ex10_3.htm


    Exhibit
      10.3

     

    EXCLUSIVE
      LICENSE AGREEMENT

    For
      Licensing Patent Rights

    


    THIS
      AGREEMENT is made
      and entered into this _____ of November, 2007, by and between the Regents Of
      The
      University Of Colorado, a body corporate, having its principal office at 1800
      Grant Street, 8th Floor, Denver, CO 80203 (hereinafter “University”) and V-Clip
      Pharmaceuticals, Inc.(“V-Clip”), a California corporation having its principal
      office at 1321 Mountain View Circle, Azusa, California 91702, and Viral
      Genetics, Inc, a Delaware corporation having its principal office at 1321
      Mountain View Circle, Azusa, California 91702 (“Viral Genetics”).

    


    WITNESSETH

    


    WHEREAS,
      University is
      the owner of certain Patent Rights (as later defined herein) developed by
      inventor Dr. Karen Newell (“Dr. Newell”), et al., and has the right to grant
      licenses under said Patent Rights, and;

    


    WHEREAS,
      V-Clip and Viral Genetics  are 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 premises and the mutual covenants
      contained herein, the parties hereto agree as follows:

    


    


    ARTICLE
      1 DEFINITIONS

     

    1.01          “Licensee”
      shall mean V-Clip, but in the event of, and upon, merger of V-Clip entirely
      into
      Viral Genetics, Inc., then licensee shall mean Viral Genetics, Inc.

     

    1.02          “Affiliate(s)”
      shall mean every corporation, or entity, which, directly or indirectly, or
      through one or more intermediaries, controls, is controlled by, or is under
      common control with Licensee.  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.

     

    1.03          “Effective
      Date” shall mean the date of the last signature on this Agreement.

     

    1.04          “Fields
      of Use” shall mean the fields of use identified in Appendix
      B.

     

    1.05          “Know-How”
      shall mean, and be limited to: (a) University's proprietary information that
      has
      been created, developed, or fixed in any tangible medium of expression prior
      to
      or as of the Effective Date and which is directly related to the use of, or
      desirable for the practice of, the licensed Patent Rights; and (b) University's
      proprietary information that is directly related to the use of, or desirable
      for
      the practice of, the licensed Patent Rights developed by Dr. Newell after the
      Effective Date while Dr. Newell remains an employee of University and is an
      active participant in Licensee as an employee, board member or
      consultant.

    


    
      
        
          
          

        

        
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    1.06        
      “Licensed Process(es)” shall mean any process, art, or method that is covered in
      whole or in part by an issued, unexpired claim or a pending claim contained
      in
      the Patent Rights.

     

    1.07        
      “Licensed Product(s)” shall mean any:

     

    (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 in the country in which
      any such product or part thereof is made, used or sold; and

     

    (b)           product,
      apparatus, or part thereof that is manufactured by using a process covered
      in
      whole or in part by an issued, unexpired claim or a pending claim contained
      in
      the Patent Rights in the country in which any Licensed Processes is
      used.

     

    1.08         “Net
      Sales” shall mean the total gross receipts for sales of Licensed Products or
      practice of Licensed Processes by or on behalf of Licensee or its Affiliates,
      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 or its
      Affiliates for the sale, lease, or transfer of Licensed Products or Licensed
      Processes.

     

    1.09         “Patent
      Rights” shall mean all of the following University intellectual
      property:

     

    (a)           the
      United States and foreign patents and/or patent
      applications,  provisional patent applications, and invention
      disclosures listed in Appendix A;

     

    (b)           United
      States and foreign patents issued from the applications listed in
Appendix A and from divisionals and continuations of
      these applications;

     

    (c)           claims
      of U.S. and foreign continuation-in-part applications, and of the resulting
      patents, that are directed to subject matter specifically described in the
      U.S.
      and foreign applications listed in Appendix
      A;

     

    (d)           claims
      of all foreign patent applications, and of the resulting patents, that are
      directed to subject matter specifically described in the United States patents
      and/or patent applications described in (a), (b) or (c) above; and

     

    (e)           any
      reissues of United States patents described in (a), (b) or (c)
      above.

