University.
      Subsequently, Znomics will pay University a Research Fee of $99,525 upon
      completion of due diligence on the chemical library and initiation of the
      program and receipt of an invoice from the University. These payments will
      be used to support research in the Trede Lab following the Proposed Budget
      outlined in Section II
      above.

            


    

     

    
      	
              ·  

            	
              Success
      Fee: Znomics will pay Utah a final payment of $101,183 upon completion of
      the deliverables 1-10 in section I above. The parties will cooperate in
      good faith to resolve reasonable concerns raised by Znomics concerning
      completion of the deliverables; provided nothing herein shall be construed
      as a warranty regarding the research or deliverables under this
      Agreement.

            


    

     

    
      
         


      

      
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    APPENDlX
B

     

    MTA

    
 

    
      
        
           


        

        
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    ZNOMICS,
INC.

    MATERIALS
TRANSFER AGREEMENT

     

    THIS
MATERIALS TRANSFER AGREEMENT (this "Agreement") is made and entered between
Znomics, Inc., a Nevada corporation with its principal place of business at 2611
SW 3rd Ave., Suite
200, Portland Oregon 97201 ("Provider") and University of Utah, a body
politic and corporate of the State of Utah ("Recipient") is effective as
of May 6, 2008 (the '''Effective Date") and sets forth the terms and conditions
on which Provider will transfer materials to Recipient and Recipient's use
thereof.

     

    1.           Background. Provider
is willing to transfer the materials specified on Exhibit A

     

    hereto
(collectively, the "Materials") for use as set forth herein. Recipient desires
to obtain these Materials for the purpose of conducting certain research
described in Exhibit B hereto (as may be
amended by mutual agreement of the parties, the "Research").

     

    2.           Materials. Recipient
agrees that all Materials obtained from Provider, from time to

     

    time,
shall be used solely for the purpose of conducting the Research in the
laboratory of Recipient's employee, Dr. Nikolaus Trede, Ph.D. (the
"Investigator") and not for any commercial or other purposes. Materials shall
include the original materials transferred to Recipient, as well as any progeny,
derivatives or improvements developed or derived by Recipient therefrom, and any
combination of the foregoing with other substances.

     

    3.           Confidentiality.

     

    3.1           Confidential
Information. Recipient shall treat all information received
from

     

    Provider
or otherwise generated in connection with the Research (collectively, the
"Confidential Information") and the Materials as confidential and shall not use
such Confidential Information or 1-laterials except for purposes of the
Research, or disclose any of such Confidential Information or Materials to any
third party or personnel except for the Investigator and those employees of
Recipient working in the Investigator's laboratory who require access thereto to
perform the Research, without the prior written consent of
Provider.

     

    3.2           Exceptions.                            
Notwithstanding the foregoing, Recipient shall have no

     

    obligation
with respect to information (other than the Materials) disclosed by Provider
hereunder that (a) is or becomes publicly known and made generally available
from sources who have not obtained such information, directly or indirectly,
from Provider; or (b) was in Recipient's possession at the time of disclosure by
Provider as established by written documentation and was not acquired directly
or indirectly from Provider or from any other party under an obligation of
confidentiality to Provider; or ( c) was developed independently by Recipient by
those without access to Materials as established by written documentation.
Recipient further agrees that any and all of Recipient's employees who require
access to the Materials to conduct the Research shall be subject to contractual
obligations of non-use and non-disclosure at least as restrictive as those set
forth in this Agreement.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    4.           Protection of Information
and Material. Without limiting Section 3 above, Recipient

     

    shall not
transfer any of the Materials to any other party. Upon completion of the
Research, and in the absence of further written agreement of the parties,
Recipient shall cease all use and make no further use of the Confidential
Information and the Materials. Recipient shall take all reasonable steps,
including, but not limited to, those steps taken to protect information and
other property of its own of a confidential nature, to ensure that the
Confidential Information and Materials are not disclosed or duplicated or in any
manner delivered or disseminated to others. Provider reserves the right to
distribute similar Materials to others and to use such materials for its own
purposes, whatever they may be.

     

    Recipient
is subject to the Government Records Access and Management Act (GRAMA), Section
63-2-101 et seq., Utah Code Ann. (1953), as amended. Notwithstanding any
provision of this Agreement to the contrary, Recipient shall keep confidential
any information provided to Recipient by Provider that Provider considers
confidential, to the extent allowable under GRAMA and as provided in Section
538-16-301 et seq., Utah Code Ann. In order to be eligible for such protection
under GRAMA, confidential information of Provider disclosed to the Recipient
must be in written or other tangible form, marked as proprietary, and
accompanied by a written claim by Provider stating the reasons that such
information must be kept confidential. Provider may disclose confidential
information to Recipient orally. Such oral disclosures shall be reduced to
writing by Provider, marked "Confidential", and delivered to Recipient within 30
days of disclosure.

