Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Fox Petroleum Inc. - Exhibit 10.1

PROMISSORY NOTE

	Principal Sum: $150,000 	May 1st, 2008 
	  	London, UK 

	To: 	EuroEnergy Growth Capital S.A. 
	  	Salduba Building, Top Floor, 
	  	53rd East Street, Urbanizacion 
	  	Obarrio Panama 5 

     FOR VALUE RECEIVED, Fox Petroleum
Inc. (the “Borrower”) promises to pay on the earlier of (i) the date that the
Borrower obtains equity financing from a third party in the minimum amount of
$1,000,000 net to the borrower, or (ii) May 1st, 2009 (the “Payment
Date”) to the order of EuroEnergy Growth Capital S.A., the principal sum of
$150,000 (the “Loan”) in lawful currency of the United States.

     For the period from the date of
advance of the Loan up to and including the Payment Date interest will accrue on
the Loan on the balance of principal outstanding at the rate of 10% per annum,
calculated and compounded monthly not in advance, until paid. Interest will be
payable in a balloon payment on the Payment Date. 

     The undersigned may at any time
and from time to time prepay in whole or in part the said principal sum without
notice or bonus or penalty.

     Presentment, protest, notice of
  protest and notice of dishonour are hereby waived.

IN WITNESS WHEREOF the Borrower has duly executed this
Promissory Note as of the date first written above.

Fox Petroleum Inc.

	Per: 	/s/ Alex Craven 
	  	Alex Cravenex10_1.htm

     

    

      EXHIBIT
10.1

      

      MANUFACTURING
AND DISTRIBUTION AGREEMENT

      

      

      This Manufacturing and Distribution
Agreement (“Agreement”),
effective this 1st day of August 2007 (the “Effective Date”), is
made by and between Quick Med
Technologies, Inc., with a registered office at 902 NW 4th Street,
Gainesville, Florida 32601 (hereinafter “QMT”) and BASF Beauty Care Solutions, L.L.C.,
a member of the BASF Group, with a registered office at 50 Health
Sciences Drive, Stony Brook, NY 11790, formerly named Engelhard Long Island,
Inc., (hereinafter “BASF”), each
singularly a “Party” and
collectively the “Parties”.  Certain
capitalized terms set forth herein are defined in Section 1.

       

      WHEREAS,
QMT owns or controls Patent Rights and Know How to the QMT Compound and the use
thereof, and has the right to grant licenses to the QMT Compound under such
Patent Rights and Know How;

       

      WHEREAS,
the Parties have entered into the Master Agreement for Product Development,
Manufacturing and Distribution dated August 15, 2002, the Product Development
and Distribution Agreement for Ilomastat dated August 15, 2002, the Tolling
Agreement dated October 20, 2005, as amended, and the Letter of Intent with the
effective date of February 1, 2006, as amended, (hereinafter the “Prior
Agreements”) and desire to replace and supersede the Prior Agreements with this
Agreement.

       

      WHEREAS,
QMT desires to appoint BASF as a manufacturer and distributor of the QMT
Compound in the Field in the Territory on an exclusive basis and in connection
therewith, agrees to grant, and BASF desires to obtain, exclusive and
non-exclusive licenses to such Patent Rights and non exclusive right to the Know
How for the QMT Compound in the Field in the Territory on the terms and
conditions of this Agreement.

       

      NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties do hereby
agree as follows:

       

      1.           Definitions.

       

      The following terms, whether used in
the singular or the plural, shall have the following meanings for purposes of
this Agreement:

       

      1.1           “Active” means any
carrier or delivery system containing a cosmetic ingredient comprising or
consisting of the QMT Compound or an Improvement thereto developed or licensed
by BASF, but shall not include the QMT Compound or any Improvement
thereto.

       

      1.2           
“Affiliate”
means any corporation, firm, partnership or other entity, which controls, is
controlled by or is under common control with a Party.  For purposes
of this Section 1.2, “control” means direct or indirect ownership of more than
fifty percent (50%) of the outstanding stock or other voting rights entitled to
elect directors thereof or the ability to otherwise control the management of
the corporation, firm, partnership or other entity.

       

      1.3     “Competitive Products”
means the sale of the QMT Compound for use in the anti aging cosmetic market in
any country by a third party for a period of two (2) quarters.

       

      1.4           “Cosmetic(s)” means a
product in which at least one of the product claims is for moisturization,
alleviation of the appearance of aging (chronological aging or photoaging) or
whitening/depigmentation and said product is regulated as a cosmetic under the
FDCA or would be regulated as a cosmetic under the FDCA if sold in the United
States, and for which no pre-market approval is required under the FDCA or under
any other similar regulatory scheme in another country.

       

      1.5           “Cosmetic Product
Formulation” means any consumer-ready product (whether or not it is
packaged for consumer use in the Field) produced by BASF that contains the QMT
Compound (or any Improvements thereto) or an Active, cosmetic excipients(s),
and/or aesthetic modifiers(s).

       

      1.6           “Compound Invention”
has the meaning set forth in Section 10.2(b) hereof.

       

      1.7           “Contract Year” means
the twelve (12) month period beginning on January 1, 2008, and each consecutive
12-month period thereafter during the Term.

       

      
        	
                 
      

              	
                1.8

              	
                “Disclosing
      Party” has the meaning set forth in Section 8.1
    hereof.

              

      

       

      
        	
                 
      

              	
                1.9

              	
                “Distribution
      Fee” means a fee on each sale or other transfer of Licensed
      Product; said fee based on the Net Revenues of Licensed Products as set
      forth in Section 3 below.

              

      

       

      
        	
                 
      

              	
                1.10

              	
                “FDA” means the
      United States Food and Drug
Administration.

              

      

       

      
        	
                 
      

              	
                1.11

              	
                “FDCA” means the
      Food, Drug and Cosmetic Act of the United States and the regulations and
      rules promulgated thereunder.

              

      

       

      
        	
                 
      

              	
                1.12

              	
                “Field” means
      the field of Cosmetics sold on an OTC basis
  only.

              

      

       

      
        	
                 
      

              	
                1.13

              	
                “First Contract Year
      Minimum Sales” has the meaning set forth in Section 3.2(a)
      hereof.

              

      

       

      
        	
                 
      

              	
                1.14

              	
                “Improvements”
      means any change, addition, modification, variation, alteration,
      enhancement, or improvement to the QMT Compound or to the inventions
      described and/or claimed in the Patent Rights or in the Know
      How.

              

      

       

      
        	
                 
      

              	
                1.15

              	
                “Indemnitees”
      has the meanings set forth in Section 7.1 and 7.2
  hereof.

              

      

       

      
        	
                 
      

              	
                1.16

              	
                “Initial Term”
      means January 1, 2008 until midnight of the last day of the second
      Contract Year.

              

      

       

      
         

        
          
            
              *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

               

               

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

       

      
      

           1.17    “Know-how” means the
technical and scientific information and know-how of QMT which relates to
manufacturing the QMT Compound for use in the Field as of the Effective Date,
such as data, results, formula, designs, specifications, methods,
processes, techniques, technical information, process information, clinical
information and any other information which is owned or controlled (including
the ability to grant a license or sublicense) by QMT as of the Effective
Date.

       

      
        	
                 
      

              	
                1.18

              	
                “Licensed
      Product” means any of the following: (a) QMT Compound (or any
      Improvements thereto) sold or assigned for use in a Cosmetic prepared by a
      Third Party or in a Cosmetic Product Formulation for use in the Field; or
      (b) an Active sold or assigned for use in a Cosmetic prepared by a Third
      Party or in a Cosmetic Product Formulation for use in the
      Field.

