EXHIBIT 10.8
SETTLEMENT AND LICENSE AGREEMENT
PARTIES
This Settlement and License Agreement (the "Agreement"), entered into as
of this 26th day of June, 2005, is between CYTOMEDIX, INC. ("Cytomedix"), a
Delaware corporation, having a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; PERFUSION PARTNERS AND ASSOCIATES,
INC. ("PPAI"), a Florida corporation, having a principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; and Transcorporeal, Inc.
("Transcorporeal"), a Florida corporation having a principal place of business
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Each of Cytomedix, PPAI and
Transcorporeal are referred to in this Agreement as a "Party" and collectively
as the "Parties." Capitalized terms used herein and not otherwise defined shall
have the meaning set forth in Article 1 hereof.
RECITALS
WHEREAS, Cytomedix filed an action against PPAI (the "Illinois Action"),
Civil Action ▇▇. ▇▇ ▇ ▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ District Court for the Northern
District of Illinois, which included claims for infringement of U.S. Patent No.
5,165,938 ("the '938 Patent") based upon PPAI's manufacture, use, marketing,
offer to sell, and/or sale of products used to practice Platelet Therapies;
WHEREAS, Transcorporeal and PPAI share common ownership and control and
PPAI is presently in the business of supplying products and services for
conducting Platelet Therapies;
WHEREAS, PPAI is a debtor and debtor in possession in a chapter 11 case
(the "Chapter 11 Case") pending before the Bankruptcy Court for the Middle
District of Florida, Fort ▇▇▇▇▇ Division (the "Bankruptcy Court");
WHEREAS, PPAI and Transcorporeal desire to acquire from Cytomedix on the
terms and conditions contained herein the non-exclusive right under the Licensed
Patents to manufacture, use, market, offer to sell, and/or sell products for use
in practicing processes covered by one or more claims of the Licensed Patents
and to settle all disputes between and among the Parties;
NOW, THEREFORE, in consideration of the following terms, covenants and
conditions, Cytomedix, PPAI and Transcorporeal hereby agree as follows:
TERMS OF AGREEMENT
1. Definitions.
1.1. "Affiliate" shall mean:
(a) any individual who or Entity that, in whatever country
organized or resident, directly or indirectly through one or
more intermediaries, is controlled by, or is under common
control with, or controls, a Party or Entity; or
(b) any Entity in which any individual or Entity recited in the
preceding sub-paragraph (a) directly or indirectly through one
or more intermediaries has at least a forty percent (40%)
ownership or voting rights interest (whether through stock
ownership, stock power, voting proxy, or otherwise).
1.2. "Disposable Kit" shall mean, collectively, the single-use disposable
components, applicators, reagents and other items manufactured,
marketed, promoted, offered to be sold, or sold by PPAI and/or
Transcorporeal as a Platelet Product for use by others in practicing
a single Platelet Therapy.
1.3. "Distributor" means an entity which contracts with PPAI and/or
Transcorporeal to either a) provide promotion, sales and
distribution services of PPAI Branded Platelet Products, or b) buy
Platelet Products from PPAI and/or Transcorporeal for resale under a
PPAI Brand.
1.4. "Entity" shall mean any corporation, firm, partnership,
proprietorship, or other form of business organization.
1.5. "Gross Sales" means, applying generally accepted accounting
principles, actual gross sales revenues earned by PPAI and/or
Transcorporeal through sales of Platelet Services or PPAI Branded
Platelet Products in each country in which a Licensed Patent is in
force until the expiration of such Licensed Patent in such country.
1.6. "Licensees" means PPAI and Transcorporeal.
1.7. "Licensed Patents" means the patents and patent applications listed
in Exhibit A and any related patent application (including, without
limitation, any continuation, continued prosecution,
continuation-in-part, divisional, foreign counterpart or
substitution thereof) and any patent (including, without limitation,
any reissue or reexamination thereof), in any country granted from,
or claiming priority to, or for the benefit of any of the
aforementioned patent applications or patents, as well as rights in
any third-party patent acquired as a result of an interference
action involving any of the foregoing.
1.8. "Platelet Products" shall mean all devices, kits, applicators,
reagents or other items (regardless of whether in the nature of a
capital product having more than a single use or a disposable
product having only a single use) manufactured, marketed, promoted,
used, offered to be sold, or sold by or for PPAI and/or
Transcorporeal for use in practicing Platelet Therapies, including
without limitation the items listed in the attached Exhibit B. The
items listed in Exhibit B, and all successor equipment and products
that are improvements to such scheduled equipment and products, will
be considered Platelet Products for purposes of this Agreement. PPAI
Branded Platelet Products shall be designed in such manner that a
Disposable Kit is required for each Platelet Therapy administered.
