EXCLUSIVE LICENSE AGREEMENT

Exhibit 10.1

EXCLUSIVE LICENSE AGREEMENT

THIS AGREEMENT is made and entered into this 21 ^st day of May, 2008, by and between: SYNTHETIC BLOOD INTERNATIONAL, INC. (hereinafter referred to as the “LICENSEE”) with its principal place of business at 3189 Airway Avenue Bldg. C, Costa Mesa, CA 92626, and VIRGINIA COMMONWEALTH UNIVERSITY INTELLECTUAL PROPERTY FOUNDATION (hereinafter referred to as the “LICENSOR”), and with its principal place of operation at Virginia Commonwealth University, 800 E. Leigh Street, Suite 113, Richmond, Virginia 23298-0568, United States of America.

WHEREAS, LICENSOR is charged with management and licensing of intellectual properties developed at Virginia Commonwealth University (“VCU”) and, under VCU intellectual property policy, inventions made by employees of VCU or made using the facilities of VCU are required to be assigned to VCU and managed by LICENSOR;

WHEREAS, VCU is the owner of all right, title, and interest in patent applications associated with the VCU invention disclosure 06-31 “Novel Means to Provide Non pulmonary Oxygenation,” VCU invention disclosure 07-080 “Novel Combinatorial Approaches to Enhancing Oxygen Transport to Tissue”, and VCU Invention disclosure 08-008 “Gas Based Wound and Tissue Therapeutics” invented by Dr. Kevin Ward, Bruce Speiss, Robert Diegelman, Gary Bowlin, et al, employees at Virginia Commonwealth University; and

WHEREAS, LICENSEE is desirous of acquiring from LICENSOR certain rights set forth below;

NOW, THEREFORE, in consideration of the promises and the covenants set forth herein, LICENSOR and LICENSEE agree as follows:

I. DEFINITIONS

The following definitions shall apply in the interpretation of this AGREEMENT.

1.1 “AFFILIATE” of any LICENSEE means any corporation which, directly or indirectly, controls or is controlled by, or is under direct or indirect common control with, such LICENSEE; and for the purposes of this definition “control” (including “control by” and “under common control with”) as used with respect to any corporation or LICENSEE, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation or LICENSEE, through the ownership of more than 50% of the voting shares.

1.2 “CALENDAR QUARTER” means the three-month period ending March 31, June 30, September 30, or December 31 in any year.

1.3 “LICENSED PATENTS” shall mean the VALID CLAIMS of to, the extent controlled by LICENSOR, the United States patents and patent applications, corresponding foreign patents and patent applications as listed in Appendix A, attached hereto and incorporated herein by reference, and any reissues, re-examinations, renewals, extensions, substitutions, continuations, divisions, and continuation-in-part applications (but only those VALID CLAIMS in the continuation-in-part applications that are entirely supported in the specification and entitled to the priority date of the parent application).

1.4 “LICENSED PRODUCTS” shall mean any product in the FIELD OF USE that incorporates, is covered by (in whole or in part), or is made, uses or is used by a process covered by (in whole or in part), one or more VALID CLAIMS in one or more of the LICENSED PATENTS (including reissues and re-examinations) and without a license from VCU, would infringe one or more of the VALID CLAIMS in a Licensed Patent.

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1.5 “FIELD OF USE” shall mean all therapeutic and diagnostic applications in humans and animals.

1.6 “IMPROVEMENT INVENTIONS” shall mean inventions in the FIELD OF USE which improvement arose from research sponsored by LICENSEE and/or arose out of research in the FIELD OF USE in the area of oxygen therapeutics conducted (i) solely by Dr. Bruce Spiess, or (ii) under the direction or control of Dr. Bruce Spiess (e.g., arising from Dr. Spiess’ laboratory or research group).

1.7 “EFFECTIVE DATE” shall mean the date of the AGREEMENT set forth above.

1.8 “NET SALES” shall mean the amounts received by LICENSEE from the use of LICENSED PRODUCTS, or the sale of LICENSED PRODUCTS, less (i) discounts or rebates actually allowed from the billed amount, (ii) credits or allowances actually allowed upon claims or returns, (iii) shipping and insurance charges, and (iv) taxes, customs, or other government charges and surcharges included in the amounts billed. For non-cash and partial-cash sales, NET SALES shall include the fair market value of non-cash consideration received for such sale of the same quantity of LICENSED PRODUCTS. For sales not at arms-length, NET SALES shall be equal to the fair market price of such LICENSED PRODUCTS as when transferred in comparable arms-length transactions. In the event that LICENSED PRODUCTS are used by LICENSEE rather than sold, the parties shall agree upon an appropriate NET SALES price for each such use on which to base a royalty calculation. The distribution of reasonable quantities of free promotional samples of LICENSED PRODUCT or LICENSED PRODUCTS provided without charge for clinical trials or research purposes shall not be considered a sale of a LICENSED PRODUCT for royalty purposes.

