Document:

EXHIBIT 10.3

          **Note:   Confidential Information has been omitted and filed
                    separately with the Securities and Exchange Commission

                            CO-DEVELOPMENT AGREEMENT

                          Dated as of November 21, 2004

                                 By and Between

                           COGENCO INTERNATIONAL, INC.
                             a Colorado Corporation

                                       and

                              DMI BIOSCIENCES, INC.
                             a Colorado Corporation

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                            CO-DEVELOPMENT AGREEMENT

     This Co-Development Agreement ("Agreement"), effective on November 21, 2004
("Effective Date"), is by and between DMI BioSciences, Inc., having a place of
business at 3601 South Clarkson Street, Suite 420, Englewood, Colorado
80113-3948 ("DMI") and Cogenco International, Inc., having a place of business
at 4085 South Dexter Street, Englewood, Colorado 80113 ("COGENCO").

     WHEREAS, DMI owns Intellectual Property relating to the use of [**see cover
page note] for the treatment of asthma in humans;

     WHEREAS, DMI wants to research, develop and commercialize product(s)
comprising or utilizing a [**see cover page note] for the treatment of asthma in
humans;

     WHEREAS, DMI wants to screen [**see cover page note] to select the [**see
cover page note] or [**see cover page note] for the treatment of asthma in
humans;

     WHEREAS, COGENCO wants to fund DMI's screening of [**see cover page note]
and DMI's research, development and commercialization of product(s) comprising
or utilizing a [**see cover page note] for the treatment of asthma in humans;
and

     WHEREAS, DMI and COGENCO signed a Term Sheet on August 23, 2004, setting
forth certain agreed terms to be included in this Agreement.

     NOW THEREFORE, in consideration of the foregoing and the mutual covenants,
terms, conditions and agreements set forth below, the parties agree as follows.

                             Article 1. Definitions

     As used herein, the following capitalized terms have the meanings set forth
below:

     1.1  "Affiliate" means any corporation, firm, partnership or other entity
          that, directly or indirectly, controls, is controlled by, or is under
          common control with, DMI or COGENCO. For the purposes of this
          Agreement, "control" or "controlled" means possession of the power to
          direct, or cause the direction of, the management and policies of a
          corporation, firm, partnership, or other entity, whether through the
          ownership of equity, status as a general partner, by contract or
          otherwise.

     1.2  "Advisory Committee" means the Advisory Committee described in Article
          9.

     1.3  "Backup Candidate" has the meaning given in Section 3.2.

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     1.4  "Calendar Quarter" means each three (3)-month period ending on the
          last day of March, June, September and December of a given year.

     1.5  "Clinical Trials" means all human clinical trials conducted with a
          Product, including Phase 1 through Phase 4 human clinical trials.

     1.6  "Clinical Trials Plan" means a Clinical Trials Plan as adopted and
          amended from time to time by the Advisory Committee as described in
          Article 9. Each Clinical Trials Plan will be a comprehensive plan for
          performing all Clinical Trials necessary to obtain Regulatory Approval
          of Product(s) in the Territory and will include a budget, a schedule
          of deadlines and time periods for accomplishing all necessary
          activities, procedures for ensuring compliance with all regulatory and
          quality guidelines and requirements, and all other relevant
          information.

     1.7  "Commercially Reasonable And Diligent Efforts" means, with respect to
          research, development and commercialization of a Product, a party's
          use of best efforts and resources consistent with the exercise of
          prudent scientific and business judgment, as applied to other
          pharmaceutical products of similar potential, market size and
          competitive environment.

     1.8  "Commercialization Plan" means a Commercialization Plan adopted and
          amended from time to time by the Advisory Committee as described in
          Article 9. Each Commercialization Plan will be a comprehensive plan
          for the commercialization of Product(s) in the Territory and will
          include a budget, a schedule of deadlines and time periods for
          accomplishing all necessary activities (including a deadline for the
          First Commercial Sale of Product(s) that have received Regulatory
          Approval), marketing plans, descriptions of promotional activities,
          sales objectives, branding strategies, and all other relevant
          information.

     1.9  "Deductible Expenses" for a Product are (i) all of the costs of
          manufacturing or purchasing the Product, (ii) all of the costs of
          **distributing, shipping and selling the Product, (iii) all of the
          costs of marketing, promoting and advertising the Product, (iv)
          returns and allowances, (v) all taxes, including income taxes, and
          insurance, and (vi) reasonable Overhead. "Deductible Expenses" do not
          include the costs of screening, research, development, Preclinical
          Studies, Clinical Trials, obtaining Regulatory Approval of the
          Product, legal expenses (attorneys fees, filing fees, disbursements,
          expert witness fees, etc.), amounts paid as a result of a settlement
          or order of court (judgments) in connection with a claim or lawsuit,
          or any portion of these costs.

     1.10 "[**see cover page note]" means an unsubstituted [**see cover page
          note], a substituted [**see cover page note] or a [**see cover page
          note] derivative. [**see cover page note] include substituted and
          unsubstituted 2,5-[**see cover page note] and derivatives of
          2,5-[**see cover page note]. Other names for 2,5-[**see cover page
          note] are 2,5-[**see cover page note], [**see cover page note], [**see
          cover page note] and [**see cover page note].

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     1.11 "DMI" means DMI BioSciences, Inc. DMI is also referred to herein as a
          "party". Collectively, DMI and COGENCO are sometimes referred as the
          "parties".

     1.12 "Drug Approval Application" means an application for Regulatory
          Approval required for commercial sales of a Product, such as an NDA.

     1.13 "Effective Date" is the date first written above.

     1.14 "COGENCO" means Cogenco International, Inc. COGENCO is also referred
          to herein as a "party". Collectively, DMI and COGENCO are sometimes
          referred as the "parties".

     1.15 "FDA" means the United States Food and Drug Administration.

     1.16 "Field" means the use of Product(s) to treat asthma in humans.

     1.17 "First Commercial Sale" means the first sale of each Product in a
          country of the Territory following Regulatory Approval of the Product
          in that country, or if no such Regulatory Approval or similar
          marketing approval is required, the date upon which each Product is
          first commercially available in a country.

     1.18 "GCP" means the E6 Guideline for Good Clinical Practice of the ICH.

     1.19 "GLP" means the current Good Laboratory Practice regulations
          promulgated by the FDA, published at Part 58 of Title 21 of the United
          States Code of Federal Regulations, as amended from time to time, and
          such equivalent regulations or standards of countries outside the
          United States as may be applicable to activities conducted hereunder.

     1.20 "GMP" means the current Good Manufacturing Practice regulations
          promulgated by the FDA, published at Part 210 et seq. and Parts
          600-610 of Title 21 of the United States Code of Federal Regulations,
          as amended from time to time, and such equivalent regulations or
          standards of countries outside the United States as may be applicable
          to activities conducted hereunder.

     1.21 "Gross Sales Amount" means all monies and the fair market value of all
          other consideration (including payment in kind, exchange or other
          form) received with respect to Sales of a Product.

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     1.22 "ICH" means International Conference on Harmonisation of Technical
          Requirements for Registration of Pharmaceuticals for Human Use.

     1.23 "IND" means an Investigational New Drug Application satisfying the
          requirements of Part 312 of Title 21 of the United States Code of
          Federal Regulations filed with the FDA to commence human clinical
          testing of any Product in the United States or any similar filing with
          a regulatory authority of another country to commence human clinical
          testing of any Product in that country.

     1.24 "Indication" means a human disease or condition, an important
          manifestation of a human disease or condition, or a symptom associated
          with a human disease or condition for which use of a Product is
          indicated, as would be identified in the Product's label under
          applicable FDA regulations or the foreign equivalent thereof.

     1.25 "Indirect Costs" means all of the costs incurred in performing those
          activities necessary for specific Preclinical Studies or Clinical
          Trial(s) to take place, such as procurement or manufacture of
          Product(s), formulation and analytical studies, safety assessments,
          and preparation of documentation required by regulatory authorities.

     1.26 "Intellectual Property" means: (i) inventions, know-how, trade
          secrets, other Proprietary Information, works of authorship, and
          trademarks and other designations of origin; (ii) all rights and
          privileges therein throughout the world; and (iii) all physical
          embodiments thereof.

     1.27 "Lead Candidate" has the meaning given in Section 3.2.

     1.28 "Major Market Countries" means [**see cover page note].

     1.29 "NDA" means a New Drug Application satisfying the requirements of
          Title 21 of the United States Code of Federal Regulations filed with
          the FDA to obtain Regulatory Approval for a Product in the United
          States or any similar filing with a regulatory authority of another
          country to market any Product in that country.

     1.30 "Overhead" means costs incurred by a party, or for its account, which
          are attributable to a party's supervision, services, occupancy costs,
          corporate bonus, and its payroll, information systems, human relations
          or purchasing functions and which are allocated based on space
          occupied, headcount or other activity-based method consistently
          applied by the party.

     1.31 "Phase 1 Trial" means a human clinical trial in any country that is
          conducted to initially evaluate the safety and/or pharmacological
          effect of a Product in human subjects or that would otherwise satisfy
          the requirements of Part 312 of Title 21 of the United States Code of
          Federal Regulations or its foreign equivalent.

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     1.32 "Phase 2 Trial" means a human clinical trial in any country that is
          conducted to initially evaluate the effectiveness of a Product for a
          particular Indication in patients with the Indication or that would
          otherwise satisfy the requirements of Part 312 of Title 21 of the
          United States Code of Federal Regulations or its foreign equivalent.

     1.33 "Phase 2a Trial" means a limited Phase 2 Trial typically conducted in
          up to 50 patients to demonstrate the effectiveness of a Product for an
          Indication.

     1.34 "Phase 2b Trial" means a Phase 2 Trial, the results of which, alone or
          in combination with the results of the Phase 2a Trial, would
          demonstrate the effectiveness of a Product for a particular Indication
          in patients with the Indication or that would otherwise satisfy the
          requirements of Part 312 of Title 21 of the United States Code of
          Federal Regulations or its foreign equivalent.

     1.35 "Phase 3 Trial" means a controlled human clinical trial in any
          country, the results of which could be used to establish safety and
          efficacy of a Product as a basis for a marketing approval application
          submitted to the FDA, or that would otherwise satisfy the requirements
          of Part 312 of Title 21 of the United States Code of Federal
          Regulations or its foreign equivalent.