     

    1.10      
        “Territory” shall be as stated in Appendix
      B.


    


    
      
        
          
          

          
          

        

        
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    ARTICLE 
      2      GRANT OF RIGHTS AND
      ACCEPTANCE

    


    2.01         University
      hereby grants and Licensee accepts, during the term and subject to the terms
      and
      conditions of this Agreement, and further subject to University's right to
      do so
      without incurring liability to third parties,

    


    (a)           an
      exclusive license to use the Know-How in the Territory and in the Field of
      Use;
      and

     

    (b)           an
      exclusive license of University’s Patent Rights in the Territory to make , use,
      sell, offer to sell, and import any Licensed Product(s) in the Field of Use
      and
      to practice any Licensed Process(es) in the Field of Use.

     

    2.02         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.

     

    2.03         This
      Agreement shall be subject to the mandatory public laws in any country where
      this Agreement will produce an effect.

     

    ARTICLE
      3      FUTURE IMPROVEMENTS AND
      ADDITIONS

     

    3.01          Improvements.  Provided
      that Dr. Newell is at the time obligated to assign intellectual property to
      University and is involved as an employee, board member, or consultant to
      Licensee, and in the event that Dr. Newell, or anybody working in a laboratory
      under the supervision or direction of Dr. Newell develops any patentable
      invention the practice of which would also require the practice of an invention
      claimed in or covered by the Licensed Patent Rights and which is a modification
      of, or addition to, the invention claimed in or covered by the Licensed Patent
      Rights in (“Improvement”), then University shall disclose each such Improvement
      to Licensee in reasonable written detail.  All Improvements made in the
      Field of Use as a result of the sponsored research of Article 8 (“SRA
      Improvements”) will be considered part of this Agreement at no additional cost
      to Licensee, and all Improvements in the Field of Use not resulting from such
      sponsored research (“Non-SRA Improvements”) shall be considered part of this
      Agreement provided that Licensee makes a one time up front payment of twenty
      thousand dollars ($20,000) to University for each such Non-SRA Improvement
      within sixty (60) days of the disclosure of each such Non-SRA Improvement to
      Licensee; provided, however that all such payments shall be waived the until
      execution of the Sponsored Research Agreement referred to in Article
      8.

     

    3.02          Independent
      Inventions.  Provided that Dr. Newell is at the time obligated to
      assign intellectual property to University and is involved as an employee,
      board
      member, or consultant to Licensee, 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
      by
      the parties following the exercise by Licensee of the
      Option.  Licensee shall have [REDACTED]from the date of disclosure by
      University to exercise the Option.  An Independent Invention shall be
      an invention that:

     

    (a)           Is
      made by Dr. Newell, or anybody working in a laboratory under the supervision
      or
      direction of Dr. Newell; and

    


    
      
        
          
          

          
          

        

        
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      (b)           Is
        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 and

       

      (c)           
        Is not subject to any prior contractual or legal obligations.

       

      3.03         Field
        of Use Expansion.  University shall disclose to Licensee in
        reasonable written detail, after the University’s Technology Transfer Office
        (“TTO”) receives notification from the inventor(s)
        of such invention, each invention that has been made that would be an
        Improvement or an Independent Invention that would involve applications outside
        the Field of Use, and Licensee shall have a [REDACTED] exclusive right of
        first
        negotiation to expand the Field of Use hereunder (provided there are no
        conflicts with pre-existing University obligations) to include such invention
        in
        one or more additional fields for Licensed Product or Licensed Process (for
        example, and by way of example only, in the diagnosis or treatment of bacterial
        or other viral diseases not already included in The Fields of Use), on terms
        and
        conditions to be negotiated by the parties based on industry economic and
        diligence standards; provided, however, that said right of first negotiation
        shall not extend to the fields of autoimmune diseases or energy
        metabolism.

