FIRST AMENDED AND
RESTATED
LICENSE AGREEMENT
BETWEEN
MEDISTEM LABORATORIES,
INC.
AND
INSTITUTE FOR CELLULAR
MEDICINE
DATED NOVEMBER 10,
2006
TABLE OF CONTENTS
Page
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1.
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DEFINITIONS
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1
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2.
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REPRESENTATIONS AND WARRANTIES
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3
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2.1
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Representations and Warranties of Both
Parties
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3
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2.2
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Representations and Warranties of
Medistem
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4
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2.3
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Representations and Warranties of
Licensee
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4
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3.
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DEVELOPMENT PROGRAM
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5
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3.1
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Generally
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5
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3.2
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Specific Licensee Responsibilities
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5
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3.3
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Medistem Activities
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6
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3.4
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Regulatory Matters
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6
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3.5
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Funding.
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7
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3.6
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Liability
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7
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3.7
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Termination
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7
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4.
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GRANT OF RIGHTS; MARKETING
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7
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4.1
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Development License
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7
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4.2
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Commercialization License
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7
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4.3
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Sublicensing.
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7
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4.4
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Marketing Obligations, Rights
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8
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4.5
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Trademarks
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8
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5.
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FEES
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8
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5.1
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Fees
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8
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6.
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REPORTS
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8
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6.1
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Reports
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8
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6.2
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Mode of Payment
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8
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6.3
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Records Retention
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8
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6.4
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Audit Request
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9
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6.5
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Cost of Audit
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9
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6.6
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Taxes.
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9
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7.
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OWNERSHIP; PATENTS
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9
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7.1
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Ownership
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9
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7.2
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Patent Maintenance.
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10
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TABLE OF CONTENTS
(continued)
Page
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7.3
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Patent Enforcement.
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10
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7.4
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Infringement Action by Third Parties
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11
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8.
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PUBLICATION; CONFIDENTIALITY
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12
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8.1
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Notification
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12
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8.2
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Review
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12
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8.3
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Exclusions
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12
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8.4
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Confidentiality; Exceptions
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12
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8.5
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Exceptions to Obligation
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13
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8.6
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Limitations on Use
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13
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8.7
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Remedies
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13
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9.
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INDEMNIFICATION
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13
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9.1
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Indemnification by Licensee
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13
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9.2
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Indemnification by Medistem
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14
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9.3
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Notice of Indemnification
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14
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9.4
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Complete Indemnification
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15
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10.
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TERM; TERMINATION
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15
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10.1
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Term
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15
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10.2
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Termination for Cause
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15
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10.3
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Effect of Expiration or Termination.
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15
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10.4
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Accrued Rights; Surviving Obligations
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15
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11.
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FORCE MAJEURE
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16
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11.1
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Events of Force Majeure
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16
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12.
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MISCELLANEOUS.
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16
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12.1
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Relationship of Parties
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16
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12.2
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Assignment
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16
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12.3
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Books and Records
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16
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12.4
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Further Actions
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16
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12.5
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Notice
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17
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12.6
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Use of Name
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17
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12.7
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Public Announcements
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17
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12.8
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Waiver
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17
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TABLE OF CONTENTS
(continued)
Page
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12.9
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Compliance with Law
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18
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12.10
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Severability
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18
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12.11
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Amendment
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18
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12.12
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Governing Law.
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18
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12.13
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Arbitration
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18
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12.14
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Entire Agreement
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18
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12.15
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Parties in Interest
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19
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12.16
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Descriptive Headings
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19
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12.17
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Counterparts
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19
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FIRST AMENDED AND RESTATED
LICENSE AGREEMENT
THIS FIRST AMENDED AND RESTATED
LICENSE AGREEMENT (this “Agreement”), dated as of
November 10, 2006, is entered into by and between Medistem
Laboratories, Inc., a corporation organized and existing under the
laws of Nevada, having offices located at 2027 E Cedar St. #102,
Tempe, AZ 85281 (“Medistem”), and Institute for
Cellular Medicine, a company organized and existing under the laws
of Costa Rica, having offices located at the Guimel Building, San
Jose, Costa Rica (“Licensee”). This Agreement hereby
amends and restates and replaces in its entirety the License
Agreement previously entered into between Licensee and Medistem,
dated February 23, 2006 (the “Original
Agreement”).