     

    5.           Title. All right,
title and interest in and to the Confidential Information and all

     

    Materials
shall remain vested in Provider. Without limiting the foregoing, Recipient
agrees that all right, title and interest in and to Inventions shall be the sole
property of Provider. Accordingly, Recipient hereby assigns to Provider the
entire right, title and interest in and to the Inventions. Recipient hereby
agrees to promptly report to Provider all Inventions. Recipient further agrees
to execute any and all papers and documents that are necessary or convenient to
perfect the foregoing assignment and fully implement Provider's rights in the
Inventions. For purposes of this Agreement, "Invention" shall mean any and all
discoveries, inventions and other subject matter (whether patentable or not)
conceived, reduced to practice or otherwise discovered by Recipient in the
course of performing the Research or otherwise in connection with use of the
Materials as permitted under this Agreement and all intellectual property rights
therein. Nothing in this Agreement is to be construed as granting a license to
Recipient to utilize the Confidential Information or Materials except as
expressly provided in this Agreement, under any patent or other intellectual
property rights owned by Provider, unless a separate agreement for such rights
is executed by Recipient and Provider.

     

    6.           Publication.
Recipient shall not disclose the Invention, its underlying data,
and/or

     

    any
conclusions drawn from the Research, orally or in writing, (e.g., by submission
of a manuscript, abstract, patent application, or otherwise) to any third party,
without prior 'Written approval of Provider, subject to the following. Recipient
shall provide Provider with a copy of any manuscript(s) intended for publication
or disclosure describing the Materials, or the data and/or results of its
research using the Materials, in each case at least sixty (60) days prior to the
intended date of initial publication or disclosure to allow Provider an
opportunity to review, and comment upon and approve such proposed publication.
If Provider notifies Recipient within sixty (60) days of receipt of the proposed
publication or disclosure that the data, results and/or other subject matter
presented in the proposed publication or disclosure contains patentable subject
matter claiming (i)

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    Materials
and/or (ii) Results and/or (iii) the use of Materials and/or Results, Recipient
agrees to delay such publication or disclosure for a period of at least ninety
(90) days from Recipient's receipt of such notice from Provider to allow
Provider to take appropriate steps for filing patent applications thereon.
Further, if Provider notifies Recipient that such proposed publication presents
data and/or results which contain any information of Provider that is subject to
use and nondisclosure restrictions under Section 3 hereof, Recipient agrees to
remove such information from the proposed publication or disclosure. Recipient
shall mention Provider and the responsible Provider employee(s) by name in any such
publication as co-authors or in any other appropriate way in accordance with
accepted norms for scientific publication.

     

    7.           Return of
Materials.  Upon completion of the Research, Recipient agrees
to return

    any
Materials not consumed therein and provide Provider with a copy of written
reports, documents, data, results and other information relating to the
Materials and the Research.

     

    8.           Care in Use of
Materials.      Recipient acknowledges that
the Materials are

    experimental
in nature and may have unknown characteristics and therefore agrees to use
prudence and reasonable care in the use, handling, storage, transportation and
disposition and containment of the Materials. Recipient shall at all times use
the Materials in compliance with all state, federal and other applicable laws,
rules and regulations pertaining to use of the Materials.

     

    9.           Waiver of
Warranties.  PROVIDER SUPPLIES ALL INFORMATION AND

    MATERIALS
WITHOUT ANY WARRANTY, REPRESENTATION OR UNDERTAKING WHATSOEVER, EXPRESSED OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY RESPECTING THE EFFICIENCY,
PERFORMANCE, WORKMANSHIP, CONDITION, MERCHANTABILITY, FITNESS FOR PARTICULAR
PURPOSE, OR NONINFRINGEMENT.

     

    10.           No
Conflict.   Recipient shall not use any of the Materials
and/or Results in any research that is subject to consulting, licensing or
similar obligations to any third party, unless written permission is first
obtained from Provider. To the best of its knowledge, Recipient hereby warrants
that the rights and obligations set forth herein do not, and during the term of
the Agreement will not, conflict with any other right or obligation provided
under any other agreement that Recipient has with any third party, including any
company or government entity.

     

    11.           Hold
Harmless.   To the extent allowable by law, Recipient
shall defend, indemnify

    and hold
harmless Provider and its directors, officers and employees from and against any
loss, claims or liability of any kind which arises out of, in connection with,
or as a result of the use, handling, storage transportation, containment or
disposition of the Materials by Recipient or any of its directors, officers,
employees, representatives and/or agents.