       

    

    3.04         University
      shall disclose each Independent Invention to Licensee in reasonable written
      detail after the TTO receives notification from the inventor(s) that such
      Independent Invention has been made, and Licensee shall have [REDACTED] 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;

     

    3.05         Notwithstanding
      any other provision in this Agreement to the contrary, and whether or not such
      work is in the Field or Field of Use Expansion, University shall not own or
      have
      (and nothing in this Agreement shall constitute a grant of) any rights in,
      to or
      under any patents, inventions, technology, know how, or other intellectual
      property:

     

    (a)           That
      may be created or developed at any time by Licensee, or by Karen Newell working
      or consulting at Licensee independent of her work performed or contemplated
      under funded research or employment agreement at the University, using
      Licensee’s own facilities, for Licensee’s own account and benefit;
      or

     

    (b)           That
      may be created or developed at any time by Licensee, using its own facilities,
      or under a contract with, or under a grant from, a Third Person

     

    ARTICLE
      4      SUBLICENSING

     

    4.01       
       Upon prior written approval by University, such approval not to be
      unreasonably withheld, Licensee and or its Affiliates may sublicense to one
      or
      more third parties the rights granted in Article 2 subject to the following
      limitations:

     

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

    

      
        
          
          

          
          

        

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

     

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

     

    4.02         Licenses
      transferred to Affiliates shall not be considered sublicenses for purposes
      herein unless such Affiliates are involved in the use of the Licensed Process
      or
      Patent.

     

    4.03         Any
      sublicenses granted by Licensee shall provide only for cash consideration from
      sublicensees unless University has expressly consented otherwise in writing
      in
      advance, which consent shall not be unreasonably withheld.

     

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

     

    ARTICLE
      5      GOVERNMENT AND UNIVERSITY
      RIGHTS

     

    5.01         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 et al (“Bayh-Dole Act”) and 37 C.F.R. 401, as such may be
      amended.  Further, Licensee agrees to take all reasonable action
      necessary to enable University to satisfy its obligations under the Bayh-Dole
      Act.

     

    5.02         University
      shall have the non-transferable right to practice the Patent Rights and Know-How
      for its own research and education, including sponsored research, provided
      that
      the sponsor, other than a government agency under Bayh-Dole, has no right in
      the
      results of such sponsored research.

     

    5.03         University
      shall have the right to publish any information included in the Patent Rights
      and the Know-How provided that University provides Licensee with a copy of
      the
      proposed publication at least thirty (30) days prior to publication, and takes
      reasonable steps to avoid the loss of any patent rights as a result of
      University exercising its rights under this Article 5.

     

    ARTICLE
      6      ROYALTIES

     

    6.01         Licensee
      agrees to pay University a nonrefundable and non-creditable license issue fee
      as
      set forth in Appendix C.

     

    6.02         Licensee
      agrees to pay to University an annual, nonrefundable minimum royalty as set
      forth in Appendix 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, including Eearned Sublicense
      Royalties, due for net sales made that year.

     

    6.03         Licensee
      agrees
      to pay University the Earned Royalty set forth in Appendix
      C.  In the event that the Patent Rights
      are dominated by an issued patent that is owned or controlled by a third party
      (the "Dominant Patent") and Licensee enters into a license with said third
      party
      with respect to the Dominant Patent, whether before or after the Effective
      Date,
      and agrees to pay a royalty thereunder in order to make, use, or sell the
      Licensed Products or Licensed Processes, the royalty specified in
Appendix C shall be adjusted for stacking in accordance
      with Article 6.06.

    

      
        
          
          

          
          

        

        
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      6.04         Licensee
        agrees to pay University benchmark royalties as set forth in Appendix
        C.