1.9. "Platelet Services" means all services rendered by PPAI and/or
Transcorporeal in practicing Platelet Therapies and/or assisting
others to practice Platelet Therapies.
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1.10. "Platelet Therapies" refers to methods of treating damaged tissues
and/or wounds using topical compositions containing platelets, or
substances derived from platelets, regardless of whether the patient
is a human or animal.
1.11. "PPAI" means (i) Perfusion Partners & Associates, Inc. and its
Affiliates, (ii) any Entity in which ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇
(whether individually or collectively), directly or indirectly own
50% or more of the capital, assets, voting securities, partnership
or other ownership interests, and (iii) all directors, officers,
employees, Affiliates, agents, predecessors or successors to any
Entity identified in subclauses (i) and (ii) hereof.
1.12. "Transcorporeal" means (i) Transcorporeal, Inc. and its Affiliates,
and (ii) all directors, officers, employees, Affiliates, agents,
predecessors or successors thereof.
1.13. "PPAI Brand" shall mean any trademark, trade name or brand name
owned or licensed by PPAI and/or Transcorporeal (including, without
limitation, the Secquire(TM) or Thrombograft(TM) brand names). "PPAI
Branded" shall mean having or bearing a PPAI Brand.
1.14. "Third Party Licensed Product" shall mean any medical device
(whether a hardware or disposable device) that is covered by an
existing license between Cytomedix and the seller or distributor of
such device. Examples of current medical device that would be deemed
"Third Party Licensed Products" for purposes of this Agreement are
devices sold by Harvest Technologies, Inc., under the brand name
SmartPReP(TM) and the devices sold by Medtronic, Inc., under the
brand name Magellan(TM).
2. License Grant.
2.1. Licensed Patent Rights. Cytomedix hereby grants to Licensees for the
term specified in Section 5.1 hereof, a non-exclusive,
royalty-bearing license to manufacture, have made, use, import,
sell, promote, market offer for sale, or otherwise transfer PPAI
Branded Platelet Products for use in practicing processes covered by
one or more claims of the Licensed Patents in any field of use
anywhere in the world. This grant includes the right for Licensees
to grant sublicenses to Distributors, with the prior written consent
of Cytomedix (which shall not be unreasonably withheld). This grant
also includes the right for any customers (ultimate or in privity or
otherwise) of Licensees or Distributors to use import, market, offer
for sale, and/or sell (for further use or resale) PPAI Branded
Platelet Products without payment of any additional royalty or
amount to Cytomedix. This license grant "runs with the PPAI Branded
Platelet Product sold (provided that a PPAI Branded Disposable Kit
is used in each Platelet Therapy administered therewith)" and the
Licensed Patents shall be exhausted with respect to every PPAI
Branded Platelet Product as to which the required royalty hereunder
is paid. For purposes of this Agreement, the limited license grant
set forth in this Section 2.1 is hereinafter referred to as the
"Licensed Patent Rights." Licensees shall have no right to perform a
Platelet Service unless a single use PPAI Branded Disposable Kit is
used in conjunction therewith.
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2.2. Grant of Immunity. Cytomedix (for itself and on behalf of its
predecessors, successors, assigns, and each of its and their
respective Affiliates and sublicensees, officers, directors,
employees and agents) (collectively, the "Cytomedix Parties") hereby
irrevocably grants immunity to Licensees, their respective
predecessors, successors and assigns, and each of their respective
officers, directors, employees, agents, shareholders, partners,
representatives, and all other persons acting by or on their behalf)
(collectively, the "PPAI Releasees") against any and all actions for
or claims of infringement (whether based on a direct or contributory
infringement, inducement to infringe, or other theory) relating to
the use of PPAI Branded Platelet Products before the Effective Date
of this Agreement.
2.3. No Implied Licenses. No rights or licenses, other than those
expressly granted herein with respect to the Licensed Patents or any
other intellectual property owned or controlled by Cytomedix, are
granted or shall be deemed granted to Licensees or any other Entity
(including any purchaser of Platelet Services or PPAI Branded
Products).