     1.36 "Phase 4 Trial" means a human clinical trial in any country initiated
          after Regulatory Approval in that country within the approved product
          labeling.

     1.37 "Preclinical Studies" means, with respect to a Product, one or more of
          the following: (i) synthesis and formulation; (ii) physical and
          chemical properties, (iii) in vitro activity, (iv) in vivo activity in
          animals, (v) metabolism, absorption and pharmacokinetics data from
          animal studies, (vi) toxicology data, and (vii) similar studies that
          are typically performed before first administration of a Product to
          humans.

     1.38 "Prime Rate" means that prime interest rate specified in the Wall
          Street Journal, Colorado Edition, for the date specified.

     1.39 "Product(s)" means any pharmaceutical product(s) comprising or
          utilizing a Selected Candidate which is(are) used for treatment of
          asthma in humans.

     1.40 "Profits" means Gross Sales Amount for a Product less all Deductible
          Expenses for the Product.

     1.41 "Proprietary Information" means all business and technical information
          of a confidential and proprietary nature, including ideas, inventions,
          discoveries, trade secrets, know-how, protocols, research plans,

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          development plans, compilations, methods, techniques, processes, data,
          test results, formulas, formulations, computer programs, reports,
          other works of authorship, business plans, sales forecasts, marketing
          information, pricing and financial information, customer lists,
          branding strategy, and planned or pending acquisitions and
          divestitures, and all physical embodiments thereof, including disks,
          computers, software, printouts, laboratory notebooks, writings, notes,
          documentation, records, reports, sketches, plans, memoranda,
          compilations, devices, prototypes, instruments, blueprints, diagrams,
          specifications, operating instructions, written descriptions,
          photographs, videos, chemicals, biological materials, compositions,
          lists, invention disclosures, and patent applications.

     1.42 "Regulatory Approval" means all approvals, licenses, registrations and
          authorizations by the appropriate government entity or entities in a
          country or region (such as the European Union) necessary for the
          commercial sale of a Product in that country or region, including
          where applicable, approval of labeling, pricing, reimbursements and
          manufacturing. "Regulatory Approval" in the United States for
          Product(s) shall mean final approval of an NDA pursuant to Part 314 of
          Title 21 of the United States Code of Federal Regulations permitting
          marketing of the Product in interstate commerce of the United States.
          "Regulatory Approval" in the European Union for Product(s) shall mean
          final approval of a Marketing Authorization Application pursuant
          Council Directive 75/319/EEC, as amended, or Council Regulation
          2309/93/EEC, as amended.

     1.43 "Research And Development Plan" means a Research And Development Plan
          as adopted and amended from time to time by the Advisory Committee as
          described in Article 9. Each Research And Development Plan will be a
          comprehensive plan for the research, development and Preclinical
          Studies of Product(s) in the Territory and will include a listing and
          prioritization of projects, objectives and goals, a budget, a schedule
          of deadlines and time periods for accomplishing all necessary
          activities, procedures for ensuring compliance with all regulatory and
          quality guidelines and requirements, and all other relevant
          information.

     1.44 "Revenues" means (i) Profits and (ii) those payments received from
          licensees and sublicensees of DMI and/or COGENCO, including licensing
          fees, sublicensing fees, milestone payments and royalties.

     1.45 "Sales" means sales of each Product in the Territory by either party
          to Third Parties in bona fide arms-length transactions.

     1.46 "Screening Plan" means a Screening Plan adopted and amended from time
          to time by the Advisory Committee as described in Article 9. Each
          Screening Plan will be a comprehensive plan for the screening of
          [**see cover page note] to select the Selected Candidates for the
          treatment of asthma in humans and will include a listing and
          prioritization of projects, objectives and goals, a budget, a schedule
          of deadlines and time periods for accomplishing all necessary
          activities, procedures for ensuring compliance with all regulatory and
          quality guidelines and requirements, and all other relevant
          information.

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     1.47 "Selected Candidates" has the meaning given in Section 3.2.

     1.48 "Term Sheet" shall mean that term sheet setting forth certain agreed
          terms to be included in this Agreement which was executed by the
          parties on August 23, 2004.

     1.49 "Territory" means the world.

     1.50 "Third Party" means an entity other than DMI or COGENCO. A Third Party
          may be an individual, corporation, firm, partnership or other entity.
          Third Parties include Affiliates.

     1.51 "USA" or "United States" shall mean the United States Of America, its
          possessions, territories, and protectorates (including the
          Commonwealth of Puerto Rico), and the District Of Columbia.

                  Article 2. Scope And Goals Of The Development

     2.1  It is the intent of DMI and COGENCO to screen [**see cover page note]
          and to research, develop, obtain Regulatory Approval for, and
          commercialize Product(s) for the Field within the Territory, as more
          particularly set forth herein. Therefore, DMI and COGENCO agree,
          pursuant and subject to the terms of this Agreement, to cooperate
          with, and provide reasonable support for, each other in developing
          Product(s), with the goal of obtaining Regulatory Approval for
          Product(s) as soon as reasonably practicable for commercial marketing
          and sale in the Territory.

     2.2  In particular, it is a high priority, and shall be the first priority,
          of the parties to develop and commercialize Product(s) for the Field
          in the Major Market Countries. Therefore, DMI and COGENCO agree,
          pursuant and subject to the terms of this Agreement, to cooperate
          with, and provide reasonable support for, each other in developing
          Product(s), with the goal of obtaining Regulatory Approval as soon as
          reasonably practicable for the commercial marketing and sale of
          Product(s) in the Major Market Countries and then in other countries
          of the Territory.

     2.3  It is also the intent of DMI and COGENCO to share the Revenues
          obtained as a result of the commercialization, sales, licensing and
          sublicensing of Product(s) for the Field within the Territory.

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                        Article 3. DMI's Responsibilities

     3.1  Subject to the supervision of the Advisory Committee as described in
          Article 9, DMI shall be responsible for managing, directing,
          supervising and coordinating the screening of [**see cover page note]
          and the research, development, Clinical Trials and commercialization
          of Product(s) for the Field in the Territory.

     3.2  DMI shall be responsible for conducting the screening of the [**see
          cover page note] in accordance with the Screening Plan as adopted and
          amended from time to time by the Advisory Committee. Based on the
          screening results, DMI will select the [**see cover page note] which
          shows the most promise for being a successful treatment for asthma in
          humans (referred to herein as the "Lead Candidate"). If the screening
          identifies more than one [**see cover page note] that would be
          suitable for the treatment of asthma in humans, DMI will select a
          second [**see cover page note] as a backup compound (referred to
          herein as the "Backup Candidate"). The Lead Candidate and the Backup
          Candidate are referred to herein collectively as the Selected
          Candidates. DMI shall also recommend to the Advisory Committee whether
          Product(s) containing the Backup Candidate should be developed for the
          Field in conjunction with, or separately from, Product(s) containing
          the Lead Candidate, or if development of Product(s) containing the
          Backup Candidate should be deferred.

     3.3  DMI shall be responsible for conducting research and development for
          Products(s) in accordance with the Research And Development Plan for
          the Product(s) as adopted and amended from time to time by the
          Advisory Committee.

     3.4  DMI shall be responsible for conducting all Preclinical Studies for
          Products(s) in accordance with the Research And Development Plan for
          the Product(s) as adopted and amended from time to time by the
          Advisory Committee, and any such Preclinical Studies shall be designed
          and conducted so that the results can be used in connection with
          efforts to obtain Regulatory Approval of the Product(s) in at least
          the Major Market Countries.

     3.5  DMI shall be responsible for conducting Phase 1 Trials for Products(s)
          in accordance with the Clinical Trials Plan for the Product(s) as
          adopted and amended from time to time by the Advisory Committee, and
          any such Phase 1 Trials shall be designed and conducted so that the
          results can be used in connection with efforts to obtain Regulatory
          Approval of the Product(s) in at least the Major Market Countries.

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     3.6  DMI shall be responsible for conducting Phase 2 Trials or Phase 2a and
          Phase 2b Trials of Product(s). The Phase 2 Trials or Phase 2a and
          Phase 2b Trials shall be conducted in accordance with the Clinical
          Trials Plan for Product(s) as adopted and amended from time to time by
          the Advisory Committee, and the Phase 2 Trials or Phase 2a and Phase
          2b Trials shall be designed and conducted so that the results can be
          used in connection with efforts to obtain Regulatory Approval of the
          Product(s) in at least the Major Market Countries.

     3.7  Upon successful completion of Phase 2 Trials or Phase 2a and Phase 2b
          Trials, DMI shall be responsible for conducting Phase 3 Trials of
          Product(s) and shall be responsible for taking the steps necessary,
          and performing the additional work required, to obtain Regulatory
          Approval to market Product(s) for the Field in at least the Major
          Market Countries in accordance with the Clinical Trials Plan for
          Product(s) as adopted and amended from time to time by the Advisory
          Committee.

     3.8  After Regulatory Approval of Product(s), DMI shall be responsible for
          commercializing the Product(s) for the Field in at least the Major
          Market Countries in accordance with the Commercialization Plan for the
          Product(s) as adopted and amended from time to time by the Advisory
          Committee. DMI shall also be responsible for commercializing
          Product(s) for which no Regulatory Approval is required in accordance
          with the Commercialization Plan for the Product(s) as adopted and
          amended from time to time by the Advisory Committee.

     3.9  DMI shall be responsible for conducting Phase 4 Trials, if any, for
          Product(s) in accordance with the Clinical Trials Plan for the
          Product(s) as adopted and amended from time to time by the Advisory
          Committee.

     3.10 DMI shall be responsible for the manufacture and supply of all
          Selected Candidates and all Product(s).

     3.11 DMI shall report to Advisory Committee on the status of the screening
          of the [**see cover page note] and the research, development, Clinical
          Trials and commercialization of the Product(s) in such form, manner
          and frequency as the Advisory Committee may request from time to time.

                      Article 4. COGENCO's Responsibilities

     4.1  COGENCO agrees to purchase all of its requirements, if any, of
          Selected Candidates and Product(s) from DMI upon commercially
          reasonable terms and conditions to be negotiated in good faith by the
          parties.

     4.2  COGENCO agrees to make the payments provided for in Articles 6 and 7
          in a timely manner.
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           Article 5. Obligations And Responsibilities Of Both Parties

     5.1  Each party agrees to use Commercially Reasonable And Diligent Efforts
          to perform its obligations hereunder, including screening [**see cover
          page note], researching, developing, performing Clinical Trials and
          commercializing Product(s) for the Field within the Territory, and
          providing funding for all of the foregoing.