1.9 “SUBLICENSEE” shall mean any non-affiliated third party to whom LICENSEE has granted a SUBLICENSE. “SUBLICENSE” shall mean an agreement in which LICENSEE (i) grants or otherwise transfers any of the rights licensed to LICENSEE hereunder, (ii) agrees not to assert such rights or to sue, prevent or seek a legal remedy for the practice of same, or (iii) is under an obligation to grant, assign or transfer any such rights or non-assertion, or to forebear from granting or transferring such rights to any other entity, including licenses, option agreements, right of first refusal agreements, or other agreements.

1.10 “SUBLICENSING REVENUE” shall mean the fair market cash value of any and all consideration received by LICENSEE from SUBLICENSEE under its SUBLICENSE, including without limitation running royalties paid for NET SALES of LICENSED PRODUCTS by SUBLICENSEE, license issue fees and other licensing fees, option fees, milestone payments, minimum annual royalties, equity or other payments of any kind whatsoever, irrespective of whether such revenues are received in the form of cash, barter, credit, stock, warrants, release from debt, goods or services, licenses back, or any other form whatever. Notwithstanding the foregoing, “SUBLICENSING REVENUE” shall not include the following payments, in cash or equity, received by LICENSEE: (i) payments for research and development activities, as documented in development plans and/or budgets under research or development agreements with third parties, (ii) amounts received in consideration for LICENSEE’s equity, and (iii) amounts received in consideration for the sale of all or substantially all of the business or assets of LICENSEE relating to this license, whether by merger, acquisition, sale of assets, stock, or otherwise.

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1.11 “VALID CLAIM” means a claim of a patent or patent application in any country that (i) has not expired, (ii) has not been disclaimed, (iii) has not been cancelled or superseded, or if cancelled or superseded, has been reinstated; (iv) has not been revoked, held invalid, held unpatentable, or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken, and (v) has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer, or otherwise.

II. GRANT

2.1 LICENSOR grants to LICENSEE an exclusive, royalty bearing, worldwide license under the LICENSED PATENTS to make, have made, use, offer to sell, sell, have sold, and import LICENSED PRODUCTS, with the right to SUBLICENSE under the terms of Article VIII, throughout the term hereof in the FIELD OF USE. This grant shall be subject to the payment by LICENSEE to LICENSOR of all consideration as provided in this AGREEMENT, and shall be further subject to the rights retained by LICENSOR and VCU to:

2.2 LICENSOR grants to LICENSEE, and LICENSEE accepts, an exclusive first option to include IMPROVEMENT INVENTIONS in this AGREEMENT. Subject to any third party obligations, LICENSOR grants to LICENSEE, and LICENSEE accepts, an exclusive first option to enter into good faith negotiations for a license in the FIELD OF USE to include any inventions with respect to oxygen therapeutics invented by Dr. Bruce Spiess together with other inventors (if no inventor objects in writing) in this AGREEMENT upon payment of $25,000 fee. Subject to any third party obligations and if no inventor objects in writing, LICENSEE shall have an option to negotiate an exclusive license on inventions based on oxygen delivery to tissue developed by other inventors at VCU after the EFFECTIVE DATE under commercially reasonable terms. The exclusive option granted to LICENSEE under this Section 2.2 must be exercised in writing within forty-five (45) days after LICENSEE’S receipt of written information of LICENSOR’S decision to file a patent application concerning an IMPROVEMENT INVENTION or other invention from LICENSOR. Upon expiration of the option period, LICENSOR may seek other licensees.

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2.3 Notwithstanding anything herein to the contrary, any and all licenses and other rights granted hereunder are limited by and subject to the rights and requirements of the United States Government which may attach as a result of United States Government sponsorship of research at VCU, in which the invention covered by the LICENSED PATENTS was conceived or reduced to practice, as set forth in 35 U.S.C. §§200-206, 37 C.F.R. Part 401 and in the relevant United States Government research contracts with VCU, and as such rights and requirements may be amended or modified by law. To the extent applicable, such rights and requirements include without limitation (i) the grant of a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the Government any of the LICENSED PATENTS throughout the world (as set forth in 35 U.S.C. §202(c)(4)), and (ii) the requirement that LICENSED PRODUCTS used or sold in the United States will be manufactured substantially in the United States (as set forth in 35 U.S.C. §204).

