Document:

ex10_4.htm

    
      Exhibit
        10.4

       

      THE
        SECURITIES REFERRED TO IN THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT
        BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
        REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING SUCH SECURITIES
        OR THE
        COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY
        TO
        THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
        IS
        EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
        SECURITIES ACT.

    

     

    V-CLIP
      PHARMACEUTICALS, INC.

     

    SUBSCRIPTION
      AGREEMENT

     

    THIS
      SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of November
      __, 2007 (the “Effective Date”), is by and between V-Clip
      Pharmaceuticals, Inc., a California corporation (the
“Company”), and University License Equity Holdings, Inc., a
      Colorado nonprofit corporation (the “Investor”).

     

    Recital

     

    The
      Investor desires to acquire 600 shares (the “Shares”) of the
      Company’s Common Stock, no par value per share (the “Company
      Stock”), in consideration for the grant of an exclusive license by The
      Regents of The University of Colorado, a constitutional body corporate, to
      the
      Company of certain patent rights under that certain License Agreement, dated
      of
      even date herewith (the “License Agreement”), and the Company
      desires to issue such shares of Company Stock to the Investor in connection
      with
      consideration for the grant of the exclusive license under the License
      Agreement, upon the terms and conditions set forth herein.

     

    Agreement

     

    NOW,
      THEREFORE, in consideration of the foregoing recital and for other good
      and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:

     

    1.           Subscription.  At
      or prior to the Effective Date, subject to the terms and conditions hereof,
      the
      following shall occur:

     

    a.           The
      Investor and the Company shall execute this Agreement;

     

    b.           The
      Company shall issue the Shares to the Investor and shall deliver to the Investor
      a stock certificate evidencing its ownership of the Shares; and

     

    c.           The
      Regents of the University of Colorado and the Company shall execute the License
      Agreement.

     

    2.           Representations
      and Warranties of the
      Company.  The Company hereby
      represents and warrants to the Investor that, as of the Effective Date and
      immediately prior to issuing the Shares:

     

    a.           Organization;
      Corporate Power. The Company is a corporation duly organized, validly
      existing and in good standing under the laws of the State of California. The
      Company has all requisite corporate power and authority to own and operate
      its
      properties and assets, to execute and deliver this Agreement, to carry out
      the
      provisions of this Agreement, to issue and sell the Shares and to carry on
      its
      business as presently conducted and as presently proposed to be conducted.
      The
      Company is duly qualified and is authorized to do business and is in good
      standing as a foreign corporation in all jurisdictions in which the nature
      of
      its activities and of its properties (both owned and leased) makes such
      qualification necessary.

     

    

    
      
        
          
          

        

        
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    b.           Capitalization.
      Other than as set forth on Schedule A attached hereto, the Company does
      not have any other shares of capital stock authorized.  Schedule
      A attached hereto sets forth the type and number of shares of capital stock
      authorized by the Company, all of the Company's issued and outstanding capital
      stock and all securities of the Company convertible into or exchangeable for
      shares of capital stock or voting securities of the Company or warrants, subscription rights, options, stock appreciation
      rights,
      phantom equity or other rights to acquire from the Company, or other obligation
      of the Company to issue, any capital stock, voting securities or securities
      convertible into or exchangeable for capital stock or voting securities of
      the
      Company and the name of each record holder thereof.  Schedule A
      sets forth all equity, option, incentive and stock purchase plans and all other
      plans or arrangements under which the Company may issue any capital stock or
      securities of the Company and the number of shares of capital stock authorized
      to be issued under such plans or arrangements.  All issued and
      outstanding securities of the Company are set forth on Schedule A
      attached hereto and (i) have been duly authorized and validly issued,
      (ii) are fully paid and nonassessable, and (iii) were issued in
      compliance with all applicable state and federal laws concerning the issuance
      of
      securities.  When issued in compliance with the provisions of this
      Agreement, the Shares will be validly issued, fully paid and non-assessable
      and
      free of any liens or encumbrances and will not violate or be subject to any
      preemptive rights or rights of first refusal granted by the
      Company.  The Shares will be issued in compliance with all applicable
      federal and state securities laws.  The Shares represent six percent
      (6 %) of the issued and outstanding capital stock of the Company, calculated
      pursuant to Section 5(a) below.

     

    c.           Due
      Authorization; Enforceability. All corporate action on the part of the
      Company, its officers, directors and stockholders necessary for the
      authorization of this Agreement, the performance of all of the Company’s
      obligations hereunder, and the authorization, sale, issuance and delivery of
      the
      Shares pursuant hereto has been taken.  This Agreement, when executed
      and delivered, constitutes the legal, valid and binding obligation of the
      Company enforceable against the Company in accordance with its terms, except
      (i)
      as limited by applicable bankruptcy, insolvency, reorganization, moratorium
      or
      other laws of general application affecting enforcement of creditors’ rights and
      (ii) general principles of equity that restrict the availability of equitable
      remedies.  No authorization, approval, consent or license of any third
      party, court or governmental regulatory body or authority is required on the
      part of the Company in connection with the execution and delivery of this
      Agreement and the valid issuance and sale of the Shares or the consummation
      of
      any other transaction contemplated hereby.

     

    d.           Intellectual
      Property. The Company owns or possesses sufficient legal rights to all
      patents, trademarks, service marks, trade names, copyrights, trade secrets,
      licenses, information and other proprietary rights and processes necessary
      for
      its business as now conducted and as presently proposed to be conducted, without
      any known infringement of the rights of others. Except as disclosed in writing
      to the Investor, the Company has not received any communications alleging that
      the Company has violated or, by conducting its business as presently proposed,
      would violate any of the patents, trademarks,
      service marks, trade names, copyrights or trade secrets or other proprietary
      rights of any other person or entity. The Company is not aware of any violation
      by a third party of any of the Company's intellectual property. Notwithstanding
      the foregoing, the Company makes no representations or warranties to Investor
      regarding any of the intellectual property rights licensed to the Company from
      The Regents of the University of Colorado pursuant to the License
      Agreement.