2.4. Taxes and Authorizations. Licensees shall be solely responsible for
the payment and discharge of any taxes, duties, or withholdings
relating to any transaction in connection with the manufacture, use,
sale, or other commercialization of any of the Platelet Services or
PPAI Branded Products. Licensees shall, at their own expense, be
responsible for applying for and obtaining any approvals,
authorizations, or validations relative to this Agreement under the
appropriate federal, state, or local laws.
3. Royalties, Reports and Payments.
3.1. Royalty. Licensees shall pay monthly royalties to Cytomedix for the
Licensed Patent Rights in an amount equal to ten percent (10%) of
monthly Gross Sales (as defined in Section 1.3 hereof) in each
country in which a Licensed Patent is in force until the expiration
of such Licensed Patent in such country. Notwithstanding anything
herein to the contrary, Licensees shall pay minimum royalties as
follows: (i) $40 for each Platelet Service provided by Licensees
(excluding Platelet Services provided using Third Party Licensed
Products); (ii) $30 for each PPAI Branded Disposable Kit sold by
Licensees prior to January 1, 2006 (whether to or through a
Distributor, other intermediary, or end-user) for use by any Entity
other than Licensees in providing Platelet Therapies; (iii) $35 for
each PPAI Branded Disposable Kit sold by Licensees between (and
including) January 1 and June 30, 2006; and (iv) $40 for each PPAI
Branded Disposable Kit sold by Licensees between (and including)
July 1, 2006 and November 24, 2009.
3.2. Notwithstanding anything in Section 3.1, when a Platelet Service is
provided by a Licensee, the Licensee shall become obligated to pay a
royalty equal to ten percent (10%) of Gross Sale revenue earned for
the Platelet Service and for any PPAI Branded Platelet Product used
in providing that service, regardless of whether PPAI separately
invoices the customer for the sale or use of the PPAI Branded
Platelet Product in connection with that service; provided, however,
that the Licensee shall not be required to pay Cytomedix an
additional minimum royalty for having used a PPAI Branded Platelet
Product in providing that service as long as the Gross Sale revenue
earned from which the royalty is paid shall include both the charge
for providing a Platelet Service and the charge for using a PPAI
Branded Platelet Product. Thus, by way of example, if PPAI invoices
a customer a total of $500.00 for having provided a Platelet Service
using a PPAI Branded Product (whether as a single charge or as
separate charges for the service and the product), then the royalty
to be paid by PPAI shall be $50 (or 10% of the Gross Sale associated
with the Platelet Service) and there shall be no additional royalty
payable by PPAI for having used a PPAI Branded Platelet Product. By
way of further example, if PPAI invoices a customer a total of
$300.00 for having provided a Platelet Service using a PPAI Branded
Product (whether as a single charge or as separate charges for the
service and the product), then the royalty to be paid by PPAI shall
be $40 and there shall be no additional royalty payable by PPAI for
having used a PPAI Branded Platelet Product.
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3.3. Royalty Reports and Records. Within ten (10) days following the end
of each calendar month of this Agreement, Licensees shall each
deliver to Cytomedix a written report showing in reasonably specific
detail the number of Platelet Therapies provided, the sales of each
Platelet Product sold (whether of PPAI Branded Platelet Product or
Third Party Licensed Product), sales of any Platelet Services sold,
the aggregate Gross Sales proceeds received in respect of such
sales, and the aggregate royalties owing in respect thereof (the
"Royalty Report"). Such report shall separately identify sales and
royalties owing for Platelet Products sold through Distributors. The
Licensees shall maintain for a period of three years following
delivery of a Royalty Report complete and accurate records in
sufficient detail to enable the royalty payable thereunder to be
determined. Licensees shall keep accurate records of all operations
affecting payments hereunder.
3.4. Audits. Licensees shall permit Cytomedix or its duly authorized
agent to inspect all records required to be maintained under this
Agreement and to make copies of or extracts from such records during
regular business hours throughout the term of this Agreement and for
a period of three (3) years thereafter. Additionally, upon the
written request of Cytomedix, but not more than twice during each
annual period of this Agreement, Licensees shall permit an
independent audit of their performance hereunder, which audit shall
be conducted by a party selected by Cytomedix. Licensees shall
provide Cytomedix's auditors with access during normal business
hours to such of the records of each Licensee as are reasonably
necessary to verify the accuracy of any Royalty Report delivered by
each Licensee. Licensees further shall use their best efforts, as
reasonably required by Cytomedix, to cause any supplier or
Distributor of Platelet Products (whether PPAI Branded Platelet
Product or Third Party Licensed Product) to provide Cytomedix with
copies of records reasonably necessary to verify the Platelet
Products sold to Licensees for any period covered by this Agreement.