              

      

       

      
        	
                 
      

              	
                1.19

              	
                “Manufacturing
      Costs” means the direct costs and expenses based on Direct
      Material, Direct Labor and Direct Selling Expenses actually incurred by
      BASF in manufacturing Licensed Product(s).  Manufacturing Costs
      shall be calculated in accordance with United States generally accepted
      accounting principles applied on a consistent basis (“GAAP”), adapted
      as necessary to comply with the provisions set forth
  below:

              

      

       

      1.19.1
“Direct
Material” means the materials directly used in the manufacturing process
of the Licensed Products, including, without limitation, packaging, consumables,
active substances and raw materials directly used in manufacturing the Licensed
Product(s).  Direct Material shall include the QMT Compound when the
Licensed Product is an Active, but shall not include QMT Compound when the
Licensed Product is the QMT Compound.

       

      1.19.2
“Direct Labor”
means the cost and expense of employees directly engaged in production
activities for the manufacture of Licensed Products, including without
limitation, all salaries, base pay, overtime,
wages, vacation, illness. holidays, personnel with pay and shift
differential,  fringe benefits (such as health and life insurance),
payroll taxes, pension and profit sharing for workers directly identified with
manufacturing the Product(s).

       

      1.19.3
“Direct
Selling” means direct sales commissions (but not salaries or bonuses)
paid to BASF’s sales personnel and to its independent third party sales agents
for generating sales order(s) for the sale of Product to independent third
parties (exclusive of house accounts).

       

      Without
expanding the foregoing, in no event shall Manufacturing Costs include any
allocation for “Allocated Manufacturing Overhead”, meaning those indirect
manufacturing costs related to the Licensed Product(s).  Allocated
Manufacturing Overhead shall include, without limitation, the following:
maintenance, repairs and supplies for machine maintenance and repairs; quality
assurance; inspection and quality control, labor costs and supplies; materials
handling; salaries and wages
of personnel; rent depreciation, occupancy charges and fixed utility charges;
depreciation on equipment; and other manufacturing overhead costs related to
each Licensed Product; insurance; taxes; research and development costs; costs
and fees related to the prosecution and maintenance of intellectual property;
and supplies and chemicals used in the manufacturing process and that are not
assigned to specific products but are included in manufacturing overhead
costs

       

      1.20           “Marks” has the
meaning set forth in Section 10.6 hereof.

       

      1.21           “Net Revenue” means
the all gross amounts received in connection with Licensed Products sold or
transferred by BASF or its Affiliates (including, without limitation, all fees,
invoices (based on the gross invoice price), milestones, royalties, option fees
or premiums, and all other amounts directly or indirectly received by BASF or
its Affiliates in connection with or relating to the sale or transfer of
Licensed Product), after deduction of the following items, to the extent such
items are incurred, taken or borne by the seller thereof and do not exceed
reasonable and customary amounts in the market in which such sale
occurred:  (a) credits actually given or made for approved return of
goods; (b) taxes or government charges, duties or tariffs (other than an income
tax) levied on the sale, transportation or delivery of a Licensed Product; (c)
third party sales agent’s commissions, if any, directly attributable to the sale
of Licensed Product; and (d) the direct Manufacturing Costs for the manufacture
of the Licensed Product.  If Licensed Product is sold by BASF to an
Affiliate and the sale is made at a discounted price, the Distribution Fees
payable hereunder shall be at the undiscounted price.  In
circumstances wherein the QMT Compound is being sold to an Affiliate for the
manufacture of Licensed Products for sale to unrelated Third Parties, then QMT
shall only receive Distribution Fees on the undiscounted price to the unrelated
Third Party.

       

      1.22           “OTC” means
over-the-counter retail cosmetic consumer products that do not require a medical
prescription for purchase and are not subject to regulations as a device,
biologic or drug but is regulated solely as a cosmetic under the
FDCA.  For the purpose of sales of products outside the United States,
the definition of “OTC” shall be deemed to include any product which would be
sold as an over-the-counter retail cosmetic consumer product pursuant to this
definition if such product was sold in the United States.

       

      1.23           “Patent Rights” means
the Patent Rights listed in Subparts I and II of Exhibit A
hereto.

       

      1.24           “Proprietary
Information” has the meaning set forth in Section 8.1
hereof.

            

             
1.25           “QMT Compound” means
the matrix metalloproteinase inhibitor (known under the common law trademark as
“Ilomastat”) as claimed in the Patent Rights

       

      1.26           “Recipient” has the
meaning set forth in Section 8.1 hereof.

       

      1.27           “Second Contract Year Minimum
Sales” has the meaning set forth in Section 3.2(b) hereof.

       

      
        
          
            *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

             

             

          

           

        

        
           

          
            

          

        

        
           

        

      

      1.28           “Term” shall have the
meaning set forth in Section 9.1 hereof.

       

      1.29           “Territory” means
worldwide.

       

      1.30           “Third Contract Year Minimum
Sales” has the meaning set forth in Section 3.2(c) hereof.

       

      1.31           “Third Party” means
any entity other than a Party to this Agreement or their respective
Affiliates.

       

      2.           Appointment.

       

      2.1           Appointment.  Subject
to the terms and conditions of this Agreement, QMT hereby appoints BASF as the
exclusive manufacturer and distributor of the Licensed Products in the Field in
the Territory.  In connection therewith and solely in support thereof,
QMT hereby grants to BASF during the Term a Distribution Fee bearing exclusive
license, and exclusive sublicense under the Amended and Restated License
Agreement from University of Florida Research Foundation, Inc., dated as of
November 22, 2002, and the License Agreement from University of Michigan dated
as of May 24, 2007 (as amended from time to time, the “Michigan License”), to
the patents and patent applications listed in Subpart I of the Patent Rights; a
Distribution Fee bearing non-exclusive license, and non-exclusive sublicense
under said License Agreement from University of Florida Research Foundation, Inc
and said License Agreement from University of Michigan, to the patents listed in
Subpart II of the Patent Rights; and a non-exclusive license to the Know How, to
make, use, sell, offer for sale and import Licensed Products in the Territory
and to use the QMT Compound solely for research and development relating to
Improvements or new Licensed Products in the Territory .

       

      2.2           Sublicense. QMT
hereby grants to BASF during the Term the right to grant sublicenses under the
Patent Rights to one or more Affiliates or to Third Parties solely for the right
to manufacture and to sell the Licensed Product to BASF for the purposes set
forth in this Agreement.  Each such sublicense shall be pursuant to
written agreement, a true and correct copy of which shall be delivered to QMT
within thirty (30) days following its execution.  Each such sublicense
agreement shall be consistent with the terms of this Agreement and shall
incorporate such terms as required to provide QMT with the same protections and
rights provided hereunder.  BASF agrees to enforce compliance by the
sublicensee under each such sublicense agreement.  QMT agrees that
such delivered sublicense(s) and the all of the terms and conditions contained
therein is BASF Proprietary Information and shall treat such Proprietary
Information in accordance with Section 8 hereof.  QMT also agrees that
in certain instances Proprietary Information of BASF or the sublicense may be
redacted from such delivered sublicenses.

       

      2.3           Know-How.  Under
the Prior Agreements, QMT has disclosed Know-How to BASF solely for purposes of
BASF’s research, development and manufacture of Licensed
Products.  BASF agrees that such disclosed Know-How is QMT’s
Proprietary Information and shall treat such Proprietary Information in
accordance with Section 8 hereof.

       

       

          2.4                 No Other
Rights.  Except for the express license and sublicense granted
pursuant to Section 2.1 hereof, no license, express or implied, is granted by
either Party to the other Party or its Affiliates under any intellectual
property rights owned or controlled by such Party or its
Affiliates.