    

    
      
        
          
          

        

        
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    e.           Litigation.  There
      is no action, suit, proceeding or investigation pending or, to the Company's
      knowledge, threatened against the Company that questions the validity of any
      of
      this Agreement or the right of the Company to enter into this Agreement, or
      to
      consummate the transactions contemplated hereby, or which would reasonably
      be
      expected to result, either individually or in the aggregate, in any material
      adverse change in the assets, properties, condition, affairs, prospects,
      business or operations of the Company, financially or otherwise, or any change
      in the current equity ownership of the Company. The Company is not a party
      or,
      to the best of its knowledge, subject to the provisions of any order, writ,
      injunction, judgment or decree of any arbitration panel or tribunal, court
      or
      government agency or instrumentality.

     

    f.           Compliance
      with Laws; Permits.  The Company is not in violation of any
      applicable statute, rule, regulation, order or restriction of any domestic
      or
      foreign government or any instrumentality or agency thereof in respect of the
      conduct of its business or the ownership of its properties which violation
      would
      materially and adversely affect the business, operations, assets, properties,
      liabilities, prospects, financial condition or operations of the
      Company.

     

    g.           Consents.
      All consents, approvals, orders, or authorizations of, or
      registrations, qualifications, designations, declarations, or filings with,
      any
      third parties or governmental authority, required on the part of the Company
      in
      connection with the valid execution and delivery of this Agreement, the offer,
      sale or issuance of the Shares or the consummation of the transactions
      contemplated hereby have been obtained and are effective as of the Effective
      Date, except for notices required or permitted to be filed with certain state
      and federal securities commissions, which required notices will be filed on
      a
      timely basis.

     

    h.           Title
      to Properties and Assets; Liens, Etc.  The Company has good
      and marketable title to the properties and assets it owns (whether tangible
      or
      intangible) and is in material compliance with all leases pursuant to which
      it
      leases its leasehold estates. The properties and assets owned by the Company
      are
      not subject to any mortgage, pledge, lien, lease, encumbrance or charge, other
      than (a) those resulting from taxes which have not yet become delinquent, and
      (b) liens and encumbrances arising in the ordinary course of business or minor
      liens and encumbrances which do not materially detract from the value of the
      property subject thereto or materially impair the business or operations of
      the
      Company. All facilities, machinery, equipment, fixtures, vehicles and other
      properties owned, leased or used by the Company are in good operating condition
      and repair, normal wear and tear excepted, and are reasonably fit and usable
      for
      the purposes for which they are being used.

     

    i.           Full
      Disclosure. The Company has provided Investor with all information
      requested by the Investor in connection with its decision to acquire the Shares.
      To the Company’s
      knowledge, none of this Agreement, any attachments hereto, or any other
      information delivered by the Company to the Investor or its attorneys or agents
      in connection herewith or therewith contain any untrue statement of a material
      fact nor, to the Company’s knowledge, omit to state a material fact necessary in
      order to make the statements contained herein or therein not
      misleading.

    

    
      
        
          
          

        

        
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    j.           Defaults.  The
      Company is not in violation or default of any term of (i) its articles of
      incorporation or bylaws, (ii) any provision of any material mortgage, indenture,
      contract, agreement, or instrument to which it is a party or by which it is
      bound, or (iii) any judgment, decree, order, writ applicable to the
      Company.  The execution, delivery, and performance of and compliance
      with this Agreement and the issuance and sale of the Shares, will not, with
      or
      without the passage of time or the giving of notice, result in any such
      violations, or be in conflict with or constitute a default under any of the
      foregoing, or result in the creation of any mortgage, pledge, lien, encumbrance
      or charge upon any of the properties or assets of the Company or the suspension,
      revocation, impairment, forfeiture or nonrenewal of any permit license,
      authorization or approval applicable to the Company.

     

    k.           Exemption.  The
      offer, issuance, and sale of the Shares is exempt from the registration and
      prospectus delivery requirements of the Securities Act of 1933, as amended
      (the
“SecuritiesAct”), and it has been registered
      or qualified (or is exempt from registration and qualification) under the
      registration, permit, or qualification requirements of all applicable state
      securities laws.

     

    l.           Broker
      Fees.  The Company has not employed any broker, finder or
      agent, or agreed to pay or incurred any brokerage fee, finder's fee or
      commission with respect to the transactions contemplated by this Agreement,
      and
      has not dealt with anyone purporting to act in the capacity of a broker, finder
      or agent with respect hereto as a result of which any claim for a fee can or
      will be made against the Investor.

     

    3.           Representations
      and Warranties of the Investor.  The Investor
      hereby represents and warrants to the Company that, as of the Effective
      Date:

     

    a.           Experience;
      Investigation; Investment.    The Investor has such
      knowledge and experience in financial and business matters that it is capable
      of
      evaluating the merits and risks of an investment in the Shares.  The
      Company has made all requested information available to the Investor and the
      Investor has received sufficient information to enable it to evaluate the merits
      and risks of its investment.  The Investor understands that its
      investment in the Company is speculative and any return on the investment is
      highly uncertain.  The Investor is able to bear the economic risk of
      the investment and has the ability to hold the Shares indefinitely and the
      ability to suffer a complete loss of its investment.  The Investor is
      purchasing the Shares for investment for its own account, for investment
      purposes only, and not with a view towards their distribution.

