AMENDED AND RESTATED LICENSE AGREEMENT

A.

Arizona State University (“ASU”) is the owner of the Licensed Subject Matter (as defined below).

B.

AzTE is the exclusive intellectual property management company for ASU and the exclusive master licensee of all current and future Licensed Subject Matter pursuant to a license agreement between ASU and AzTE dated November 1, 2003, with full power and authority to sublicense and otherwise grants rights to third parties in the Licensed Subject Matter.

C.

AzERx and AzTE are parties to that certain Option Agreement dated March 25, 2004, as amended (the “Option Agreement”) pursuant to which AzERx has rights to that certain License Agreement (the “License Agreement”) contemplated thereby. Licensee and AzERx are currently negotiating a possible purchase by Licensee of all or substantially all of the assets of AzERx pursuant to that certain Asset Purchase Agreement dated as of the date hereof (the “Transaction”). In connection with Transaction, AzERx will assign to Licensee its rights to the License Agreement. However, Licensee has required as a condition to entering into the Transaction that AzTE enter into this amended and restated License Agreement upon the closing of the Transaction.

D.

This Agreement and the grant of the license described herein are subject to the terms of the Bayh-Dole Act, 35 U.S.C. Sections 200-212.

1.

DEFINITIONS

directly or indirectly, the maximum percentage of such outstanding stock or voting rights permitted by local law and otherwise exercises control over the management of such company. With respect to ASU and AzTE, “Affiliate” shall also include AzTE, ASU and professors, employees, contractors and agents of ASU .

1.2

“ Founders ” shall mean the following ASU employees, who are the founders and shareholders of AzERx: Coleen Brophy and Alyssa Panitch.

1.3

“ Improvements ” shall mean any and all improvements, alterations, updates, modifications and enhancements to the Licensed Patents that are developed by Founders in their own respective laboratories, solely, or jointly with Licensee or other third-parties (including Sublicensees), or their respective employees, contractors, Affiliates or agents, or any other party utilizing ASU facilities or ASU resources. Improvements shall also include any such improvements, alterations, updates, modifications and enhancements to Licensed Patents that are produced by Licensee, any Sublicensee, or their respective employees, contractors, agents or Affiliates; provided, however, that Improvements shall not include improvements, alterations, updates, modifications or enhancements that are both (1) produced independently by Licensee (without inventive contribution of ASU or its employees, contractors, Affiliates or agents or through the use of any ASU resources or facilities) and (2) are not based on any Confidential Information in the Licensed Subject Matter. Further, Improvements shall not include rights to improvements, alterations, updates, modifications or enhancements derived from research funded from third party government or industry sponsors, granting agencies, or any third party research partners, which are granted to such parties in connection with such funding.

1.4

[INTENTIONALLY OMITTED.]

1.5

“ Know-How ” shall mean all unpatented or unpatentable technical data, information, materials and technical expertise that relates to the Licensed Patents and Improvements for use in the Licensed Field of Use, that are developed by the Founders (and persons working under their direct supervision) in the Founders’ respective laboratories, including without limitation, chemical and physical data and techniques, regulatory plans, clinical data, medical uses, product forms, formulations, recorded notes, studies, ideas, inventions and specifications, which are not generally known, in which AzTE or ASU has an ownership or licensable interest during the Term. “Know-How” shall not include any of such technical data, information, materials or technical expertise that (i) is or becomes in the public domain or (ii) is produced independently by Licensee (without inventive contribution of ASU or its employees, contractors, Affiliates or agents or through the use of any ASU resources or facilities) and is not based on any Confidential Information in the Licensed Subject Matter.

1.6

“ Licensed Field of Use ” shall mean all fields of use and applications of the Licensed Subject Matter.

1.7

“ Licensed Patents ” shall mean any and all of ASU’s rights in the United States or other international or foreign patents or patent applications, provisional, non-provisional, and continuing applications thereof that are listed on Schedule 1 hereto, including any U.S., international or foreign patents or the equivalent thereof issuing thereon or any addition, division, continuation, continuation-in-part, substitution, renewal, reissue, re-examination or extension thereof. With respect to ASU’s rights in patents and patent applications that will be and have been developed under the Research Collaboration Agreement between ASU and Prolexys Pharmaceuticals, Inc., a Delaware corporation dated February 20, 2004 (the “Prolexys Research Agreement”), the Licensed Patents shall include ASU’s rights (and only to the extent of such rights) under such patents and patent applications solely in the areas of: (a) small molecule memetics of HSP20; and (b) new proteins and peptides developed from existing Licensed Patents; provided , however , the rights of ASU (if any) are subject to any rights granted to Prolexys under the Prolexys Research Agreement, a correct and complete copy of which has been provided to Licensee by AzTE.

