LICENSE AGREEMENT

 

LICENSE AGREEMENT

BETWEEN

MEDISTEM LABORATORIES, INC.

AND

RIO VALLEY MEDICAL CLINIC

DATED JANUARY 2, 2007

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

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LICENSE AGREEMENT

THIS LICENSE AGREEMENT (“Agreement”), dated as of January 2, 2007, 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 Rio Valley Medical Clinic, an entity controlled by Dr. Frank Morales, having offices located at Av. Bursatil #300 Ste 306, Tijuana BC Mexico (“Licensee”). All capitalized terms used in this Agreement have the meanings set forth in Section 1 .

PRELIMINARY STATEMENTS

A.

Medistem owns the rights to the Intellectual Property in existence as of the Effective Date.

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, a non-exclusive license for 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.

NOW, THEREFORE, in consideration of the foregoing Preliminary Statements and the mutual agreements and covenants set forth herein, the Parties hereby agree as follows:

1.

DEFINITIONS.

 

As used in this Agreement, the following terms shall have the meanings set forth in this Section 1 unless the context dictates otherwise:

1.1

“ Additional Programs ” shall have the meaning assigned to such term in Section 3.8 .

1.2

“ 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. “Affiliate” shall include entities that are formed or come into existence after the date of this Agreement.

1.3

“ Confidential Information ” shall have the meaning assigned to such term in Section 8.4 .

 

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1.4

“ Effective Date ” shall mean the date of this Agreement.

1.5

“ Field ” shall mean the therapeutic treatment of various medical conditions in humans.

1.6

“ IND ” shall mean any filing made with the Regulatory Authority having jurisdiction in the Territory for initiating clinical trials with respect to the Product.

1.7

“ Intellectual Property ” shall mean any and all Patents and Know-how.

1.8

“ Invention(s) ” 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

“ Licensee ” shall mean Dr. Frank Morales and all Affiliates of Dr. Frank Morales that engage in stem-cell related activities in the Territory.

1.13

“ Medistem ” shall mean Medistem Laboratories, Inc. and/or its Affiliates.

1.14

“ Net Revenues ” shall mean shall mean cash receipts actually collected by Licensee during a given calendar month from Licensee’s activities in connection with the Program, after deducting discounts and refunds but before deducting any of Licensee’s costs or expenses incurred in connection with Licensee’s activities in connection with the Program.

 

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1.15

 “ Party ” shall mean Medistem or Licensee and, when used in the plural, shall mean Medistem and Licensee.

1.16

“ Patents ” shall mean a provisional patent application and any other patents, patents pending 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 therefor, 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.

1.17

“ Product ” shall mean all infusion quality post-natal and adult stem cells suitable 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.

1.18

“ Program ” shall mean the activities that the Parties intend that Licensee will perform and engage in under this Agreement.

1.19

 “ Regulatory Authority ” shall mean the authority(ies) having jurisdiction in the Territory with responsibility for granting regulatory approval for the manufacturing and sale of the Product, and any successor(s) thereto.

1.20

“ Territory ” shall mean metropolitan areas in Mexico in which Licensee currently conducts stem cell activities; namely Tijuana, Mexico.

1.21

 “ Third Party ” shall mean any person who or which is neither a Party nor an Affiliate of a Party.

1.22

“ Trademark ” shall have the meaning assigned thereto in Section 4.4 .

1.23

“ Warrant ” shall have the meaning assigned thereto in Section 3.8.

2.

REPRESENTATIONS AND WARRANTIES.

 

2.1

Representations and Warranties of Medistem.  Medistem represents and warrants to Licensee, as of the Effective Date, that:

(a)

Medistem is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada;

(b)

Medistem has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof and is free to enter into this Agreement;

 

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(c)

by entering into this Agreement, Medistem will not violate any other agreement to which it is a party;

(d)

Medistem has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement;

(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 Medistem for any commission, fee or other compensation as a finder or broker because of any act or omission by Medistem or any of its agents;

(f)

Medistem is the owner of, or has exclusive rights to, all of the Intellectual Property in existence on the Effective Date, and has the exclusive right to grant the licenses granted under this Agreement;

(g)

to the best of Medistem’s knowledge, without investigation, 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;

(h)

to the best of Medistem’s knowledge, without investigation, 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

(i)

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.

