LICENSING AGREEMENT
This Licensing Agreement ("Agreement") is made effective as of September 1, 2005
by and between Institute of Cell Therapy, a company duly incorporated and
organized under the laws of Kiev, Ukraine ("ICT" or "Licensor"), having its
principal office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and Stem Cell
Therapy International Corp., a corporation duly incorporated under the laws of
Nevada, with its principal office located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("SCTI" or "Licensee").
RECITALS
WHEREAS, Licensor is the owner of: (1) a unique process for producing
biological solution of human stem cells (the "Process"); and (2) 26 Patents in
the name of Licensor, the abstract for which in fully set forth in Schedule A
hereto (the "Patents"); and (3) products consisting of biological solution of
human stem cells (the "Products"); and
WHEREAS, Licensor is in the business of producing biological solution of
human stem cells and engages in continuing research regarding the production and
utilization of stem cells ; and
WHEREAS, Licensor's business is operated in connection with the use of the
Intellectual Property and in connection with the Relationships; and
WHEREAS, Licensee has the expertise and experience to utilize the Patents,
the Products and the Process of Licensor in establishing clinics , marketing,
treating and administeringstem cell products to customers, as well as certain
limited sales to universities, for research or to private labs with appropriate
supervision by Licensee and/or Licensor; and
WHEREAS, Licensee has established financial relationships for the purpose
of taking the Company to the public securities markets and financing the
proposed business sufficient to adequately promote and undertake its proposed
business with respect to the stem cell products; and
WHEREAS, Licensee desires to utilize the Process, the Patents and the
Products for the purpose of establishing the proposed stem cell business
throughout the Territory (the "Licensee Business"); and
WHEREAS, Licensor has agreed to grant Licensee the exclusive license to the
Patents, the Process and the Products in the Territory in accordance with the
terms of this License Agreement; and
WHEREAS, Licensor wishes to sell and Licensee wishes to purchase the
Products consisting of biological solution of human stem cells at the prices
hereinafter set forth.
DEFINITIONS
Unless the context requires otherwise, whenever used in this Agreement the
following terms and expressions shall have the following meaning:
"AGREEMENT" means this agreement including the Exhibits, Addendums and
Schedules, as they may be amended from time to time.
"ALLO-TRANSPLANTS" means biological solution of human stem cells used in
transplantation therapy.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on which
commercial banks in the city of New York or in The Ukraine are authorized by law
to close.
"BUSINESS METHODS" means business methods developed, licensed to, and/or owned
or developed by Licensor or Licensee relating to the Patents, the Process or the
Products .
"CONFIDENTIAL INFORMATION" includes all information, whether written or oral, in
whatever form disclosed, concerning any technologies, products, developments,
business methods, business plans, marketing, investment, management, financial
and other business affairs in connection with all matters relating to or arising
out of this Agreement.
"CUSTOMERS" means any natural person(s) or legal entities primarily solicited by
Licensee under this Agreement in the Territory.
"DOING BUSINESS" means transplantation within a given country of a minimum of 60
Transplants in any given consecutive twelve month period, whether such
transplantation is done by Licensor alone or by Licensor as part of a joint
venture.
"INTELLECTUAL PROPERTY" means the Patents, Processes and Confidential
Information
"LIQUIDITY $20,000,000 EVENT" means the cumulative release from the
Lockup Agreement to Licensor of shares of common stock which are freely
tradeable on a United States public stock market and which, if sold at the
prevailing market price at the time of each such release, would in the aggregate
result in $20,000,000 in gross proceeds from the sale of such securities to
Licensor.
"LOCKUP AGREEMENT" means the Lockup Agreement entered into by Licensor in
accordance with paragraph 4.3 hereof.
"PATENTS" means those patent rights set forth on Schedule A hereto.
"PRODUCTS" means products incorporating biological solution of human stem
cells produced or otherwise produced or manufactured by Licensor.
"RELATIONSHIPS" means those business relationships between Licensor and certain
companies.
"TERRITORY" means any and all countries in the World except for (i) The
Ukraine, (ii) the Dominican Republic, and (iii) up to three additional countries
which (a) are designated by Licensor in writing to Licensee, (b) are not
countries in which Licensee has already commenced Doing Business (as defined
herein), (c) do not include the United States of America, and (d) are countries
in which Licensor commences Doing Business within 12 months of such designation.