III. PAYMENT PROVISIONS

3.1 In consideration for the rights, privileges and license granted under this AGREEMENT, the LICENSEE must pay to LICENSOR the fees and royalties specified in Appendix B, attached hereto and incorporated herein by reference.

3.2 With each report submitted under Section 5.1 of this AGREEMENT, LICENSEE shall make all payments to LICENSOR in US dollars due and payable under this Article III. If no royalties are due, LICENSEE shall so report.

3.3 LICENSEE shall be obligated to pay royalties as provided in this AGREEMENT on all LICENSED PRODUCTS that are either sold or produced under this license, regardless of whether such LICENSED PRODUCTS are produced prior to the EFFECTIVE DATE of this AGREEMENT or sold after the termination of this AGREEMENT. LICENSEE also agrees to make a written report to LICENSOR within ninety (90) days after the termination of this AGREEMENT pursuant to Article VII. LICENSEE shall continue to make reports concerning royalties on the sale of LICENSED PRODUCTS payable in accordance with this Article III after termination of this AGREEMENT, until such time as all such LICENSED PRODUCTS produced under the license have been sold or destroyed. Concurrent with the submittal of each post-termination report, LICENSEE shall pay LICENSOR all applicable royalties.

3.4 All payments due the LICENSOR must be paid in U.S. currency to the LICENSOR. The LICENSEE must convert NET SALES invoiced in foreign currency into equivalent U.S. currency at the exchange rate for the foreign currency prevailing as of the last day of the reporting period, as reported in the Wall Street Journal ^® . Royalty payments shall be based on NET SALES in any country where a valid patent covering LICENSED PATENTS or LICENSED PRODUCTS is in effect, and on NET SALES of export PRODUCTS when the PRODUCTS were produced in a country where a valid patent covering LICENSED PATENTS is in effect. LICENSEE agrees to pay interest of 1.5% per month, the interest being compounded monthly, or two hundred fifty dollars ($250.00), whichever is greater, on any delinquent payments to LICENSOR. LICENSEE shall calculate the correct late payment charge, and shall add it to each such late payment. LICENSEE shall pay for all costs and reasonable attorneys fees incurred by LICENSOR in collecting payments due to LICENSOR.

3.5 In the case of a buyout or other change in majority ownership of LICENSEE, or a buyout of LICENSED PRODUCTS, all payment provisions arc passed through, non-negotiable, and remain in effect for LICENSEE. SUBLICENSEE, or purchaser, as applicable. LICENSEE shall inform any potential purchaser of this clause and present evidence of such notification to LICENSOR.

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IV. DILIGENCE AND PATENT PROSECUTION

4.1 The LICENSEE will use its reasonable best efforts to bring one or more LICENSED PRODUCT(S) to market through a thorough, vigorous and diligent program for exploitation of the PATENT RIGHTS and to continue active, diligent marketing efforts for LICENSED PRODUCTS throughout the life of this AGREEMENT.

4.2 LICENSEE agrees to present to LICENSOR a development plan for each LICENSED PRODUCT within two (2) months of acquiring the relevant LICENSED PATENT. The diligence milestones outlined in the development plans for each LICENSED PRODUCT will be attached to this AGREEMENT as a new Appendix C _1.2.3 etc., no later than two months after LICENSEE acquires the the relevant LICENSED PATENT. To be in compliance with Section 4.1, the LICENSEE must meet the diligence milestones set out in Appendix C, which shall be attached hereto and incorporated herein by reference.

4.3 Article IV is a material term of this AGREEMENT, without which the license grant under Article II would not have been made, and the LICENSEE’S failure to perform in accordance with Sections 4.1 and 4.2 is grounds for the LICENSOR to terminate this AGREEMENT pursuant to Article VII.

4.4 LICENSEE shall be responsible for the cost of prosecution and maintenance of patents and copyrights during the term of this AGREEMENT. LICENSEE shall have the right to appoint and engage patent counsel to prosecute and maintain the LICENSED PATENTS, subject to the approval of LICENSOR, such approval not to be unreasonably or untimely withheld. LICENSOR shall fully cooperate and assist LICENSEE in all related matters. LICENSEE shall provide LICENSOR with copies of all papers received from and to be filed in the U.S. Patent and Trademark Office, U.S. Copyright Office, and corresponding foreign patent and copyright offices.