     

    b.           Transfer
      Restrictions.   The Investor will not sell, offer for
      sale, assign, pledge, hypothecate or otherwise transfer or encumber all or
      any
      part of its interest in the Shares in the absence of either (i) an effective
      registration statement covering such transaction under the Securities Act,
      or
      (ii) an opinion of counsel reasonably
      satisfactory to the Company to the effect that registration under the Securities
      Act is not required; provided, however, that the Company agrees that the
      Investor may transfer the Shares to any entity or organization within the
      Control Group (as defined below) (an "Exempt Transfer"). 
As used herein, "Control Group" means the University of
      Colorado (“CU”), the University of Colorado Foundation, Inc.
      (collectively with CU and the Investor, the “CU Entities”) or
      any third party that directly or indirectly (by the ownership of voting
      rights, the power to appoint the governing body, contract, or otherwise)
      controls, is controlled by, or is under common control with the CU
      Entities.

    

    
      
        
          
          

        

        
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    The
      Investor understands and agrees that the following legend (or one substantially
      similar) will be placed on the certificates for the Shares:

     

     

    
      	
              “THE
                SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
                UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
                OF
                ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
                TO
                AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR PURSUANT TO
                AN
                APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH
                ACT.

            

    

     

    c.           Registration.     The
      Investor understands that the Shares are being issued and sold in reliance
      upon
      exemptions provided in the Securities Act.  The Investor understands
      that the Company is under no obligation to register the Shares or to assist
      the
      Investor in complying with any exemption from registration if the Investor
      should at a later date wish to dispose of such Shares.  The Investor
      understands that the Shares may not qualify for sale or other disposition under
      Rule 144 promulgated under the Securities Act.

     

    4.          Indemnity.  The
      Company agrees to indemnify and hold harmless the CU Entities,
      their directors, officers, stockholders, control affiliates, agents and
      employees, from and against any claim, demand, loss, liability and expense
      (including, without limitation, reasonable attorneys’ fees and disbursements)
      incurred as a result of any misrepresentation or breach of any agreement,
      representation, warranty or covenant made by the Company herein.

     

    5.           Anti-Dilution
      and Preemptive Rights Covenant.

     

    a.           Calculation.     The
      Company agrees to maintain the Investor’s percentage ownership of the Company’s
      total outstanding capital stock on a fully diluted basis calculated solely
      based
      upon the Investor’s ownership of the Shares  and any additional
      capital stock issued to the Investor pursuant to this Section 5 (collectively
      with the Shares, the “Anti-Dilution Shares”) (excluding any
      other securities of the Company owned by the Investor) at six percent (6 %)
      (the
“Investor’s Ownership Interest”), subject to adjustment
      downward if the Investor transfers any Anti-Dilution Shares (as discussed
      below), as calculated in this Section 5(a).  The calculation of the
      Company’s total outstanding capital stock on a fully-diluted basis shall include
      the Company’s issued and outstanding common stock, any other issued and
      outstanding capital stock of the Company or any issued and outstanding
      securities convertible or exchangeable into capital stock of the
      Company.  This calculation shall not include (i) any shares of
      restricted stock or shares of capital stock issued or issuable upon the exercise
      of options granted
      to the Company’s employees, directors or consultants pursuant to any stock
      purchase or stock option plans or other arrangements that are approved by the
      Company’s board of directors (the “Board of Directors”); (ii)
      any shares of capital stock issued by the Company in a public offering of such
      stock pursuant to a registration statement filed under the Securities Act (a
      “Public Offering”); or (iii) any shares of capital stock issued
      by the Company in connection with an acquisition or merger with an unaffiliated
      third party that is approved by the Board of Directors (an “Approved
      Merger”) (collectively, the “Excluded
      Securities”).  The Company shall maintain the Investor’s
      Ownership Interest by issuing to the Investor additional securities of the
      same
      type of security that triggers this provision. If the Investor transfers any
      of
      the Anti-Dilution Shares (other than in an Exempt Transfer), the Investor’s
      Ownership Interest shall be reduced proportionately and the Company’s
      anti-dilution obligation under this Section 5 shall be proportionately
      reduced.

     

    

    
      
        
          
          

        

        
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    b.           Notice.    If
      the Investor is entitled to receive additional securities pursuant to Section
      5(a) above, the Company shall provide the Investor with prompt written notice
      thereof.  A capitalization table showing the new capitalization of the
      Company, including the adjustment in the number of securities issued to the
      Investor, shall be provided with such notice.  The Company shall
      promptly deliver to the Investor the additional securities, and the Investor
      shall not be obligated to pay any additional consideration for such additional
      securities received.

     

    c.           Termination.  The
      Investor’s rights under Section 5(a) shall terminate on the earliest to occur of
      the following:  (i) immediately prior to a sale of all or
      substantially all of the assets of the Company approved by the Board of
      Directors, (ii) immediately prior to any issuance or exchange of stock in
      connection with an Approved Merger in which the stockholders of the Company
      immediately prior to such transaction own less than 50% of the Company’s or
      other surviving entity’s voting power immediately following such transaction or
      merger of the Company with and into Viral Genetics, Inc., a Delaware corporation
      (“Viral Genetics”), pursuant to a Memorandum of Understanding between the
      Company, Investor and Viral Genetics of even date herewith, (the events
      described in subparagraphs (i) and (ii) shall be referred to as a
“Change in Control”); (iii) upon the closing of an equity
      financing which results in the Company having received at least two million
      dollars ($2,000,000) in the aggregate in equity financing from non-affiliated
      third parties on an arms-length basis subsequent to the Effective Date (the
      “Threshold Amount”) and shall not apply to any equity issued in
      any financing in excess of the Threshold Amount (regardless of whether the
      Threshold Amount is exceeded in the equity financing in which the Threshold
      Amount is reached); or (iv) immediately prior to the effective date of any
      Public Offering.