1. GRANT OF EXCLUSIVE RIGHT
1.1 Licensor hereby grants to Licensee an exclusive right and license in the
Territory to utilize the Patents, Process and Products as permitted by this
Agreement subject to the terms and conditions hereof, in any manner whatsoever,
in connection with the operation of Licensee's Business involving the operation
of clinics for treatment with stem cell materials and technology, as well as
limited sales of stem cell materials to universities, for research and to
private labs with appropriate supervision by licensee or licensor (hereinafter
referred to as "License Rights"). If Licensee wishes to transfer or further
sublicense the "Patents " to any other person or entity , Licensee shall notify
Licensor of its such intention and shall provide Licensor with full details of
such proposed transfer or proposed sublicense, including, but not limited to,
the name and address of the proposed transferee or sublicensee, the names of the
principals of such proposed transferee or sublicensee, the proposed scope of the
proposed transfer or sublicense, the qualifications of the proposed transferee
or sublicensee to engage in the business of utilizing the license, the financial
qualifications and responsibility of the proposed transferee or proposed
sublicensee and all of the terms and conditions of such proposed transfer or
proposed sublicense. Licensor shall have the right to approve or disapprove of
any such proposed transfer
or proposed sublicense in its discretion, provided such refusal is reasonable
and not unreasonably delayed, as well as the right to treat such proposal as an
offer of a right of first refusal to retake Licensor's right under this
Agreement to the extent of such proposed transfer or proposed sublicense on the
same terms and conditions. In the event that Licensor approves of such proposed
transfer or sublicense, Licensor shall be entitled to receive, and Licensee
shall pay to Licensor a royalty of fifty (50%) percent of the gross
consideration (after deduction of any and all reasonable costs or expenses
associated with entering into any such sublicense agreement which are
appropriately disclosed to and documented in full for Licensor) received by
Licensee from such person or entity within thirty (30) days of any payment to
Licensee. Any and all agreements with any such sublicensee shall provide that in
the event any such sublicensee does not pay any such obligation within such
thirty day period, both Licensor and Licensee shall have the ability to
terminate such sublicense, unless Licensee pays any and all amounts due
hereunder from such sublicense to Licensor, in which case Licensor's ability to
terminate such sublicense for non-payment shall be suspended for any period
during which Licensee pays such amounts.
1.2 Any agreement to transfer or sublicense shall include all default,
termination and confidentiality provisions contained in this Agreement.
1.3 Licensee acknowledges that the Patents are the sole and exclusive property
of Licensor, subject only to the license hereby granted. Licensor acknowledges
agrees and understands that the Patents may not be the only patents,
intellectual property, know how or other products utilized in the Licensee's
Business. With respect to any "improvements": (a) If during the term of this
Agreement, Licensor makes any improvements to the Patents, Licensor hereby
grants Licensee a right of first refusal to license said improvements on the
same or better terms and conditions offered to Licensor by any bona fide third
party offeror; (b) If, during the term of this Agreement, Licensor makes any
improvements, modifications, or alterations in or to the Patents
("Improvement"), then Licensor shall notify Licensee of such Improvements and
provide Licensee with sufficient information to permit Licensee to properly
analyze the impact of the Improvement on the business of Licensee. Licensee
shall have thirty (30) days within which to notify Licensor of its desire and
intention to license such Improvement, subsequent to which Licensee and Licensor
agree to negotiate in good faith to determine the costs of such development and
enter into an appropriate license agreement reflecting all economic factors
including the costs of such Improvement and entering into an "Improvement
License Agreement." (c) If Licensee wishes Licensor to research and develop an
improvement to any designated Patent or Patents and describe the nature of such
improvement to Licensor, then Licensor shall quote Licensee a price for
researching and developing such
improvement or improvements, the parties shall enter into an "Improvement
Development Agreement" with respect thereto and, upon development of such
improvement, provided Licensee has discharged its obligations under the terms of
the "Improvement Development Agreement", Licensee shall be granted a license
with respect to such improvement on the terms of the Improvement Development
Agreement; (d) If Licensee researches and develops an Improvement of any Patent
or Patents on its own, and at its own sole cost and expense, it shall
immediately notify Licensor thereof and cooperate fully with Licensor in
patenting such improvement in Licensor's name, and Licensee shall be granted a
license with respect to such improvement at no additional charge.
1.4 Licensor shall provide reasonable telephonic and electronic mail ("e-mail")
support to Licensee on an as needed basis, during Licensor's regular business
hours.
1.5 Licensee may build clinics or other appropriate facilities in the Territory
for the operation of the proposed stem cell business as set forth herein at its
own cost and expense and choose any geographic site locations for the purpose of
administering, treating, selling (as limited herein), analyzing, and testing the
products for its own quality control purposes. Subject to availability of
personnel and scheduling to be mutually agreed, Licensor shall provide a
commercially reasonable amount of training for technicians at such facilities to
Licensee payable by Licensee at Licensor's cost plus a reasonable markup. During
the Initial Term and the Second Term, Licensor agrees to fully support Licensee
in these activities. Licensor agrees that with respect to each reimbursable cost
item it will first obtain written approval from Licensee before expending funds
for any cost item or items whose aggregate cost would exceed $1,000.00 in any
thirty day period.
1.6 Upon a Liquidity $20,000,000 Event, Licensee shall become the beneficial
owner of 20% of the Patents as set forth in Schedule A, as well as any and all
other Patents licensed to Licensee by Licensor in accordance with the terms of
this Agreement, with full title and all property rights thereto without any
further required action by Licensor or Licensee. Licensor agrees to take all
further actions and execute any and all additional documents necessary to
document and perfect Licensee's percentage ownership of the Patents.