PRELIMINARY
STATEMENTS
A. Medistem
owns the rights to the Patents and Know-How in existence as of the
Effective Date relating to the Invention.
B. Licensee
has the personnel, facilities and expertise necessary for the
development and commercialization of the Product in the
Territory.
C. Licensee
wishes to perform all of the functions required to develop and
commercialize the Product in the Territory, and Medistem wishes to
license Licensee do so, upon the terms and subject to the
conditions set forth in this Agreement. In connection therewith,
Licensee desires to obtain, and Medistem desires to grant to
Licensee, an exclusive license under the Licensed Technology with
respect to the commercialization of the Product in the Territory
for applications in the Field, subject to Medistem’s right to
manufacture and supply post-natal and adult stem cells for
Licensee, all on the terms and subject to the conditions set forth
below.
D. Simultaneously
with the execution of the Original Agreement, the Parties entered
into that certain Equipment Lease Agreement (the “Equipment
Lease Agreement”) and the documents ancillary thereto, all
dated as of the date of the Original Agreement, pursuant to which
Licensee is leasing certain equipment from Medistem for use in
Licensee’s operations.
NOW, THEREFORE, in consideration of
the foregoing Preliminary Statements and the mutual agreements and
covenants set forth herein, the Parties hereby agree as
follows:
As used in this Agreement, the
following terms shall have the meanings set forth in this
Section 1 unless context dictates otherwise:
1.1 “
Affiliate ,” with respect to any Party, shall mean any
entity controlling, controlled by, or under common control with,
such Party. For these purposes, “control” shall refer
to: (i) the possession, directly or indirectly, of the power
to direct the management or policies of an entity, whether through
the ownership of voting securities, by contract or otherwise, or
(ii) the ownership, directly or indirectly, of at least 50% of
the voting securities or other ownership interest of an
entity.
1.2 “
Confidential Information ” shall have the meaning
assigned to such term in Section 8.4.
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1.3
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“ Effective Date
” shall mean the date of this Agreement.
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1.4 “
Equipment Lease Agreement ” shall have the meaning
assigned to such term in the Preliminary Statements.
1.5 “
Field ” shall mean the therapeutic treatment of
various medical conditions in humans.
1.6 “
First Commercial Sale ” shall mean the first sale for
use or consumption by the general public of the Product in the
Territory.
1.7 “
IND ” shall mean any filing made with the Regulatory
Authority in the Territory for initiating clinical trials in such
country with respect to the Product.
1.8 “
Invention ” shall mean any new or useful process,
manufacture, compound or composition of matter relating to the
Product (including, without limitation, the formulation, delivery
or use thereof), whether patentable or unpatentable, or any
improvement thereof, that is conceived or first reduced to practice
or demonstrated to have utility during the term of this
Agreement.
1.9 “
Know-how ” shall mean any and all Inventions,
improvements, discoveries, claims, formulae, processes, trade
secrets, technologies and know-how (including confidential data and
Confidential Information) that is generated, owned or controlled by
Medistem at any time before or during the term of this Agreement
relating to, derived from or useful for the use or sale of the
Product, including, without limitation, synthesis, preparation,
recovery and purification processes and techniques, control methods
and assays, chemical data, toxicological and pharmacological data
and techniques, clinical data, medical uses, product forms and
product formulations and specifications.
1.10 “
Licensed Claim ” shall mean any claim of any Patent
that relates to and is necessary for the use and sale of the
Product, which claim has not been held invalid or unenforceable by
decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed
for appeal, and which is not admitted to be invalid through
disclaimer or otherwise not admitted by Medistem to be
invalid.
1.11 “
Licensed Technology ” shall mean the Licensed Claims
and Know-how, collectively.
1.12 “
Pre-tax Income ” shall mean income from continuing
operations as such term is commonly defined using generally
accepted accounting principles in the United States, as computed on
a quarterly basis. Such amounts shall be determined from the books
and records maintained by Licensee, its Affiliates or Sublicensees,
as applicable.
1.13 “
Party ” shall mean Medistem or Licensee and, when used
in the plural, shall mean Medistem and Licensee.
1.14 “
Patents ” shall mean the provisional patent
application described on Exhibit A attached hereto,
and any other patents or patent applications owned or controlled by
Medistem during the term of this Agreement that relate to the
Product, together with any patents that may issue therefore,
including any and all extensions, renewals, continuations,
continuations-in-part, divisions, patents-of-additions, reissues,
supplementary protection certificates or foreign counterparts of
any of the foregoing.