     5.2  Each party shall be responsible for adherence to, and compliance with,
          all applicable laws, regulatory guidelines and requirements, and
          quality standards for the research, development, manufacture,
          Preclinical Studies, and Clinical Trials it performs and for Sales of
          Product(s) made by it.

     5.3  Each party agrees to make available to the other party all information
          produced or obtained by it as a result of performing its obligations
          and responsibilities under this Agreement.

     5.4  Each party shall mark all Product(s) sold by it, and shall cause any
          entity authorized by it to sell Product(s) to mark all Product(s) sold
          by that entity, with the applicable patent number(s) in accordance
          with the requirements of applicable laws and regulations in the
          country or countries of manufacture and sale.

                    Article 6. Upfront And Milestone Payments

     6.1  COGENCO will pay DMI a non-refundable payment of $500,000 no later
          than five (5) days after the Effective Date. This payment represents
          reimbursement of some of the research costs incurred by DMI prior to
          the Effective Date.

     6.2  COGENCO will also pay DMI a non-refundable payment of $2,500,000 no
          later than five (5) days after the Effective Date.

     6.3  COGENCO will also pay DMI a non-refundable payment of $1,000,000 no
          later than five (5) days after the commencement of the first Phase 1
          Clinical Trial of a Product suitable for a Major Market Country.

     6.4  COGENCO will also pay DMI a non-refundable payment of $2,500,000 no
          later than five (5) days after the commencement of the first Phase 2a
          or Phase 2 Clinical Trial of a Product suitable for a Major Market
          Country.

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     6.5  COGENCO will also pay DMI a non-refundable payment of $5,000,000 no
          later than five (5) days after the filing of the first NDA for a
          Product in a Major Market Country.

     6.6  COGENCO will also pay DMI a non-refundable payment of $10,000,000 no
          later than five (5) days after the first Regulatory Approval of a
          Product in a Major Market Country.

          Article 7. Costs Of Screening, Research, Development Clinical
                   Trials And Commercialization Of Product(s)

     7.1  COGENCO agrees to pay all of the costs of the screening of the [**see
          cover page note] and of the research, development, Clinical Trials and
          commercialization of all Product(s).

     7.2  In particular, COGENCO agrees to make the following payments to DMI:

          (a)  Payment of all the costs for screening of [**see cover page
               note], plus an overhead amount to be determined as set forth in
               Subsection (i) of this Section 7.2.

          (b)  Payment of all the costs for research and development of
               Product(s), plus an overhead amount to be determined as set forth
               in Subsection (i) of this Section 7.2.

          (c)  Payment of all the costs of conducting [**see cover page note],
               Colorado, plus an overhead amount to be determined as set forth
               in Subsection (i) of this Section 7.2.

          (d)  Payment of all the costs for all Preclinical Studies of
               Product(s), including Indirect Costs, plus an overhead amount to
               be determined as set forth in Subsection (i) of this Section 7.2.

          (e)  Payment of all the costs for Phase 1 Trials of Product(s),
               including Indirect Costs, plus an overhead amount to be
               determined as set forth in Subsection (i) of this Section 7.2.

          (f)  Payment of all the costs for Phase 2 Trials or Phase 2a and Phase
               2b Trials of Product(s), including Indirect Costs, plus an
               overhead amount to be determined as set forth in Subsection (i)
               of this Section 7.2.

          (g)  Payment of all the costs for Phase 3 Trials of Product(s),
               including Indirect Costs, plus an overhead amount to be
               determined as set forth in Subsection (i) of this Section 7.2.

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          (h)  Payment of all the costs for Phase 4 Trials, if any, of
               Product(s), including Indirect Costs, plus an overhead amount to
               be determined as set forth in Subsection (i) of this Section 7.2.

          (i)  An overhead amount, as a percentage of total costs, shall be
               established by the Advisory Committee independently for each
               activity for each year during which the activity will be
               performed. Factors to be considered by the Advisory Committee in
               establishing the overhead amount include the type of activity,
               the stage of the activity (e.g., whether the activity is just
               beginning or is near completion), whether it is the first time
               that DMI has performed the activity, a realistic and reasonable
               assessment of the commitment of personnel and facilities that DMI
               must make to the activity at each stage, etc. However, in no
               event will the overhead amount be less than DMI's actual Overhead
               plus [**see cover page note] % of [**see cover page note]. If the
               overhead amount established by the Advisory Committee and paid to
               DMI as provided in Subsection (j) of this Section 7.2 is less
               than DMI's actual Overhead plus [**see cover page note] % of
               [**see cover page note], the deficiency will be paid to DMI as
               also provided in Subsection (h) of this Section 7.2.

          (j)  Payments (a) through (f) shall be made on a periodic basis to be
               determined by the Advisory Committee, but no less than quarterly.
               Each such payment shall be that amount budgeted by the Advisory
               Committee for the upcoming period for activities (a) through (e),
               including the appropriate overhead amount, and each such payment
               shall be made at least fifteen (15) days prior to the
               commencement of the upcoming period. Any overage will be credited
               toward the payment for the next period. Any deficiency shall be
               added to the payment for the next period or shall be paid sooner
               if requested by DMI, in which case the payment of the deficiency
               will be made within fifteen (15) days after being requested by
               DMI. Interest shall be paid with respect to any payment or any
               deficiency in any payment not paid within fifteen (15) days after
               being requested by DMI, with the interest rate being 10% over the
               Prime Rate and being assessed from the sixteenth day after the
               request by DMI for payment until the date the payment is
               received.

          (k)  DMI shall keep such records, books and accounts showing its use
               of the payments specified in Subsections (a) through (f) of this
               Section 7.2 as the Advisory Committee may require.

               Article 8. Sharing Of Revenues; Reports And Records

     8.1  COGENCO and DMI will share equally all Profits on Sales of Product(s)
          for the Field in the Territory made by either one of them. Payments of
          an equal share (i.e. 50%) of a selling party's Profits shall be paid
          by the selling party to the other party for each Calendar Quarter in
          which Profits are made. Payments shall be due on or before thirty (30)
          days after the last day of a Calendar Quarter in which Profits are
          made. In the case of any delay in the payment, interest at 2% over the
          Prime Rate, assessed from the thirty-first day after the last day of
          the Calendar Quarter until the date the payment is received, shall be
          due. Each party shall be responsible for paying any and all taxes
          levied on account of the payments it receives.

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<PAGE>

     8.2  COGENCO and DMI will share equally all payments received from
          licensees and sublicensees for licenses and sublicenses of their
          rights as provided for in Articles 12 and 13, including licensing
          fees, sublicensing fees, milestone payments, royalties and any other
          payments, however characterized. Payments of an equal share (i.e. 50%)
          of a payment received from licensees and sublicensees shall be made no
          later than thirty (30) days after its receipt. In the case of any
          delay in the payment, interest at 2% over the Prime Rate, assessed
          from the thirty-first day after the receipt of the payment from a
          licensee or sublicensee until the date the payment is received, shall
          be due. Each party shall be responsible for paying any and all taxes
          levied on account of the payments it receives.

     8.3  All payments shall be made by wire transfer in United States dollars
          to the credit of such bank account as may be designated by the
          receiving party to the paying party in writing. Any payment which
          falls due on a date which is a Saturday, Sunday or a legal holiday in
          the United States may be made on the next succeeding day which is not
          a Saturday, Sunday or legal holiday.

     8.4  Each party shall furnish or cause to be furnished to the other party
          on a quarterly basis a written report or reports covering each
          Calendar Quarter (each such Calendar Quarter being sometimes referred
          to herein as a "reporting period") in which Profits are made and/or in
          which payments are received from licensees or sublicensees showing (i)
          Sales of each Product in the Territory during the reporting period,
          (ii) dispositions of Product(s) other than by sale for cash, (iii)
          calculation of Profits for each Product during the reporting period,
          (iv) payments received from licensees and sublicensees during the
          reporting period, including, for royalty payments and other payments
          based on sales of Product(s), a report from the licensees and/or
          sublicensees showing the calculation of the royalties or other
          payments based on sales of Product(s), (v) the exchange rates used in
          converting into dollars from the currencies in which Sales were made
          or payments from licensees and sublicensees were received, and (vi)
          any other information necessary to establish the accuracy and
          completeness of the payments. Reports shall be due thirty (30) days
          after the end of each Calendar Quarter in which Profits are made
          and/or in which payments are received from licensees or sublicensees.
          If a party does not make Profits or receive payments from licensees or
          sublicensees in a Calendar Quarter, then that party will so notify the
          other party.

                                       14
<PAGE>

     8.5  Each party shall keep accurate and consistent records and books of
          account containing regular entries relating to Sales and to the
          manufacture or purchase of Product(s), which records shall contain all
          information necessary for the computation of Profits. Such records
          shall be available, including for a period of three (3) years after
          termination of this Agreement, for examination by representatives of
          the other party for the purpose of verifying the accuracy of the
          quarterly reports required by Subsection 8.4 and Profits computations
          for any year ending no more than 36 months prior to the date of such
          examination. Such examination shall be made no more than once in each
          Calendar Year during normal business hours with prior notice. Any such
          representative shall be entitled to make copies and extracts from such
          books and records, but only to the extent necessary to verify the
          accuracy of the quarterly reports required by Subsection 8.4 and
          Profits computations. Each party shall fully cooperate with such
          examination and inspection and shall give any explanations that
          reasonably may be requested.

     8.6  Upon the written request of a party ("requesting party"), and not more
          than once in each Calendar Year, the other party ("audited party")
          will permit an independent certified public accounting firm of
          recognized standing selected by the requesting party and reasonably
          acceptable to the audited party to have access during normal business
          hours to those records of the audited party that may be necessary to
          verify the accuracy of the quarterly reports required by Subsection
          8.4 and calculations of Profits for any year ending no more than 36
          months prior to the date of such request.

          (a)  The accounting firm will disclose to the requesting party only
               whether the quarterly reports and Profits calculations are
               correct or incorrect, the specific details concerning any
               discrepancies, and the corrected amount of Sales and/or Profits.
               No other information will be provided to the requesting party.