     

    d.        Preemptive
      Rights.  If the Investor’s rights pursuant to Section 5(a)
      are terminated pursuant to Section 5(c)(iii), the Investor shall immediately
      have the preemptive right to purchase its pro rata share of New Securities
      (as
      defined below) which the Company may, from time to time, sell and/or issue
      at
      the price at which such New Securities are to be issued (including in an equity
      financing in which the Threshold Amount is reached), such pro rata share to
      be
      determined in the same manner as the Investor’s Ownership Interest (the
“Preemptive Share”).  In the event the Company
      proposes to undertake an issuance of New Securities, it shall give the Investor
      written notice of its intention, describing the type of New
      Securities, the price and the general terms and conditions upon which the
      Company proposes to issue the New Securities (the “Issuance
      Notice”).  The Investor shall have fifteen (15) business days
      from the date of receipt of the Issuance Notice (the “Exercise
      Period”) to agree to purchase all or a portion of the Investor’s
      Preemptive Share of such New Securities for the price and upon the general
      terms
      specified in the Issuance Notice by giving written notice to the Company, which
      notice shall state the quantity of New Securities to be purchased by the
      Investor (the “Preemptive Notice”).  The Company
      shall have 90 days after the expiration of the Exercise Period (the
“Offering Period”) to sell the New Securities which are not
      purchased pursuant to the Preemptive Notice (the “Remaining New
      Securities”) at a price and upon general terms no more favorable to the
      purchasers thereof than specified in the Issuance Notice.  In the
      event the Company has not sold the Remaining New Securities within the Offering
      Period, the Company shall not thereafter issue or sell any New Securities
      without first complying with this Section 5(d).  The Company agrees
      that the Investor may transfer the rights granted to the Investor pursuant
      to
      this Section 5(d) to any entity or organization within the Control
      Group.  For purposes of this Section 5(d), “New
      Securities” shall mean any equity securities of the Company whether or
      not now authorized and any securities convertible, exchangeable or exercisable
      for any equity security of the Company other than (i) Excluded Securities,
      or
      (ii) securities issuable upon the exercise, conversion or exchange of derivative
      securities which were originally issued as New Securities in accordance with
      this Section 5(d).

     

    
      
        
          
          

        

        
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    6.           Other
      Covenants.  The Company agrees that, so
      long as the Investor owns the Shares or any additional shares issued to the
      Investor under Section 5 above:

     

               a.           Corporate
      Existence.  The Company will preserve, renew and keep in full
      force and effect, its corporate existence.

     

               b.           Compliance
      with Laws.  The Company will comply with all applicable laws,
      ordinances, rules, regulations, and requirements of governmental authorities
      except where the necessity of compliance therewith is contested in good faith
      by
      appropriate proceedings or where such noncompliance would not, individually
      or
      in the aggregate, have a material adverse effect on the business, operations,
      assets, properties, liabilities, prospects or financial condition of the
      Company.

     

    c.           Books
      and Records.  The Company will maintain true books and
      records of account in which full and correct entries will be made of all its
      business transactions pursuant to a system of accounting established and
      administered in accordance with United States generally accepted accounting
      principles consistently applied (except as noted therein), and will set aside
      on
      its books all such proper accruals and reserves as shall be required under
      United States generally accepted accounting principles consistently
      applied.

     

    d.           Information
      Delivery Requirements.  The Company shall deliver to the
      Holder no later than sixty (60) days after the end of each of the first three
      (3) calendar quarters, an income statement, balance sheet and statement of
      cash
      flows prepared in accordance with United States generally accepted accounting
      principles consistently applied and a summary of corporate events, each for
      the
      preceding quarter.  The Company shall deliver to the Holder no later
      than ninety (90) days after the close of its fiscal year, an income statement,
      balance sheet and statement of cash flows prepared in accordance
      with United States generally accepted accounting principles consistently applied
      and a summary of corporate events, each for the preceding fiscal
      year.

    

    
      
        
          
          

        

        
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    7.           Miscellaneous.

     

    a.           Remedy.  In
      addition to other remedies to the Investor may be entitled for a material breach
      by the Company of this Agreement by contract, by law or otherwise, the Investor
      shall also be entitled to terminate the License Agreement.

     

    b.           Confidentiality.  Subject
      to Section 24-72-201, et. seq., of the Colorado Revised Statutes, the
      Investor agrees that it will hold in strict confidence any information that
      is
      disclosed, delivered or made available to it in connection with or pursuant
      to
      this Agreement (the “Company Confidential Information”) and
      shall not disclose nor permit disclosure of any such information to anyone,
      except to employees or agents of the Investor to whom disclosure is necessary,
      and shall not use such information for any purpose other than to monitor its
      investment in the Company.  Notwithstanding the foregoing, the
      Investor may disclose such information to the transferee in any Exempt Transfer
      (an “Exempt Transferee”) so long as such Exempt Transferee
      agrees, subject to Section 24-72-201, et. seq., of the Colorado Revised
      Statutes, to keep any such information confidential under terms no less
      stringent than is required pursuant to this
      Agreement.  Notwithstanding anything in this Agreement to the
      contrary, the Investor shall have no obligation to preserve the confidential
      nature of any Company Confidential Information which: (i) is or becomes
      generally available to the public by other than unauthorized disclosure, (ii)
      was or is independently discovered by Investor or its employees or affiliates
      after the Effective Date, or (iii) is disclosed to the Investor by a party
      under
      no duty of confidentiality with respect to such
      information.  Disclosure of Confidential Information shall not be
      precluded if disclosure is: (i) required by law or (ii) is in response to a
      valid order of a court or other governmental body of the United States (provided
      the Investor first gives written notice to the Company and makes a reasonable
      effort to obtain a protective order requiring the Company Confidential
      Information be used solely for the purpose for which the original order was
      issued).