       

      6.05         Licensee
        agrees to pay University sublicensing royalties, in the percentages as set
        forth
        in Appendix C, of all consideration in any form received by
        Licensee or Affiliates in connection with
        a
        grant to any third party of a sublicense of the rights granted in Article
        2
        (“Sublicense Revenue”).  Sublicense Revenue shall include without
        limitation up front fees, maintenance fees, royalties on net sales by
        sublicensees, milestone payments, the unearned portion of any minimum royalties,
        equity, and research and development funding in excess of the costs of
        performing such research and development.  Royalty for sublicenses
        shall not in any event include any amount paid to Licensee by any sublicensee
        or
        other person, (a) as fair consideration for research and/or development
        services, (b) as an investment or loan to Licensee, or (c) as consideration
        for
        any other property, rights or services that have been or are expected to
        be
        furnished by Licensee to such sublicensee or person.

    

     

    6.06         In
      the event that the Licensee must enter into a license with a third party and
      agrees to pay a royalty thereunder in order to make, use, or sell a Licensed
      Product(s), the Earned Royalty shall be reduced by fifty percent (50%)
      of  the royalty paid to said third party during a given reporting
      period. However, in no event shall the Earned Royalty paid to University be
      less
      one half the specified royalty.

     

    6.07         No
      multiple royalties shall be payable because any Licensed Products or Licensed
      Processes are covered by more than one of the Patent Rights.

     

    6.08         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
      Article 6 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.

     

    6.09         Unless
      otherwise provided herein, all payments required under this Agreement shall
      be
      due within thirty (30) days of written notice from
      University.  Payments past due shall bear interest at the rate of one
      and on-half percent (1.5%) per month compounded, or the maximum interest rate
      allowed by applicable law, whichever is
      less. 

     

    ARTICLE
      7      REPORTS, RECORDS AND
      AUDITS

     

    7.01         Starting
      with the first sale of Licensed Product or Practice of Licensed Process for
      which Net Sales has been received by Licensee, or for which a sublicensing
      Royalty has been received, Licensee shall, without request by University, and
      within forty-five (45) days of the respective period, render to University
      written accounts for each calendar quarter 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.  Minimum
      annual royalties, if any, that are due University for any calendar year, shall
      be paid by Licensee along with the written report due under this
      Agreement.  The written report shall be in the form of the report of
Appendix D.

    


    
      
        
          
          

          
          

        

        
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    7.02         Licensee
      shall
      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.  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.

     

    7.03         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.  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. 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.

     

    7.04         Licensee
      acknowledges that University is subject to the Colorado Public 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.

     

    7.05         Each
      Party shall vigilantly protect the confidential 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.  All written documents containing confidential information
      and other material in tangible form received 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.

     

    ARTICLE
      8      SPONSORED RESEARCH

     

    8.01         Licensee
      shall sponsor research related to Licensed Process(es) and Licensed Product(s)
      at University, to be memorialized in a separate Sponsored Research Agreement
      (“SRA”) to be negotiated between University and
      Licensee.    Licensee agrees that the SRA will include
      Licensee’s obligation to make the following payments to, or for the benefit of,
      the lab of Dr. Newell at the University of Colorado, each of said payments
      to
      have an indirect cost rate as determined by UCCS administration: Twenty Five
      Thousand Dollars ($25,000.00) on the first day of each of April, July, and
      October of 2008, and of each April, July, and October and January
      thereafter,  ending with the payment in January 2012, provided that at
      the time any such payment is due, Dr. Newell is employed by
      University.  Any Improvements and Independent Inventions resulting
      from such research shall be subject to Article 3 of this Agreement.

     

    ARTICLE
      9      DUE DILIGENCE AND
      PERFORMANCE

     

    9.01         Licensee
      shall use its best efforts to bring Licensed Products and Licensed Processes
      to
      market through a thorough, vigorous and diligent program for exploitation of
      the
      Patent Rights, to develop 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.  Licensee acknowledges and agrees to the performance
      milestones defined in Appendix E.

    


    
      
        
          
          

          
          

        

        
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    9.02         Licensee
      agrees
      to develop a vigorous sublicensing program to effect commercialization of
      Licensed Products and Licensed Processes in any Field of Use or Territory that
      Licensee decides not to exploit for its own self.


