CONTRACT
on realization the "TISSUE BONDING" project
This contract entered into on this 9 day of July, 1996 by and among:
1. CSMG
Consortium Service Management Group, Inc. of Corpus Christi, Texas, USA 000 X.
Xxxxx Xx., Xxx. 000 X. Xxxxxx Xxxxxxx, Xxxxx 00000 XXX (hereinafter referred to
as "CSMG".)
2. IAW
International Association "Welding" has been established and now operates in
accordance with the Ukrainian legislation; the headquarters' legal address is
Xxxxxxx, 000000, Xxxx, Xxxxxxxx xxx., 00 (hereinafter referred to as "IAW") Both
sides hereinafter together referred to as "Parties".
PREAMBLE
(A) As the X.X. Xxxxx Institute of Electric Welding of the National Academy of
Sciences of Ukraine, Clinical and Experimental Surgery Institute and "Ohmadet"
(Mother and Child Care) Scientific Medical Center, represented by IAW, have
valuable information, "know-how" and patentable works that have been developed
during several years in the sphere of tissue bonding for the various functional
purposes and it was confirmed by CSMG experts; (B) As CSMG has a great
experience in arranging and financing the works for joint projects in order to
bring the latest inventions up to the marketable level, (C) As on October 25,
1995 the EXCLUSIVE RIGHTS, NON DISCLOSURE AND NON CIRCUMVENT AGREEMENT (Addendum
1) was signed in order to receive financial assistance from CSMG needed for
realizing the "Tissue Bonding" project;
The "Non Disclosure Agreement" was signed on February 8, 1996
(Addendum 1) (D) As CSMG has organized this financial assistance as it had been
described in the Agreement (C); (E) As CSMG in cooperation with the American
scientists and specialists is ready to cooperate with IAW which represents the
temporary scientific team of Ukrainian scientists and specialists in order to
improve the technology and equipment, provide research, testing, patenting,
marketing, manufacture, licensing, servicing and distribution of the products to
be manufactured within the "Tissue Bonding" project; (F) As the Parties have
developed the program of joint works (Addendum 2) they are ready to work
together as a joint Ukrainian-American team in order to find commercial
application of the technique; (G) As IAW is the Association of the Research
Institutes, industrial enterprises and medical organizations and one of the
IAW's purposes is providing assistance to its members for the international
cooperation; and one of the IAW founders is the X.X. Xxxxx Institute of Electric
Welding of the National Academy of Sciences of Ukraine; (H) As in this Contract
IAW acts on behalf of the Xxxxx Institute of Electric Welding and "Ohmadet";
Thus, the Parties reached the following agreement:
1. THE PURPOSE AND THE SUBJECT OF THE CONTRACT
The purpose of this Contract is to realize The "Tissue Bonding" project by
arranging the cooperation between the Ukrainian and American Scientists and
specialists.
The objective of this cooperation is to continue the works by the Parties in
Kiev, Ukraine and USA based on the attached program for the realization of
researching, patenting, testing, manufacturing, marketing,
Exhibit 10.3
Page 1 of 6 Pages
distribution and service of the Tissue Bonding technology and equipment; and to
bring the Tissue Bonding equipment to market as quickly as possible, joint
continuation of the development and enlargement of the spheres of the Tissue
Bonding method usage and improvement of the equipment and tools.
2. DEFINITION
(A) LIVE BIOLOGICAL TISSUE BONDING. The Xxxxx Institute of Electric Welding
together with the experimental department of the Clinical and Experimental
Surgery Institute and the microsurgery department of the "Ohmadet" Scientific
Medical Center have developed the method and equipment allowing to provide soft
biological tissues bonding without additional materials such as surgical
threads, glues, etc. The tissue bonding method employs an appliance, equipment
and tools, micro surgical experience to perform seamless bonding of soft
biological tissue. The method is characterized by use of the specialized
equipment, instruments and interchangeable manipulation surgical tools
applicable for different surgical operations.
(B) TISSUE BONDING PROJECT. The joint project to be done by both Parties with
the involvement of other organizations is to bring the method, equipment,
instruments and tools for tissue bonding to fruition as viable market product
and to provide further development of the method and to enlarge the sphere for
its usage.
(C) PRODUCTS TO BE RECEIVED ON THE -TISSUE BONDINGPROJECT. Energy supply
equipment with computer control, specialized surgical tool with a device for its
connection to the energy supply equipment, the technique of surgical operations
on different tissues and reports on the
performed researches.
(A) This Contract is effective on the date of the first monthly funding set
forth in numerical xxxxxxxxx 0.X, xxxxx, delivered by CSMG and shall be
completed after fulfilling the works on the agreed program which describes the
contractors' responsibilities. Annually all the works performed shall be
described in the annual report signed by the Parties and then the Parties work
out a new work plan for the following year within the Program framework.