       

      2.5           Governmental Rights;
University of Florida and University of Michigan.  All rights
and licenses granted by QMT under this Agreement are subject to (i) any
limitations imposed by the terms of any government grant, government contract or
government cooperative agreement applicable to the Patent Rights that are the
subject of this Agreement, and/or (ii) applicable requirements of 35 U.S.C.
Sections 200 et
seq., as
amended, and implementing regulations and policies.  Without
limitation of the foregoing, BASF agrees that, to the extent required under 35
U.S.C. Section 204, any Product used, sold, distributed, rented or leased by the
BASF or an Affiliate in the United States will be manufactured substantially in
the United States.  Furthermore, certain of the rights granted
hereunder are subject to a reservation of rights by the University of Florida
and University of Michigan and its affiliates to use the Patent Rights for its
research, public service, internal (including clinical), and educational
purposes and the rights to grant others similar non-commerical rights and the
licenses granted hereunder are expressly made subject to such rights and the
license from University of Florida and University of Michigan.

       

      3.           Consideration.

       

      3.1 Distribution
Fee.  In consideration of the rights and appointments granted
to BASF pursuant to Section 2.1 hereof, commencing on the Effective Date, BASF
shall pay to QMT during the Term a Distribution Fee as set forth in this Section
3.  The Distribution Fee shall be due and payable to QMT on a calendar
year quarterly basis as set forth in Section 3.2(d) below.  In the
event BASF is required to pay royalties to any Third Party (other than any
payments which may be required to be made to the University of Michigan or the
University of Florida under any of the Patent Rights) in order to make, use or
sell Licensed Products, BASF’s obligation to pay the Distribution Fee to QMT
under this Section 3.1 shall not be affected.  Further, in the event
BASF sells Actives or the QMT Compound to a Third Party solely for use by BASF
to produce a Cosmetic Product Formulation to be sold to such Third Party, QMT
shall be paid a Distribution Fee on Net Revenues of the Active or QMT Compound
sale, not the sale of the Cosmetic Product Formulation.

       

      
        	
                 
      

              	
                3.2

              	
                Distribution
      Fees.

              

      

       

      (a)              Distribution Fees During the
First Contract Year.  During the first Contract Year, BASF
shall pay QMT a Distribution Fee equal to: (i) *****
of the Net Revenues received until the total invoiced sales of Licensed
Products for the first Contract Year equals *****
U.S. dollars (the “First Contract Year Minimum Sales”); (ii) *****
of the Net Revenues received as of the date the total invoiced sales of
Licensed Products for the first Contract Year is greater than *****
U.S. dollars but less than *****
U.S. dollars; and (iii) *****
of the Net Revenues received as of the date the total invoiced sales of
Licensed Products for the first Contract Year is equal to *****
U.S. dollars.  In the event the First Contract Year Minimum
Sales are not met, QMT has the option to convert
this Agreement to a non-exclusive license for all Patent Rights, or to terminate
this Agreement in accordance with Section 9 below.

       

      (b)              Distribution Fees During the
Second Contract Year.  During the second Contract Year, BASF
shall pay QMT a Distribution Fee equal to: (i) *****
of the Net Revenues received until the total invoiced sales of Licensed Products
for the second Contract Year equals *****
U.S. dollars (the “Second Contract Year Minimum Sales”); (ii) *****
of the Net Revenues received as of the date the total invoiced sales of
Licensed Products for the second Contract Year is greater than *****
U.S. dollars but less than *****
U.S. dollars; and (iii) *****
of the Net Revenues received as of the date the total invoiced sales of
Licensed Products for the second Contract Year is equal to *****
U.S. dollars.  In the event the Second Contract Year Minimum
Sales are not met, QMT has the option to convert this Agreement to a
non-exclusive license for all Patent Rights, or to terminate this Agreement in
accordance with Section 9 below.

       

      (c)              Distribution Fees During the
Third Contract Year..  During the third Contract Year, BASF
shall pay QMT a Distribution Fee equal to: (i) *****
of the Net Revenues received until the total invoiced sales of Licensed
Products for the third Contract Year equals *****
U.S. dollars (the “Third Contract Year Minimum Sales”); (ii) *****
of the Net Revenues received as of the date the total invoiced sales of
Licensed Products for the third Contract Year is greater than *****
U.S. dollars but less than *****
U.S. dollars; and (iii) *****
of the Net Revenues received as of the date the total invoiced sales of
Licensed Products for the third Contract Year is equal to *****
U.S. dollars.

       

      (d)              Distribution
Fees for each Contract Year shall be due and payable each quarter at the same
time as the Distribution Fee Report is due to the QMT pursuant to Section
4.2.

       

      3.3 Reduction In
Distribution Fees.  For sales of Licensed Products in any
country within the Territory for which there is no granted or pending Patent
Right and within which there exists a Competitive Product, BASF and QMT shall
negotiate in good faith a reduced Distribution Fee for the Net Revenues of the
Licensed Product sold in such country or countries; provided that such sales are
not to an Affiliate of BASF solely for resale to customers in a country within
the Territory where there is an existing granted or pending Patent
Right.  The reduced Distribution Fees shall be retroactive to the date
the Competitive Product, as defined, first existed, and BASF shall be provided a
credit towards future Distribution Fees which is equal in amount to the
difference between Distribution Fees actually paid and the amount of such
reduced Distribution Fees which would have been due.

       

      
         

        
          
            
              *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

               

               

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

       

      4.           Payments, Reports and
Records.

       

      4.1           New Licensed
Products.  BASF shall provide written notice to QMT of the
trademarks and tradenames of all Licensed Product as of the Effective Date of
this Agreement and thereafter shall provide the trademarks or tradenames of any
new product or product line containing or constituting the Licensed Product at
least thirty (30) days prior to the launch thereof.  QMT agrees that
the pending launch of a new product or product line, and such trademarks
and tradenames is BASF’s Proprietary Information (or the Proprietary Information
of BASF’s customer) and shall treat such information as Proprietary Information
in accordance with Section 8 hereof until such time as the trademark/tradename
or launch falls within the exception of Section 8.3(c).  In the event
that Proprietary Information submitted to QMT pursuant to this Section 4.1 is
publicly disclosed by QMT prior to the applicability of Section 8.3(c), whether
such disclosure is intentional or not, the notice requirement of this Section
4.1 shall no longer apply to BASF.

       

      4.2           Payments.  During
the Term, and within thirty (30) days from the last business day of the quarter
to which a report relates, BASF shall furnish to QMT quarterly written reports
during each Contract Year showing the following: (i) the Net Revenues of the
Licensed Products (broken out by product line) sold by BASF. and its Affiliates
during the reporting period listed by country, and qualifying deductions, as
defined in Section 1.19 hereof, listed by category of deduction; (ii) the
Distribution Fees payable in United States dollars which shall have accrued
hereunder in respect of such sales; (iii) withholding taxes, if any, required by
law to be deducted in respect of such sales, as applicable; and (iv) the
exchange rates used in determining the amount of United States dollars, if
applicable. The reports shall be substantially similar to the form attached
hereto as Exhibit B. All Distribution Fee payments shall be due and payable on
the date such report is due.  If no payments are due for any reporting
period hereunder, BASF shall so report.  All reports delivered
pursuant to this Section shall constitute the Proprietary Information of BASF
and shall be subject to Section 8 hereof except that it may be used and
disclosed by the QMT for purposes of enforcing the terms of this
Agreement.  All payments to QMT under this Agreement shall be made in
United States dollars by check payable to “Quick Med Technologies, Inc.” or, if
requested by QMT, by wire transfer to an account designated by QMT.