Furthermore, if Licensor desires to offer any portion of the existing Patents
for sale, Licensee shall have the right of first refusal for such Patents on the
same or better terms as offered by any bona fide third party for such Patents
Licensor shall provide written notice to Licensee of any such bona fide offer to
purchase and Licensee shall have 30 days to elect to match such offer from the
date of receipt of the notice.
2. DUTIES OF LICENSEE
2.1 Licensor agrees to sell and provide and Licensee agrees to exclusively
purchase from Licensor all biological solution of stem cell Allo Transplant
materials from Licensor for a period of three years. For purposes hereof,
"Portion" shall be defined to mean that quantity of biological solution of stem
cell Allo Transplant materials required to treat one patient for one condition.
Such Allo Transplant materials shall be at a cost to Licensee of $6500 per
"portion", or such lower amount as shall hereafter be mutually determined
between Licensor and Licensee during such three year term. Such cost shall
remain the same during this period whether or not any such "portion" reflects
the existing patents or updated or improved stem cell technology from Licensor.
Licensor agrees that Licensee shall be the exclusive purchaser of such stem cell
Allo Transplant material during such period provided that Licensee purchases (or
refers customers to ICT for direct sale or treatment by ICT) a minimum of 60
"portions" in any given twelve month period. In the event that Licensor is
unable to provide all of the Allo Transplant stem cell materials requested by
Licensee during each year of the three year period, and subsequent to such three
year period, Licensee shall have the right to purchase Allo Transplant materials
from other vendors, subject to Licensor's absolute right, but not the duty, to
perform reasonable and timely quality control with respect to such biological
solution of stem cell materials, and Licensee shall cooperate fully with
Licensor. In the event that Licensee does not purchase the minimum quantities of
materials set forth herein, Licensor shall have the right to sell such materials
to other parties (but Licensee shall remain entitled to purchase portions at the
prices set forth herein). Licensee agrees to provide Licensor within 30 days of
execution of this Agreement an international irrevocable letter of credit (the
"Letter of Credit") in Licensor's favor for the three year term of this
requirement in the amount of One Hundred Twenty Thousand Dollars ($120,000.00)
from a reputable and chartered bank in the United States of America securing the
minimum purchase requirement set forth above. The Letter of Credit shall provide
that upon the failure by Licensee to purchase and failure to pay for the minimum
number of portions hereinabove set forth, Licensor shall be entitled to draw
upon the Letter of Credit at the rate of $2,000 for every portion less than the
minimum purchased without any further notice to or action by Licensee by
providing a notarized affidavit from Licensor to the bank advising of such
failure and drawing upon the Letter of Credit. In the event the Letter of Credit
is drawn upon during the three year period, Licensee agrees to replenish the
Letter of Credit to the extent of any such draws. Except with respect to this
paragraph relating to purchase of Allo Transplant materials from Licensor,
Licensee is not otherwise prohibited from using
any other persons' or entities' non-Allo stem cell product(s).
2.3 Licensee shall at all times during the Term of this Agreement be entitled
to maintain and defend the Patents and prosecute claims to prohibit any
interference with the Patents by third parties. If and in the event that the
Licensee becomes aware of any interference with the Patents by any party,
Licensee shall immediately notify Licensor thereof in writing, providing all
information known to Licensee or reasonably obtained by Licensee with respect to
such interference. In the event Licensee fails to notify Licensor of any such
material interference within 30 days of knowledge of such an interference,
Licensee's License rights as otherwise set forth herein in the particular State
(if in the United States of America) or Country (if elsewhere) shall be
terminable upon notice by Licensee.
2.4 Licensee shall be solely responsible for the organization, operation,
marketing and management of its business, and shall be responsible for the
development of its own ongoing method of business operation, including but not
limited to the following: selection and establishment of business sites; sales
techniques; marketing plan/system and advertising practices; employee selection,
hiring and training; personnel policies and practices; hours of operation; and
all other such ongoing concerns in the course of Licensee's routine business
operation and management. Licensee agrees that it is not subject to any control
by Licensor and is not relying upon Licensor for any assistance regarding the
aforementioned items in this paragraph, except for technological support as
hereinabove provided.
2.5 Licensee may file and/or record any and all necessary forms or
documentation relating to the operation of its business, including, but not
limited to, any state application for registration of fictitious name, but it is
specifically understood and agreed that Licensee shall under no circumstances be
permitted to file, record or register any trademark, tradename or other
identifying material of Licensor, or to utilize any of the foregoing in
connection with its promotion of the business and operations of the Licensee,
without the prior consent of the Licensor, in writing, the granting or
withholding of such consent shall be in the sole judgment and discretion of the
Licensor.
2.6 The Parties acknowledge and agree that no partnership or joint venture is
created by this Agreement and that Licensee may not, without prior approval,
hold itself out as an agent or representative of Licensor, and may not incur any
liability or create any obligation whatsoever for Licensor.
2.7 At all times Licensee shall conduct its business in accordance with all
material applicable federal, state and local laws, regulations and ordinances.
Licensee shall not, either during or after the Term of this Agreement, do
anything, or aid or assist any other party to do anything, which would
materially infringe on, harm, impair, or
contest the rights granted herein to Licensee with respect to the Licensee
Rights.