          (b)  If the requesting party's independent accounting firm determines
               that Profits have been overpaid, the requesting party will repay
               the audited party the overage on the same date that the
               requesting party delivers to the audited party such accounting
               firm's written report. If the requesting party's independent
               accounting firm determines that Profits have been underpaid, the
               audited party will pay the amount of the additional Profits plus
               interest assessed at 2% over the Prime Rate from the time(s) the
               payment(s) was(were) originally due. The payment of the
               additional Profits and interest will be due no later than fifteen
               (15) days after the date on which the requesting party delivers
               to the audited party such accounting firm's written report.

          (c)  The fees charged by the accounting firm will be paid by the
               requesting party, provided that, if the audit determines that the
               additional Profits payable by the audited party to the requesting
               party for such period exceed 5% of the Profits actually paid,
               then the audited party will pay the reasonable fees and expenses
               charged by such accounting firm.

                                       15
<PAGE>

     8.7  Each party will treat all financial information of the other party
          subject to review under this Article 8 as Proprietary Information in
          accordance with Article 16 hereof and will cause its representatives
          and accounting firm to enter into an acceptable confidentiality
          agreement obligating such representatives and accounting firm to
          retain all such financial information in confidence pursuant to the
          confidentiality and non-use provisions of Article 16.

                          Article 9. Advisory Committee

     9.1  The parties hereby establish an Advisory Committee to manage,
          supervise and coordinate, in accordance with the terms of this
          Agreement, all of the activities contemplated by this Agreement,
          including the screening of the [**see cover page note] and the
          research, development and commercialization of Product(s) for the
          Field within the Territory. In particular, but without limitation, the
          responsibilities of the Advisory Committee will include:

          (a)  Approval of Screening Plans, Research And Development Plans,
               Clinical Trials Plans, and Commercialization Plans, and
               modifications of these plans as necessary or desirable, but no
               less than annually.

          (b)  Approval of DMI's selection of the Lead Candidate and the Backup
               Candidate and of DMI's selection of Product(s) for Clinical
               Trials. In particular, Product(s) containing the Backup Candidate
               may, upon approval by the Advisory Committee, be developed for
               the Field in conjunction with, or separately from, the Lead
               Candidate.

          (c)  Approval of the protocols for all Clinical Trials and approval of
               the Indication(s) for all Product(s) selected for Clinical
               Trials.

          (d)  Ensuring the existence and quality of Standard Operating
               Procedures (SOPs) for compliance with standards of good practice
               in all areas of a Product's research, development and
               commercialization (e.g., GLP, GCP, GMP, etc.).

          (e)  Coordination of the manufacture and supply of the Product(s), the
               regulatory filings, marketing, post-approval development studies
               and all other activities necessary or desirable for the
               development and commercialization of the Product(s).

                                       16
<PAGE>

          (f)  Determining if it would be desirable to have [**see cover page
               note] licensee be responsible for the development and
               commercialization of Product(s) for the Field in all or part of
               the Territory and, if it is so determined, selecting any such
               licensee and establishing procedures, guidelines, parameters and
               strategies in advance for negotiating the license. [**see cover
               page note] shall be responsible for negotiating the license, and
               the Advisory Committee may advise DMI during this negotiation.
               Also, the Advisory Committee must approve the final license
               agreement.

          (g)  Facilitate the exchange of information and the cooperation and
               coordination between the parties as they exercise their
               respective rights and meet their respective obligations under
               this Agreement.

          (h)  Develop a publication strategy within the guidelines established
               in Section 16.

          (i)  Establish sub-committees as appropriate to facilitate progress,
               coordination and cooperation in key areas.

          (j)  Establish the overhead amounts as provided in Subsection (i) of
               Section 7.2.

          (k)  Perform such other functions as appropriate to further the
               purposes of this Agreement.

     9.2  The Advisory Committee will be composed of an equal number of
          representatives of each party who shall be appointed, and may be
          replaced at any time, by such party on written notice to the other
          party in accordance with this Agreement. Initially, the Advisory
          Committee will be composed of two representatives of each party, but
          the number of representatives may be any number subsequently agreed to
          by the Advisory Committee. The representatives will be individuals
          with expertise in basic research, pre-clinical research, clinical
          trials, manufacturing, regulatory filings, marketing and post-approval
          development, as applicable to the stage of the development or
          commercialization of the Product(s). Any party may designate a
          substitute to attend and perform the functions of one of its members
          at any meeting of the Advisory Committee by notifying the other party.
          DMI shall designate one of its representatives to be the Chairperson
          of the Advisory Committee. Within five (5) days after the Effective
          Date, each party will notify the other of the identity of its two
          initial representatives and DMI will notify COGENCO of the identity of
          the Chairperson.

     9.3  The Advisory Committee will meet within fifteen (15) days after the
          Effective Date and at least once each Calendar Quarter thereafter or
          at any other frequency agreed to by the Advisory Committee. The time
          and location of the initial meeting shall be determined by the
          Co-Chairpersons, and the time and location of subsequent meetings
          shall be established by the Advisory Committee. Meetings may be held
          in person or by means of a telephone or video conference. The
          Co-Chairpersons shall send notices and agendas for each meeting to all

                                       17
<PAGE>

          of the members of the Advisory Committee. Each party will alternately
          be responsible for preparing and delivering to the members of the
          Advisory Committee, within thirty (30) days after the date of each
          meeting, minutes of such meeting setting forth all decisions of the
          Advisory Committee and including a report on the progress of work
          performed.

     9.4  Within thirty (30) days after the Effective Date, the Advisory
          Committee will approve an initial Screening Plan. DMI shall be
          responsible for preparing a draft of this initial Screening Plan and
          will submit it to the Advisory Committee within fifteen (15) days
          after the Effective Date for review, revision and approval of the
          Advisory Committee. The Screening Plan will be revised and amended at
          least quarterly.

     9.5  Within sixty (60) days after the Effective Date, the Advisory
          Committee will approve an initial Research And Development Plan. DMI
          shall be responsible for preparing a draft of this initial Research
          And Development Plan and will submit it to the Advisory Committee
          within forty-five (45) days after the Effective Date for review,
          revision and approval of the Advisory Committee. The Research And
          Development Plan will be revised and amended at least annually.

     9.6  Within such time agreed to by the Advisory Committee, the Advisory
          Committee will approve an initial Clinical Trials Plan. DMI shall be
          responsible for preparing a draft of this initial Clinical Trials Plan
          and will submit it to the Advisory Committee within such time agreed
          to by the Advisory Committee, for review, revision and approval of the
          Advisory Committee. The Clinical Trials Plan will be revised and
          amended at least annually.

     9.7  Within such time agreed to by the Advisory Committee, the Advisory
          Committee will approve an initial Commercialization Plan. DMI shall be
          responsible for preparing a draft of this initial Commercialization
          Plan and will submit it to the Advisory Committee within such time
          agreed to by the Advisory Committee, for review, revision and approval
          of the Advisory Committee. The Commercialization Plan will be revised
          and amended at least annually.

     9.8  The objective of the Advisory Committee will be to reach agreement by
          consensus on all matters. In the event that the members do not reach
          consensus with respect to any matter, a vote will be taken. Each
          representative will have one vote. All major decisions about the
          screening of [**see cover page note] and the research, development and
          commercialization of the Product(s) shall be made by majority vote of
          the representatives. In the event of a tie vote, the matter will be
          resolved as provided in Article 23. All decisions about the licensing
          of a [**see cover page note] licensee pursuant to Section 12.2 shall
          be made by a [**see cover page note] vote of the representatives. In
          the event the vote is not [**see cover page note], the matter will be
          resolved as provided in Article 23.

                                       18
<PAGE>

                         Article 10. Regulatory Filings

     10.1 Prior to submitting any IND or other Drug Approval Application, the
          parties shall consult with each other regarding the scope and general
          content of such IND or Drug Approval Application. Each party shall
          have the right to review and comment on all INDs and Drug Approval
          Applications prior to filing in accordance with specific time lines or
          other arrangements agreed upon by the Advisory Committee, and such
          comments will be given all due consideration by the other party.

     10.2 Regulatory documents for each filing will be owned and centralized and
          held at DMI's offices or the offices of DMI's Third Party Contractors,
          but will be made available to COGENCO for its review.

     10.3 DMI shall not have the right to transfer title or otherwise attempt in
          any manner to dispose of any INDs or Drug Approval Applications
          without the written consent of COGENCO.

     10.4 DMI shall be responsible for conducting meetings and discussions and
          routine telephone communications with the regulatory authority related
          to the Clinical Trials it is performing. All parties may participate
          in all substantive discussions and meetings with regulatory
          authorities. COGENCO will send only a reasonable number of
          representatives to any such discussion or meeting.

     10.5 The parties shall cooperate in good faith with respect to the conduct
          of any inspections by any regulatory authority of DMI's or a Third
          Party Contractor's sites and facilities related to a Product, and both
          parties shall, at a minimum, be given the opportunity to attend the
          summary, or wrap up, meeting related to the Product with such
          regulatory authority at the conclusion of such site inspection. If
          DMI's sites or facilities are being inspected, DMI shall consider the
          attendance of COGENCO at the inspections, but shall not be obligated
          to accept COGENCO's attendance at such inspections if such attendance
          would result in the disclosure to COGENCO of confidential information
          or trade secrets unrelated to Product(s).

                                       19
<PAGE>

     10.6 To the extent that DMI receives written or material oral
          communications from a regulatory authority relating to a Product or a
          Clinical Trial, DMI shall notify COGENCO and provide a copy of any
          written communication as soon as reasonably practicable.

     10.7 During a Clinical Trial, DMI shall be responsible for the prompt
          reporting of adverse reactions (as defined by the World Health
          Organization) directly or indirectly attributable to the use of the
          Product being used in the Clinical Trial to the regulatory authority
          in compliance with applicable law. After Regulatory Approval of a
          Product, DMI shall continue to be responsible for the prompt reporting
          of any adverse reactions directly or indirectly attributable to the
          use of the Product to the appropriate regulatory authorities in
          compliance with applicable law. COGENCO shall immediately inform DMI
          of any adverse drug reactions of which it becomes aware.

                        Article 11. Intellectual Property

     11.1 As of the Effective Date, DMI is the sole and exclusive owner of
          Intellectual Property covering or relating to the use of [**see cover
          page note] to treat asthma in humans, including the patent and patent
          applications listed in Appendix A attached hereto. DMI shall remain
          the owner of this Intellectual Property.