Nothing contained in this Agreement shall be construed as giving Licensee any rights to any consideration ASU is permitted to receive other than such rights to patents and patent applications under the Prolexys Research Agreement. Licensed Patents shall not include any intellectual property not specifically set forth herein.

1.8

“ Licensed Products ” shall mean, with respect to Net Sales in a country, any method, system, material, composition, item, compound, device or embodiment, product, or part thereof, which is part of, or embodied in, the Licensed Subject Matter, and for which at the time of the occurrence of the relevant Net Sales in such country, the manufacture, use or sale is covered in whole or in part by any Valid Claim contained in the Licensed Patents under a patent issued by such country. “Licensed Products” shall include any services offered using any of the foregoing.

1.9

“ Licensed Subject Matter ” shall mean all of ASU’s rights to the Licensed Patents, Know-How and Improvements.

1.10

“ Net Sales ” means the total of the gross revenue recorded by the Licensee, its Affiliates, or any Sublicensee, from the import, sale, license, use, distribution, leasing or other disposition, transfer, for Licensed Products to third parties (including Affiliates), provided that Net Sales shall not include (i) reasonable and customary trade, cash or quantity discounts or rebates actually allowed; (ii) credits and rebates for damaged, rejected, or returned Licensed Products provided that such Licensed Product was sold not more than twelve (12) months prior to the date of such return, customary prepaid freight and insurance charges , and customs duties, tariffs, sales, use, privilege, excise and other similar use or sales taxes or other governmental charges actually paid in connection with sales or other dispositions of Licensed Products (but excluding what are commonly known as income taxes). Any adjustment to Net Sales resulting from returns of Licensed Products sold shall only be applied as an adjustment to Net Sales in succeeding periods. For transactions in Licensed Products between Licensee and an Affiliate or Sublicensee of Licensee for the sole purpose of resale to customers, royalties shall be based on Net Sales by the Affiliate or Sublicensee to its own customers.

1.11

“ Option ” shall mean the option granted by AzTE to AzERx pursuant to that Option Agreement between AzTE and AzERx dated March 25, 2004.

1.12

“ Sublicensee ” shall mean any person or entity that has a valid sublicense to any portion of the Licensed Subject Matter pursuant to a sublicense from Licensee after compliance with the provisions of Section 3 below . “Sublicensee” shall not include contractors who are licensed by Licensee solely to develop or manufacture Licensed Products on Licensee’s behalf.

1.13

“ Territory ” shall mean the world.

1.14

“ Term ” shall mean that period beginning on the Effective Date and expiring upon the expiration of the obligation of Licensee to pay royalties under this Agreement.

1.15

“ VA ” shall mean the United States Department of Veterans Affairs.

1.16

“ VA Agreement ” shall mean that certain Cooperative Technology Administration Agreement between ASU and VA dated November 18, 2003, a correct and complete copy of which has been provided to Licensee by AzTE.

1.17

“ Valid Claim ” shall mean a claim in any filed patent application or any issued and unexpired patent, which shall not have been withdrawn, cancelled or disclaimed, nor held invalid by a court of competent jurisdiction in an unapealled or unappealable decision (after all such statute limitations for such appeal have run) in the country where the product or process was made, used or sold by licensee, its Affiliates or Sublicensees.

2.1

Subject to the terms and conditions of this Agreement, AzTE hereby grants to Licensee during the Term, a royalty-bearing, exclusive license, including the right to sublicense, under the Licensed Subject Matter (under the conditions described below), to develop, have developed , make, have made, use, offer for sale, sell, have sold, import , export and otherwise commercialize Licensed Products throughout the Territory solely in the Licensed Field of Use; provided , however , the rights to Know-How shall be exclusive only to the extent necessary to exercise Licensees rights under the Licensed Patents and Improvements.

2.2

AzTE expressly reserves the right for ASU to use the Licensed Subject Matter solely for noncommercial purposes such as for educational, teaching and research purposes. Further, AzTE and ASU shall have the right to make the Licensed Subject Matter available to other scientific institutions and researchers solely for non-commercial scientific and research purposes.

2.3

The grant of license set forth above is subject to any interest in the Licensed Subject Matter retained by the United States or state government granting agencies.