       

      4.3           Withholding
Taxes.  All Distribution Fee payments are exclusive of all
federal, state, local and foreign taxes, levies, and assessments, duties,
customs and similar charges.  BASF shall be responsible for any and
all such applicable charges incident to the payments to QMT under this
Agreement, other than taxes on QMT’s income.  When QMT has the legal
obligation to collect such taxes, the appropriate amount shall be paid by BASF
(by adding such amount to the payment to QMT under Section 4.2), unless BASF
provides QMT with a valid tax exemption certificate authorized by the
appropriate taxing authority.  In the event that BASF is required by
applicable law to make deductions or withholdings from payments to QMT
hereunder, then BASF shall pay such additional amounts to QMT as may be
necessary to assure that the actual amount received by QMT after deduction or
withholding shall equal the amount that would have been received if such
deduction or withholding were not required.

       

      4.4          Exchange
Rates.  If BASF receives revenues from the sale of Licensed
Products in currency other than United States dollars, revenues shall be
converted to United States dollars at the conversion rate for foreign currency
published by Deutsche Bundesbank as of the last business day of the applicable
month.

       

      4.5          BASF’s Recordkeeping and
Inspection.  BASF shall keep for at least six (6) years records
of all sales of Licensed Products in sufficient detail to permit QMT to confirm
the accuracy
of BASF’s Distribution Fee payment calculations.  At the request of
QMT, or with regard to the sublicensed Patent Rights at the request of the
University of Michigan or the University of Florida, as the case may be, no more
frequently than once per year, upon at least five (5) business days prior
written notice to BASF and at the expense of QMT, the University of Michigan or
the University of Florida, as the case may be, (except as otherwise provided
below), BASF shall permit an experienced, independent certified public
accountant selected by QMT, or in the event such request is pursuant to a
request and reasonably acceptable to BASF to inspect, during regular business
hours, any such BASF records for the then-preceding six (6) years solely to the
extent necessary to verify such calculations; provided that such accountant
in advance has entered into a confidentiality agreement with BASF (substantially
similar to the confidentiality provisions of this Agreement) limiting the
disclosure of such information to authorized representatives of the Parties and
further provided that the University of Michigan or the University of Florida,
as the case may be, has entered into a confidentiality agreement with BASF
(substantially similar to the confidentiality provisions of this Agreement)
limiting the disclosure of such information to authorized representatives of the
University of Michigan or the University of Florida, as the case may
be..  Results of any such inspection shall be made available to both
Parties.  If such inspection reveals a deficiency in the calculation
of Distribution Fees resulting in an underpayment to QMT by five percent (5%) or
more, BASF shall pay all costs and expenses of such inspection.  If,
during any Contract Year during the Term, an inspection reveals a deficiency in
the calculation of Distribution Fees resulting in an underpayment to QMT by
twenty percent (20%) or more, then BASF shall, at its sole cost and expense,
thereafter supply QMT with annual audits by a mutually agreeable independent
auditing firm for each remaining Contract Year during the Term within sixty (60)
days following the end of each Contract Year.

       

      4.6           Interest on Late
Payments.  Amounts that are not paid by BASF within thirty (30)
days following the date such payments were due shall accrue interest, from the
due date until paid, at a rate equal to one and one-half percent (1.5%) per
month (or the maximum allowed by law, if less).

       

      5.           Research, and Development Data;
Marketing Review.

       

      5.1           Product
Data.  BASF shall be responsible for the development of all
data and other information relating to the Licensed Products and Product sales,
including without limitation all stability and safety data, (collectively the
“Product Data”)
necessary to support sales of Licensed Products in the Field in the
Territory.

       

      5.2           Copies of Product
Data.  QMT shall have the right to request and obtain copies of
any data and information, including all such safety and stability data and
reports developed by BASF to support the sales made by BASF hereunder, that
would reasonably be provided publicly to the marketplace or to clients during
the marketing process.  Any BASF or third party confidential
information may be redacted prior to submission to QMT.

       

      5.3             Ilomastat
Initiative.  BASF has prepared a comprehensive review and study
of Ilomastat in connection with assessing its re-position as Licensed Product, a
copy of which is attached
hereto as Exhibit C.  The results of such Study shall not be publicly
disclosed unless agreed to by both Parties.

       

      5.4           Marketing
Review.  On or before September 1, 2008, BASF shall meet with
QMT to provide a marketing review of regarding the marketing efforts being made
by BASF with respect to the Licensed Product.  The marketing review
shall include of a review of the accounts under development and a review of the
prospects for each such account.

       

      5.5           Research and
Development.  The license and sublicense granted hereunder by
QMT specifically includes the right for BASF, including its Affiliates, to
conduct research and development on the QMT Compound and on existing and new
Actives within the Field. Any Improvements to the QMT Compound conceived and/or
reduced to practice by BASF shall be assigned to QMT and licensed back to BASF
in the Field, as part of the Patent Rights or Know How without any additional
royalty or fee, other than the fees payable hereunder for the Patent Rights and
Know How in connection with the Licensed Products.

       

      
         

        
          
            
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      6.           Representations and Warranties;
Disclaimer; Limitation of Liability.

       

      6.1           Representations and
Warranties of BASF.  BASF represents and warrants to QMT as
follows:

       

      (a)           BASF
is a corporation duly organized, validly existing and in good standing under the
laws of Delaware.  BASF has all requisite corporate power to own and
operate its properties and assets and to carry on its business as presently
being conducted and as proposed to be conducted.  BASF has, and will
have on all relevant dates, all requisite legal and corporate power to execute
and deliver this Agreement, and to carry out and perform its obligations under
the terms of this Agreement; and

       

      (b)           the
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all appropriate BASF corporate
action.  The performance by BASF of any of the terms and conditions of
this Agreement on its part to be performed does not and will not constitute a
breach or violation of any other agreement or understanding, written or oral, to
which it is a party.

       

      6.2           Representations and
Warranties of QMT.  QMT represents and warrants to BASF as
follows:

       

      (a)           QMT
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada.  QMT has all requisite corporate power to
own and operate its properties and assets and to carry on its business as
presently being conducted and as proposed to be conducted.  QMT has,
and will have on all relevant dates, all requisite legal and corporate power to
execute and deliver this Agreement, and to carry out and perform its obligations
under the terms of this Agreement; and

       

      (b)           the
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all appropriate QMT corporate
action.  The
performance by QMT of any of the terms and conditions of this Agreement on its
part to be performed does not and will not constitute a breach or violation of
any other agreement or understanding, written or oral, to which it is a
party.

       

      (c)           QMT
has, and will have on all relevant dates, all requisite legal rights to grant
the exclusive license and sublicense under Subpart I of the Patent Rights, and
non-exclusive license and sublicense under Subpart II of the Patent Rights, as
provided to BASF hereunder and that the Patent Rights include all the patent
applications and patents that QMT owns or controls that cover the manufacture,
use, and sale of Licensed Products in the Field in the Territory.

       

      (d)           QMT
does not have any knowledge that the manufacture, use, and sale of the QMT
Compound in the Field in the Territory infringes any patent or other
intellectual property rights of any Third Parties.

       

      (e)           QMT
will use commercially reasonable efforts to investigate any Cosmetics sold by a
Third Party in Field in the Territory and claiming MMP inhibition to determine
if such Third Party may be infringing any patents listed in Subpart I of the
Patent Rights.

       

      6.3           Disclaimer of
Warranty.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, QMT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTY OF ANY KIND,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE TECHNOLOGY AND PATENT RIGHTS FOR
THE QMT COMPOUND INCLUDING WITHOUT LIMITATION WARRANTIES OF THE VALIDITY OR
ENFORCEABILITY OF THE PATENT RIGHTS, MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE.  ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE
EXPRESSLY DISCLAIMED BY QMT. 