     

    Article
      10      PATENTS, COSTS, AND
      ENFORCEMENT

     

    10.01       Licensee
      shall reimburse University within thirty (30) days of University’s invoice, an
      amount of unreimbursed patent expenses (currently estimated at $3,500.00)
      incurred by University through the Effective Date of this
      Agreement.  Remaining costs incurred from August 31, 2007 through the
      Effective Date of this Agreement shall be invoiced by University and paid by
      Licensee within thirty (30) days of invoice.

     

    10.02       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 including all costs, associated with the perfection and
      maintenance of Patent Rights. Licensee’s patent counsel shall keep University
      advised as to the status of the Patent Rights by providing University, 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.  Licensee shall consult with University in such prosecution
      and maintenance, shall diligently seek University’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 University sixty (60) days prior to any
      bar
      date, of Licensee’s intention and reason therefore, and providing University
      with reasonable opportunity to assume responsibility for prosecution,
      maintenance and associated costs of such patents and patent applications. 
If University pursues such patent protection, then from that time forward all
      such 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.

     

    10.03       No
      claims of the Patent Rights shall be significantly 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, and if an objection by University not given within 45
      days
      then University approval shall be deemed given.  Licensee’s obligations
      under this Article 10.03 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.  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.

     

    10.04       At
      any time, University may provide Licensee with written notice that University
      wishes to resume control, at University’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.  The
      forfeiture provisions of Articles 10.02 and 10.03 shall not apply to Patent
      Rights in patent applications, and patents arising therefrom, referred to in
      this Article 10.04.

    


    
      
        
          
          

          
          

        

        
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    10.05      University
      and Licensee agree to inform the other party promptly in writing of any
      suspected infringement of the Patent Rights by a third party.  During
      the exclusive period of this license, Licensee shall have the first right to
      bring an infringement action to enforce the Patent Rights.  Licensee
      shall notify University within ninety (90) days of receiving notice of an
      alleged infringement of its intention, or lack thereof, to enforce the Patent
      Rights. In any such action, Licensee, may, at it option, join University as
      a
      plaintiff.  If Licensee declines to institute suit, University shall
      have the right to institute an action for infringement of the Patent Rights
      against such third party.  Any action for infringement shall be
      managed in accordance with the following:

     

    (a)           For
      any suit brought in Licensee’s name or in both parties’ names, the out-of-pocket
      costs thereof shall be borne by Licensee. For any recovery or settlement,
      Licensee shall first be reimbursed for its out-of-pocket costs and then Licensee
      shall pay University the portion of the recovery or settlement for past
      infringement for royalties due, or an appropriate compensation in the event
      of a
      cross-license or other non-cash settlement.  University, at its
      option, may be represented by separate counsel of its own selection, the fees
      for which shall be paid by University.

     

    (b)           If
      Licensee declines to institute suit, University may, but is not obligated to,
      institute suit.  If University decides to institute suit, it shall
      notify Licensee in writing.  Licensee’s failure to notify University
      in writing within thirty (30) days after the date of University’s notice, 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; and

     

    (c)           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.

     

    10.06       In
      the event that an action alleging invalidity or non-infringement of any of
      the
      Patent Rights shall be brought against Licensee by declaratory judgment action
      or raised by way of counterclaim or affirmative defense in an infringement
      suit
      brought by Licensee under Article 10.05, pursuant to this Agreement and the
      provisions of Chapter 29 of Title 35, U.S. Code or other statutes, Licensee
      may:

     

    
      
        
          
          

          
          

        

        
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    (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; (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 Article
      10.05; and

     

    (b)           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 (a) and (b) 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.  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.

     

    10.07      
      In all cases, Licensee agrees to keep University reasonably apprised of the
      status and progress of any litigation.

     

    ARTICLE
      11      WARRANTIES, INDEMNIFICATIONS AND
      INSURANCE

     

    11.01      
      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.