     11.2 DMI shall also be the sole and exclusive owner of all Intellectual
          Property concerning or relating to (i) the treatment of asthma with a
          [**see cover page note], including all methods of treatment, any such
          compounds and/or products comprising any such compounds, (ii) the
          Selected Candidates, including any derivatives of them, and/or (iii)
          Product(s), which is conceived, created, discovered, produced or
          developed by either party and/or by assignees, licensees,
          sublicensees, consultants and/or Affiliates of either party or both
          parties and/or by Third-Party contractors of DMI during the term of
          this Agreement.

     11.3 COGENCO agrees to make prompt written disclosure to DMI of all
          Intellectual Property concerning or relating to (i) the treatment of
          asthma with a [**see cover page note], including all methods of
          treatment, any such compounds and/or products comprising any such
          compounds, (ii) the Selected Candidates, including any derivatives of
          them, and/or (iii) Product(s) which is conceived, created, discovered,
          produced or developed by it, its assignees, its sublicensees, its
          consultants and/or its Affiliates during the term of this Agreement.

     11.4 COGENCO agrees to require its sublicensees and consultants to assign
          to COGENCO all Intellectual Property concerning or relating to (i) the
          treatment of asthma with a [**see cover page note], including all
          methods of treatment, any such compounds and/or products comprising
          any such compounds, (ii) the Selected Candidates, including any
          derivatives of them, and/or (iii) Product(s) which is conceived,
          created, discovered, produced or developed by any of them during the
          term of the sublicense or consultant's agreement.

                                       20
<PAGE>

     11.5 COGENCO also agrees to require its assignees and Affiliates to assign
          to COGENCO all Intellectual Property concerning or relating to (i) the
          treatment of asthma with a [**see cover page note], including all
          methods of treatment, any such compounds and/or products comprising
          any such compounds, (ii) the Selected Candidates, including any
          derivatives of them, and/or (iii) Product(s) which is conceived,
          created, discovered, produced or developed by, or on behalf of, any of
          them during the term of this Agreement.

     11.6 COGENCO agrees to, and does hereby, assign to DMI all of its right,
          title and interest in and to all Intellectual Property concerning or
          relating to (i) the treatment of asthma with a [**see cover page
          note], including all methods of treatment, any such compounds and/or
          products comprising any such compounds, (ii) the Selected Candidates,
          including any derivatives of them, and/or (iii) Product(s) which is
          conceived, created, discovered, produced or developed by it, its
          assignees, sublicensees, consultants and/or Affiliates during the term
          of this Agreement.

     11.7 COGENCO will assist DMI, at DMI's expense, in every proper way to
          obtain, maintain and enforce United States and foreign proprietary
          rights relating to any and all Intellectual Property now or hereafter
          owned by DMI which concerns or relates to (i) the treatment of asthma
          with a [**see cover page note], including all methods of treatment,
          any such compounds and/or products comprising any such compounds, (ii)
          the Selected Candidates, including any derivatives of them, and/or
          (iii) Product(s). To that end, COGENCO will:

          (a)  Execute, verify and deliver such documents and perform such other
               acts (including providing evidence and witnesses within its
               control and appearing as a witness) as DMI may reasonably request
               for use in applying for, obtaining, perfecting, evidencing,
               sustaining and enforcing such proprietary rights.

          (b)  Where the assignment of proprietary rights to DMI is provided for
               herein, execute, verify and deliver assignments of such
               proprietary rights to DMI or its designee.

          (c)  In the event DMI is unable for any reason, after reasonable
               effort, to secure COGENCO's signature on any document needed in
               connection with the actions specified in this Article 11, COGENCO
               hereby irrevocably designates and appoints DMI and its duly
               authorized officers and agents as its agent and attorney-in-fact,
               to act for and on COGENCO's behalf to execute, verify and file
               any such documents and to do all other lawfully permitted acts to
               further the purposes of this Article 11 with the same legal force
               and effect as if executed by COGENCO.

                                       21
<PAGE>

     11.8 DMI will take all necessary steps to obtain and maintain protection
          for all Intellectual Property now or hereafter owned by it, and DMI
          shall be responsible for, and shall bear all the costs of, obtaining
          and maintaining protection for its Intellectual Property.

     11.9 DMI shall keep COGENCO advised as to all developments and shall
          provide COGENCO with all materials sufficiently in advance to allow
          COGENCO to review and provide input on any proposed filing prior to
          its filing, which input shall be considered in good faith and included
          where reasonably possible by DMI. Notwithstanding the foregoing, DMI
          shall have the right to take such actions as are reasonably necessary,
          in its good faith judgment, to preserve all rights in its Intellectual
          Property, and DMI shall notify COGENCO as soon as possible after
          taking any such action.

     11.10 DMI will abandon Intellectual Property or any rights therein, only
          after notice to COGENCO at least thirty (30) days in advance and only
          after giving COGENCO an opportunity to assume responsibility for
          obtaining and/or maintaining the Intellectual Property protection
          proposed to be abandoned.

     11.11 The parties agree to share equally the costs (including attorney's
          fees, license fees, milestone payments, royalties and any other costs)
          should it become necessary for DMI and/or COGENCO to acquire or
          license the Intellectual Property of one or more Third Parties in
          order to be able to make, have made, use, sell, offer for sale,
          market, commercialize, import and export Product(s) for the Field in
          the Territory.

     11.12 DMI shall have the right, with the approval of COGENCO, to assign its
          Intellectual Property covering or relating to the use of [**see cover
          page note] to treat asthma in humans to Third Parties in all or part
          of the Territory, provided the assignee agrees to assume all of DMI's
          obligations and responsibilities under this Agreement in all, or the
          assignee's part, of the Territory.

                                       22
<PAGE>

                      Article 12. Licenses Of Third Parties

     12.1 DMI shall have the right to license its Intellectual Property covering
          or relating to the use of [**see cover page note] to treat asthma in
          humans to Third Parties in all or part of the Territory for the
          treatment of asthma with the approval of COGENCO.

     12.2 The Parties contemplate that they are likely to want to have a [**see
          cover page note] licensee be responsible for the development and
          commercialization of Product(s) for the Field in all or a part of the
          Territory. In such a case, the Advisory Committee will select the
          [**see cover page note] licensee, and [**see cover page note] will
          negotiate any such license, all as provided in Article 9, [**see cover
          page note] agrees to license its Intellectual Property to the licensee
          selected by the Advisory Committee as necessary to effectuate the
          terms of the license negotiated by [**see cover page note] and
          approved by the Advisory Committee.

                         Article 13. Co-Marketing Rights

     13.1 In the event the parties enter into one or more licenses as provided
          in Section 12.2 above, [**see cover page note] shall retain the right,
          but not the responsibility or obligation, for DMI and COGENCO - to
          market and/or promote Product(s) for the Field within the Territory or
          part of the Territory - that is licensed ("Co-Marketing Rights").
          These Co-Marketing Rights shall include the right to make, have made,
          use, sell, offer for sale, commercialize, import and export Product(s)
          to the extent necessary for DMI and COGENCO to be able to market
          and/or promote Product(s) for the Field within the Territory or part
          of the Territory that is licensed.

     13.2 DMI hereby grants to COGENCO a license of all of its Intellectual
          Property covering or relating to the treatment of asthma in humans
          with a [**see cover page note] to the extent needed by COGENCO to
          fully exercise the Co-Marketing Rights it receives pursuant to the
          terms of Section 13.1.

     13.3 DMI shall have the right to license its Co-Marketing Rights to Third
          Parties with the approval of COGENCO.

     13.4 COGENCO shall have the right to sublicense its Co-Marketing Rights to
          Third Parties with the approval of DMI.

                       Article 14. Third-Party Contractors

     14.1 DMI may enter into written contracts with Third Parties to perform
          activities required of it under the terms of this Agreement or in
          furtherance of the goals of this Agreement, including, without
          limitation, Third-Party manufacturers, consultants, clinical
          investigators and contract research organizations.

                                       23
<PAGE>

     14.2 Any such Third-Party contractors must agree to adhere to all
          applicable laws, regulatory guidelines and requirements, and quality
          standards for the research, development, manufacture, Preclinical
          Studies and Clinical Trials it performs and must agree to use only
          qualified personnel to perform the work which is the subject of the
          Third-Party contract.

     14.3 All Third-Party contractors must also agree to be bound by
          confidentiality and nonuse provisions which are substantially the same
          as those contained in Article 15.

     14.4 All Third-Party contractors must further agree to assign any
          Intellectual Property conceived, created, discovered, produced or
          developed as a result of the Third Party's performance under the
          contract to DMI.

     14.5 All Third-Party contracts for the manufacture and/or supply of
          Product(s) or for the performance of Preclinical Studies or Clinical
          Trials must be approved in advance by the Advisory Committee.

     14.6 Third-Party contracts are distinguished herein from licenses and
          sublicenses because no payments are made by the Third-Party
          contractors to DMI and/or COGENCO pursuant to the terms of a
          Third-Party contract. Thus, any contract under which payments are made
          by a Third Party to DMI and/or COGENCO, including agreements with
          distributors of Product(s), shall be classified as a license or
          sublicense hereunder.

                           Article 15. Confidentiality

     15.1 Each party agrees to treat and maintain any of the other party's
          Proprietary Information which is in its possession, which comes into
          its possession during the term of this Agreement, or which is
          conceived, created, discovered, produced, developed or obtained by the
          other party as a result of performance under this Agreement, in
          confidence, and agrees not to disclose any such Proprietary
          Information to anyone and to not use any such Proprietary Information,
          except for the purposes of performing its obligations under this
          Agreement. Notwithstanding the foregoing, each party may disclose the
          other party's Proprietary Information to its employees, consultants,
          agents, and Third-Party contractors, or as is deemed necessary for any
          purpose set forth in, or relating to, this Agreement, provided that
          any recipients are bound by like duties of confidentiality,
          nondisclosure and nonuse as contained herein. Further, each party may
          disclose and use the other party's Proprietary Information with the
          written consent of the other party.

                                       24
<PAGE>

     15.2 Notwithstanding the foregoing, each party may disclose the existence
          and content of this Agreement and other agreements between the parties
          to advisors, agents, consultants, investors, and Third-Party
          contactors who agree to be bound by like duties of confidentiality,
          nondisclosure and nonuse as contained herein.