4.5 All patents, patent applications, and copyrights on the LICENSED PATENTS shall be, assigned to LICENSOR, and LICENSOR’S interest therein shall be recorded in the U.S. Patent and Trademark Office, U.S. Copyright Office, and corresponding foreign patent and copyright offices.

4.6 LICENSOR shall provide LICENSEE with copies of all papers, including without limitation, all papers existing prior to the EFFECTIVE DATE, received from and to be filed in the U.S. Patent and Trademark Office, U.S. Copyright Office, and corresponding foreign patent and copyright offices.

4.7 LICENSEE shall be entitled, in its discretion, to abandon any application or granted patent or copyright if it considers that the ongoing costs of the same are not justified, provided that LICENSEE notifies LICENSOR prior to such abandonment and allows LICENSOR opportunity to avoid such abandonment. In no event shall such reasonable opportunity be less than three (3) months prior to abandonment. If LICENSEE chooses to abandon an application or granted patent or copyright under this provision and LICENSOR, at its sole expense, continues pursuing the application, granted patent or copyright, LICENSEE shall retain no right to use or exploit the LICENSED PATENTS or any related copyright in the country, territory or jurisdiction which granted the patent or copyright.

4.8 LICENSOR shall have the right to immediately terminate this AGREEMENT, without requirement of notification of default, in the event that LICENSEE challenges, directly or indirectly or at written urging of a third party on behalf of LICENSEE, whether as a claim, a cross-claim, counterclaim, or defense, the validity or enforceability of any of the LICENSED PATENTS before any court, arbitrator, or other tribunal or administrative agency in any jurisdiction. The parties acknowledge that re-examination proceedings shall not be considered a challenge of the LICENSED PATENTS.

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V. REPORTING OBLIGATIONS

5.1 LICENSEE, within sixty (60) days after each CALENDAR QUARTER of each year, shall deliver to LICENSOR true and accurate reports, pertaining to NET SALES of LICENSED PRODUCTS, which shall include at least the following information:

5.2 Progress Report. On or before January 1 and July 1 of each year until LICENSEE markets LICENSED PRODUCTS, LICENSEE shall make a written semi-annual report to LICENSOR covering the preceding six (6) months regarding the progress of LICENSEE toward commercial use of LICENSED PRODUCTS. Such report shall include, as a minimum, information sufficient to enable LICENSOR to satisfy reporting requirements of the U.S. Government and for LICENSOR to ascertain progress by LICENSEE toward meeting the diligence requirements of Sections 4.1 and 4.2.

5.3 LICENSEE shall keep full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to LICENSOR hereunder. Said books of account shall be kept at LICENSEE’S principal place of business. Said books and supporting data, subject to reasonable obligations of confidentiality, shall be open at all reasonable times for five (5) years following the end of the calendar year to which they pertain, to the inspection of LICENSOR or its agents for the purpose of verifying LICENSEE’s royalty statement or compliance in other respects with this AGREEMENT. Said records will include general ledger records showing cash receipts and expenses, and records which include production records, customers, serial numbers, and related information, as applicable, in sufficient detail to enable the royalties payable hereunder by LICENSEE to be determined. Such examination is to be made by LICENSOR or its designee, at the expense of LICENSOR. Should such inspection, however, lead to the discovery of a greater than five percent (5%) discrepancy in reporting to LICENSOR’S detriment, LICENSEE shall pay the full cost of such inspection. LICENSEE shall pay any amounts such inspection reveals to be due and owing within thirty (30) days of the receipt of an invoice for same.

VI. INFRINGEMENT

6.1 LICENSOR represents that, to the best of its knowledge, as of the EFFECTIVE DATE, the entire right, title, and interest in the patent applications or patents comprising the LICENSED PATENTS have been assigned to it (or VCU) free and clear of all liens, claims and encumbrances of any inventor or any non-governmental third party and that it (or VCU) has all requisite power and authority to grant the

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license contained in this AGREEMENT. LICENSOR also represents that it has received no notification (i) that the LICENSED PATENTS are invalid or (ii) that the exercise by LICENSEE of the rights granted hereunder will infringe on any patent or other proprietary right of any third party. LICENSEE acknowledges and agrees that all rights licensed by the LICENSOR hereunder are licensed “as is” and without any representation, indemnification or warranty with respect to possible infringement of third party rights. In the event of a third party infringement action against either party with respect to any LICENSED PATENTS, LICENSEE will defend LICENSOR and VCU at LICENSEE’s expense, with the understanding that breaching such obligation may result in a default judgment against LICENSEE, its AFFILIATES, SUBLICENSEEs, and/or LICENSOR (however, LICENSEE’S failure to defend sha