**Exhibit 10.12**

 

**Collaborative ResearchAgreement**

 

**NewHorizons Diagnostic** (“New Horizons”), a Maryland corporation with an address at 9110Red Branch Road, Columbia, Maryland 21045, and**Power3Medical Products, Inc.**(“Power3”), with an address of 3400Research Forest Drive, The Woodlands, TX 77381, enter into this Collaborative Research Agreement (“Agreement”)for the development and evaluation of a diagnostic tool for NeurodegenerativeDisease.  This Agreement is effective asof March 21, 2005 (“Effective Date”).

 

**1.****                                      SCOPEOF WORK.**

 

1.1                                 Within 60 days afterthe Effective Date, Power3 and New Horizons will develop an agreed upon time schedule andbudget for accomplishing the Schedule of Work set forth under this Section andin Exhibit A.  The time schedule andbudget will clearly define the obligations of each party and the expenses to beencumbered by each party.

 

1.2                                 As soon as practicableafter the Effective Date, Power3 will disclose to New Horizons, the identity ofprotein biomarkers for neurological disease and related information as setforth under Phase I of Exhibit A.

 

1.3                                 Technical personnel ofPower3 and New Horizons will meet to determine the most efficacious way topursue the expression of the protein biomarkers as set forth under Phase III ofExhibit A.  Power3 and New Horizonsshall work together to select which biomarkers to pursue first and to achievemilligram quantities of those protein biomarkers.

 

1.4                                 Once sufficientquantities of a protein biomarker become available, New Horizons will initiatethe production of monoclonal and polyclonal antibodies to that biomarker as setforth in Phase IV of Exhibit A.

 

1.5                                 The technicalpersonnel of Power3 and New Horizons will determine which biomarker antibodiesto include in one or more diagnostic assays. Once the antibodies to be included in a diagnostic assay becomeavailable, New Horizons and Power3 will initiate the development and validationof a diagnostic assay for a neurodegenerative or other disease pursuant toPhase V of Exhibit A.

 

1.6                                 Technical personnel ofPower3 will be available on a reasonable basis during the term of thisAgreement to consult with New Horizons and provide assistance to New Horizonsin the performance of Phases II, III, IV and V.

 

1.7                                 New HorizonsDiagnostics will co-develop with Power3 a test comparable to the standard serumtest now run from a whole blood spot card.

 

1.8                                 New HorizonsDiagnostics will assist in expanding the testing platform currently developed(and future platforms) into other geographical locations where it hasinfluences.

 

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1.9                                 New HorizonsDiagnostics will assist Power3 to raise the required capital (government orprivate) to enable the validation of the technology and test development.

 

**2.****                                      CONFIDENTIALITY. **For the purposes of this Agreement, theterm “Information” shall mean all information provided by either party to theother for the purposes of fulfilling this Agreement which the disclosing partyshall deliver to the receiving party, marked “Confidential”, and all oralmaterial which the disclosing party declares to be confidential and confirmssuch declaration in writing within thirty (30) days of disclosure.  The receiving party agrees to maintain theInformation in confidence with the same degree of care it holds its ownconfidential information.  The receivingparty will not use the Information except for the work described in Exhibit Aand Section 1 of this Agreement. The receiving party will disclose the Information only to its officersand employees directly concerned with the work, but will neither discloseInformation to any third party nor use the Information for any otherpurpose.  All obligations of thereceiving party under this Agreement shall survive the termination of thisAgreement for a period of five (5) years.

 

**3.****                                      EXCEPTIONSTO CONFIDENTIALITY. **The receivingparty’s obligation of nondisclosure and the limitations upon the right to usethe Information shall not apply to the extent that the receiving party candemonstrate by written documentation that the Information: (a) was in thepossession of receiving party prior to the time of disclosure; or (b) isor becomes public knowledge through no fault or omission of receiving party; or(c) is obtained by receiving party from a third party under no obligationof confidentiality to the disclosing party; or (d) is ordered to bedisclosed by a court of law.

 

**4.****                                      CONSIDERATION.   **New Horizons Diagnostics (NHD) andPower3 will work together to achieve the goals of Phases II, III, IV and Vof Exhibit A for the development of at least one successful diagnostic kitfor monitoring the presence of neurological and/or other diseases.  In the event that the goals of Phases II, III,IV and V are achieved, NHD will be compensated in any of the followingfashions:

 

1.               NHD will receive abusiness agreement to manufacture at least one key component of any diagnostickit developed under this Agreement.

2.               NHD will receiveroyalties on the sale of any diagnostic kit developed under this Agreement.

3.               NHD will form ajoint venture with Power3 for the commercialization of at least one diagnostickit developed under this Agreement.