2.8 This Agreement shall in no way whatsoever affect the business activities of
the Licensor presently in operation in The Ukraine, the Dominican Republic and
any other operations of Licensor designated in the future as set forth in the
definition of "Territory" and shall not constitute any restriction upon such
activities.
2.9 Within 30 days of the execution of this Agreement, Licensee agrees to take
all action necessary to provide for the addition of seats on its board of
directors so that the number of directors shall be five (5) in total. During the
Term, Licensor shall have the right, but not the obligation, to appoint one
person of its choice to Licensee's board of directors.
3. TERM
3.1 Unless terminated in accordance with the terms of this Agreement, this
Agreement shall be effective as of the date of execution of this Agreement and
shall remain in effect for the remainder of the year 2005 and the Ten (10)
calendar year period thereafter ("Initial Term"). Provided that Licensee is not
in default in the payment of a material money obligation to Licensor in
accordance with the terms of this Agreement, and provided that this Agreement
has not previously been terminated in accordance with the provisions of
Paragraph 8.1 hereof during the Initial Term hereof, Licensee shall have the
right to renew such License and Agreement for an additional Ten (10) calendar
year period following the Initial Term by giving Licensor notice, in writing, of
its election to renew this Agreement, which such notice shall be given not more
than 180 days nor less than 60 days prior to the expiration of the Initial Term
of this Agreement. In the event Licensor determines that Licensee may not renew
this Agreement because of a default in the payment of a material money
obligation to Licensor, it shall immediately provide Licensee with notice of
such default and shall provide Licensee the right to cure such default within 60
days, upon satisfaction of which the election to renew this Agreement shall be
immediately effective.
4. PRICE AND PAYMENT
4.1 License Consideration. Licensee shall tender Licensor a total license fee
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(the "License Fee") consisting of Licensee's common stock (the "Common Stock")
in an amount equal to twenty percent (20%) of the Licensee's total issued and
outstanding common stock at the date of this Agreement on a fully diluted basis.
The Common Stock shall constitute "restricted securities" as such term is
defined in Securities and Exchange Commission Rule 144 and shall bear a
restrictive transfer legend on each certificate issued in connection with this
Agreement, and shall not be subject to any
securities registration rights except as stated in this paragraph. Licensee
shall at its sole cost and expense include such shares in the first registration
statement pertaining to Licensee's securities filed by the Licensee with the
United States Securities and Exchange Commission. The Common Stock shall be
issued to Licensor by Licensee within thirty (30) days following the effective
date of this Agreement.
4.2 Anti-Dilution. Pursuant to this paragraph, Licensor shall be provided with
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anti-dilution rights in order to maintain its percentage equity interest in
Licensee (taking into account the equity at the time of such event of the
officers and directors of Licensee at the time of execution of this Agreement
and taking into consideration any sales or other dispositions of common stock by
Licensor), in the event the current officers and/or directors of the Licensee
are issued additional shares of common stock of Licensee without delivering to
Licensee consideration for such shares (as reflected on the audited financial
statements of Licensee). However, these anti-dilution rights shall not apply to
any private placement or public capital raising activities of the Licensee and
other recapitalizations where current officers and directors of the Licensee may
purchase or otherwise acquire common stock of Licensee on the same terms offered
to other investors. Under such circumstances, Licensor shall be offered the same
opportunity to purchase or acquire Licensee's common stock at the same price and
terms as the proposed purchasers in such financing in order to maintain its then
percentage equity position as it relates to the position of the officers and
directors at the time of this Agreement (taking into consideration any sales or
other dispositions of common stock by Licensor), but shall not be obligated to
make such purchase. The anti-dilution rights shall terminate when (i) the
Licensee lists its common stock on any national securities exchange above the
over-the-counter bulletin board ("OTCBB"); or (ii) upon a Liquidity $20,000,000
Event.
4.3 Licensor and Licensee shall enter into an appropriate lockup agreement
pursuant to which Licensor agrees (upon either effective registration of the
Shares or upon the availability of an exemption from registration of the
Shares), Licensor and/or its designees or transferees will be permitted to sell
on public security markets during any 30 day period no more than the greater of
(i) 5% of the prior months total trading volume (shares sold times price of
shares sold) or (ii) 20,000 shares.
4.4 Unless the Shares have been otherwise registered for resale in accordance
with paragraph 4.1 hereof, and in the event that Licensor tenders any of the
Shares for removal of the legends required under Rule 144 on the Shares together
with (i) an affidavit that Licensor has met all of the requirements of Rule 144
and (ii) an opinion of legal counsel that such requirements have been met,
Licensee shall immediately instruct its transfer agent to remove the legend on
such tendered Shares in accordance with Rule 144. Provided however, that if
Licensee provides an opinion of
independent legal counsel that such removal is not permissible in accordance
with such Rule 144, Licensee shall have no such obligation to remove the legend.