(B) The Contract shall be renewed automatically annually and the Parties agree
that the amount of, and need for, funding will be reviewed by both Parties on an
annual basis after signing the documents about the works that will have been
completed by that time and according to the agreed new work plan for the
following year with all the necessary changes in order to reach the purposes of
this Contract.
4. CONTRACT COST
For the rights acquired hereinafter and described below CSMG shall fund the
"Tissue Bonding" project realization.
(A) CSMG shall transfer to the IAW's bank account during the first year of work
on the Contract the monthly amount USD 16 217 (sixteen thousand two hundred
seventeen) for the direct expenses on the "Tissue Bonding" project according to
the calculations (Addendum 3). This amount may be changed taking into account
all the necessary amendments described in 3.B.
(B) Payments on this Contract shall be transferred at the beginning of every
month by CSMG in US dollars only to the IAW's bank account:
hard currency account # 3433180400 at the State Export-Import Bank of Ukraine.
0, Xxxxxxxxxx xxx, Xxxx 000000, Xxxxxxx. Correspondent account of the State
Export Import Bank of Ukraine: CITIBANK N.A. NEW-YORK 00000000 or CREDIT
LYONNAIS, NEW-YORK BRANCH CORR.ACC. N 01-32726-001-00.
5. RIGHTS OF THE PARTIES
Exhibit 10.3
Page 2 of 6 Pages
(A) CSMG will have an exclusive right to market, manufacture, distribute,
license and service the products of the "Tissue Bonding" project, servicing and
licensing on the territory described below.
CSMG can give the above mentioned rights in this agreement between both Parties
to the organization that provides financing for this project only (L Group) but
without giving those rights any other Party.
(B) CSMG will have the rights to use the patents described in the Addendum 4 on
the territory mentioned below.
CSMG can give the above mentioned rights in this agreement between both Parties
to the organization that provides financing for this project only (L Group) but
without giving those rights any other Party.
(C) X.X.Xxxxx Institute of Electric Welding and/or its scientist will assign the
patents described in the Addendum 4 to CSMG. Patents shall be issued in the name
of X.X.Xxxxx Institute of Electric Welding.
(D) IAW shall have the exclusive rights to provide all the bank and customs
operations on the territory of Ukraine.
(E) The Parties shall have the equal rights to divide the revenues received from
the realization "Tissue Bonding" project equally in accordance with Paragraph 8
of this Contract.
(F) The Parties shall have equal rights to the patents which will be obtained as
a result of further joint research work on "Live Tissue Bonding".
(G) The Contracts for commercial distribution of the products of the "Tissue
Bonding" project shall be signed by both Party.
JH) If the financing from CSMG for the researches on this project will be
stopped before the appointed time, the rights described in paragraphs 5.A and
5.C will be cancelled after two months if the problem is not solved.
6. TERRITORY
The territory on which this Contract is effective and gives to CSMG the
exclusive rights to test, market, manufacture, license, service, and otherwise
distribute the developments of the Tissue Bonding project first shall be the
United States of America and Europe, but CSMG shall have the priority right for
the immediate participation in the markets of the other parts of the world, once
the country markets are identified as economically viable and are agreed to by
both sides.
7. PATENTS
CSMG at its expense shall arrange to initiate and complete a patent search and
patent application in the USA for the method, equipment and their application.
The parties agree that patents shall be issued in the name of X.X.Xxxxx
Institute of Electric Welding and/or the inventors named by X.X.Xxxxx Institute
of Electric Welding. All patents and patents rights shall be assigned to CSMG.
8. REVENUE SHARING
Revenues received by CSMG from an organization which has received the rights in
compliance with Paragraphs 5(A) and 5(B) from all types of the Tissue Bonding
project sales, marketing, manufacturing, licensing and other distribution of
Tissue Bonding products, realization of the further patents, assigning of
"know-how" and other distributions, including all types of equipment shall be
divided equally between the Parties.