4.               NHD will receive areasonable percentage of any cash consideration that Power3 receives from athird party for the technology and/or diagnostic kit developed under thisAgreement.

 

NHD realizes that it is too early to commit to precise numbers for theabove considerations.  Both parties agreeto be reasonable in assessing these.  Ifthere is any disagreement they agree to arbitration by a mutually acceptablethird party.

 

**5.****                                      DISCLAIMEROF WARRANTIES.  THE INFORMATION THAT NEWHORIZONS SHALL RECEIVE, HAVE ACCESS TO, AND/OR BECOME FAMILIAR**

 

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**WITH PURSUANT TO THIS AGREEMENT IS PROVIDED “ASIS” AND “WHERE IS.”  THERE ARE NOREPRESENTATIONS OR WARRANTIES BY POWER3, EXPRESSED OR IMPLIED, INCLUDING,WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR APARTICULAR PURPOSE.**

 

**6.****                                     ****PUBLICITY. **No press releases or other statements, intended foruse in the public or private media, in connection with this Agreement shall bemade by Power3 or New Horizons without the prior written consent of the otherParty.  If either Party is required by lawor governmental regulation to describe its relationship to the other, it shallpromptly give the other Party notice with a copy of any disclosure it proposesto make.  This does not include internaldocuments available to the public, which identify the existence of thisagreement.

 

**7.**                                      **INDEMNIFICATION. **EachParty shall defend, indemnify and hold harmless the other Party, its employees,directors, trustees and officers (“Indemnities”), from and against any and allliability which an Indemnitee may incur by reason of the other Party’s use ofthe Information or results of the work, except to the extent arising from thenegligence or willful malfeasance of the Indemnities.

 

**8.**                                      **ENTIRE AGREEMENT.** This Agreement sets forth the entire agreement between Power3 and NewHorizons as to its subject matter.  Noneof the terms of this agreement shall be amended except in a writing signed byboth parties.

 

**9.**                                      **BREACH.**  If eitherparty breaches this agreement, the other may terminate it if the breachingparty does not cure the breach within thirty (30) days of written notice of thesame.  The right of termination shall bein addition to any other rights the terminating party may have, at law orequity, pursuant to this Agreement.

 

**10.**                               **COMPLIANCEWITH LAWS.**  Both New Horizonsand Power3 shall comply in all material respects with the requirements of allapplicable laws, rules, regulations and orders of any government authority inhandling or disposing of biological reagents.

 

**11.**                               **CHOICE OFLAW.**  This Agreement shall beconstrued in accordance with the laws of the State of Texas.

 

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IN WITNESS WHEREOF, the parties hereto have caused their dulyauthorized representatives to execute this Agreement.

 

 
| **Agreed:**                        |                                 | **Agreed:**                         |
|------------------------------------|--------------------------------------|-------------------------------------|
|                               |                                 |                                |
| Power3 Medical Products, Inc. |                                 | New Horizons Diagnostic Corporation |
|                               |                                 |                                |
|                               |                                 |                                |
| By:                                | /s/Steven B. Rash                    |                                |   | By: |       /s/Lawrence  Loomis |   |
| Name:                              |   Steven B. Rash           |                                |   |   | Name: |   Lawrence  Loomis |   |
| Title:                             |     Chairman/CEO |                                |   |   | Title: |       President |   |
| Date:                              |   3/21/05                  |                                |   |   | Date: |   3/21/05 |   |
|                                    |                                      |                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**Exhibit A**

**Scopeof Work**

 

**Phase I****                                               BiomarkerIdentification**

1.                                  BiomarkerIdentification

2.                                  AccessionNumber in NCBI or Swiss Database

3.                                  Proteinand/or DNA sequence

4.                                  Clinicaland Patient data related to the Biomarker

 

**Phase II****                                           Developmentof Diagnostic Test based upon current technology**

1.                                  NHD will develop, inconjunction with Power3 a test device and procedure that will enable Power3 toget results from a whole blood spot (on a card) comparable to their currentresults obtained from patient serum.

 

**Phase III****                                       ProteinExpression of Non-Commercially Available Biomarkers**

1.                                  ConstructcDNA clone

2.                                  Expressat least 2 mg protein for injection

 

**Phase IV****                                      AntibodyDevelopment and Evaluation**

1.                                  DetermineAntibody Specifications (specificity, affinity, cross-reactivity, etc.)

1.                                  ImmunizeHost

2.                                  ProduceAntibodies

3.                                  ConstructAntibody Libraries

4.                                  EvaluateAntibodies

5.                                  DeliverAntibodies that meet Specifications

 

**Phase V.****                                       DiagnosticKit Development**

1.                                  IdentifyAntibodies for Differential Diagnosis

2.                                  Designand Develop Diagnostic Kit

3.                                  Validationof Diagnostic Kit

 

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