3.1

Affiliates shall be deemed to be licensees under this Agreement provided that such Affiliates first consent in writing to be bound by the applicable terms of this Agreement to the same extent as Licensee and such consent has been delivered to AzTE. Each sublicense agreement shall contain confidentiality and non-use provisions no less burdensome than set forth in Section 7 herein and shall further require Sublicensees to maintain books and records consistent with the provisions of Section 9.5 . Licensee shall provide AzTE with a copy of all documentation granting any such rights within 10 business days of the date such documentation is executed and delivered.

3.2

Upon termination of this Agreement for any reason, AzTE, at its reasonable discretion, may determine whether any or all sublicenses granted to Sublicensees shall be cancelled or assigned to AzTE.

5.1

AzERx has previously paid or agreed to pay to AzTE an initial non-refundable license fee of One Hundred Six Thousand One Hundred Twenty-Nine and 11/100 Dollars ($106,129.11), payable on the effective date hereof.

5.2

In further consideration for the rights, privileges and licenses granted by AzTE hereunder, Licensee shall pay AzTE royalties until the last expiration date of a Licensed Patent in the amount of 3% of Net Sales by Licensee, Sublicensees, or any Affiliates of Licensed Products (regardless of how many Licensed Patents are used in the Licensed Products), and 5% of any other consideration received by Licensee, Sublicensees and any Affiliates in connection with the grant of sublicense rights to Licensed Subject Matter (e.g., license issue fees, milestones, exclusivity fees, etc.) but excluding (i) royalty payments received (which shall be governed by the previous clause) by Licensee or (ii) payments received that are not received primarily for rights to the Licensed Subject or Licensed Products such as consideration received in connection with a sale of all or substantially all of the stock or assets of Licensee, until the expiration of the Term. It is understood and agreed by the parties that the payment of royalties pursuant to this Section 5.2 shall be made only on the first Net Sale of a Licensed Product by Licensee, a Subsidiary or a Sublicensee, and that subsequent Sales of the same Licensed Product or Licensed Process for

which royalties have been accrued pursuant to this Section 5.2 shall not be subject to any additional accrual of royalties (for example, and for illustration purposes only, if a royalty accrues due to a Sale by Licensee of a Licensed Product to a Sublicensee or a pharmaceutical distributor, a subsequent Sale by such Sublicensee or such pharmaceutical distributor shall not generate a royalty payable to AzTE).

5.3

Beginning on the date Licensee or any Sublicensee first records any revenue for Net Sales of Licensed Products for commercial use (“First Sale”), Licensee shall pay to AzTE until the last expiration date of a Licensed Patent a minimum annual royalty (the “Minimum Annual Royalty”), in the amounts set forth below, for the twelve-month period beginning on the date of First Sale and each succeeding twelve-month period during the Term (each, a “Minimum Royalty Year”). The Minimum Annual Royalty shall be paid to AzTE in two (2) equal installments, in arrears, semi-annually, on or before 30 days after each June 30 or December 31 semi-annual period; provided, that the first such installment shall be made within 30 days after the First Sale. The Minimum Annual Royalty shall be credited against all amounts payable under Section 5.2 hereto in the Minimum Royalty Year to which the installment of Minimum Annual Royalty relates. Licensee shall pay the Minimum Annual Royalty under this Agreement regardless of whether or not Licensee’s Net Sales for the relevant Minimum Royalty Year achieve an aggregate level sufficient to result in earned royalties equal to the Minimum Annual Royalty. The Minimum Annual Royalty amounts shall be as follows:

$

25,000

$

50,000

$

75,000

$

100,000

5.4

The Licensee shall be responsible for payment of all bank transfer charges, taxes, duties and other charges imposed by any taxing authority (other than AzTE’s income taxes) in connection with payments of royalties from Licensee to AzTE. All amounts payable to AzTE under this Agreement shall be grossed up for all required applicable withholdings related to such charges, taxes or duties.

5.5

Amounts payable under Section 5 hereof shall be paid, semi-annually in arrears, to AzTE within thirty (30) days after the semi-annual period in which such amounts are due, except as otherwise expressly provided herein. All payments will be paid to AzTE in U.S. dollars by check or wire transfer of immediately available funds, as directed by AzTE in writing.