     

    11.02  
          Notwithstanding anything in this Agreement to the
      contrary, nothing in this Agreement shall be construed as:

     

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

     

    (b)           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

     

    (c)           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 or to provide any services other than those specified in this
      Agreement.

     

    11.03      
      Except to the extent of University’s own negligence, 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 attorney fees), 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:

    


    
      
        
          
          

          
          

        

        
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    (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.

     

    11.04       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 for companies similarly situated.

     

    ARTICLE
      12      DURATION, TERMINATION AND
      CONVERSION

     

    12.01       This
      Agreement shall become effective as of the Effective Date and shall expire
      on
      the expiration date of the last to expire patents within Patent
      Rights.

     

    12.02       Licensee
      may terminate this Agreement at any time on ninety (90) days written notice
      to
      University if Licensee:

     

    (a)           pays
      all amounts due as well as all non-cancelable costs to University through the
      termination date;

     

    (b)           submits
      a final report of the type described in Article 7;

     

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

     

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

     

    (e)           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.

     

    12.03      University
      may terminate this Agreement in the event that:

     

    (a)           Licensee
      fails to pay University any amounts when due to University hereunder and
      Licensee fails to make such payment within sixty (60) days of prior written
      notice;

     

    (b)           Licensee
      voluntarily files for Chapter 7 under the Bankruptcy Act; or

     

    
      
        
        

      

      
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    (c)           Licensee
      is in breach or default of this Agreement other than those occurrences listed
      in
      Articles 12.03(a) and 12.03(b) and Licensee fails to cure the breach or default
      within  ninety (90) days of written notice of the breach or default.
      Events constituting a breach or default shall include, but are not limited
      to,
      the following:

     

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

     

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

     

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

     

    (d)           Licensee,
      directly or indirectly, challenges or causes to be challenged the validity
      or
      enforceability of any Patent Rights, or Licensor’s ownership of any Patent Right
      before any court, agency or tribunal.

     

    (e)           Termination
      shall be effected by written notice after the period of time referred to in
      the
      relevant Article 12.03(a) or 12.03(c) or the event referred to in Article
      12.03(d) and shall be effective immediately upon such written
      notice.

     

    


    ARTICLE
      13      MISCELLANEOUS

     

    13.01     
      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.

     

    13.02     
      This Agreement shall be governed by and construed in accordance with the laws
      of
      the State of Colorado.

     

    13.03      
      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:

              To:  Kathe
                Zaslow

              Office
                of Technology Transfer

              University
                of Colorado, 588 SYS

              Suite
                390, 4001 Discovery Drive

              Boulder,
                CO 80309-0589

              CC:      Lynn
                Pae

              CC:
                David Poticha

            	
              Licensee:

              ____________________

              President

              V-Clip Pharmaceuticals, Inc

              1321 Mountain View Circle

              Azusa, California 91702

               

              _____________________

            


    

     

    or
      to the
      address noticed by a party in writing or to the address of a successor in
      interest noticed by a party in writing.

     

    
      
        
        

      

      
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    14.04      
      Except as required by law or by Federal or State regulation, 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.

     

    14.05      
      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 feasible and
                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.

            


    

     

    14.06    
        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.  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.  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, 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 (a) accepts, generally
      and unconditionally, the jurisdiction of such court and any related appellate
      court, and (b) 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.

    


    
      
        
        

      

      
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    14.07     
      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 that 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.

    


    14.08      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.

     

    
      14.09  
           This
        Agreement does not establish a joint venture, agency or partnership between
        the
parties,
        nor create an employer - employee relationship.

    

    


    14.10  
         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.

    


    14.11   
        Any provisions of this Agreement that by its nature is intended to
      survive, shall survive any termination or expiration of this
      Agreement.

    


    14.12  
         This Agreement shall be binding upon and inure to the benefit
      of the respective successors and assigns of the Parties
      hereto.  Licensee may not assign its rights in this Agreement without
      prior written approval by University, such approval not to be unreasonably
      withheld or delayed, provided, however, that Licensee may assign its rights
      to
      Viral Genetics, Inc. in connection with a merger of V-Clip into Viral Genetics
      without the prior approval of University.