       

      6.4           Limitation of
Liability.  It is agreed by the Parties that neither Party
shall be liable to the other Party for any special, consequential, indirect,
exemplary or incidental damages (including lost or anticipated revenues or
profits relating to the same), arising from any claim relating to this
Agreement, whether such claim is based on contract, tort (including negligence)
or otherwise, even if an authorized representative of such Party is advised of
the possibility or likelihood of same.

       

      6.5     Limitations of Liability for
the University of Michigan and the University of Florida.  BASF
further agrees that neither the University of Florida nor the University of
Michigan nor any of their regents, trustees, fellows, officers, employees or
agents, have made or make any representations, extend warranties of any kind,
either express or implied, including but not limited to the implied warranties
of merchantability or fitness for a particular purpose, and in no event will the
University of Florida  or the University of Michigan or its regents,
trustees, directors, fellows, officers, employees and agents be responsible or
liable for any direct, indirect, special, incidental, or consequential damages
or lost profits or other economic loss or damage with respect to BASF’s
manufacture, use or sale of the Licensed Products.  The above
limitations on
liability apply even though the University of Michigan or University of Florida,
its regents, directors, trustees, fellows, officers, employees or agents may
have been advised of the possibility of such damage.  BASF shall not
make any statements or representations or warranties whatsoever to any person or
entity, or accept any liabilities or responsibilities whatsoever from any person
or entity which are inconsistent with the above limitations of
liability.

       

      

        
          
            
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      7.           Indemnification and
Insurance.

       

      7.1           Indemnification by
BASF.  BASF shall indemnify, defend and hold harmless QMT and
its Affiliates, University of Florida, University of Michigan, and their
respective directors, officers, employees, fellows, regents, trustees, students,
and agents, and their respective successors, heirs and assigns (the “QMT Indemnitees”)
against any liability, damage, loss or expense (including reasonable attorneys’
fees and expenses of litigation) incurred by or imposed upon the Indemnitees in
connection with any Third Party claim, demand, suit, action or judgment arising
out of any theory of product liability (including without limitation actions in
the form of tort, warranty or strict liability) or based on, or caused by (i)
any breach of any representation or warranty provided hereunder by BASF or (ii)
any act or omission of BASF or its Affiliates with respect to the development,
manufacture, use, sale, offer for sale, importation or exportation of any
Product, except to the extent that such liability, damage, loss or expense is
directly attributable to the gross negligence or intentional misconduct of QMT
or its Affiliates or the breach of any representation or warranty provided
hereunder by QMT.  In any calendar year, BASF’s liability hereunder
shall not exceed the sum of all Distribution Fees paid to QMT in such calendar
year except to the extent that such liability, damage, loss or expense is
directly attributable to the gross negligence or intentional misconduct of BASF
or to product liability claims for Actives, QMT Compound, or Cosmetic Product
Formulations which are directly based on the acts or omissions of
BASF.

       

      7.2           Indemnification by
QMT.  QMT shall indemnify, defend and hold harmless BASF and
its Affiliates and their respective directors, officers, employees and agents,
and their respective successors, heirs and assigns (the “BASF Indemnitees”)
against any liability, damage, loss or expense (including reasonable attorneys’
fees and expenses of litigation) incurred by or imposed upon the Indemnitees in
connection with any Third Party claim, demand, suit, action or judgment arising
out of or based on, or caused by any breach of any representation or warranty
provided hereunder by QMT.  Except due to a breach of the warranties
set forth in Section 6.2(c) and 6.2(d), in any calendar year, QMT’s liability
hereunder shall not exceed the sum of all Distribution Fees received from BASF
in such year except to the extent that such liability, damage, loss or expense
is directly attributable to the gross negligence or intentional misconduct of
QMT.

       

      7.3           Notice and
Cooperation.  Any BASF or QMT Indemnitee seeking
indemnification under Section 7.1 or Section 7.2 shall provide the other Party
with prompt written notice of any claim, demand, suit, action or judgment for
which indemnification is sought under this Agreement.  An
Indemnitee’s failure to deliver written notice to the other Party within a
reasonable time after the commencement of any such action, to the extent
prejudicial to such other Party’s ability to defend such action, shall relieve
such other Party of liability to the Indemnitee under this Section
7.  BASF, QMT, University of Michigan, or University of Florida, as
the case may be, agree at its own expense, to provide attorneys reasonably
acceptable to the Indemnitees to defend against any such
claim.   The Indemnitees shall cooperate fully with BASF or QMT,
as the case may be, in such defense and will permit BASF or QMT, as the case may
be, to conduct and control such defense and the disposition of such claim, suit,
or action (including all decisions relative to litigation, appeal and
settlement); provided,
however, that any Indemnitee shall have the right to retain its own
counsel at the expense of the other Party, if representation of such Indemnitee
by the counsel retained by the other Party would be inappropriate because of
actual or potential conflicts in the interests of such Indemnitee and any other
party represented by the counsel retained by BASF or QMT, as the case may
be.  The Indemnitees shall be kept informed of the progress in the
defense and disposition of such claim and shall be consulted with regard to any
proposed settlement.  The indemnification under this Section 7 shall
not apply to amounts paid in settlement of any liability, claim, lawsuit, loss,
demand, damage, cost or expense if such settlement is effected by the
Indemnitees without the consent of the other Party.  BASF shall not
settle any such legal action with an admission of liability of University of
Michigan or University of Florida, without their written approval, as the case
may be.

       

      8.           Confidentiality.

       

      8.1           Proprietary
Information.  As used in this Agreement, the term “Proprietary
Information” shall mean all scientific, technical, trade or business
information of either Party (the “Disclosing Party”)
disclosed to the other Party (the “Recipient”), whether
or not in writing, of a confidential or proprietary nature, including any
portion of analyses, compilations, forecasts, studies or other documents
prepared by Recipient which contains such information.  By way of
illustration, but not limitation, Proprietary Information may include
inventions, Know-how, products, processes, methods, techniques, assays,
formulas, compositions, compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer programs, customer and
supplier lists and contacts at or knowledge of customers or prospective
customers of the Disclosing Party.

       

      8.2           Disclosure of Proprietary
Information.  Except as expressly permitted in this Section 8,
during the Term and for a period of five (5) years thereafter, the Recipient
shall hold in confidence and shall not directly or indirectly disclose,
communicate or in any way divulge to any person any Proprietary Information,
without the prior written consent of the Disclosing Party.  The
Recipient shall use such Proprietary Information solely for the purposes of this
Agreement. The Recipient shall not provide or grant access to the Proprietary
Information to any Third Party, except the Recipient may disclose Proprietary
Information received by it under this Agreement only to those of its directors,
officers, employees, agents and consultants, and the directors, officers,
employees, agents and consultants of its Affiliates, who have a need to know
such Proprietary Information in the course of the performance of their duties
and who are bound by a written agreement to protect the confidentiality of such
Proprietary Information.