In the event that Licensee fails to cause the removal of such legend as set
forth herein, without limitation to any other right of Licensor under law or
equity, Licensor shall have the right to seek specific enforcement of the
requirements of this paragraph 4.4 as well as any and all costs (including legal
fees) associated with such enforcement, and shall have the right to seek damages
equivalent to any and all lost profits caused by the failure of licensee to
remove the legend on the tendered shares as set forth herein.
4.5 Licensor shall in its sole and absolute discretion have the power to adjust
and/or modify its rights under this Agreement so as to achieve the most
favorable and advantageous tax consequences resulting to Licensor from this
Agreement and provided, that such modification shall not result in accrual of
any material negative consequence to Licensee.
5. NON-COMPETITION & NON-SOLICITATION
5.1 During the term of this Agreement, each of Licensor and Licensee shall not,
without the prior written consent from the other party, directly or indirectly
(including without limitation, through any affiliate of either party), (i)
solicit or request any person who is at the time an employee of or a consultant
of the other party to leave the employment of or terminate such person's
relationship with that party or (ii) employ, hire, engage or be associated with,
or endeavor to entice away from the applicable party any such person. Key
employees of the Licensor should be available to serve as Consultants to the
Licensee, and serve on the Corporate Advisory Board on terms which are
satisfactory to Licensor, Licensee and the employees of Licensor.
5.2 During the term of this Agreement, Licensor and Licensee shall not,
directly or indirectly (including without limitation, through any affiliate of
either party) (i) solicit any existing customer of the other party, (ii)
intentionally attempt to limit or interfere with any permitted business
agreement or relationship existing involving the other party and/or its
affiliates with any third party; or (iii) disparage the business reputation of
the other party (or its management team) or (iv) take any actions that are
harmful to the other party's goodwill with its customers, providers, vendors,
employees, the media or the public.
6. CONFIDENTIALITY
6.1 Neither Licensor or Licensee shall use or divulge or communicate to
any person (other than those whose province it is to know the same or as
permitted or
contemplated by this Agreement or with the written approval of the other party
or as may be required by law):
(i) any Confidential Information; or
(ii) any of the terms of this Agreement
6.2 Licensor and Licensee shall prevent the unauthorized publication or
disclosure of any such information, materials or documents and ensure that any
person to whom the information, materials or documents are disclosed is aware
that the same is confidential and is covered by a similar duty to maintain
confidentiality. Licensor and Licensee shall each employ its best efforts to
ensure that its directors, shareholders, employees, consultants, agents or
advisors are aware of and comply with the confidentiality and non-disclosure
provisions contained in this Section.
7. LEGAL RELATIONSHIP
7.1 Nothing herein shall contain any facts as to suggest that Licensor and
Licensee are engaging in a joint venture or partnership. Neither party shall
have any authority to bind the other to any legal obligation. Licensee shall
only contract with Customers on its own behalf.
7.2 In the event that Licensor or Licensee are acquired by another
entity, or there is a change of control within either Party, this Agreement
shall continue to exist, with all relative rights, privileges, titles, and shall
be assigned and transferred in its entirety to the new, successor or reorganized
entity.
8. TERMINATION
8.1 Licensor shall not terminate or limit Licensee's rights, except for
Licensee's material non-performance, which "non-performance" shall include (i)
failure to deliver the common stock within the time frame set forth in paragraph
4.1 hereof or to remove restrictive legends as provided herein, (ii) failure by
Licensee to have its common stock traded on a United States public securities
market (including without limitation the Over-the-counter Bulletin Board, the
Pink Sheets, the Nasdaq Stock Market, or the American Stock Exchange) within six
months of the date of this Agreement, (iii) Except in the case of a Liquity
$20,000,000 Event (in which case this shall not be a termination), the
commencement by or against Licensee of any voluntary or involuntary proceeding
under any bankruptcy, reorganization, arrangement, insolvency, readjustment or
debt, receivership, dissolution, or liquidation law or statute or any
jurisdiction, whether now or hereafter in effect; or the
adjudication of Licensee as insolvent or bankrupt by a decree of a court of
competent jurisdiction. In the event of non-performance, notified in writing by
Licensor at any time during the term of this Agreement and its extensions,
Licensee shall be allowed a cure period of thirty (30) days in which to cure its
non-performance and to implement a remedy deemed reasonably acceptable to
Licensor, which, if same is acceptable to Licensor, Licensor shall then promptly
and diligently prosecute to completion. The failure by Licensee to cure or
diligently prosecute a remedy accepted by Licensor to completion as aforesaid
shall result in termination without further notice or opportunity to cure.
8.2 This Agreement may be terminated by Licensee, upon sixty (60) days prior
written notice to Licensor if Licensor breaches any of its material obligations
under this Agreement and such breach is not cured within such sixty (60) day
period.