2.2

Representations and Warranties of Licensee .  Licensee represents and warrants to Medistem, as of the Effective Date, that:

(a)

Licensee a natural person with full legal capacity to enter into this binding Agreement and to carry out the provisions hereof;

(b)

Licensee is free to enter into this Agreement;

(c)

by entering into this Agreement, Licensee will not violate: (i) any law, regulation or order of any Regulatory Authority, government agency or court, or (ii) any other agreement to which it is a party;

(d)

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 Licensee for any commission, fee or other compensation as a finder or broker because of any act or omission by Licensee or any of its agents;

 

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(e)

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;

(f)

Licensee has all necessary approvals, licenses and permits with Regulatory Authorities and other government agencies as are required to perform its obligations under this Agreement and will maintain such approvals, licenses and permits during the Term of this Agreement;

(g)

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

(h)

Licensee shall perform such obligations in a manner commensurate with professional standards generally applicable in its industry.

3.

ROGRAM.

 

3.1

Generally .  Licensee shall use all commercially reasonable efforts diligently to develop and commercialize the Product in the Territory, in such order of priority as Licensee reasonably shall deem appropriate.  In connection therewith, Licensee shall dedicate such resources to the development and commercialization of the Product consistent, at a minimum, with the resources that Licensee dedicated to stem cell related activities of a similar nature to those involving the Product that were engaged in by Licensee and Licensee’s Affiliates prior to entering into this Agreement.

3.2

Specific Licensee Responsibilities.  As part of the Program, Licensee shall:

(a)

Conduct or cause to be conducted, manage, and oversee growth and development of the Product for use in clinical applications, studies, and for subsequent marketing;

(b)

Market clinical treatment services relating to the Product and generate a minimum of $20,000 of monthly revenues from stem-cell related patient treatment activities involving the Product and under this Agreement;

(c)

Make, effect and pursue, on behalf of Medistem, all filings and other actions with and before Regulatory Authorities as requested by Medistem to develop or enhance Medistem’s Intellectual Property and/or to pursue and perfect INDs arising from or relating to the subject matter of this Agreement;

(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;

 

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(e)

Make a good faith effort to accept patient applications for stem cell related treatment using the Product, and to treat all such applicants that conform to established medical protocols as mutually agreed between both Parties;

(f)

Conduct the Program in good scientific manner, and in compliance in all material respects with all requirements of applicable laws, rules and regulations of any Regulatory Authority or government agency, 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 Program efficiently and expeditiously;

(g)

Maintain existing facilities and equipment in an acceptable and professional manner and be responsible for expenditures necessary to maintain such facilities and equipment;

(h)

Provide, hire, train, supervise, ensure the licensure of and compensate all professional and support staff as required for Licensee to perform its obligations and conduct the activities contemplated under this Agreement;

(i)

Within 30 days after the end of each six-month period during the term of the Program and within 30 days following the expiration or termination of the Program, furnish, at Medistem’s request, reasonably detailed, written reports on all activities conducted by Licensee under the Program during such six-month period or the term of the Program, as the case may be;

(j)

Comply with all reporting, accounting, bookkeeping and record keeping and retention policies and procedures established by Medistem as reasonably required in order to manage, conduct, record and account for the operations of Licensee under this Agreement, and 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 Program in the form required under all applicable laws and regulations;

(k)

Maintain all necessary approvals, licenses and permits with Regulatory Authorities and other government agencies as are required to perform its obligations under this Agreement in accordance with Section 3.4 ;

(l)

Allow representatives of Medistem, upon reasonable notice and during normal business hours, to visit Licensee’s facilities where the Program is being conducted, and consult informally, during such visits and by telephone, with Licensee’s personnel performing work on the Program; and

(m)

It being understood by the Parties that all Intellectual Property relating to the Product, including any and all Inventions as may arise from, out of, as a result of or in any way in connection with the Program, is and shall always be and remain the sole property of Medistem, Licensee agrees to perform all of its obligations and agreements contained in Section 7 , “ Ownership; Patents ,” of this Agreement.