       

      8.3    Limitation on
Obligations.  The obligations of the Recipient specified in
Section 8.2 above shall not apply, and the Recipient shall have no further
obligations, with respect to any Proprietary Information to the extent the
Recipient can demonstrate, by clear and convincing evidence, that such
Proprietary Information:

       

      (a)           was
known or used by the Recipient prior to the date of disclosure to the Recipient,
as evidenced by the prior written records of the Recipient;

       

      (b)           either
before or after the date of disclosure to the Recipient, is lawfully disclosed
to the Recipient by an independent, unaffiliated Third Party rightfully in
possession of the Proprietary Information;

       

      (c)           either
before or after the date of disclosure to the Recipient, becomes published or
generally known to the public through no fault or omission on the part of the
Recipient, but such inapplicability applies only after such information is
published or becomes generally known;

       

      (d)           is
independently developed by the Recipient without reference to the Proprietary
Information of the Disclosing Party; or

       

      (e)           is
required to be disclosed by the Recipient to comply with applicable laws or to
comply with governmental regulations; provided, that the Recipient
(i) provides prior written notice of such disclosure to the Disclosing Party;
(ii) discloses the Proprietary Information only to the extent necessary to
comply with such applicable laws or governmental regulations; and (iii) assists
the Disclosing Party in any reasonable and lawful actions the Disclosing Party
may take to avoid and/or minimize the degree of such disclosure.

       

      8.4           Equitable
Relief.  The Recipient agrees that any breach of this Section 8
may cause the Disclosing Party substantial and irreparable damages and,
therefore, in the event of any such breach, in addition to other remedies which
may be available, the Disclosing Party shall have the right to seek specific
performance and other injunctive and equitable relief.

       

      8.5           Ownership of Proprietary
Information.  The Recipient agrees that the Disclosing Party
(or any Third Party entrusting its own confidential information to the
Disclosing Party) is and shall remain the exclusive owner of the Proprietary
Information disclosed to the Recipient and all patent, copyright, trademark,
trade secret, and other intellectual property rights in such Proprietary
Information or arising therefrom.  Except as expressly set forth in
this Agreement, no option, license, or conveyance of such rights to the
Recipient is granted or implied under this Agreement.

       

      

        
          
            
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      9.           Term and
Termination.

       

      9.1           Term.  Unless
terminated sooner as provided in this Section 9, the term of this Agreement
shall commence with the Effective Date and end at midnight on December 31,
2010.  (referred to as the “Term”).

       

      9.2    Material
Breach.  The failure by BASF to comply with any of its
obligations contained in this Agreement, including without limitation, BASF’s
failure to submit Distribution Fee reports when due or failure to pay
Distribution Fees when due, shall entitle QMT to give to BASF written notice
specifying the nature of the default and requiring it to cure such
default.  If such default is not cured within thirty (30) days after
the receipt of such notice, then QMT shall be entitled, without prejudice to any
of its other rights conferred on it by this Agreement and in addition to any
other remedies available to it by law or in equity, to terminate this Agreement
effective immediately upon written notice to BASF regardless of whether any cure
is made after the expiration of such thirty (30) day period.  The
right of QMT to terminate this Agreement, as hereinabove provided, shall not be
affected in any way by its waiver or failure to take action with respect to any
previous default.  The breach of QMT of any of the warranties set
forth in Section 6.2 shall entitle BASF to terminate this Agreement by giving
QMT thirty (30) days prior written notice.

       

      9.3           Failure to Meet Minimum
Sales.  The failure by BASF to make the First or Second Year
Contract Year Minimum Sales as set forth in Section 3.2 herein shall entitle
QMT, at its option, to terminate this Agreement effective upon thirty (60) days
written notice to BASF.  The right of QMT to convert this Agreement to
a non-exclusive license for all the Patent Rights for the remainder of the Term,
or to terminate this Agreement.  

       

      9.4           Effect of
Termination.

       

      (a)           In
the event of termination of this Agreement pursuant to Section 9.1 through 9.3
then all licenses and rights granted to BASF hereunder shall terminate and, BASF
shall cease to manufacture, use and sell Licensed Products as of the effective
date of such termination.BASF shall be obligated to pay all Distribution Fees
accrued through the date of termination which are unpaid.

       

      (b)           Notwithstanding
the foregoing, in the event this Agreement is terminated pursuant to Section 9.1
or 9.3, QMT agrees to either provide BASF with a non-exclusive license to make,
use, and sell Licensed Products to all then existing BASF customers of Licensed
Products, including the right to sublicense a Third Party to make the QMT
Compound solely for use in the manufacture of such Licensed Products, at a
Distribution Fee equal to *****
of Net Revenue for such Licensed Products, for a period not to exceed one
hundred twenty (120) days from the date of termination for the purpose of
fulfilling Customer orders for Customers that are existing on the date of such
termination and selling off any existing inventory of Licensed Products (the
“Sell-Off
Period”).  Any remaining inventory of Licensed Products after
such Sell-Off Period shall be destroyed by BASF at its sole
expense.

       

      (c)           Upon
termination of this Agreement, QMT will use its commercially reasonable efforts
to locate and appoint a Third Party supplier for the then current Customers of
BASF of Licensed Products.  In this case, “commercially reasonable
efforts” means internal business development activities consistent with products
of this type and commercial market.  In the event QMT provides BASF
with notice that a Third Party supplier was appointed, BASF agrees to provide
QMT with a listing of all then existing BASF customers of Licensed Products
(“BASF
Customers”)  along with all necessary standard operating
procedures, manufacturing documentation, formulas, adverse event reports and
data concerning the Licensed Products supplied to each such BASF
Customer.  QMT or its Third Party supplier shall be permitted to
contact each BASF Customer to arrange a supply of Licensed Product
thereto.  If QMT or its Third Party supplier enters into a supply
agreement with any such BASF Customer or otherwise continues to supply Licensed
Product to a BASF Customer, whether or not under an executed supply agreement,
then (a) during the six (6) month period following the date of termination of
this Agreement, QMT will pay to BASF *****
of all Net Revenues received from such BASF Customer for Licensed
Products and (b) during the subsequent six (6) month period QMT will pay to BASF
*****
of all Net Revenues received from such BASF Customers for Licensed
Products.  Thereafter, no further amounts will be owed with respect to
any sales to any of such BASF Customers for Licensed Products. All payments
shall be made within sixty (60) days of the receipt thereof from such BASF
Customer.  However, if no Third Party is located and/or appointed by
QMT within one hundred and twenty (120) days of from the termination of this
Agreement, and notwithstanding Section 9.4(a), QMT shall grant BASF a
Distribution Fee bearing non-exclusive license and sublicense under the Patent
Rights and Know-How to make, use, sell, offer for sale and import Licensed
Products to BASF Customers pursuant to the terms of this Agreement in effect for
the Contract Year in which termination occurred, such non-exclusive license
remaining in effect for: (i) the shorter of six (6) moths from the date of
termination or until a Third Party supplier is appointed; or (ii) until there
are no BASF Customers.

       

      (d)           Any
obligation under any provision of this Agreement which is intended to survive
termination of this Agreement, including without limitation, Sections 8, 9.4(d),
and 10 shall survive termination of this Agreement and shall not relieve either
Party from any obligation which accrued prior to such termination.

       

      9.5          Expiration.  Upon
expiration of this Agreement, QMT will offer to enter into a new Manufacturing
and Distribution Agreement with BASF or to renew this Agreement for an
additional term to be mutually agreed to between the
Parties.  However, in the event the Parties do not enter into a new
Manufacturing and Distribution Agreement or renew this Agreement within one
hundred and twenty (120) days prior to the expiration date, then the obligations
of 9.4(d) shall apply.  Any obligation under any provision of this
Agreement which is intended to survive expiration of this Agreement, including
without limitation, Sections 8, 9.4(d), and 10 shall survive and expiration this
Agreement shall not relieve either Party from any obligation which accrued prior
to such expiration.

       

      
         

        
          
            
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      10.           Intellectual Property
Rights.