If Cytomedix's auditor demonstrates by way of written report that
additional royalties were owed during an audited period, the
Licensee shall pay said additional royalties due within ten (10)
days of the date Cytomedix delivers such report to the Licensee. The
fees charged by such accountant shall be paid by Cytomedix, unless
the report concludes that the royalties payable by the Licensee for
the audited period are more than one hundred five percent (105%) of
the royalties actually paid for such audited period, in which case
the Licensee shall pay all fees charged by such accountant.
3.5. Payment Terms. Royalties shown to be owing in any Royalty Report
shall be paid on or before the tenth (10th) day following the close
of each calendar month, and shall be submitted to Cytomedix
contemporaneous with the submission of each monthly Royalty Report
required to be submitted by each Licensee. If the royalty payable
remains unpaid at the time due, then interest shall accrue on such
unpaid amount, until paid, at twenty percent (20%) per annum.
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3.6. Lump-Sum Payment. In addition to the payment of royalties specified
in Section 3.1, on the date that the Bankruptcy Court enters an
order approving this Agreement, PPAI and Transcorporeal shall become
absolutely and unconditionally liable to Cytomedix in the amount of
Two Hundred Fifty Thousand Dollars ($250,000). The liability created
under this Section 3.6 shall be paid as follows:
(i) PPAI shall immediately, upon executing this agreement, deliver
to Cytomedix's counsel the Nine Thousand Five Hundred Dollars
($9,500) "adequate protection" payment currently due under the
order of the Bankruptcy Court, thereby bringing the principal
balance of the "adequate protection" funds in escrow to
Fifty-Seven Thousand Dollars ($57,000).
(ii) On the date that the Bankruptcy Court enters an order
approving this Agreement, Cytomedix's counsel shall be
authorized to distribute the entirety of the escrowed
"adequate protection" funds, including accrued interest earned
thereon, to Cytomedix.
(iii) On the date that the Bankruptcy Court enters and order
approving this Agreement, Licensees shall by wire transfer
deliver an additional Forty-Three Thousand Dollars ($43,000)
to Cytomedix's account in accordance with the prior written
instructions of Cytomedix.
(iv) The remaining liability created under this Section 3.6 shall
be reflected in a promissory note bearing a principal amount
of One Hundred Fifty Thousand Dollars ($150,000), executed by
PPAI and Transcorporeal, jointly and severally, and dated as
of June 30, 2005. The promissory note shall bear an eight
percent (8.0%) annual rate of interest. Payments on the note
in the amount of $3,041.46 shall be made monthly, with the
first payment to be made on July 1, 2005. A balloon payment in
the amount of $67,248.31 shall be made to Cytomedix on June
30, 2008.
This Agreement shall not become effective unless and until Cytomedix shall
have received the lump-sum payments from Licensees specified in
subparagraphs (ii) and (iii) hereof, and the date of receipt of such
payment shall be the "Effective Date" of this Agreement. Cytomedix shall
not be bound by any terms of this Agreement if, on or before August 15,
2005, this Agreement shall not have been approved by the Bankruptcy Court
and the lump-sum payments shall not have been received.
4. Representations and Warranties.
4.1. Authorization. Each party hereby represents and warrants that it (a)
has the power and authority and the legal right to enter into this
Agreement on behalf of itself and all affiliated entities and to
perform its obligations hereunder, and (b) has taken all necessary
action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This
Agreement has been duly executed and delivered on behalf of such
party, and constitutes a legal, valid, binding obligation,
enforceable against such party in accordance with its terms.
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4.2. Limitation of Warranties. Nothing in this Agreement shall be
construed as: (a) a warranty or representation by Cytomedix as to
the validity or scope of any Licensed Patent Rights; (b) a warranty
or representation that anything made, used, sold, or otherwise
disposed of under any license granted in this Agreement is or will
be free from infringement of patent or from suits by third parties
for infringement of patent; (c) conferring the right to use in
advertising, publicity or otherwise any trademark, trade name, or
names, or any contraction, abbreviation, simulation or adaptation
thereof, of either party; or (d) an obligation to furnish any
know-how associated with the Patents.