 

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3.3

Medistem Activities.  In support of the Program, Medistem shall:

(a)

promptly after the Effective Date, provide to Licensee copies of all (or relevant portions of) Know-how, trade secrets, Intellectual Property, and such other related information relating to the development and commercialization of the Product, in Medistem’s possession and control;

(b)

make available to Licensee reasonable management oversight with respect to the Program and the commercialization of the Product;

(c)

supply Licensee with Product for the activities contemplated under this Agreement in such quantities and upon such delivery schedules as Licensee may reasonably request, provided that Medistem shall not be required to deliver any minimum amount of Product or meet Licensee’s requested delivery schedule, and provided further that Medistem shall not be liable to Licensee for any failure or inability to deliver Product in the quantities or upon the delivery schedules requested by Licensee;

(d)

manage certain functions with respect to the conduct of Licensee’s activities under this Agreement, including: application intake and processing; patient booking; support for marketing the services of Licensee under the Program; patient billing; revenue and cash management and treasury functions with respect to patient billings and revenue-sharing arrangements; accounting and bookkeeping; travel arrangements, coordination and booking; training of licensee’s personnel in the use of equipment and operational procedures; consulting services relating to the conduct of all aspects of the Program; and any other duties specifically agreed to by Licensee and Medistem; provided that such agreement is documented in a writing duly executed by both Parties;

(e)

have the right, in its sole discretion, if it determines that leasehold improvements, facility improvements, or additional laboratory or medical equipment are desired to further the cause of this License Agreement, to provide or facilitate financing for such facilities or equipment, or to provide directly such laboratory or medical equipment, provided that all personal property and equipment acquired under this provision shall be the sole property of Medistem; and

(f)

have the right, during normal business hours and upon reasonable notice, to inspect and copy all such records and all such records and the data therein and any and all Inventions contained or embodied therein, are and shall be the sole property of Medistem.  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.

 

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3.4

Implementation of the Program.  Licensee and Medistem shall cooperate in good faith and use their commercially reasonable best efforts to commence the Program on or about January 2, 2007; provided that the actual commencement date of the Program in general or specific aspects of the Program shall be subject to implementation at such time or times as the Parties may mutually agree upon in good faith.

3.5

Regulatory Matters .

(a)

As provided in Sections 2.3(b) and 3.2(k) , Licensee is responsible for obtaining and maintaining all necessary approvals, licenses and permits with Regulatory Authorities and other government agencies as are required to perform its obligations under this Agreement, and shall maintain such approvals, licenses and permits during the Term of this Agreement.

(b)

In the event that new approvals, licenses and permits are needed from any Regulatory Authority or other government agency to perform Licensee’s obligations under this Agreement, whether as a result of new legislation or otherwise, Licensee is responsible for obtaining and maintaining such licenses or approvals.

(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 reasonably be necessary or appropriate in furtherance of Licensee’s obligations under this Section 3.4 .

(d)

Licensee shall provide Medistem with complete copies of, and shall keep Medistem informed as to the status of, all regulatory filings made pursuant to this Section 3.4 .

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 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 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 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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3.8

Warrants for the Program in the Territory.  In consideration for Licensee’s activities in connection with the Program, Medistem shall grant to Dr. Frank Morales, a Common Stock Purchase Warrant to acquire an aggregate of 700,000 shares of Medistem’s common stock at an exercise price equal to the closing price of Medistem’s common stock on the OTC Bulletin Board on the Effective Date.  Such Warrant shall vest and become exercisable for one-third of the shares of common stock on each of the first, second, and third anniversaries of the Effective Date.  The form of Warrant is attached as Exhibit A to this Agreement.