     

    c.           Observer
      Rights.  The Company shall allow one (1) representative (the
“Board Observer”), as may be designated by the Investor, to
      attend all meetings of the Company’s Board of Directors in a nonvoting
      capacity.  The Company shall provide the Board Observer all notices,
      materials and other information provided to the Board of Directors in connection
      with any meetings of the Board of Directors.  The Company reserves the
      right to exclude the Board Observer from access to any material or meeting
      or
      portion thereof if the Company believes that such exclusion is reasonably
      necessary to (i) preserve the attorney-client privilege, or (ii) avoid a
      conflict of interest arising from a discussion of a transaction, dispute or
      negotiation regarding the Investor.  The Investor’s rights under this
      Section 7(c) shall terminate immediately prior to the earliest to occur of
      (y) a
      Change in Control or (z) the effective date of any Public Offering.

    

    
      
        
          
          

        

        
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    d.           Entire
      Agreement.  This Agreement contains the entire agreement
      among the parties with respect to the subject matter hereof.  This
      Agreement may be modified only in writing signed by the parties
      hereto.

     

    e.           Governing
      Law.  The terms of this Agreement shall be construed in
      accordance with the laws of the State of Colorado, as applied to contracts
      entered into by Colorado residents within the State of Colorado and to be
      performed entirely within the State of Colorado, without regard to the law
      of
      conflicts of the State of Colorado.  The Company hereby
      (i) submits to the non-exclusive jurisdiction of the courts of the State of
      Colorado and the Federal courts of the United States sitting in the State of
      Colorado for the purpose of any action or proceeding arising out of or relating
      to this Agreement, (ii) agrees that all claims in respect of any such
      action or proceeding may be heard and determined in such courts,
      (iii) irrevocably waives (to the extent permitted by applicable law) any
      objection which it now or hereafter may have to the laying of venue of any
      such
      action or proceeding brought in any of the foregoing courts in and of the State
      of Colorado, and any objection on the ground that any such action or proceeding
      in any such court has been brought in an inconvenient forum, and (iv) agrees
      that a final judgment in any such action or proceeding shall be conclusive
      and
      may be enforced in other jurisdictions by suit on the judgment or in any other
      manner permitted by law. 

     

    f.           Successors
      and Assigns. This Agreement shall be binding upon the successors and
      assigns of the parties hereto.

     

    g.           Severability.
      If any provision of this Agreement shall be held invalid, illegal
      or
      unenforceable for any reason, the validity, legality and enforceability of
      the
      remaining provisions shall not in any way be affected or impaired
      thereby.

     

    h.           Counterparts;
      Facsimile Signatures.  This Agreement may be executed in
      multiple counterparts, each of which need not contain the signatures of more
      than one party, but all such counterparts taken together will constitute one
      and
      the same Agreement.  This Agreement may be executed by delivery of an
      original executed counterpart signature page by facsimile
      transmission.

     

    i.           Notice.  Any
      and all notices, requests, consents and demands required or permitted to be
      given hereunder shall be given in writing and shall be deemed to have been
      duly
      given and received (i) upon personal delivery, (ii) upon the first business
      day
      following the receipt of confirmation of facsimile transmission to the facsimile
      number set forth below, (iii) the next business day after delivery to reputable
      overnight courier addressed as set forth below, or (iv) upon the third business
      day after deposit in the United States first class mail, postage prepaid and
      addressed as set forth below.  Any party hereto may by notice so given
      change its address for future notices hereunder.  Notices shall be
      sent to the addresses specified below:

     

    If
      to the
      Investor:

     

    University
      License Equity Holdings, Inc.

    4740
      Walnut Street, Suite 100

    Campus
      Box 488

    Boulder,
      CO 80309

    Attn:    Tom
      Smerdon

    Fax:           (303)
      735-3831

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    With
      a copy to:

    

    Hensley
      Kim & Holzer, LLC

    1660
      Lincoln Street, Suite 3000

    Denver,
      Colorado 80264

    Attention:  Darren
      R. Hensley, Esq.

    Fax:
      (720) 377-0777

    

    If
      to the Company:

    

    V-Clip
      Pharmaceuticals, Inc.

    1321
      Mountain View Circle

    Azusa,
      CA
      91702

    Fax:
      (626) 334-5324

     

    j.           Headings.          The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    

    *
      * * *
      *

     

     

     

     

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Subscription Agreement
      as of the date first above written.

     

    
      	 	INVESTOR:	 
	 	 	 
	 	University
              License Equity Holdings, Inc.	 
	 	 	 	 