1.15 “
Product ” shall mean all infusion quality adult stem
cells for use in the Field, the manufacture, use or sale of which
either is: (i) based upon, derived from or related to any of the
Know-how; and/or (ii) covered by one or more Licensed Claims and,
but for this Agreement, would constitute an infringement (whether
directly, contributorily or by inducement) thereof, and such other
ancillary services related to the foregoing.
1.16 “
Registration ” shall mean, with respect to the
Territory, approval of the Registration Application for the Product
filed in such country, including pricing or reimbursement, where
applicable, by the Regulatory Authority in such country.
1.17 “
Registration Application ” shall mean any filing(s)
made with the Regulatory Authority in the Territory for regulatory
approval of the manufacture and sale of the Product in such
country.
1.18 “
Regulatory Authority ” shall mean the authority(ies)
in the Territory with responsibility for granting regulatory
approval for the manufacturing and sale of the Product in such
country, and any successor(s) thereto.
1.19 “
Sublicensee ” shall mean a Third Party to which
Licensee has granted a sublicense to develop, manufacture, use or
sell the Product in any country in the Territory, pursuant to
Section 4.3.
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1.20
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“ Territory ”
shall mean Costa Rica.
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1.21 “
Third Party ” shall mean any person who or which is
neither a Party nor an Affiliate of a Party.
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1.22
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“ Trademark ”
shall have the meaning assigned thereto in
Section 4.5.
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2.
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REPRESENTATIONS AND
WARRANTIES.
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2.1
Representations and Warranties of Both Parties. Each Party
represents and warrants to the other Party, as of the Effective
Date, that:
(a) such
Party is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has full
corporate power and authority to enter into this Agreement and to
carry out the provisions hereof;
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(b)
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such Party is free to enter into
this Agreement;
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(c) in
so doing, such Party will not violate any other agreement to which
it is a party;
(d) such
Party has taken all corporate action necessary to authorize the
execution and delivery of this Agreement and the performance of its
obligations under this Agreement; and
(e) no
person or entity has or will have, as a result of the transactions
contemplated by this Agreement, any right, interest or valid claim
against or upon such Party for any commission, fee or other
compensation as a finder or broker because of any act or omission
by such Party or any of its agents.
2.2
Representations and Warranties of Medistem. Medistem
represents and warrants to Licensee, as of the Effective Date,
that:
(a) Medistem
is the owner of, or has exclusive rights to, all of the Patents in
existence on the Effective Date, and has the exclusive right to
grant the licenses granted under this Agreement
therefor;
(b) to
the best of Medistem’s knowledge, Medistem has exclusive
rights to all of the Know-how in existence on the Effective Date
and the exclusive right to grant licenses with respect
thereto;
(c) to
the best of Medistem’s knowledge, Licensee’s use of the
Product in the Field, in accordance with the terms of this
Agreement, does not infringe upon or conflict with any patent or
other proprietary rights in the Territory of any Third Party;
and
(d) Medistem
has not entered into any agreement with any Third Party that is in
conflict with the rights granted to Licensee pursuant to this
Agreement.
2.3
Representations and Warranties of Licensee . Licensee
represents and warrants to Medistem, as of the Effective Date,
that:
(a) Licensee
has the facilities, personnel and experience sufficient in quantity
and quality to perform its obligations under this Agreement or will
have such resources within a reasonable period of time following
the Effective Date;
(b) All
of the personnel assigned to perform such obligations shall be
qualified and properly trained and shall do so in accordance with
applicable law; and
(c) Licensee
shall perform such obligations in a manner commensurate with
professional standards generally applicable in its
industry.
3.1
Generally . Licensee shall use all commercially reasonable
efforts diligently to develop and commercialize the Product in the
Territory (including, without limitation, obtaining all
Registrations necessary to market and sell the Product in such
country), in such order of priority as Licensee reasonably shall
deem appropriate. In connection therewith, Licensee shall dedicate
resources to the development and commercialization of the Product
consistent with the resources that Licensee, at all relevant times,
would dedicate to products of a similar nature to those of the
Product that were generated from Licensee’s own research
efforts and that Licensee decided to develop commercially and
market.