6.1

Subject to the requirements, limitations and conditions set forth in this Agreement, AzTE shall direct, with the agreement of Licensee which shall not be unreasonably withheld or delayed, after consultation with Licensee and through counsel of Licensee’s choosing: (i) the preparation, filing, and prosecution of the United States and foreign patent applications within Licensed Subject Matter (including any interferences and foreign oppositions) and (ii) the maintenance and enforcement of the patents issuing therefrom. AzTE shall implement all reasonable requests made by Licensee with regard to the preparation, filing, prosecution and/or maintenance of the patent applications and/or patents within Licensed Subject Matter. AzTE and Licensee shall cooperate in good faith to determine the content and claims made with respect to such filings. Patent counsel shall be directed to provide both AzTE and Licensee copies of all relevant documentation sufficiently in advance of such filings so both parties have a reasonably sufficient amount of time to provide comments on such proposed filings and to otherwise be informed and apprised of the continuing prosecution and other status of all Licensed Patents. All legal fees and out-of-pocket

expenses associated with the filing, prosecution and maintenance of Licensed Patents shall be paid by Licensee directly to such patent counsel when due.

6.2

All Licensed Patents shall be held in the name of ASU or AzTE, as determined by AzTE.

6.3

If either party receives notice or information pertaining to the actual or potential infringement of Licensed Patents, that party shall notify the other party promptly, but not later than thirty (30) days after receipt of such notice or information.

6.4

Licensee shall have the continuing responsibility to notify AzTE if Licensee is not a small entity under the provisions of 15 USC Section 632 as applied in 35 USC Section 41(h).

6.5

Promptly after the Effective Date and from time to time during the Term of this Agreement, Licensee, and its Affiliates shall disclose to AzTE all inventions, technical data, information, and materials relating to the Licensed Subject Matter that could reasonably be considered Improvements and (ii) to the extent that AzTE or ASU has the legal right to do so, AzTE shall disclose to Licensee all Know-How and Improvements that is known by AzTE or ASU and with respect to which AzTE or ASU has an ownership or licensable interest. For purposes of the foregoing provisions, information known or available to Founders shall be deemed to have satisfied any disclosure obligations of AzTE or ASU.

7.1

Each party undertakes during the Term of this Agreement, and for a period of seven (7) years following the termination of this Agreement, to hold in confidence and not to use or disclose to any third party, or to use for any purpose other than pursuant to this Agreement, the Know-How or other confidential information or materials (the “Confidential Information”) received from the other party. Information which is communicated orally shall be considered Confidential Information if such information is confirmed in writing as being Confidential Information within a reasonable time after the initial disclosure. Licensee shall require any Sublicensee to assume the same obligation in any sublicenses. The obligation under this Section 7.1 shall not apply to information which:

7.2

AzTE and Licensee may also disclose Confidential Information to the extent required by applicable law, provided that the party required to make such disclosure cooperates with the other party’s efforts to limit such disclosure and promptly notifies such other party upon receipt of any order or request for such disclosure.

7.3

Notwithstanding the provisions of Section 7.1 , each of the parties, ASU and their respective Affiliates reserve the right to publish (and teach) information of scientific importance . Each of Licensee and AzTE shall, and shall cause its Affiliates to, provide the other party with an advance copy of any proposed publication or other written disclosure with respect to Licensed Subject Matter (“Publication”) and the receiving party shall have ninety (90) days within which to recommend any changes it reasonably believes are necessary to preserve patent rights or Know-How belonging in whole or in part to Licensee or ASU or their respective Affiliates and the disclosing party shall cause the incorporation of such recommended changes not to be unreasonably refused. Further, if the receiving party informs the disclosing party, within ninety (90) days of receipt of an advance copy of a proposed Publication, that such Publication in the receiving party’s reasonable judgment could be expected to have a material adverse effect on any patent rights or Know-How belonging in whole or in part to Licensee or ASU, or their respective Affiliates, the disclosing party shall cause such Publication to be delayed for such period of time as shall be reasonably required to avoid such adverse effect. In the case of inventions, the delay shall be sufficiently long (but in not in excess of six (6) months) to permit the timely preparation and filing of patent application(s) or a certification of invention with respect to the information involved. Notwithstanding anything to the contrary in this Section 7.3 , neither AzTE or ASU shall have any responsibility or obligation related to any Publication by any Founder.

7.4

Any press release or other public announcement regarding the transactions contemplated by this Agreement shall be mutually agreed by the parties unless AzTE or ASU reasonably determine such disclosure is necessary to satisfy any disclosure duties related to ASU being a public institution; provided , however , that prior to any such disclosure, AzTE shall first consult with Licensee to ensure that any such disclosure does not violate any strategic, securities or other legal requirements applicable to Licensee. AzTE and ASU shall further be entitled to publish the existence of this Agreement on their websites and as otherwise required by law without consent of Licensee, provided, however, that prior to such disclosure AzTE shall first consult with Licensee to ensure that any such disclosure does not violate any strategic, securities or other legal requirements applicable to Licensee. Licensee shall be entitled to publis