    


    14.13   
        This agreement may be executed in counterpart, and photocopy,
      facsimile, electronic or other copies shall have the same effect for all
      purposes as an ink-signed original.

    


     

    Signature
      Page Follows

     

    


    
      
        
          
          

          
          

        

        
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    IN
      WITNESS WHEREOF the parties hereto have caused this Agreement, which is
      effective on the date of the last to sign below, to be executed in duplicate
      by
      their respective duly authorized officers.

     

    


     

    
      	
              University:

               

              By:      
                _________________________________

              Title:   
                _________________________________

              Date:   
                _________________________________

              Office
                of Technology Transfer

              University
                of Colorado

               

               

            	
              V-Clip
                Pharmaceuticals, Inc.:

               

              By:     
                _________________________________

              Title:   
                President

              Date:  
                _________________________________

              .

               

               

               

            
	 	
              Viral
                Genetics, Inc.:

               

              By:       
                _________________________________

              Title:     
                President

              Date:    
                _________________________________

              Viral
                Genetics, Inc

               

            


    

    


    


    


    
      
        
          
          

          
          

        

        
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    APPENDIX
      A

    PATENT
      RIGHTS

    


    INVENTION
      DISCLOSURES

    


    INVENTION
      DISCLOSURE: CU1760C

     

    United
      States Patent Application No. 60/886,852, Titled “METHODS OF MODULATING IMMUNE
      FUNCTION THROUGH TARGETING OF INVARIANT CHAIN/CD74 AND CLIP”

     

    and

     

    United
      States Patent Application No. 60/906,731, titled “IMMUNE MECHANISM FOR THE
      DEPLETION OF CD4+ T CELLS”.

     

    


    INVENTION
      DISCLOSURES: CU1969C and CU1971C

     

    United
      States Patent Application No. No. 61/000,152, filed October 23, 2007, titled
      “COMPETITIVE INHIBITORS OF INVARIANT CHAIN EXPRESSION AND/OR ECTOPIC CLIP
      BINDING”.

    


     

    


    


    


    


    


    
      
        
          
          

          
          

        

        
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    APPENDIX  B

    


    FIELD
      OF USE and TERRITORY

    


    


    Field
      of Use:  The diagnosis and treatment of HIV, AIDS, Hepatitis C,
      and Herpes.

    


    Territory:  worldwide

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    


    
      
        
          
          

          
          

        

        
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    APPENDIX
      C

    


    ROYALTIES

    


    License
      Issue Fee:

    


    Within
      30
      days of the Effective Date, Licensee shall issue to University License Equity
      Holdings, Inc., a Colorado nonprofit corporation ("ULEHI"), shares of V-Clip's
      common stock representing six percent (6%) of all outstanding shares of capital
      stock of V-Clip on a fully diluted basis (the "Percentage
      Ownership").  Such shares shall be issued pursuant to ULEHI's standard
      form stock subscription agreement, a copy of which is attached
      hereto.  The Percentage Ownership shall remain at six percent (6%) and
      shall have anti-dilution until such time as:

    


    (a)        V-Clip
      shall at any time sell equity securities to third parties (“New Shares”) for
      cumulative cash consideration of more than $2 million (the Anti-Dilution
      Threshold”) -- in the event that V-Clip sells New Shares for cumulative cash
      consideration below and up to the Anti-Dilution Threshold, ULEHI shall receive
      and V-Clip shall issue additional shares of common stock of V-Clip in an amount
      such that ULEHI remains at the Percentage Ownership; or

     

    (b)      V-Clip
      is merged with and into Viral Genetics, Inc.

    


    Minimum
      annual royalty:

    


    Twenty
      Five Thousand Dollars ($25,000.00) by January 1, 2009.

    


    Twenty
      Five Thousand Dollars ($25,000.00) in each calendar year thereafter until first
      commercial sales occur.

    


    Seventy
      Five Thousand Dollars ($75,000.00) in each calendar year after first commercial
      sales occur.