9. EFFECT OF TERMINATION On the termination of this Agreement:
9.1 The License grant and all rights and obligations of the parties hereunder
shall automatically terminate except for such rights of action as shall have
accrued prior to such termination and any obligation which expressly or by
implication may be intended to come into or continue in force on or after such
termination;
9.2 Licensee shall, (i) at its own expense, return to Licensor or otherwise
dispose of as Licensor may instruct, all technical and promotional materials and
other documents and papers whatsoever sent to Licensee and relating to the
Confidential Information, Products or the business of Licensor (other than
correspondence between the parties, copies of which shall be delivered to
Licensor) and all property of Licensor in Licensee's possession or under its
control, and (ii) immediately cease the use of the Patents and Confidential
Information
10. REPRESENTATIONS AND WARRANTIES OF LICENSOR
10.1 Licensor currently operates a stem cell biological solution producing
clinical treatment business and research facility from and in Kiev, The Ukraine.
10.2 Licensor warrants and represents that the Patents have been formally
granted by the government of The Ukraine and former USSR. All of the Patents
which are ultimately submitted for registration in the United States may be
contested and there is no guarantee that the Patents will not be challenged in
the future.
10.3 Licensor warrants and represents that Licensee is under no obligation to
purchase, lease, take possession of, or receive any products, equipment,
supplies,
services or assistance with which to start its business, either from Licensor or
from an entity recommended by Licensor, other than minimum annual purchase
requirements required pursuant to paragraph 2.1 hereof.
10.4 Licensor shall not, during the Term of this Agreement, do anything, or aid
or assist any other party to do anything which would infringe on, harm, impair,
or contest the License Rights granted herein except in the event of a breach of
this Agreement by Licensee, except that Licensor shall have the right to carry
on its research and clinical studies.
10.5 Licensor warrants and represents that the Patents, the Process and the
Products will provide the technology and information necessary to effectuate the
Licensee Business intended in this Agreement.
10.6 Licensor acknowledges the shares of common stock to be issued by the
Licensee and delivered to Licensor pursuant hereto will not be registered under
the Securities Act of 1933, as amended, Chapter 517, Florida Statutes, or any
other states' securities laws. The shares are issued under applicable exemptions
from the securities registration requirements of such statutes. The exemptions
being claimed include, but are not necessarily limited to, those available under
Section 4(2) of the Securities Act and Section 517.061(11) Florida Statutes;
and, the reliance by the Licensee upon the exemptions from the securities
registration requirements of the federal and state securities laws is predicated
in part on the representations, understandings and covenants set forth in this
Agreement.
10.7 Licensor acknowledges and agrees that in connection with the issuance of
Licensee's common stock, Licensor will execute a stock subscription agreement in
the form annexed hereto as Schedule D.
11. INTELLECTUAL PROPERTY RIGHTS
11.1 All Intellectual Property Rights, including without limitation patents,
designs, utility models, copyrights, trade or service marks, trade secrets and
other proprietary information, in or relating to the Patents and Products and
any other products and services, without respect to whether it is under the
license hereunder or otherwise provided by or used by Licensee with Licensor's
permission, or related thereto and all improvements thereto are and shall remain
the sole and exclusive property of Licensor. Except as otherwise provided in
this Agreement, Licensee shall have no right to use or obtain for its own
benefit or grant any licenses with respect to the Patents or Products, or any
other related products or services or any of the Patents therein or relating
thereto.
12. MISCELLANEOUS
12.1 Licensee and Licensor each shall conduct its business in material
compliance of all applicable laws, ordinances, regulations and other
requirements of any federal, state, county, municipal or other government and
will obtain all necessary permits, licenses or other consents for the lawful
operation of its business, the failure of which would have a material adverse
impact on the business of such party.
12.2 Notices. Any notice, demand or delivery to be given or to be served upon
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any party in connection with this Agreement must be in writing, and must be
given by a recognized international courier (e.g., DHL or Federal Express) and
shall be deemed to have been received on the date such notice is placed with
such international courier or, if given otherwise than by international courier,
it shall be deemed to have been received on the date that it is personally or
directly delivered to the party to whom it is addressed. Such notices, as
provided herein, shall be given to the parties hereto at the following address:
Licensor: INSTITUTE OF CELL THERAPY ("ICT") ▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Licensee: STEM CELL THERAPY INTERNATIONAL CORP.
▇▇▇▇▇▇ ▇▇▇, Chairman
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Any party hereto may at any time by giving ten (10) days' prior written
notice to the other party hereto, designate any other address in substitution of
the foregoing address to which such notice shall be sent.
12.3 Licensee and Licensor acknowledge that the parties have not intended to
create a franchise relationship between themselves and that Licensor has not
represented this licensing arrangement to be a "franchise" as defined in 16
C.F.R. 436 et. seq., or as defined in any applicable state franchise laws,
prior to or during the negotiation of this Agreement. The parties acknowledge
that the Licensor has made no representation that any form of business
operations or management plan, manual, or advice, or any marketing plan or
system, would be provided to or necessarily implemented by Licensee. Licensee
acknowledges that Licensee has not been provided with, or required under the
terms of this Agreement to adopt or utilize any marketing plan or system, nor
has Licensor prescribed to Licensee, in whole or in
part, any form of marketing plan or system in relation to this Agreement.