     

    12.           No Implied
License.   Nothing in this Agreement, nor either party's
performance

    under it,
is intended to confer or grant, or shall be construed to confer or grant, to
Recipient any license, option, right or other proprietary interest in the
Materials or Results or the use of Materials and/or Results, or in any
intellectual property relating to any of the foregoing, whether by implication,
estoppel or otherwise.

     

    13.           Cost of
Research.   Recipient shall be responsible for its own
expenses in conducting

     

    
      
         


      

      
        15

        
          

        

      

      
         


      

    

     

    the
Research, and Provider shall have no obligation to pay Recipient
therefor.

     

    14.           Miscellaneous.    Except
as otherwise provided herein, each party hereto represents

    that it
has the full right, power and authority to enter into this Agreement. This
Agreement shall be construed and enforced in accordance with the laws of the
United States of America. This Agreement sets forth the entire agreement between
the parties with respect to the subject matter contained herein and supersedes
any previous understandings, commitments or agreements, whether oral or written.
This
Agreement may only be amended with a writing signed by authorized
representatives of both parties hereto that specifically and expressly refers to
this Agreement. Recipient may not assign or otherwise transfer its rights and
obligations hereunder without the prior written approval of
Provider.

     

    IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized representatives.

    


    


    
      	
              ZNOMICS,
      INC.

               

              (“Provider”)

               

               

              By:______________________________

              Signature

               

              Name:
      Richard A. Sessions, M.B.A.

               

              Title:
      Chief Executive Officer

               

               

            	
              UNIVERSITY
      OF UTAH

               

              (“Recipient”)

               

               

              By:_____________________________

              Signature

               

              Name:
      Brent K Brown, Esq.

               

              Title:
      Director,

              Office
      of Sponsored Projects

            
	
              Date:_____________________________

               

               

              Phone:
      503-827-5271 x102

               

              FAX:  503-546-2585

            	
              Date:___________________________

               

               

              Phone:
      801-213-3581

               

              FAX:  801-581-7538

            


    


    
      
         


      

      
        16

        
          

        

      

      
         


      

    

     

    Acknowledgment

     

    I have
read this Agreement and understand, accept and will abide by the terms and
conditions of this Agreement.

     

    


    By:_________________________

    Nikolaus S. Trede, M.D.

    Principal Investigator

     

    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    APPENDIXC

    License
Terms

    
      	
              Purpose

            	
              Utah
      and ZNOM contemplate entering into a research collaboration conducted in
      the laboratory of Dr. Nikolaus Trede of Utah. ZNOM wishes to heave an
      exclusive option to license any and all intellectual property which
      results from the collaboration and is owned by Utah on the terms and
      conditions set forth below. Capitalized terms that are not defined herein
      shall be defined in the License Agreement.

               

            
	
              Option
      Exercise

            	
              ZNOM
      may exercise the option at its sole discretion at any time during the Term
      (the “Exercise”) as set forth in Section 10 of the Research
      Agreement.

               

            
	
              Patent
      Prosecution

            	
              Utah
      shall file and prosecute any and all patent applications prior to
      Exercise. Following Exercise, ZNOM shall take over patent prosecution and
      shall be solely responsible for all patent related expenses. At all times
      following Exercise ZNOM shall consult with Utah regarding patent
      prosecution matters.

               

            
	
              Financial

            	 
      
	
              Option

              Exercise

               

            	
              Within
      thirty (30) days of execution of an exclusive license, ZNOM shall pay Utah
      a one-time non-refundable fee of $25,000

            
	
              Milestones

            	
              The
      following milestone payments shall be paid by ZNOM to Utah once the first
      time such milestone is reached for a Licensed Product:

               

            
	 
      	
              Issuance
      of US patent - $75,000

            
	 
      	
              Issuance
      of EU patent - $75,000

            
	 
      	
              Initiation
      of first phase I trial - $100,000

            
	 
      	
              Initiation
      of first phase II trial - $150,000

            
	 
      	
              Initiation
      of first phase III trial - $200,000

            
	 
      	
              First
      sale - $250,000

            
	 
      	 
      
	
              Maintenance

              Fee

            	
              ZNOMICS
      shall pay an annual maintenance fee of $5,000 on each anniversary of the
      effective date of the license agreement.

               

            
	
              Royalty

            	
              ZNOMICS
      and Utah will negotiate a royalty between 1-2% on sales of a Licensed
      Product covered by a Valid Claim of a Licensed Patent. Provided that the
      total royalty paid in any years does not exceed $1,000,000. ZNOM shall
      have a royalty reduction for royalties paid for third party intellectual
      party which is required for ZNOM to practice the Licensed
      Patent.

               

            
	
              Sublicensing

            	
              In
      addition to the above milestone payments ZNOM shall share revenue related
      to sublicensing of the Licensed Patent and negotiate a range as follows :
      35%-10% of all consideration from a partner (excluding FTE
      support)