	
               

            	
              By:
                

            	 	 
	 	Its:	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	COMPANY:	 
	 	 	 	 
	 	
              V-Clip
                Pharmaceuticals, Inc

            	 
	 	 	 	 
	 	By:	 	 
	 	Its:	 	 
	 	 	 	 

    

     

     

     

     

     

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      A

    

    CAPITALIZATION

    

    

    

    

    Table
      1 -- V-Clip Stockholders other than ULEHI

    

    

    
      	
              V-Clip
                Stockholder

            	
              Number
                of Shares

              of

              Common
                Stock

            
	
              Viral
                Genetics

            	
               4,400

            
	
              M.
                Karen Newell

            	
               2,200

            
	
              Robert
                Berliner

            	
               2,200

            
	
              Evan
                Newell

            	
               500

            
	
              Robert
                Melamede

            	
               100

            
	
              Total

            	
               9,400

            

    

     

     

    Table
      2 -- V-Clip Stockholders including ULEHI

     

     

    
      	
              Shareholder

            	
              Shares
                of V-Clip 
Common Stock

            	
              %
                of Total

            
	
              Viral
                Genetics

            	
               4,400

            	
              44.00%

            
	
              M.
                Karen Newell

            	
               2,200

            	
              22.00%

            
	
              Robert
                Berliner

            	
               2,200

            	
              22.00%

            
	
              Evan
                Newell

            	
               500

            	
              5.00%

            
	
              Robert
                Melamede

            	
               100

            	
              1.00%

            
	
              ULEHI

            	
               600

            	
              6.00%

            
	
              Total

            	
               10,000

            	
              100.00%

            

    

     

    Table
      2
      represents all the shares of capital stock that will be issued and outstanding
      after issuance of the ULEHI shares.  There are no outstanding shares
      of V-Clip preferred stock.ex10_5.htm

    Exhibit
      10.5

    Memorandum
      of Understanding

    

    This
      Memorandum of Understanding (this “Memorandum”) is entered into
      by and among Viral Genetics, Inc., a Delaware corporation
      (“Viral Genetics”), and V-Clip Pharmaceuticals,
      Inc., a California corporation
      (“V-Clip”), and solely with respect to Section 10 and
Exhibit A(ii)-(iii) below, University License Equity
      Holdings, Inc., a Colorado nonprofit corporation
      (“ULEHI”), this __ day of November 2007 (the “Effective
      Date”).

    

    This
      Memorandum is an outline of the general understanding of an agreement to merge
      V-Clip with and into Viral Genetics and shall be deemed a valid and binding
      agreement of the parties hereto.  ULEHI is a party hereto for purposes
      of Section 10 and Exhibit A(ii)-(iii) below only.

    

    1.           Viral
      Genetics shall perform work to be done by an independent laboratory to determine
      the viability of the Licensed Process(es) and/or Licensed Product(s) covered
      by
      the License Agreement between V-Clip and The Regents of the University of
      Colorado entered into contemporaneously with this Memorandum (the
“License Agreement”).  The value of such work shall
      be equivalent to at least Six Hundred Thousand Dollars ($600,000), which amount
      may include the in-kind value of work directed to the viability of the Licensed
      Processes (as defined in the License Agreement) or Licensed Products (as defined
      in the License Agreement) including, without limitation, work sponsored by
      the
      NIH or similar entities.    Dr. Karen Newell, inventor of
      the licensed technology, will collaborate with Viral Genetics on the
      experimental design and research site selection and will have the unrestricted
      right to use the data developed in the course of such work in her research
      at
      the University of Colorado.

    

    2.           Viral
      Genetics shall have the option to require V-Clip to merge with and into Viral
      Genetics in accordance with all applicable laws, rules and regulations (the
      “Merger”) by delivering to V-Clip written notice of Viral
      Genetics’ exercise of such option at any time on or before the date that is the
      one-year anniversary of the Effective Date.  In exchange for their
      stock of V-Clip in connection with the Merger, V-Clip’s stockholders
      (“V-Clip Stockholders”) shall receive securities issued by Viral
      Genetics as set forth in Exhibit A attached hereto (the
“Merger Securities”).  Viral Genetics and V-Clip
      acknowledge and agree that the terms of the Merger and the consideration in
      the
      form of the Merger Securities (the “Merger Consideration”) have
      been negotiated between V-Clip and Viral Genetics on an arms-length
      basis.

    

    3.           Promptly,
      but no later than fifteen (15) days subsequent to the date of the closing of
      the
      Merger (the “Closing”), Viral Genetics shall issue to each
      V-Clip Stockholder stock certificates, option agreements, warrant agreements
      and
      any other certificates or agreements representing the Merger Consideration
      as
      set forth in Exhibit A attached hereto.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    4.           Viral
      Genetics hereby represents and warrants to V-Clip that Viral Genetics has
      250,000,000 authorized shares of Common Stock, $.0001 par value (“Common
      Stock”), of which 155,532,013 shares are issued and outstanding, and
      20,000,000 authorized shares of Preferred Stock, par value $.0001, of which
      no
      shares are issued and outstanding. All issued and outstanding shares of Common
      Stock: (i) have been duly authorized and validly issued, and (ii) are fully
      paid
      and non-assessable.  There are no other authorized or outstanding
      equity securities of any class, kind, or character, and there are no outstanding
      subscriptions, options, warrants, debt or other agreements, or commitments
      obligating Viral Genetics to issue any additional shares of its capital stock
      of
      any class, or any options or rights with respect thereto, or any securities
      convertible into, or exchangeable or exercisable for any shares of capital
      stock
      of any class as of the date hereof, except as set forth in Exhibit B
attached hereto and pursuant to the terms of this
      Memorandum.  When issued in compliance with the provisions of this
      Memorandum, the shares of Common Stock issued as Merger Consideration will
      be
      validly issued, fully paid and non-assessable.  When issued in
      compliance with the provisions of this Memorandum and the option agreements
      and
      warrant agreements constituting Merger Consideration, the shares of Common
      Stock
      underlying such options and warrants will be validly issued, fully paid and
      non-assessable.  When issued in compliance with the provisions of this
      Memorandum and any relevant agreements constituting Merger Consideration, the
      shares of Common Stock underlying any such other Merger Securities will be
      validly issued, fully paid and non-assessable.