       

      10.1           Ownership of Intellectual
Property.  QMT shall own all right, title and interest in the
copyright, patent, trademark, trade secret or other intellectual property rights
in the QMT Compound or any Improvements which are conceived or reduced to
practice by QMT or BASF.  BASF shall own all right, title and interest
in the copyright, patent, trademark, trade secret or other intellectual property
rights in existing and new Actives or Cosmetic Product Formulations, including
without limitation any derivatives, variations, and or improvements
thereto.

       

      10.2    Ownership of
Inventions.  Inventorship shall be determined in accordance
with United States patent law at the time the inventor made the
invention.  Each Party shall ensure that its employees, consultants,
agents, and representatives are contractually required to assign to such Party
all rights, title, and interest to any inventions, to maintain all Proprietary
Information, and to promptly disclose to such Party all such
inventions.  

       

      (a)             QMT
Inventions.  QMT will have and retains sole and exclusive title
to all inventions, developments, improvements, discoveries and Know-how relating
to the QMT Compound and Improvements which are made, conceived or reduced to
practice by QMT or by BASF, or by Affiliates, employees, consultants, agents or
other Persons acting under its authority of either BASF or QMT in the course of
or as a result of this Agreement.  However, if any such QMT Inventions
would prevent BASF from selling Licensed Products pursuant to this Agreement,
then for the term of this Agreement, such QMT invention shall automatically be
considered part of Subpart I of the Patent Rights set forth in Exhibit A and
subject to the exclusive license granted hereunder.

       

      (b)             BASF
Inventions.  In the event any Active or Cosmetic Product
Formulation is made, conceived or reduced to practice by BASF, its Affiliates,
employees, consultants, agents or other persons acting under its authority in
the course of, in connection with or as a result of this Agreement, either
solely or jointly with QMT, an Affiliate or a Third Party, such Active or
Cosmetic Product Formulation shall be owned by BASF.

       

      10.3           Prosecution of Patent
Rights.  QMT, by counsel it selects, shall diligently maintain
all patents and patent applications listed in Subpart I of the Patent
Rights.  QMT shall also make all reasonable efforts to maintain all
patents listed in Subpart II of the Patent Rights subject to any restrictions
set forth in its agreements with the University of Florida Research Foundation,
Inc. and/or the University of Michigan.  QMT shall bear all the costs
and expenses associated with the filing, prosecution and maintenance of such
Patent Rights.  If QMT elects, for any reason, not to maintain active
or enforceable any Patent Rights, QMT will so notify BASF and upon agreement by
BASF to pay the cost of obtaining or maintaining any such Patent Rights, QMT
will act to obtain or maintain any such Patent Rights.  Any such costs
paid by BASF pursuant to this Section 10.3 shall be subtracted from the next
Minimum or Actual Monthly Distribution Fee payment due to QMT by BASF, and if so
subtracted will be set forth in the corresponding Distribution Fee report sent
to QMT.  If QMT receives notification that any Patent Rights have been
declared invalid or rendered unenforceable by a patent office or patent court or
other patent enforcement tribunal, QMT shall promptly provide BASF with a copy
of such notification.

       

      10.4           Third Party
Infringement.

       

      (a)           QMT
shall use its commercially reasonable efforts to investigate potential
infringers of its Patent Rights with respect to  the QMT Compound in
the Field and unless otherwise mutually agreed by the Parties, QMT shall have
the first right to either enter into negotiations to settle or proceed with an
action against any alleged infringers with respect to the QMT Compound in the
Field subject to this Section 10.4, or to prosecute any Third Party infringement
of the Patent Rights and/or to defend the Patent Rights in any declaratory
judgment action brought by a Third Party which alleges invalidity,
unenforceability or non-infringement of the Patent Rights.  QMT shall
notify BASF of all potential infringers of its Patent Rights with respect to the
QMT Compound in the Field.   BASF shall reasonably cooperate with
any reasonable requests by QMT to assist in the litigation or enforcement of the
Patent Rights, but shall not be responsible for any costs associated with such
enforcement.  QMT may not enter into any settlement, consent judgment
or other voluntary final disposition of any infringement or declaratory judgment
action hereunder with respect to the QMT Compound in the Field without the prior
written consent of BASF, which shall not be unreasonably withheld or delayed or
conditioned.  Any recovery or damages derived from any such action
shall be retained by QMT, after reimbursement to BASF of all costs and expenses
(including without limitation, reasonable attorneys’ fees) incurred by BASF in
connection with providing its assistance.  BASF acknowledges that if a
declaratory judgment action alleging invalidity or unenforceability of any of
the Patent Rights owned by University of Michigan or University of Florida, as
the case may be, is brought and the action is not a reaction to an assertion of
or action for patent infringement, the University of Michigan and/or the
University of Florida, as the case may be, at its sole option, has the right to
intervene and assume control over the defense of such action.

       

      (c)           In
the event QMT elects not to enforce or defend the Patent Rights against any
alleged infringer in the Field and a Competitive Product exists due to such
alleged infringer’s activities, then the amount of the Distribution Fee for the
Net Revenues of the Licensed Products sold in such country or countries in which
the Competitive Products are sold shall be reduced to ***** of the Net
Revenues.

       

      (d)           Each
Party shall promptly notify the other Party in writing of any alleged
infringement of a Licensed Product in the Field and of any available evidence
thereof.  BASF shall have the right, but shall not be obligated, to
commence legal action at its own expense to defend or prosecute such
infringements relating to Actives or Cosmetic Product
Formulations.   No settlement, consent judgment or other
voluntary final disposition of the suit may be entered into without the consent
of QMT, which consent shall not be unreasonably withheld or
delayed.  QMT shall reasonably cooperate with any requests by BASF to
assist in the litigation or enforcement of the Patent Rights.  The
total cost of any action commenced solely by BASF shall be borne by BASF, and
BASF shall retain any recovery or damages derived therefrom, after reimbursement
to QMT of all costs and expenses (including without limitation, reasonable
attorneys’ fees) incurred by QMT in connection therewith.

       

      10.5           Infringement
Allegations.  In the event that a Third Party asserts or
alleges that a Licensed Product manufactured or sold by BASF or its Affiliates
infringes a patent or other proprietary right of such Third Party, except if
such Licensed Product is the QMT Compound, BASF shall assume the defense of such
claim at its sole cost.  QMT may participate in the defense of such
claim through counsel of its own choosing and at its sole expense.  In
the event that QMT receives notice of such assertion or allegation, QMT shall
notify BASF of such allegation or assertion.  BASF may enter into any
settlement, consent judgment, or other voluntary final disposition of any
infringement action under this Section 10.5; provided, however, that BASF
shall not enter into any settlement, consent judgment or other voluntary final
disposition that admits or concedes that an aspect of the Patent Rights is
invalid or unenforceable, without the prior written consent of
QMT.  However, if such consent is withheld by QMT, then QMT shall be
obligated to assume all costs associated with the continued defense of the
infringement action as of the date consent is withheld, and shall pay any amount
of damages awarded to the Third Party which are in excess of the amount which
would have been paid by BASF pursuant to the settlement, consent judgment or
other voluntary disposition for which consent was withheld by
QMT.  For the purposes of this Section 10.5, QMT’s consent shall be
deemed to be withheld if no written consent is received by BASF within fifteen
(15) days of the date BASF requests such consent.  In the event that a
Third Party asserts or alleges that the QMT Compound infringes a patent or other
proprietary right of such Third Party, QMT shall assume the defense of such
claim and shall indemnify BASF for all damages incurred by it as a result of
such claim.  BASF may participate in the defense of such claim through
counsel of its own choosing and at its sole expense. QMT may enter into any
settlement, consent judgment, or other voluntary final disposition of any
infringement action under this Section 10.5.   In the event that
BASF receives notice of such assertion or allegation, BASF shall notify QMT of
such allegation or assertion.