3.9

Assistance with Additional Programs; Additional Warrants.  Licensee, in Licensee’s discretion, shall assist Medistem in connection with opening additional clinics in other locations for the purpose of developing and commercializing the Product in such locations (“Additional Programs”).  Licensee and Medistem shall mutually agreed upon the terms and conditions of Licensee’s assistance to Medistem in connection with each such Additional Program.  Upon the successful commencement of revenue generating operations at each Additional Program for which Licensee and/or Dr. Frank Morales has provided assistance, Medistem shall issue to Dr. Frank Morales, a Warrant for an additional 150,000 shares of Medistem common stock at an exercise price equal to the closing price of Medistem’s common stock on the OTC Bulletin Board on the date of grant.  The form of such Warrant shall be substantially the same as Exhibit A attached to this Agreement, except that such Warrant shall be fully vested and exercisable for all 150,000 shares as of the date of grant.

4.

GRANT OF RIGHTS; MARKETING.

 

4.1

Development License .  Medistem hereby grants to Licensee, during the term of this Agreement, a non-exclusive, non-transferable license, under the Licensed Technology, to perform the activities described herein.

4.2

Commercialization License .  Medistem hereby grants to Licensee a non-exclusive, non-transferable license throughout the Territory, 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 Mexico during the term of this Agreement, a statement referencing the license granted to Licensee pursuant to this Section 4.2 shall be registered with the Mexican Patent Office (or similar authority) at Licensee’s cost, as soon as is practically possible after the issuance of the respective Patents.

4.3

Sublicensing.  Licensee shall not be permitted to sublicense the rights granted to Licensee pursuant to this Agreement without the express, specific, prior written approval Medistem, which approval shall be in Medistem’s sole and absolute discretion.

4.4

Marketing Obligations, Rights.  Licensee shall use all commercially reasonable efforts to market the Product in the Territory.

 

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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.

FEES.

 

5.1

Fees.  As consideration to Medistem for the license, the provision of stem cells, the funding of additional equipment and facilities, the management of key processes, and the other rights granted to Licensee under this Agreement, Licensee shall pay to Medistem or its assignee royalty payments equal to 90% of all of Licensee’s monthly Net Revenues in excess of $20,000.  

5.2

Mode of Payment .  Medistem will manage and control treasury functions with respect to patient billing in connection with the Program.  Medistem will maintain a separate bank account for purposes of isolating revenues generated under this arrangement.  Revenues will be distributed to Medistem and Licensee on a monthly basis within 10 days of the receipt of reports outlined in Section 6.1 below.  All payments shall be made in U.S. Dollars.  

6.

REPORTS.

 

6.1

Reports.   During the term of this Agreement, Licensee shall furnish to Medistem, within 5 days after the end of each month, written reports containing detailed information regarding each and all patient treatments and aggregate monthly data reflecting revenues earned and unearned. Formats for such reports shall be in conformity with such templates and data collection protocols as may, from time-to-time be provided by Medistem. Such reports and the information therein shall be supported by the Licensee’s medical and financial records.

6.2

Records Retention .  Licensee and its Affiliates shall keep complete and accurate records, including detailed financial records, pertaining to the activities of Licensee relating to the Program and the commercial use of the Product and the Licensed Technology, for a period of three calendar years after the year in which such activities and financial transactions occurred, and in sufficient detail to permit Medistem to confirm the accuracy of the aggregate fee calculations hereunder.

6.3

Audit Request .  During the term of this Agreement and for a period of two (2) years thereafter, at the request of Medistem, Licensee and its Affiliates shall permit an independent, certified public accountant appointed by Medistem and reasonably acceptable to Licensee, at reasonable times and upon reasonable notice, to examine such records as may be necessary to: (i) determine the correctness of any report or payment made under this Agreement; or (ii) obtain information as to the aggregate fees payable for any calendar quarter in the case of Licensee’s failure to report or pay pursuant to this Agreement.  Said accountant shall not disclose to Medistem any information other than information relating to said reports, fees, and payments.  Results of any such examination shall be made available to both Parties.