3.2
Specific Licensee Responsibilities. As part of the
Development Program, Licensee shall:
(a) Conduct,
or cause to be conducted, manage and oversee formulation of the
Product for use in clinical studies and for subsequent
marketing;
(b) Conduct,
or cause to be conducted, manage and oversee all clinical studies
required by the Regulatory Authorities in order to obtain
Registration for the Product in the Territory;
(c) Make
and pursue all regulatory filings (including, without limitation,
all INDs and Registration Applications), based in part on the
information and documentation provided by Medistem and in part on
information and data generated and obtained by Licensee in
connection with the Development Program, and conduct all analysis
and other support necessary with respect to the manufacture and
sale of the Product in the Territory;
(d) Use
all commercially reasonable efforts and proceed diligently to
perform such obligations, including, without limitation, by using
personnel with sufficient skills and experience, together with
sufficient equipment and facilities;
(e) Conduct
the Development Program in good scientific manner, and in
compliance in all material respects with all requirements of
applicable laws, rules and regulations, and all other requirements
of any applicable current good clinical practice, current good
laboratory practice and current good manufacturing practice to
attempt to achieve the objectives of the Development Program
efficiently and expeditiously;
(f) Within
30 days after the end of each six-month period during the term of
the Development Program and within 30 days following the expiration
or termination of the Development Program, furnish at
Medistem’s request reasonably detailed, written reports on
all activities conducted by Licensee under the Development Program
during such six-month period or the term of the Development
Program, as the case may be;
(g) Maintain
records, in sufficient detail and in good scientific manner, which
shall be complete and accurate and shall fully and properly reflect
all work done and results achieved in connection with the
Development Program in the form required under all applicable laws
and regulations. Medistem shall have the right, during normal
business hours and upon reasonable notice, to inspect and copy all
such records. Medistem shall maintain such records
and information contained therein in
confidence in accordance with Section 8 and shall not use such
records or information except to the extent otherwise permitted by
this Agreement; and
(h) Allow
representatives of Medistem, upon reasonable notice and during
normal business hours, to visit Licensee’s facilities where
the Development Program is being conducted, and consult informally,
during such visits and by telephone, with Licensee’s
personnel performing work on the Development Program.
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3.3
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Medistem Activities.
In support of the Development
Program, Medistem shall:
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(a) Immediately
after the Effective Date, provide to Licensee copies of all (or
relevant portions of) Know-how, trade secrets, Patents, and such
other related information relating to the development and
commercialization of the Product, in Medistem’s possession
and control; and
(b) Make
available to Licensee reasonable management oversight with respect
to the Development Program and the commercialization of the
Product.
(a) Licensee
shall be responsible for preparing and filing INDs, Registration
Applications and other regulatory filings for the Product in the
Territory through and including Registration, and thereafter shall
be responsible for maintaining such Registrations. All such filings
shall be in Medistem’s name (or that of its Affiliates,
Sublicensees or distributors, as the case may be). Licensee shall
also obtain any export approvals required by the Regulatory
Authorities to export Product.
(b) Medistem,
or, where required by applicable law, its designees(s) shall own
all INDs, Registration Applications, Registrations and other
regulatory filings for the Product in the Territory.
(c) In
order to assist Licensee in the performance of its obligations
under this Section 3.4, Medistem shall provide Licensee or its
designee(s) with complete copies (or copies of relevant portions)
of, and shall grant Licensee or its designee(s) the right to
cross-reference, all of Medistem’s registrations or other
regulatory filings made or held in any country for the Product; and
shall do all such further acts as promptly as possible after
Licensee’s request therefor, that may be necessary or
appropriate to effectuate such right.
(d) Licensee
shall keep Medistem informed as to the status of all regulatory
filings made pursuant to this Section 3.4.
(e) In
connection with any IND or Registration Application filed pursuant
to this Section 3.4, Licensee shall notify Medistem as soon as
reasonably possible of any meeting with the Regulatory Authority in
the Territory scheduled by Licensee (which notification shall
describe the subject matter of any such meeting), shall permit
Medistem to assist Licensee in the preparation for any such meeting
and shall promptly advise Medistem in writing of the outcome of any
such meeting.