    

    5.           All
      corporate action on the part of Viral Genetics and V-Clip, and their respective
      officers, directors and stockholders, necessary for the authorization of this
      Memorandum has been taken, and with respect to the Merger has been taken or
      will
      have been taken at the time of the Closing.

    

    6.           The
      execution of this Memorandum and the consummation of the Merger will not result
      in any breach of any of the terms, conditions, or provisions of, or constitute
      a
      default under, or result in the creation of any lien, charge, or encumbrance
      on,
      any property or assets of Viral Genetics pursuant to any indenture, mortgage,
      deed of trust, agreement, corporate charter, bylaws, contract, or other
      instrument to which Viral Genetics is a party or by which Viral Genetics may
      be
      bound or any law, rule, regulation, qualification, license, order or judgment
      applicable to Viral Genetics or any of its property.

    

    7.           Viral
      Genetics has, and as of the Closing will have, filed all reports and made all
      other filings required to be filed by it under the Securities Act of 1933,
      as
      amended (the “Securities Act”), and the Securities Exchange Act
      of 1934, as amended (collectively with the Securities Act, the
“Securities Laws”), and subsequent to the Effective Date will
      use its best efforts to file all reports and other filings required to be filed
      by it under the Securities Laws.  Subsequent to the Merger, Viral
      Genetics will take any actions required from time to time to enable the V-Clip
      Stockholders to sell any securities constituting Merger Consideration pursuant
      to Rule 144 under the Securities Act. Viral Genetics shall take any and all
      actions and make any necessary filings with any governmental agency necessary
      to
      cause the issuance of the Merger Securities and any securities
      underlying the Merger Securities exempt from the registration requirements
      of
      the Securities Act and any applicable state securities
      laws.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    8.           No
      V-Clip Stockholder shall be granted or otherwise receive any rights or benefits
      with respect to the Merger Consideration that is not otherwise granted on
      identical terms to all V-Clip Stockholders, including without limitation
      registration rights and rights with respect to the transfer of
      securities.

    

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

    

    10.           ULEHI
      shall be deemed a third party beneficiary of all of the provisions of this
      Memorandum.

    

    

    *     *     *     *     *

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Memorandum of Understanding
      as of the Effective Date.

     

    
      	 	Viral
              Genetics,
              Inc.	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	 	 
	 	Title:	 	 
	 	 	 	 
	 	V-Clip
              Pharmaceuticals,
              Inc.	 
	 	 	 	 
	 	 	 	 
	 	
              By:
                

            	 	 
	 	Title:	 	 
	 	 	 	 
	 	 	 	 
	 	For
              purposes of Section 10 and Exhibit A(ii)-(iii) only:	 
	 	University
              License Equity Holding, Inc.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
              By:
                

            	 	 
	 	Title:	 	 

    

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    Merger
      Securities to be Issued to V-Clip Stockholders

    

    

    (i)
      V-Clip Stockholders other than ULEHI

    

    
      	
              V-Clip
                Stockholder

            	
              Number
                of Shares

              of

              Common
                Stock

            	
              Number
                of 
Options*

            	
              Number
                of 
Options**

            	
              Number
                of 
Warrants***

            
	
              Viral
                Genetics

            	
              16,306,327

            	
              16,306,327

            	
              4,423,900

            	
              6,952,495

            
	
              M.
                Karen Newell

            	
              8,153,163

            	
              8,153,163

            	
              2,211,950

            	
              3,476,247

            
	
              Robert
                Berliner

            	
              8,153,163

            	
              8,153,163

            	
              2,211,950

            	
              3,476,247

            
	
              Evan
                Newell

            	
              1,852,991

            	
              1,852,991

            	
              502,716

            	
              790,056

            
	
              Robert
                Melamede

            	
              370,598

            	
              370,598

            	
              100,543

            	
              158,011

            

    

    

    
      	
              *

            	
              Options
                to acquire shares of Common Stock at an exercise price of $0.03,
                expiring
                on the date that is the tenth (10th)
                anniversary
                of the date of the Closing and containing a cashless exercise
                provision.

            

    

    

    
      	
              **

            	
              Options
                to acquire shares of Common Stock at an exercise price of $0.315,
                expiring
                on May 30, 2011 and on the same option agreement form as the Viral
                Genetic
                options set forth on Exhibit B attached
                hereto.

            

    

    

    
      	
              ***

            	
              Warrants
                to acquire shares of Common Stock at an exercise price of $0.39,
                expiring
                on February 28, 2010 and on the same warrant agreement form as the
                Viral
                Genetic warrants set forth on Exhibit B attached
                hereto.

            

    

    

    All
      Merger Securities shall be fully vested upon the Closing.

    

    In
      the
      event of a forward stock split of the outstanding shares of Common Stock or
      a
      stock dividend of shares of Common Stock prior to the Closing, the number of
      Merger Securities described above (i) shall be proportionately increased, and
      (ii) the exercise price of the options and warrants included in the Merger
      Securities described above shall be proportionately decreased. As an example,
      and for the sake of greater clarity, if, prior to the Closing, Viral Genetics
      effects a ten-for-one (10:1) forward stock split of its outstanding of shares
      of
      Common Stock, then the number of Merger Securities shall be increased by
      multiplying such number by ten (10) and the exercise prices of the options
      and
      warrants included in the Merger Securities described above shall be decreased
      by
      dividing such exercise prices by ten (10).