 

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6.4

Cost of Audit.   Medistem shall bear the full cost of the performance of any audit requested by Medistem except as hereinafter set forth.  If, as a result of any inspection of the books and records of Licensee or its Affiliates, it is shown that Licensee’s payments under this Agreement were less than the amount which should have been paid, then Licensee shall make all payments required to be made to eliminate any discrepancy revealed by said inspection within 30 days after Medistem’s demand therefor.  Furthermore, if the payments made were less than 95% of the amount that should have been paid during the period in question, Licensee shall also reimburse Medistem for the reasonable costs of such audit.

6.5

Taxes .  In the event that Licensee is required to withhold and pay any tax to the local, state or federal tax or revenue authorities having jurisdiction over the Territory regarding any payment to Medistem due to the laws of such jurisdiction, such amount shall be deducted from the payment to be made by Licensee.  Licensee shall promptly notify Medistem of such withholding and, within a reasonable amount of time after making such deduction, furnish Medistem with copies of any tax certificate or other documentation evidencing such withholding.  Each Party agrees to cooperate with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect.

7.

OWNERSHIP; PATENTS.

 

7.1

Ownership .  

(a)

Medistem shall retain all right, title and interest in and to all Patents, Know-how (including, without limitation, Inventions and trade secrets), and other Intellectual Property, regardless of which Party develops, prepares and prosecutes the applications associated therewith, or maintains the patents, copyrights or other Intellectual Property rights related thereto, subject to the license granted to Licensee pursuant to Section 4.2 .  

(b)

Rights to Inventions made solely by employees of Medistem shall belong to Medistem.

(c)

Rights to Inventions made solely by employees of Licensee shall belong to Medistem.

(d)

Rights to Inventions which were made jointly by employees of Medistem and employees of Licensee shall belong to Medistem.  Such joint Inventions shall be subject to the Field and territorial restrictions of this Agreement with respect to manufacture, use and sale of such Inventions.  

 

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7.2

Patent Maintenance.

(a)

Medistem shall have full responsibility for, and shall control the preparation and prosecution of, all patent applications and the maintenance of all patents relating to the Licensed Technology (including the Patents) throughout the Territory.  In connection therewith, Medistem shall consult with Licensee in order to assure that all future filings with respect to the Patents are made in a timely manner and identify the relevant countries in the Territory, to the extent that Medistem can do so.  Medistem shall pay all costs and expenses of filing, prosecuting and maintaining the Patents and the patents covering Inventions owned by Medistem in the Territory.  

(b)

Medistem shall select qualified independent patent counsel to file and prosecute all patent applications pursuant to Section 7.2(a) .  Medistem shall provide copies to Licensee of any filings made to, and written communications received from, any patent office relating, in whole or in part, to the Licensed Claims.

(c)

Each Party agrees promptly to provide to the other Party a complete written disclosure of any Invention made by such Party.  Medistem shall determine whether any Invention is patentable and whether filing a patent application is economically justifiable, and if so, shall proceed with the preparation and prosecution of a patent application covering any such Invention.

(d)

Each Party agrees to cooperate with the other Party to execute all lawful papers and instruments, to make all rightful oaths and declarations and to provide consultation and assistance as may be necessary in the preparation, prosecution, maintenance and enforcement of all such patents and patent applications.

7.3

Patent Enforcement.

(a)

If either Party learns of an infringement, unauthorized use, misappropriation or ownership claim or threatened infringement or other such claim (any of the foregoing, an “infringement”) by a Third Party with respect to any Licensed Technology within the Territory, such Party shall promptly notify the other Party and shall provide such other Party with available evidence of such infringement.

 

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(b)

Medistem shall have the first right, but not the duty, to institute patent infringement actions against Third Parties based on any Licensed Technology in the Territory.  If Medistem (or its designee) does not secure actual cessation of such infringement or institute an infringement proceeding against an offending Third Party within 180 days of learning of such infringement, Licensee shall have the right, but not the duty, to institute such an action with respect to any infringement by such Third Party.  The costs and expenses of any such action (including fees of attorneys and other professionals) shall be borne by the Party instituting the action, or, if the Parties elect to cooperate in instituting and maintaining such action, such costs and expenses shall be borne by the Parti