     15.3 Nothing contained herein shall in any way restrict or impair the right
          of either party to use, disclose, or otherwise deal with the other
          party's Proprietary Information which the party claiming waiver can
          demonstrate by written records:

          (a)  is or becomes generally known to the public through no fault of
               the party;

          (b)  was known to it prior to the time of disclosure by the other
               party;

          (c)  was independently developed by it and not in performance of its
               obligations under this Agreement;

          (d)  was lawfully obtained without restrictions from a Third Party who
               has authority to make such disclosure; or

          (e)  which the party is required to disclose pursuant to applicable
               law or pursuant to a requirement, subpoena, order or other
               request of a court, agency or other governmental entity,
               including required disclosures to a governmental entity or agency
               in connection with seeking any governmental or regulatory
               approval; in such case, the party shall notify the other party
               prior to such disclosure so as to give the other party an
               opportunity to protest the disclosure.

              Article 16. Publicity, Publications And Presentations

     16.1 The parties agree that the public announcement of the execution of
          this Agreement shall be in the form of a press release to be agreed on
          by the parties before or on the Effective Date and, thereafter, each
          party shall be entitled to make or publish any public statement
          consistent with the contents thereof. Thereafter, the parties will
          jointly discuss and agree on any statement to the public regarding
          this Agreement, the transactions contemplated herein, or clinical,
          regulatory and commercial developments relating to the Product(s),
          subject in each case to disclosure otherwise required by law or
          regulation as determined in good faith by each party. When a party
          wishes to make a public statement, it will notify the other party and
          give the other party at least three (3) business days to review and
          comment on such statement, and the parties will discuss and agree on
          the final content of the statement. If a party is not legally able to
          give notice as required by the previous sentence, it will furnish the

                                       25
<PAGE>

          other party with a copy of its disclosure as soon as practicable after
          the making thereof. The parties acknowledge the importance of
          supporting each other's efforts to publicly disclose results and
          significant developments regarding Product(s). The principles to be
          observed in such public disclosures will be accuracy, the
          confidentiality requirements of Article 15, compliance with regulatory
          agency regulations and guidelines, the advantage a competitor may gain
          from any public statements under this Subsection 16.1, and the
          standards and customs in the pharmaceutical industry for such
          disclosures by companies comparable to DMI and COGENCO.

     16.2 DMI and COGENCO each acknowledge the other party's interest in
          publishing certain of the results of the work performed pursuant to
          the terms of this Agreement and in making presentations at scientific
          meetings to (i) obtain recognition within the scientific community,
          (ii) advance the state of scientific knowledge, and (iii) promote the
          Product(s). Both parties also recognize their mutual interest in
          obtaining valid patent rights for any inventions concerning or
          relating to the use of [**see cover page note] for the treatment of
          asthma, the Selected Candidates, including derivatives of them, and/or
          Product(s) and in protecting the confidentiality of their Proprietary
          Information.

          (a)  Consequently, if either party desires to publish or present the
               results of the work performed pursuant to the terms of this
               Agreement, the publishing/presenting party shall provide the
               nonpublishing/nonpresenting party and the Advisory Committee with
               a draft manuscript of the proposed publication or presentation.

          (b)  The nonpublishing/nonpresenting party and the Advisory Committee
               shall have thirty (30) days from receipt of the draft manuscript
               to review it.

          (c)  The publishing/presenting party agrees to delete any information
               identified by the nonpublishing/nonpresenting party as its
               Proprietary Information upon written request of the
               nonpublishing/nonpresenting party received within the thirty-day
               review period.

          (d)  The publishing/presenting party also agrees to delete any
               information identified by the Advisory Committee as Proprietary
               Information, the deletion of which is necessary for the
               protection of the commercial interests of the parties, upon
               written request of the Advisory Committee received within the
               thirty-day review period.

          (e)  If the Advisory Committee objects in writing within the
               thirty-day review period to the publication or presentation as
               being inconsistent with the publication strategy established by
               the Advisory Committee pursuant to Section 9.1, then the
               publishing/presenting party and the Advisory Committee will
               discuss in good faith possible modifications of, or delays in,
               the publication or presentation. The publishing/presenting party
               shall have the right to proceed with the publication or
               presentation if an agreement with the Advisory Committee about
               the proposed modifications or delays cannot be reached within
               thirty days after receipt of the written objection.

                                       26
<PAGE>

          (f)  Finally, in the event that the nonpublishing/nonpresenting party
               or the Advisory Committee determines that the manuscript
               describes patentable subject matter, the
               nonpublishing/nonpresenting party and/or the Advisory Committee
               shall so notify the publishing/presenting party in writing within
               the thirty-day review period. Upon receipt of this notification,
               the publishing/presenting party will delay publication of the
               manuscript or the presentation of the information contained in
               the manuscript for a period of ninety (90) days from the date of
               receipt of the written notice.

             Article 17. Representations, Warranties And Disclaimer

     17.1 DMI represents and warrants that it has the right and authority to
          enter into, and perform its obligations under, this Agreement and that
          there are no outstanding grants, licenses, encumbrances or agreements,
          either written, oral or implied, inconsistent with this Agreement, or
          which this Agreement, or performance hereunder, would violate, breach,
          conflict with, or cause a default.

     17.2 DMI represents and warrants that it is the sole and exclusive owner of
          the patent and patent applications listed in Appendix A.

     17.3 DMI further represents and warrants that it has the full right and
          authority to grant COGENCO all of the rights granted hereunder.

     17.4 COGENCO represents and warrants that it has the right and authority to
          enter into, and perform its obligations under, this Agreement and that
          there are no outstanding grants, licenses, encumbrances or agreements,
          either written, oral or implied, inconsistent with this Agreement, or
          which this Agreement, or performance hereunder, would violate, breach,
          conflict with, or cause a default.

     17.5 EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 17, DMI DOES NOT MAKE
          ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR OTHERWISE, CONCERNING
          THE INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION IT CURRENTLY OWNS
          AND WHICH IT IS LICENSING TO COGENCO HEREUNDER. SPECIFICALLY, WITHOUT
          LIMITING THE GENERALITY OF THE FOREGOING, DMI MAKES NO EXPRESS OR
          IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS (FOR A PARTICULAR PURPOSE
          OR OTHERWISE), QUALITY OR USEFULNESS OF ITS INTELLECTUAL PROPERTY OR
          PROPRIETARY INFORMATION. DMI DOES NOT WARRANT THE ACCURACY OF ANY

                                       27
<PAGE>

          INFORMATION INCLUDED WITHIN THE INTELLECTUAL PROPERTY OR PROPRIETARY
          INFORMATION OR THAT THE PRACTICE OF ITS INTELLECTUAL PROPERTY OR THE
          USE OF ITS PROPRIETARY INFORMATION WILL BE FREE FROM CLAIMS OF
          INFRINGEMENT BY THIRD PARTIES OR ANY OTHER RIGHTS OF THIRD PARTIES.
          UNDER NO CIRCUMSTANCE SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY
          OR ANY THIRD PARTY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN
          TORT, CONTRACT, STRICT LIABILITY OR OTHERWISE INCURRED BY THE OTHER
          PARTY OR ANY THIRD PARTY.

                    Article 18. Defense Of Third-Party Claims

     18.1 With respect to claims or suits by Third Parties resulting from, or
          arising out of, the performance of this Agreement, the parties hereto
          agree as follows:

          (a)  Each party shall have the right to control the defense or
               settlement of any claim or suit that may be brought against it
               with counsel of its own choosing and at its own expense.

          (b)  Each party agrees to inform the other party as soon as
               practicable of any such claim or suit and to keep the other party
               informed about the claim or suit until resolved.

          (c)  Each party agrees to cooperate with the other party to the extent
               necessary with respect to defending against any such claim or
               suit. All of the cooperating party's expenses shall be paid for,
               or reimbursed by, the other party.

          (d)  Each party agrees that it will not settle any claim or suit
               brought against it without the input of the other party, which
               input will be considered in good faith.

     18.2 Notwithstanding the foregoing, a party seeking indemnification from
          the other party must proceed as provided in the indemnification
          provisions of Article 20.

                                       28
<PAGE>

          Article 19. Infringement Or Misappropriation By Third Parties

     19.1 Each party will inform the other as soon as possible upon learning of
          any infringement or misappropriation by any Third Party of any
          Intellectual Property currently or hereafter owned by DMI.

     19.2 DMI shall have the first option to proceed against such Third Party.
          COGENCO agrees that it will permit the use of its name in any
          litigation suit, will sign all necessary papers, will take all
          rightful oaths, and will do whatever else may be necessary to assist
          DMI in proceeding against the Third Party. All costs, expenses and
          disbursements of proceeding against such Third Party shall be borne by
          DMI, including reimbursement of expenses incurred by COGENCO as a
          result of assisting DMI in proceeding against the Third Party. DMI
          shall keep COGENCO fully informed of all such proceedings. DMI shall
          not settle any such proceeding without the input of COGENCO, which
          input will be considered in good faith. In the event that DMI is
          successful in proceeding against the Third Party, all monies recovered
          by DMI for infringement or misappropriation by way of settlement or
          order of court shall be treated as follows. If it has not already done
          so, DMI shall deduct and reimburse COGENCO the attorneys fees,
          disbursements and costs expended by COGENCO in the conduct of
          proceeding against the Third Party. Next, DMI shall deduct and retain
          the attorneys fees, disbursements and costs expended by DMI in the
          conduct of proceeding against the Third Party. Any monies remaining
          after such deduction shall be divided as follows [**see cover page
          note] % to DMI and [**see cover page note] % to COGENCO.

     19.3 In the event that DMI elects not to proceed, COGENCO shall have the
          right to proceed against the Third Party. DMI agrees that it will
          permit the use of its name in any litigation suit, will sign all
          necessary papers, will take all rightful oaths, and will do whatever
          else may be necessary to assist COGENCO in proceeding against the
          Third Party. All costs, expenses and disbursements of proceeding
          against such Third Party shall be borne by COGENCO, including
          reimbursement of expenses incurred by DMI as a result of assisting
          COGENCO in proceeding against the Third Party. COGENCO shall keep DMI
          fully informed of all such proceedings. COGENCO shall not settle any
          such proceeding without the prior written consent of DMI, which
          consent will not be unreasonably withheld or conditioned. In the event
          that COGENCO is successful in proceeding against the Third Party, all
          monies recovered by COGENCO for infringement or misappropriation by
          way of settlement or order of court shall be treated as follows. If it
          has not already done so, COGENCO shall deduct and reimburse DMI the
          attorneys fees, disbursements and costs expended by DMI in the conduct
          of proceeding against the Third Party. Next, COGENCO shall deduct and
          retain the attorneys fees, disbursements and costs expended by COGENCO
          in the conduct of proceeding against the Third Party. Any monies
          remaining after such deduction shall be divided as follows: [**see
          cover page note] % to COGENCO and [**see cover page note] % to DMI.