3.5
Funding. Medistem agrees to advance Licensee funds in the
form of an interest-free loan necessary to allow Licensee to pay
for its reasonable actual operating expenses on a quarterly basis
or on such other basis as Medistem shall agree to, provided,
however, that Licensee has provided Medistem with reasonably
detailed budgets and supporting documentation regarding such
expenses
3.6
Liability . Licensee shall be responsible for, and hereby
assumes, any and all risks of personal injury or property damage
attributable to the negligent or willful acts or omissions, during
the term of the Development Program, of Licensee or its Affiliates,
and their respective directors, officers, employees and agents.
Medistem shall be responsible for, and hereby assumes, any and all
risks of personal injury or property damage attributable to the
negligent or willful acts or omissions, during the term of the
Development Program, of Medistem and its directors, officers and
employees.
3.7
Termination. In the event that Medistem believes that
Licensee has not made reasonably sufficient progress in the
development and commercialization of the Product in any country in
the Territory in a manner consistent with its obligations under
Section 3.1, Medistem may terminate this Agreement in its
entirety pursuant to Section 10.2.
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4.
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GRANT OF RIGHTS;
MARKETING.
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4.1
Development License . Medistem hereby grants to Licensee,
during the term of this Agreement, the exclusive (except as to
Medistem as necessary for the purposes of this Agreement), paid-up
license, with the right to grant sublicenses in accordance with the
terms of this Agreement, under the Licensed Technology, to perform
the activities described herein.
4.2
Commercialization License . Medistem hereby grants to
Licensee an exclusive license throughout the Territory, with the
right to grant sublicenses in accordance with the terms of this
Agreement, under the Licensed Technology, to develop, use,
manufacture, register, market and sell Products in the Field. With
respect to any Patents that may issue in Costa Rica during the term
of this Agreement, a statement referencing the exclusive license
granted to Licensee pursuant to this Section 4.2 shall be
registered with the Costa Rica Patent Office (or similar authority)
at Licensee’s cost, as soon as is practically possible after
the issuance of the respective Patents.
(a) No
sublicense granted by Licensee pursuant to this Section 4.3
shall be valid unless: (i) Licensee shall submit all proposed
sublicenses to Medistem for approval, which approval shall be in
Medistem’s sole and absolute discretion; (ii) Licensee shall
guarantee and be responsible for the making of all payments due,
and the making of any reports under this Agreement, with respect to
sales of Product by its Affiliates or Sublicensees and their
compliance with all applicable terms of this Agreement; and (iii)
each Affiliate or Sublicensee agrees in writing to maintain books
and records and permit Medistem to review such books and records
pursuant to the relevant provisions, and to observe all other
applicable terms, of this Agreement. In addition, no sublicense
granted by Licensee pursuant to this Section 4.3 of the
licenses granted to Licensee under Section 4.1 shall be valid
unless each such Affiliate or
Sublicensee agrees in writing to
maintain scientific records and permit Medistem to inspect and copy
such records and visit such facilities pursuant to the relevant
provisions of Section 3.2, and to observe all other applicable
terms, of this Agreement. Licensee shall promptly provide Medistem
with notice of any sublicense granted pursuant to this
Section 4.3, and provide a copy of the sublicense to Medistem
upon its request.
(d) Licensee
hereby unconditionally guarantees the performance of any of its
Affiliates and Sublicensees hereunder. In the event of a breach by
such an Affiliate or Sublicensee in the observance of applicable
terms of this Agreement, Medistem shall be entitled to proceed
against either such Affiliate or Sublicensee or directly against
Licensee, as Medistem may determine in its sole discretion, to
enforce this Agreement.
4.4
Marketing Obligations, Rights. Licensee shall use all
commercially reasonable efforts to market the Product in the
Territory.
4.5
Trademarks. Licensee shall market the Product throughout the
Territory under a trademark or trademarks (collectively, the
“Trademark”) selected by Medistem. Medistem shall own
all right, title and interest in and to such Trademark.
5.1
Fees. As further consideration to Medistem for the license
and other rights granted to Licensee under this Agreement, Licensee
shall pay to Medistem the following royalty payments: (a) 85% of
all Pre-tax Income derived by Licensee from stem cell related
treatments; and (b) 15% of all of Licensee’s Pre-tax Income
derived from non-stem cell related activities. When computing
Pre-tax Income, expenses that cannot be specifically identified as
expenses attributable to either stem cell related treatments or
non-stem cell related activities shall be allocated to stem cell
related treatments and non-stem cell related activities on a pro
rata basis based on total revenues generated