Licensee further acknowledges that Licensee has not been required under the
terms of this Agreement to adopt the business format of, or a business format
substantially similar to the business format utilized by Licensor. The parties
agree that in the event it is determined that a franchise agreement has been
entered into by the parties, the Licensee acknowledges that it has received the
necessary information from the Licensor as required by the Federal Trade
Commission; further that Licensor has made no representations relating to the
potential income from operations by Licensee and that a copy of this Agreement
was furnished to the Licensee at least five (5) days prior to the execution
hereof.
12.4 This Agreement contains the entire agreement of the parties and no
representations, inducements, promises or agreements, oral or otherwise, between
the parties not embodied herein shall be of any force or effect. No failure of
Licensor to exercise any power given it hereunder, or to insist upon the strict
compliance of Licensee of any obligation hereunder, and no custom or practice of
the parties at variance with the terms hereof shall constitute a waiver of
Licensor's right to demand exact compliance with the terms hereof.
12.5 This Agreement shall be governed by and construed solely and exclusively in
accordance with the laws of the state of New York without regard to any
statutory or common-law provision pertaining to conflicts of laws.
12.6 The Parties agree that all controversies, claims, disputes and matters in
question arising out of, or related to, this Agreement, the breach of this
Agreement, the purchase of the Licensee's securities pursuant to this Agreement
or any other matter or claim whatsoever shall be decided by courts of competent
jurisdiction in New York, New York, to the exclusion of all other places of
venue, for all matters that arise under this Agreement.
12.7 If Licensor creates new Intellectual Property which is not an improvement,
modification or alternation to the Technology reflected herein and which is
related in any way whatsoever to Stem Cell therapy or research, Licensee shall
have a right of first offer to obtain an exclusive license to such new
Intellectual Property provided, both parties can reach an acceptable agreement
concerning the price, and shall have a right of first refusal to accept any
license with respect to such new Intellectual Property which is made to any bona
fide third party on the same or better terms and conditions as proposed by such
third party.
12.8 In the event it becomes necessary for either party herein to seek legal
means to enforce the terms of this Agreement, the prevailing party is entitled
to payment of all of its reasonable attorneys' fees, costs and expenses,
including any cost reasonably and necessarily incurred by the prevailing party
as a necessary incident to
not be an adequate remedy for any breach or threatened breach of any of the
provisions of this Agreement and that, in such event, they may, in addition to
any other rights and remedies existing in their favor, apply to any court of
competent jurisdiction in New York, New York for specific performance,
injunctive and/or other relief in aid of arbitration to preserve and protect the
rights of the parties pending action by the arbitration panel.
12.10 This Agreement may be executed in several counterparts, each of which
shall be deemed an original. A facsimile signature on this agreement shall be
deemed to be an original.
12.11 The parties agree that each has participated equally in the creation and
drafting of this Agreement, and that each party to this Agreement has had the
opportunity to seek independent legal counsel prior to entering into this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth above.
"LICENSOR"
INSTITUTE OF CELL THERAPY
By:____________________
▇▇▇▇ ▇▇▇▇▇▇▇, President
"LICENSEE"
STEM CELL THERAPY INTERNATIONAL CORP.
By:______________________
▇▇▇▇▇▇ ▇▇▇, Chairman
Schedule A
AUTHORS OF THE MONOGRAPH POSSESS
THE FOLLOWING PATENTS
AND METHODICAL GUIDES:
1. Patent ~560613. The method of erythrocytes preservation 1977 1975
USSR
2. Patent ~645633. The method of blood leukocytes preservation 1978 1977
USSR
3. Patent ~825081. The method of blood leukocytes preservation 1981 1979
USSR
4. Patent ~1017251. The method of a human ovary tissue preservation 1981
1979USSR
5. Patent ~1410954. The method of treatment of anemias in pregnant 1983
1981 USSR
6. Patent ~1 3709. The method of treatment of anemias in pregnant 1997
1997Ukraine
7. Patent ~1402781. The container for freezing of biological objects
1988
1985 USSR
8. Patent ~8457. The container for freezing of biological objects 1997 1997
Ukraine
9. Patent ~1 706502. The method of preservation of human embryonic liver
hemopoietic cells 1988 1986 USSR
10. Patent ~13687 The method of preservation of human embryonic liver
hemopoietic cells 1991 1989 Ukraine
11. Patent ~1 734621. Cryoprotector of hemopoietic cells 1997 1989 USSR
12. Patent ~16859. Cryoprotector of hemopoietic cells 1995 1993 Ukraine
13. Application 93080788. The method of human immunodeficiency virus
treatment (HIV) 1995 1993 Ukraine
14. Application 93090874 The method of treatment of cytostatic disease
1997 1995 Ukraine
15. Application 93251432. The method of treatment of pancreatic diabetes
▇▇▇▇ ▇▇▇▇▇▇▇
16. Application 93121711. The method of treatment of aplastic anemias 1994
Ukraine
17. Application 95125139. The method of prevention of an acute radiation
sickness in
lethally radiated animals 1993 1993 Ukraine
18. Patent ~22981. The method of treatment of cerebral motional defects in
patients
who have undergone craniocerebral injury 1997 1993
Ukraine
19. Patent ~ 46673 . The method of cryo-preservation of human hemopoietic
cells
1997 1995 Ukraine
20. Patent ~ 2233589 The method of cryo-preservation of human hemopoietic
cells 2004 2002 Russia
21. Patent ~ 46675 A. The way of a low-temperature cell bank operating 2003
2002 Ukraine
22. Patent ~ 52502 A. The method of therapy of prostate gland cancer 2003
2002Ukraine
23. Patent ~ 56085 A. The method of obtaining a preparation of suspension of
placenta cells 2003 2003 Ukraine
24. Patent ~ 59096 A. The method of biological preparations obtaining from
placenta (variants) 2003 2003 Ukraine
25. Patent ~ 60238 A. The cryopreservative content of hemopoietic cells of
donors' cord blood and its components 2003 2003
Ukraine
26. Patent ~ 63844 A. Device for registration of processes in biological
tests
2003 2003 Ukraine
SCIENTIFIC-PRACTICAL WORKINGS-OUT ARE RESERVED BY COPYRIGHTS:
1. .-., , , -
( ). - . - : , 2004. -
250 .