    

    Similarly,
      in the event of a reverse stock split of the outstanding shares of Common Stock
      prior to the Closing, the number of Merger Securities described above (i) shall
      be proportionately decreased, and (ii) the exercise price of the options and
      warrants included in the Merger Securities described above shall be
      proportionately increased. As an example, and for the sake of greater clarity,
      if, prior to the Closing, Viral Genetics effects a
      one-for-ten (1:10) reverse stock split of its outstanding shares of Common
      Stock, then the number of Merger Securities shall be decreased by dividing
      such
      number by ten (10) and the exercise prices of the options and warrants included
      in the Merger Securities described above shall be increased by multiplying
      such
      exercise prices by ten (10).

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     (ii)
      ULEHI

    

    
      	
              Class
                of Merger 
Security

            	 	
               

              Exercise
                Price

            	 	
              Expiration
                
Date

            	 	
              Number
                Issuable

            
	
              Common
                Stock

            	 	
              N/A

            	 	
              N/A

            	 	
              Total
                number of shares of Common Stock issued and outstanding immediately
                prior
                to the Closing, which shall also be deemed to include all shares
                of Common
                Stock into which any issued and outstanding convertible debt of Viral
                Genetics as of the Closing is ultimately convertible, multiplied
                by 20%,
                and multiplied by the Investor Ownership Interest.

            
	 	 	 	 	 	 	 
	
              Options
                to Acquire Common Stock*

            	 	
              $0.03**

            	 	
              The
                date that is the tenth (10th)
                anniversary
                of the date of the Closing.

            	 	
              Total
                number of shares of Common Stock issued and outstanding immediately
                prior
                to the Closing, which shall also be deemed to include all shares
                of Common
                Stock into which any issued and outstanding convertible debt of Viral
                Genetics as of the Closing is ultimately convertible, multiplied
                by 20%,
                and multiplied by the Investor Ownership Interest.

            
	 	 	 	 	 	 	 
	
              Options
                to Acquire Common Stock***

            	 	
              Weighted
                average exercise price of all issued and outstanding Viral Genetics
                options immediately prior to the Closing.

            	 	
              Weighted
                average expiration date of all issued and outstanding Viral Genetics
                options immediately prior to the Closing.

            	 	
              Total
                number of Viral Genetics options issued and outstanding immediately
                prior
                to the Closing, multiplied by 40%, and multiplied by the Investor
                Ownership Interest.

            

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    
      	
              Warrants
                to Acquire Common Stock***

            	 	
              Weighted
                average exercise price of all issued and outstanding Viral Genetics
                warrants immediately prior to the Closing.

            	 	
              Weighted
                average expiration date of all issued and outstanding Viral Genetics
                warrants immediately prior to the Closing.

            	 	
              Total
                number of Viral Genetics warrants issued and outstanding immediately
                prior
                to the Closing, multiplied by 40%, and multiplied by the Investor
                Ownership Interest.

            
	 	 	 	 	 	 	 
	
              Any
                other securities convertible, exchangeable or exercisable for capital
                stock of Viral Genetics (other than convertible debt described above)
                issued and outstanding as of the Closing.****

            	 	
              Weighted
                average conversion rate, exercise price or exchange ratio of all
                similar
                issued and outstanding Viral Genetics securities

              immediately
                prior to the Closing.

            	 	
              Weighted
                average expiration date of all similar issued and outstanding Viral
                Genetics securities immediately prior to the Closing.

            	 	
              Total
                number of similar Viral Genetics securities issued and outstanding
                immediately prior to the Closing, multiplied by 40%, and multiplied
                by the
                Investor Ownership Interest.

            

    

    

    
      	
              *

            	
              The
                option agreements representing such options shall contain a cashless
                exercise provision.

            

    

    

    
      	
              **

            	
              The
                exercise price shall be subject to a proportionate adjustment for
                forward
                or reverse stock splits and stock
                dividends.

            

    

    

    
      	
              ***

            	
              The
                option agreements and warrant agreements representing such options
                and
                warrants, respectively, shall contain terms identical to the option
                agreements and warrant agreements, respectively, issued and outstanding
                immediately prior to the Closing.

            

    

    

    
      	
              ****

            	
              The
                form of such securities shall contain terms identical to the securities
                issued and outstanding immediately prior to the
                Closing.

            

    

    

    As
      used
      in this Exhibit A(ii), the term “Investor Ownership Interest” shall have the
      same  meaning as set forth in the Subscription Agreement between ULEHI
      and V-Clip of even date herewith and shall be subject to modification as set
      forth therein.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    All
      Merger Securities shall be fully vested upon the Closing.

    

    (iii)           All
      V-Clip Stockholders

    

    Following
      the Closing, all Viral Genetics securities held by V-Clip Stockholders,
      including those set forth in this Exhibit A, shall be treated identically to
      all
      other holders of similar Viral Genetics securities.

     

     

     

     

    
 

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    Fully
      Diluted Capitalization of Viral Genetics

    

    

    
      	
               

               

               

              Class
                of Securities

            	
              Number
                of 

              Securities
                Issued

              and

              Outstanding

            	
               

               

              Weighted
                Average 

              Exercise
                Price

            	
               

              Weighted
                Average 

              Days
                to

              Expiration

            
	
              Common
                Stock

            	
              155,532,013

            	
              N/A

            	
              N/A

            
	
              Options
                to Acquire Common Stock

            	
               

              25,135,800*

            	
               

              $0.315

            	
               

              [1294]

            
	
              Warrants
                to Acquire Common Stock

            	
               

              39,502,819*

            	
               

              $0.390

            	
               

              [838]

            
	
              Convertible
                Debt

            	
              29,767,160*

            	
              N/A

            	
              N/A

            

    

    

    
      	
              *

            	
              Shares
                of Common Stock issuable upon conversion, exercise or exchange of
                such
                securities.

            

    

    

     

     

     

     

     

     

     

     

    9

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