Exhibit 10.3
Page 3 of 6 Pages
9. ADDITIONAL RESPONSIBILITIES
In addition to other responsibilities of CSMG noted, herein, CSMG shall: (A)
Arrange for patent search in the United States (and subject to later
agreement of Parties re: countries);
(1) arrange to make application for patent in the United States of America (and,
subject to later Agreement of parties re: other countries);
(2) arrange to bring personnel, equipment and product from Kiev, Ukraine to
Louisville, USA;
(3) arrange for the expenses of the Ukraine personnel for travel, food and
lodging while in the United States;
(4) initiate the "Tissue Bonding" project in general accordance with the process
outlined in the Addendum 2 for 1996 and the agreed plans for every following
year. (B) In addition to other responsibilities noted here IAW on behalf of
X.X.Xxxxx Institute of Electric Welding shall:
(1) prepare and forward to CSMG a complete set of Tissue Bonding full
information about the tissue bonding method sufficient to enable a patent search
and application;
(2) arrange for appropriate personnel to go to United States to demonstrate the
equipment and work with patent attorney and deliver a prototype to United States
for use; one sample will be handed over to CSMG free of charge, the other sample
will be returned to Ukraine.
(3) mutually cooperate with the research and manufacturing group that CSMG has
arranged in the development of tools, equipment design and enhancement of the
project. (C) In addition IAW shall:
(1) arrange the realization of fundings from CSMG for fulfilling this project;
(2) arrange the legal support of the project in accordance with the legislation
of Ukraine, including signing contracts and agreements for fulfilling the works
on this projects;
(3) arrange information updating communications between the Parties;
(4) arrange verification of use of funds with CSMG on a monthly basis in
accordance with the Addendum 2;
(5) arrange business trips and receive the specialists working on the project.
10. CONFIDENTIALITY
The conditions of confidentiality that were described before in the
Agreements (Addendum 1) shall remain valid for this Contract.
11. FORCE-MAJEUR SITUATIONS
(A) Neither Party is responsible for the failure to realize the project or for
the delay in realization the responsibilities described in this Contract, in
case
Exhibit 10.3
Page 4 of 6 Pages
when a breach of the obligations or delay is caused directly or indirectly by
any
force-majeur situation.
(B) The following circumstances are considered to be force-majeur though they
are not limited only by the circumstances mentioned below (on the condition that
such a situation is caused by the described hereabove in paragraph XXX): o fire,
flood, explosions, accidents, social unrest, breach of the peace, lockouts,
wars and other critical situations, Government resolutions; o any damages of the
main equipment that cause closing of the enterprises; or o any industrial
conflict, strike, lockout or other situations that can not be
controlled by the Party.
(C) The Party that announces about the force-majeur situation shall inform the
other Party immediately in writing and shall do its best to ease the situation
and continue its responsibilities.
(D) If the force-majeur situation continues and, probably, will continue for
more than two months, the Party that was not informed about the force-majeur
situation may terminate the Contract in 30 days after a written notification
about its intentions.
(E) In case if the force-majeur situations affect the possibilities of one of
the Parties to meet its responsibilities, the fulfillment by the Parties of
their responsibilities shall be suspended till the moment of termination the
force-majeur situation. In this case none of the Parties will be responsible for
the breach of its duties during this period.
(F) After the elimination of the force majeur situation the Parties may consider
this Contract resumed; all the specific conditions making for resumption of this
Contract after the force-majeur situation shall be described in the minutes
subject to approval by both Parties.
12. OTHER CONDITIONS
(A) Any amendments in this Contract must be applied in writing and signed by
authorized representatives of both Parties.
(B) IAW will conduct the works for this Contract by signing contracts and work
agreement with organizations and physical persons.
(C) A list of equipment and conditions of its supply which will have to be
shipped, pursuant to the Contract, from the US to Ukraine and from Ukraine to
the US will be agreed upon in writing in the process of work and included
additionally in Addendum 5, which is part of this Contract. 13. JURIDICAL
ADDRESSES
CSMG CONSORTIUM SERVICE MANAGEMENT GROUP, INC. 000 X. Xxxxx Xx., Xxx. 000 X.
Xxxxxx Xxxxxxx, Xxxxx 00000 XXX with representation office in Kiev CSMG bank
account: BANCFIRST, Oklahoma City, Oklahoma, USA, Account # 000 000 0000 Tel:
(000) 000-0000 Fax: (000) 000-0000 Tel/Fax in Kiev: (000) 000-0000 Xxxxxx X.
Xxxxxxx, President and C.E.O.
IAW INTERNATIONAL ASSOCIATION "WELDING"
Xxxxxxx, 000000, Xxxx Xxxxxxxx xxx., 00 Tel: (000) 000-0000 Fax: (000) 000-0000
Xx. Xxxx X. Xxxxxxx, IAW representative.
This Contract has been prepared by the Parties in two copies in the Russian and
in the English languages.
Exhibit 10.3
Page 5 of 6 Pages
IAW CSMG Date Date
Chairman of the IAW
Board President,// A Academician a B.E. Xxxxx x x Xxxxxx X. Xxxxxxx
Executive Director
X.X. Xxxxxxxxxxx
Exhibit 10.3
Page 6 of 6 Pages