                                       29
<PAGE>

                           Article 20. Indemnification

     20.1 COGENCO hereby agrees to indemnify, defend and hold harmless DMI, its
          officers, directors, employees, consultants and agents from and
          against any and all liabilities, claims, demands, actions, suits,
          damages, costs, expenses (including reasonable attorneys' fees), or
          judgments (collectively "Damages") arising out of, based upon,
          resulting from, or presented or brought on account of, a material
          breach of this Agreement by COGENCO, except to the extent that such
          Damages arise out of, are based upon or result from (i) a material
          breach of the Agreement by DMI or (ii) the negligence or willful
          misconduct of DMI.

     20.2 DMI hereby agrees to indemnify, defend and hold harmless COGENCO, its
          officers, directors, employees, consultants and agents, from and
          against any liabilities, claims, demands, actions, suits, damages,
          costs, expenses (including reasonable attorneys' fees), or judgments
          (collectively "Damages") arising out of, based upon, resulting from,
          or presented or brought on account of, a material breach of this
          Agreement by DMI, except to the extent that such Damages arise out of,
          are based upon or result from (i) a material breach of the Agreement
          by COGENCO or (ii) the negligence or willful misconduct of COGENCO

     20.3 COGENCO hereby agrees to indemnify, defend and hold harmless DMI, its
          officers, directors, employees, consultants and agents, from and
          against any liabilities, claims, demands, suits, actions, damages,
          costs, expense (including reasonable attorneys' fees), or judgments
          (collectively "Damages") arising out of, based upon, resulting from,
          or presented or brought on account of, any injuries, losses or damages
          sustained by any person or property in consequence of any act or
          omission of COGENCO, except to the extent that such Damages arise out
          of, are based upon or result from (i) a material breach of the
          Agreement by DMI or (ii) the negligence or willful misconduct of DMI.

     20.4 DMI hereby agrees to indemnify, defend and hold harmless COGENCO, its
          officers, directors, employees, consultants and agents, from and
          against any liabilities, claims, demands, suits, actions, damages,
          costs, expense (including reasonable attorneys' fees), or judgments
          (collectively "Damages") arising out of, based upon, resulting from,
          or presented or brought on account of, any injuries, losses or damages
          sustained by any person or property in consequence of any act or
          omission of DMI, except to the extent that such Damages arise out of,
          are based upon or result from (i) a material breach of the Agreement
          by COGENCO or (ii) the negligence or willful misconduct of COGENCO.

                                       30
<PAGE>

     20.5 A party entitled to indemnification under this Article 20 (the
          "Indemnified Party") shall promptly notify the party potentially
          responsible for such indemnification (the "Indemnifying Party") upon
          becoming aware of any claim or claims asserted or threatened against
          such Indemnified Party which could give rise to a right of
          indemnification under this Agreement; provided, however, that the
          failure to give such notice shall not relieve the Indemnifying Party
          of its indemnity obligation hereunder, except to the extent that such
          failure substantially prejudices its rights hereunder.

     20.6 The Indemnifying Party shall have the right to defend, at its sole
          cost and expense, such claim by all appropriate proceedings, which
          proceedings shall be prosecuted diligently by the Indemnifying Party
          to a final conclusion or settled at the discretion of the Indemnifying
          Party; provided, however, that the Indemnifying Party may not enter
          into any compromise or settlement unless the Indemnified Party
          consents thereto, which consent shall not be unreasonably withheld,
          conditioned or delayed.

     20.7 The Indemnified Party may participate in, but not control, the defense
          or settlement of any claim controlled by the Indemnifying Party
          pursuant to this Article 20 and shall bear its own costs and expenses
          with respect to such participation; provided, however, that the
          Indemnifying Party shall bear such costs and expenses if counsel for
          the Indemnifying Party shall have reasonably determined that such
          counsel may not properly represent both the Indemnifying Party and the
          Indemnified Party.

     20.8 If the Indemnifying Party fails to notify the Indemnified Party within
          twenty (20) days after receipt of notice of a claim in accordance with
          Section 20.5 hereof that it elects to defend the Indemnified Party
          pursuant to this Article 20, or if the Indemnifying Party elects to
          defend the Indemnified Party but fails to prosecute or settle the
          claim diligently and promptly, then the Indemnified Party shall have
          the right to defend, at the sole cost and expense of the Indemnifying
          Party, the claim by all appropriate proceedings, which proceedings
          shall be promptly and vigorously prosecuted by the Indemnified Party
          to a final conclusion or settlement; provided, however, that in no
          event shall the Indemnifying Party be required to indemnify the
          Indemnified Party for any amount paid or payable by the Indemnified
          Party in the settlement of any such claim agreed to without the
          consent of the Indemnifying Party, which consent shall not be
          unreasonably withheld, conditioned or delayed.

                              Article 21. Insurance

     21.1 Each Party shall use all commercially reasonable efforts to maintain
          insurance, including product liability insurance, with respect to its
          activities hereunder.

                                       31
<PAGE>

     21.2 Such insurance shall be in such amounts and subject to such
          deductibles as the Parties may agree based upon standards prevailing
          in the industry at the time.

     21.3 Up until such time as Clinical Trials begin, either Party may satisfy
          its obligations under this Section through self-insurance to the same
          extent.

     21.4 At such time as a Product(s) is being manufactured by a Party for
          commercial sale, that Party shall name the other Party as an
          additional insured on any such policies. Any insurance shall not be
          construed to create a limit of the insuring Party's liability with
          respect to its indemnification obligations under Article 20. Each
          Party shall use commercially reasonable efforts to provide the other
          Party with written notice at least thirty (30) prior to a
          cancellation, non-renewal or material change in such insurance or
          self- insurance that could materially adversely affect the rights of
          the other Party hereunder. Each Party's insurance hereunder shall be
          primary and non- contributing.

                        Article 22. Term And Termination

     22.1 Unless terminated sooner as provided below, this Agreement will
          continue in full force and effect until the later of (i) such time
          after the First Commercial Sale when no Sales of any Product(s) for
          the Field have been made anywhere in the Territory for a period of one
          (1) year by either party or by any licensees, sublicensees and/or
          assignees of one or both of the parties, (ii) one (1) year after the
          termination of all licenses and sublicenses, or (iii) fifty (50) years
          from the Effective Date.

     22.2 The parties may at any time terminate this Agreement, in part or in
          its entirety, by mutual written agreement.

     22.3 DMI shall have the right to terminate this Agreement immediately by
          providing written notice to COGENCO of the termination if one or both
          of the two cash payments provided for in Subsections 6.1 and 6.2 are
          not received within five (5) days after the Effective Date.

     22.4 Other than as provided in Section 22.3, in the event of a breach or
          default in respect of any of the terms of this Agreement by either
          party, the other party shall give notice in writing, specifying in
          detail the nature of the breach or default. If the alleged breach or
          default is not cured within sixty (60) days after receipt of this
          notice, the party giving notice shall have the right to immediately
          terminate this Agreement by giving a second written notice to the
          breaching party.

     22.5 In the event of either party experiencing financial difficulties, that
          party shall immediately notify the other party to that effect. The
          party so notified shall have the right to terminate this Agreement
          within thirty (30) days of said notification. If the party having the
          right to terminate decides not to do so, then the parties agree to
          renegotiate in good faith a reduction in the share of the Revenues to
          be paid to the party experiencing financial difficulties if that party
          is unable to fully perform its obligations hereunder. A party shall be
          considered as having financial difficulties by:

                                       32
<PAGE>

          (a)  that party's commencement of a voluntary case under any
               applicable bankruptcy code or statute, or by its authorizing, by
               appropriate proceedings, the commencement of such a voluntary
               case;

          (b)  that party's failing to receive dismissal of any involuntary case
               under any applicable bankruptcy code or statute (wherein the
               other party is not a party to the case) within sixty (60) days
               after initiation of such action or petition;

          (c)  that party's seeking relief as a debtor under any applicable law
               of any jurisdiction relating to the liquidation or reorganization
               of debtors or to the modification or alteration of the rights of
               creditors, or by consenting to or acquiescing in such relief;

          (d)  the entry of an order by a court of competent jurisdiction
               finding it to be bankrupt or insolvent, or ordering or approving
               its liquidation, reorganization, or any modification or
               alteration of the rights of its creditors, or assuming custody
               of, or appointing a receiver or other custodian for, all or a
               substantial part of its property or assets; or

          (e)  that party's making an assignment for the benefit of, or entering
               into a composition with, its creditors, or appointing or
               consenting to the appointment of a receiver or other custodian
               for all or a substantial part of its property.

     22.6 Upon termination of this Agreement for any reason:

          (a)  All rights and licenses granted to COGENCO hereunder shall revert
               to DMI, except that COGENCO shall have the right to sell any
               Product(s) in inventory as provided in Subsection (b) of this
               Section 22.6.

          (b)  COGENCO shall cease all activities with respect to the
               Product(s), including all making (by COGENCO and/or by Third
               Parties for COGENCO), using, selling, offering for sale,
               marketing, commercializing, importing and exporting of
               Product(s). Notwithstanding the foregoing, COGENCO shall have the
               right to sell any Product(s) in inventory at prices of its
               choosing, provided COGENCO makes the payments and reports
               required by Article 8.

                                       33
<PAGE>

          (c)  If requested by DMI, COGENCO shall make its personnel and other
               resources reasonably available to DMI as necessary for a
               reasonable period of time, not to exceed six (6) months from the
               date of termination, to effect an orderly transition of
               responsibilities. If termination of the Agreement occurred
               because of a breach by COGENCO, then COGENCO will be responsible
               for all of the costs of performing these obligations. If
               termination of the Agreement occurred because of a breach by DMI,
               then DMI will be responsible for all of the costs of performing
               these obligations. Otherwise, the parties will share the costs.