2. , .-., , . - :
- , 2004. -136 .
3. Certificate ~ 511 The method of treatment of severe vascular
pathology of an organ of vision, inflammatory and dystrophic eyes diseases with
the help of transplantation of cryopreserved hemopoietic human embryonic liver
cells, and application of biologically active compounds of embryonic tissues .
4. Certificate ~ 1238 G.S. Lobyntseva. Dissertation on obtaining of a
doctor's degree in biology upon a theme: Cryopreservation of hemopoietic cells
of human embryonic liver .
5. Certificate ~ 2073 Cryopreservation of testicles tissue of human
fetuses for clinical application .
6. Certificate ~ 4952 Guide to purveyance and cryopreservation of
hemopoietic
human cells and Instruction on usage of hemopoietic cells .
The medical staff is represented by workers who have scientific degrees of
doctors and candidates of sciences, the State prize laureates, professors and
assistant professors in all areas of clinical therapy.
SCHEDULE B
TREATMENT
Biological preparations can produce a positive effect on age-related and
posttraumatic pathologies:
Cardiovascular system diseases: myocardial infraction, cerebral atherosclerosis,
essential hypertension, ischemic heart disease, neurocirculatory dystonia.
Systemic diseases of connective tissue: atrophic arthritis, systemic angitis,
systemic lupus, systemic scleroderma, and rheumatism.
1. Respiratory diseases: bronchial asthma, bronchitis, chronic pneumonias.
2. Diseases of the digestive tract: gastric and duodenal ulcer, nonspecific
ulcerative colitis, cholecystites, pancreatites, and colitis.
3. Liver diseases: cirrhosis, viral and toxic hepatitis, acute and chronic
renal-hepatic insufficiency.
4. Kidney and urinary tract diseases: pyelonephritis, cystitis, urethritis,
urolithiasis.
5. Endocrine diseases: diabetes of types I and II, hypothyroidism,
suprarenal insufficiency, diabetes complication, endocrine derangements.
6. Obstetrics and gynecology: premature detachment of the normal placement
of the placenta, pre-term delivery, toxicosis of pregnancy, miscarriage, fetal
hypotrophy, immunological conflict, endomethriosis, sterility, menopause,
climacteric neuroses, chronic inflammatory genital diseases.
7. Diseases of the nervous system: migraine, cerebral spastic infantile
paralysis, neuralgias, polyneuropathies, radiculopathies, neuritis, consequences
of a cranio-cerebral trauma, encephalitis and stroke.
8. Oncological diseases of the central nervous system.
9. Cerebral atrophic processes of different genesis.
10. Epilepsy and spastic syndromes of children and adults.
11. The consequences of cerebral strokes.
12. Huntington's chorea, ataxias.
13. Atherosclerosis, multiple sclerosis with spinal cord lesions.
14 ▇▇▇▇▇▇▇▇▇'▇, Alzheimer's, Down's, Strumpell's diseases.
15 Serious traumas of the spinal cord and cerebrum.
16 Surgical diseases: osteomyelites, fractures (long term), reconstructive
operations on bone tissue for various traumas and surgical interventions.
17. Malignant neo-plasms.
18. Immuno-deficiencies.
19. AIDS.
20. Infectious diseases.
21. Allergic and auto-immune diseases.
22. Blood diseases: anemia, leukopenia, thrombocytopenia, leukemia,
hemoblastosis.
23. Skin diseases: psoriasis, eczema, trophic ulcers, decubituses,
neurodermatitis, consequences of endured venereal diseases.
24. Ocular diseases.
25. Ear, throat, and nose diseases.
26. Dental and oral cavity diseases.
27. Mental diseases and sexual disorders: depression, irritation,
aggression, apathy, sleep and memory disorders.
28. Male and female sexual pathology: impotency, sterility, decrease of
potency and libido.
29. Long-term chronic diseases of the internal organs.
30. Gerontology.
31. Rejuvenation: increase of vitality, slowing down of pre-senility, life
prolongation, memory improvement, and the improvement over quality of life.
SCHEDULE C
Form of Subscription Agreement