    


    Earned
      royalty:  [REDACTED] Percent ([REDACTED]) of Net Sales
      from sales in developed countries, and [REDACTED] Percent ([REDACTED]%) from
      sales in undeveloped countries.  Developed countries are herein
      defined as United States of America, Canada, Western and Eastern Europe, Japan,
      Australia, New Zealand, Israel, Russia, and other countries of the former Soviet
      Union, Hong Kong, Singapore, South Korea, Taiwan.  Undeveloped
      countries are herein defined as countries other than developed
      countries.

    


    Benchmark
      royalties as follows:

    


    Provided
      that a patent has issued on the subject matter, the following amounts shall
      be
      paid to University within ninety (90) days of the following events:

     

    


    
      	
               

            	
              1.

            	
              [REDACTED]upon
                filing each Investigational New Drug Application (INDA) with the
                Food and
                Drug Administration (FDA) or with the European Agency for the Evaluation
                of Medicinal Products (EMEA)

            


    

    
      	
               

            	
              2.

            	
              [REDACTED]within
                ninety (90) days of each first indication in Phase
                I.

            


    

    
      	
               

            	
              3.

            	
              [REDACTED]within
                ninety (90) days of the first indication in Phase
                II.

            


    

    
      	
               

            	
              4.

            	
              [REDACTED]within
                ninety (90) days of each first indication in Phase
                III.

            


    

    
      	
               

            	
              5.

            	
              [REDACTED]within
                ninety (90) days FDA approval of a first
                indication.

            


    

    
      	
               

            	
              6.

            	
              One-half
                of all aforementioned milestones for each second and subsequent
                indications.

            


    

    


    
      
        
        

      

      
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    Payment
      of sublicensing royalties as follows:

    


    Sublicensing
      royalties payable to the University shall be, with respect to each sublicense,
      in accordance with the following, but not to exceed the Earned Royalty rate
      in
      the case of royalties paid by a sublicensee on Net Sales by a
      sublicensee:

     

    
      	 	1. 	
              For
                the first twelve (12) months 

            	
              [REDACTED]of
                Sublicense Revenue. 

            
	 	2. 	
              From
                month 13 through month 36

            	
              [REDACTED]of
                Sublicense Revenue.

            
	 	3. 	
              After
                month 36

            	
              [REDACTED]of
                Sublicense Revenue.

            


    

     

     

     

     

     

     

     

    
 

    


    
      
        
          
          

          
          

        

        
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    APPENDIX
      D

    


    FORM
      OF ROYALTY REPORT

    


    ROYALTY
      REPORT

     

    
      
        	
                Licensee:

              	 	 	 	 	
                CU
                  Case No.:

              	 	 	 	 
	
                Inventor:

              	 	 	 	 	
                Patent
                  #:

              	 	 	 	 
	
                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.

     

    Report
      Type:     ____ Single Product Line Report: 
_____________________________

    ____
      Multiproduct Summary Report.  Page 1 of _____ Pages

    ____
      Product Line Detail.  Line: _____ Trademark:
      _____    Pages: _____

     

    Report
      Currency: _____ U.S.
      Dollars     _____     
Other_________________________

     

    
      	 	
              Gross

            	
              *
                Less:

            	
              Net

            	
              Royalty

            	
              Period
                Royalty Amount

            
	
              Country

            	
              Sales

            	
              Allowances

            	
              Sales

            	
              Rate

            	
              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: $________  Conversion Rate:
      ________    Royalty U.S. Dollars: $______

     

    


    
      
        
          
          

          
          

        

        
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    APPENDIX
      E

    


    PERFORMANCE
      MILESTONES

    


    Licensee
      shall use reasonable efforts to proceed with the development, manufacture,
      exploitation and sale or lease of Licensed Products and Licensed
      Processes and to diligently develop markets for the
      Licensed Products and Licensed Processes as follows:

    


    [REDACTED]

    


    


     

     

     

     

    Page
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