          (d)  COGENCO's sublicense(s) of its rights pursuant to Section 13.4
               above (referred to herein as "Article 13 Sublicense(s)") shall be
               transferred to DMI. The Article 13 Sublicense(s) will remain in
               full force and effect so long as the sublicensee(s) perform(s)
               the obligations of the Article 13 Sublicense(s), and DMI shall
               have all of the rights and benefits of the Article 13
               Sublicense(s) (including the right to receive 100% of all
               payments due under the Article 13 Sublicense(s)) and shall be
               responsible for performing all of the obligations required of
               COGENCO by the Article 13 Sublicense(s). COGENCO will execute
               such documents as may be requested by DMI to attest to the
               transfer to DMI of all of its Article 13 Sublicense(s).

     22.7 Upon termination of this Agreement for any reason, nothing herein
          shall be construed to release either party from any obligation matured
          prior to the effective date of such termination, and neither party
          waives any rights it may have to remedies arising out of the
          termination or breach of surviving obligations.

                         Article 23. Dispute Resolution

     23.1 In the event of any controversy or claim arising out of or relating to
          any provision of this Agreement or the collaborative effort
          contemplated hereby, the parties shall initially refer such dispute to
          the Advisory Committee.

     23.2 Failing resolution by the Advisory Committee of any controversy or
          claim within thirty (30) days after such referral, the matter shall be
          referred to the Chief Executive Officers (CEOs) of DMI and COGENCO.
          Any controversy or claim arising in the Advisory Committee or any
          matter about which the Advisory Committee is deadlocked shall also be
          referred to the CEOs of DMI and COGENCO

     23.3 The CEOs of DMI and COGENCO shall, as soon as practicable, attempt in
          good faith to resolve any controversy or claim referred to them. If
          such controversy or claim is not resolved within thirty (30) days
          after referral to the CEOs of DMI and COGENCO, either party shall be
          free to notify the CEOs of DMI and COGENCO, that it wishes the matter
          to be referred to the Chief Scientific Officer of DMI. The decision of
          the Chief Scientific Officer of DMI shall be final.

                                       34
<PAGE>

     23.4 This Agreement shall be governed by, and its provisions construed and
          enforced in accordance with, the law of the State of Colorado. Both
          parties agree to submit to the jurisdiction of all Colorado courts,
          including federal courts, and to waive any and all rights under the
          law of any jurisdiction to object on any basis to jurisdiction or
          venue within Colorado.

                            Article 24. Miscellaneous

     24.1 All payments, notices, reports, exchanges of information and other
          communications between the parties required by this Agreement shall be
          sent to the addresses set out below, or to such other addresses as may
          be designated by one party to the other by notice pursuant hereto, by
          (i) prepaid, certified air mail (which shall be deemed received by the
          other party on the fifth business day following deposit in the mails),
          (ii) facsimile transmission or other electronic means of communication
          (which shall be deemed received when transmitted), with confirmation
          by first class letter, postage prepaid, or (iii) an express courier
          service, such as FedEx, DHL, Airborne or similar delivery service,
          with capabilities of tracking packages and/or letter delivery and
          providing verification of receipt (in the even of the use of such a
          service, receipt shall be on the date actually received, as verified
          by such delivery service).

                If to DMI:         DMI BioSciences Inc.
                                   3601 South Clarkson Street, Suite 420
                                   Englewood, Colorado, USA 80113-3948
                                   Attention:  Mr. Bruce G. Miller

                If to COGENCO:     Cogenco International, Inc.
                                   4085 South Dexter Street
                                   Englewood, Colorado 80113
                                   Attention: Mr. David Brenman

     24.2 No party to this Agreement shall be liable for failure to perform on
          its part any provision or part of this Agreement when such failure is
          due to fire, flood, strike or other industrial disturbance,
          unavoidable accident, war, embargo, inability to obtain materials,
          transportation controls, governmental actions, or other causes beyond
          the control of such party, but only for the period of delay imposed by
          such cause.

                                       35
<PAGE>

     24.3 For purposes of this Agreement, "business day" means a day on which
          the banks in the United States are generally open to conduct their
          regular banking business.

     24.4 Should any part or provision of this Agreement be held unenforceable
          or in conflict with the law, the validity of the remaining parts or
          provisions shall not be affected by such holding.

     24.5 The failure of either party to enforce, at any time and for any period
          of time, a provision of this Agreement is not, and shall not be
          construed to be, a waiver of any such provision or of the right of
          such party to subsequently enforce each and every such provision.

     24.6 This Agreement constitutes the entire agreement and understanding
          between the parties with respect to the subject matter hereof, and
          supersedes and replaces all prior negotiations, understandings and
          agreements, whether written or oral, including the Term Sheet between
          the parties dated August 23, 2004.

     24.7 All amendments and modifications of this Agreement shall be in writing
          and executed by both parties.

     24.8 Each party will obtain any government approval required in its country
          of domicile to enable this Agreement to become effective, or to enable
          any payment hereunder to be made, or any other obligation hereunder to
          be observed or performed. Each party will keep the other informed of
          progress in obtaining any such governmental approval and will
          cooperate with the other party in any such efforts.

     24.9 This Agreement is made subject to any restrictions concerning the
          export of materials and technology from the United States which may be
          imposed upon or related to either party to this Agreement from time to
          time by the Government of the United States. Neither party will
          export, directly or indirectly, any Proprietary Information,
          Intellectual Property, or Product(s) or other materials utilizing such
          technology to any countries for which the United States Government or
          any agency thereof at the time of export requires an export license or
          other governmental approval, without first obtaining the written
          consent to do so from the Department of Commerce or other agency of
          the United States Government when required by applicable statute or
          regulation.

     24.10 This Agreement may be assigned by either party only with the prior
          written consent of the other party, which consent will not be
          unreasonably withheld, and provided the assignee agrees to perform
          fully all of the responsibilities and obligations of the assignor
          hereunder. Any purported assignment in contravention of this Section
          24.10 shall, at the option of the non-assigning party, be null and
          void and of no effect. No assignment shall release either party from
          responsibility for performance of any accrued obligation of such party
          hereunder.

                                       36
<PAGE>

     24.11 This Agreement shall be binding upon and inure to the benefit of the
          parties, their respective officers and directors, and the permitted
          assignees of either party.

     24.12 This Agreement may be executed in any number of counterparts, each of
          which will be deemed to be an original, and all of which together
          shall be deemed to be one and the same instrument. Further, telefax
          signatures shall be binding.

     24.13 Nothing contained herein shall be deemed to create an agency, joint
          venture, amalgamation, partnership or similar relationship between DMI
          and COGENCO.

     24.14 This Agreement does not confer, and shall not be construed as
          conferring, on either party, or any other entity, any proprietary
          right or license in or to the other party's Proprietary Information or
          Intellectual Property, except as expressly provided in this Agreement.

     24.15 Ambiguities, if any, in this Agreement shall not be construed against
          any party, irrespective of which party may be deemed to have authored
          the ambiguous provision.

     24.16 The Article headings are for convenience only and will not be deemed
          to affect in any way the language of the provisions to which they
          refer.

     IN WITNESS HEREOF, each party hereto acknowledges that the representative
named below has authority to execute this Agreement on behalf of the respective
party to form a legally binding contract and has caused this Agreement to be
duly executed on its behalf.

DMI BioSciences, Inc.                          Cogenco International, Inc.

By:  ___________________________               By:  ___________________________
Name:  Bruce G. Miller                         Name:  David W. Brenman
Title:  President and CEO                      Title:  President

                                       37EXHIBIT 10.4

                               EXTENSION AGREEMENT
                          DATED AS OF JANUARY 21, 2005
                        BETWEEN DMI BIOSCIENCES, INC. AND
                           COGENCO INTERNATIONAL, INC.

     This Extension Agreement dated as of January 21, 2005 is made by and
between DMI BioSciences, Inc., a Colorado corporation ("DMI") and Cogenco
International, Inc. ("Cogenco"), (collectively referred to as the "Parties").

     WHEREAS, DMI and Cogenco entered into a Term Sheet executed on August 23,
2004 (the "Term Sheet"), requiring, among other things, a standstill period
through November 23, 2004 and the execution of the Co-Development Agreement
referred to below;

     WHEREAS, DMI and Cogenco entered into an Amended Letter of Intent dated and
executed on November 5, 2004 (superceding a previous Letter of Intent dated
August 23, 2004) regarding (i) a proposed Co-Development Agreement relating to
the treatment of asthma in humans ("CODA") and (ii) a proposed subsequent merger
and equity investment between the Parties; and

     WHEREAS, DMI and Cogenco entered into a Co-Development Agreement regarding
the treatment of asthma in humans ("CODA") effective on November 21, 2004
requiring, among other things, a non-refundable $500,000 fee and a
non-refundable $2,500,000 access payment, aggregating $3,000,000, due no later
than November 21, 2004;

     WHEREAS, the Parties mutually desire to extend the time required by Cogenco
to make the non-refundable payments aggregating $3,000,000 to DMI under the CODA
from November 2004 to February 22, 2005, pursuant to Section 8 of the CODA

     NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, which the Parties hereto acknowledge and to be good and
sufficient consideration, the Parties hereby agree as follows:

     1. Extension. DMI and Cogenco hereby agree to extend the time Cogenco is
allowed under the CODA and Amended LOI to make certain non-refundable fee and
access payments aggregating $3,000,000 to DMI from November 2004 to February 22,
2005 (the "Extension Date"). The CODA and Amended LOI shall remain in place
until the Extension Date.

     2. Waiver of Defaults. DMI hereby waives any and all Events of
Noncompliance and Events of Default of whatever nature by Cogenco pursuant to
CODA and Amended LOI until the Extension Date.

     3. Notice. Any notices, papers, demands or communications which are
required to be given in accordance with this Extension Agreement shall be in
writing and shall be delivered to the relevant Parties pursuant to and at the
addresses set forth in Section 24.1 of the CODA.

<PAGE>

     4. Miscellaneous. This Extension Agreement may only be amended by the
written agreement of DMI and Cogenco. Unless specified herein, this Extension
Agreement may not be assigned by either party except with the express written
consent of both parties. This agreement shall be binding on DMI and Cogenco and
their successors and assigns. This agreement has been made and executed in the
State of Colorado and shall be construed in accordance with the laws of the
State of Colorado.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

DMI BIOSCIENCES, INC.

By:___________________________
   Bruce G. Miller, President and CEO

COGENCO INTERNATIONAL, INC.

By:____________________________
   David W. Brenman, President

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