       

      10.7           Trademarks.  QMT
is and shall remain the owner of all right, title and interest to the common law
trademark and goodwill associated with the name “Ilomastat,” and BASF agrees
that it will not at any time assert or claim any interest in, nor register or
attempt to register, “Ilomastat” or any marks confusingly similar
thereto.  BASF is and shall remain the owner of all right, title and
interest in the registered trademark, “Equistat,” (U.S. Registration Number
2921253) and the goodwill associated therewith, and, at its expense, shall be
responsible for the selection, registration and maintenance of all other
trademarks and trade names that it employs in connection with Licensed Products
(collectively, “Marks).  QMT
agrees that it will not at any time assert or claim any interest in, nor
register or attempt to register the Marks or any marks confusingly similar
thereto.  The Marks shall include, without limitation, the name or
names of any Licensed Products, the design of the packaging of any Licensed
Products, and the appearance of dosage forms of any Licensed
Product.  BASF shall list the QMT’s trademark “Ilomastat” as an
ingredient in any Licensed Product sold by BASF and shall include the
“Ilomastat” mark in any BASF registrations with applicable regulatory
authorities necessary for the sale of Licensed Products by BASF in a
country.  In the event this Agreement is terminated by QMT, and QMT
assumes or delegates the manufacturing responsibilities with respect to the
Licensed Product pursuant to Section 9.4, then BASF agrees to license the Marks
to QMT (other than any mark associated with the name BASF) on a non exclusive
basis for a maximum period of six (6) months, solely for the purpose of making
and selling the Licensed Products and commencing such sales under new QMT
trademarks or brands.

       

      
         

        
          
            
              *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

               

               

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

      11.           Miscellaneous.

       

      11.1           Use of Name/Public
Statements.  Except to the extent required by applicable law or
regulation, each Party agrees that it will not at any time during or following
termination of this Agreement use the name of the other Party or any names,
insignia, symbols, or logotypes associated with the other Party or any variant
or variants thereof or the names of the other Party’s employees orally or in any
literature, advertising, or other materials without the prior written
consent
of Party whose name is to be used, which consent shall not be unreasonably
withheld.  BASF further agrees to refrain from using the name of the
University of Michigan or the University of Florida in publicity, promotion,
advertising or other form of publicity without the prior written approval or the
University of Michigan or the University of Florida, as the case may
be.

       

      11.2           Assignment.  This
Agreement may not be assigned or otherwise transferred (whether through merger
or change of control) by BASF without the prior written consent of the QMT
except in the event of the sale of all or substantially all of the assets, or
the merger or change on control, of BASF whereby, in the case of a merger or
change of control, over 50% of the outstanding capital stock of BASF immediately
after the merger or change in control is held by one entity and its Affiliates
(other than a current Affiliate of BASF).  This Agreement shall be
binding upon and inure to the benefit of the successors and permitted assigns of
the Parties and the name of a Party appearing herein shall be deemed to include
the names of such Party’s successors and permitted assigns to the extent
necessary to carry out the intent of this Agreement.  Any attempted
assignment not in accordance with this Section 11.2 shall be void ab initio.

       

      11.3           Independent
Contractors.   QMT and BASF shall at all times act as
independent parties and nothing contained in this Agreement shall be construed
or implied to create an agency or partnership.  Neither Party shall
have the authority to contract or incur expenses on behalf of the
other.

       

      11.4           Notices.  Any
notice or communication required or permitted to be given or made under this
Agreement by one of the Parties hereto to the other shall be in writing and
shall be deemed to have been sufficiently given or made for all purposes if sent
by hand, recognized national overnight courier or mailed by certified mail,
postage prepaid, return receipt requested, addressed to such other Party at its
respective address as follows:

       

      If to
BASF:

      

      BASF
Beauty Care Solutions LLC

      50 Heath
Sciences Drive

      Stony
Brook, New York  11790

      Attn:                      Frank
Freiler

      General
Manager

      

      If to
QMT:

      

      Quick Med
Technologies, Inc.

      902 NW
4th
Street

      Gainesville,
Florida  32601

      Attn: J.
Ladd Greeno, Chief Executive Officer

       

          11.4           Severability.  If any one or more of
the provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, that provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect; provided, however, that the
Parties shall renegotiate an acceptable replacement provision so as to
accomplish, as nearly as possible, the original intent of the
Parties.  

       

          11.5           Force
Majeure.  If either party is rendered unable, wholly or in
part, to carry out any of its duties under this Agreement by reason of (i)
natural disasters or acts of the public enemy, fire, explosion, perils of the
sea, flood, typhoon, earthquake, drought, war, riot, sabotage, accident,
embargo; or (ii) without limiting the foregoing circumstances, any circumstances
of like or different character beyond the reasonable control of the party so
failing; or (iii) interruption of or delay in transportation, inadequacy or
shortage or failure of supply of materials or equipment, breakdowns, labor
trouble from whatever cause arising and whether or not the demands of the
employees involved are reasonable and within said Party’s power to concede; or
(iv) compliance by either Party with any order, action, failure to act,
direction, or request of any governmental officer, department, agency, authority
or committee thereof, and (v) whether in any case the circumstance now exists or
hereafter arises, such Party shall forthwith give written notice thereof to the
other Party (such notice briefly to describe the circumstances causing such
inability) and, thereupon, to the extent that the party giving such notice is
unable to perform, such duty or obligation shall be suspended during, but no
longer than the continuance of such circumstances and for no longer than one
hundred and twenty (120) days from the commencement of such circumstances or in
any Contract Year.

       

      11.6           Choice of
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and applicable U.S. Federal
law, without regard to any choice of law principles that would dictate the
application of the laws of another jurisdiction.

       

      11.7           Entirety.  This
Agreement represents the entire agreement of the Parties and expressly
supersedes all previous written and oral communications between the Parties,
including without limitation the Prior Agreements.  Upon execution of
this Agreement and effective as of the Effective Date, both Parties hereby agree
that neither Party shall have any liability to the other for any claims arising
out of the Prior Agreements.

       

      11.8           Amendment.  No
amendment, alteration, or modification of this Agreement or any exhibits
attached hereto shall be valid unless executed in writing by authorized
signatories of both Parties.

       

      11.9            Waiver.   The
failure of any Party hereto to insist upon strict performance of any provision
of this Agreement or to exercise any right hereunder will not constitute a
waiver of that or any other provision or right.

       

      IN WITNESS WHEREOF, the Parties have
caused this Agreement to be executed by their duly authorized representatives as
of the date first written above.

       

       

      
        	
                QUICK
      MED TECHNOLOGIES, INC.

              	
                BASF
      BEAUTY CARE SOLUTIONS LLC.

              
	
                By:_/s/ J. Ladd
      Greeno_____________

              	
                By:  __/s/ Frank
      Freiler_________________

              
	
                Date:
      May 12,
      2008________________

              	
                Date:  _May 16,
      2008__________________ 

              
	
                Typed
      Name:  J. Ladd GREENO

              	
                Typed
      Name: Frank FREILER

              
	
                Title:  Chief
      Executive Officer

              	
                Title:  General
      Manager

              

      

      

      
        
          
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This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

             

            

             

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      EXHIBIT
A

      Patent
Rights

      

      *****

      

      

      

       

       

      

       

      
        
          
            *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

             

            

             

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
B

      Distribution
Fee Report Format

      

      

      *****

      

      

      

      

      

      

       

      

      

      

      

      

      

      

      

      
        
          
            *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

             

            

             

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      

      EXHIBIT
C

      Ilomastat
Efficacy Testing Protocol

      

      *****

       

      

       

      

       

      

       

      
        
          
            *****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

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