4.3. Disclaimer. Cytomedix makes no representations other than those
expressly set forth in this Article 4. Cytomedix expressly disclaims
all other representations, warranties and conditions, express,
implied, statutory, or otherwise, regarding the Licensed Patent
Rights and the confidential information, including without
limitation, any warranty of merchantability, fitness or a particular
purpose, or non-infringement.
4.4. No Challenge to Patents. Licensees agree not to challenge or cause
to be challenged, directly or indirectly, the validity and/or
enforceability of the Licensed Patents in any court or other
tribunal, including the United States Patent and Trademark Office.
Notwithstanding the foregoing, if a court of competent jurisdiction
enters judgment from which no appeal can be taken declaring each of
the claims of the Licensed Patents to be invalid, then the
obligations of Licensees to make any further payments to Cytomedix
shall cease, but Licensees shall not be entitled to recover any
payments made prior to entry of said final, non-appealable judgment.
4.5. Advertising. PPAI owns and develops various internet sites and
domains, including The Platelet Gel Network and website
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (collectively, whether now existing or
hereinafter designed or created, the "Websites"). PPAI also owns,
operates, or manages, in whole or in part, various educational and
training facilities and programs, including The Florida Platelet Gel
Symposium (collectively, whether now existing or hereinafter
designed or created, the "Symposia"). Cytomedix will be invited to
participate in all future Symposia as a presenter and/or exhibitor
for wound care products and topics. At no time shall PPAI permit
parties to advertise, promote, market, or sell their products or
services on or in any of the Websites or Symposia unless said
parties are authorized licensees, distributors, or sales
representatives of Cytomedix.
4.6. Representation regarding Platelet Products, Platelet Services,
Websites, Distributors, and Related Financial Data. Licensees
represent that (a) all products currently marketed or promoted by
Licensees that constitute PPAI Branded Platelet Products are listed
on Exhibit B, (b) all contracts for the providing of Platelet
Services, along with a listing of Platelet Services provided by
PPAI, are listed on Exhibit C, (c) all Websites or internet domain
sites in which either Licensee has an ownership, controlling, or
equitable interest are listed on Exhibit D, and (d) all financial
data regarding sales of Platelet Products provided to Cytomedix
before or after the Effective Date are and shall be true and
accurate representations of such data in all material respects as
reflected on Licensees' financial statements and in Licensees'
financial sales records. PPAI Branded Platelet Products shall
hereinafter through expiration be designed in such manner that a
Disposable Kit is required for each Platelet Therapy administered.
Licensees shall update and keep Exhibits B, C, and D current after
the Effective Date within 10 business days of any change in
Licensees' business or operations that would require the addition or
deletion of items listed on such Exhibits.
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5. Termination.
5.1. Expiration/Termination. This Agreement shall commence on the
Effective Date and shall expire on the earlier of (i) November 24,
2009, (ii) if there has been a breach of any material provision of
this Agreement, thirty (30) days following the sending of written
notice of such breach by Cytomedix if such breach has not been
completely cured within said thirty (30) days, and (iii) the
occurrence of a "Change-of-Control Event," as hereinafter defined.
For purposes of this Agreement, a "Change-of-Control Event" means
any transaction or any series of transactions aggregated together
(regardless of whether those transactions are in any way related or
integrated to one another) in any three-year rolling period that
results in a change in ownership or voting control of more than 50%
of the outstanding equity or voting securities or membership or
controlling interests of Representative.
5.2. Termination If Agreement Not Approved by Bankruptcy Court Before
8/15/2005. PPAI shall use its best efforts to obtain an order from
the court in the Bankruptcy Action approving this Settlement
Agreement, and shall file a Section 9019 motion for that purpose
within five (5) business days of execution of this Agreement. This
Agreement shall terminate automatically and be of no force and
effect if an order approving this Agreement is not entered by the
Bankruptcy Court on or before August 15, 2005.
5.3. Effect of Expiration or Termination. Expiration or termination of
this Agreement shall not relieve Licensees of any obligation
accruing prior to such expiration or termination. Notwithstanding
the foregoing, all rights and licenses granted to Licensees
hereunder shall terminate upon any termination or expiration of this
Agreement. Unless termination shall be based on Section 5.2 hereof,
the provisions of Articles 3, 4, 6, 7, 8, and 9, and Sections 2.2
and 5.3 hereof shall survive the expiration or termination of this
Agreement. Termination of this Agreement shall not limit any party
from pursuing any other remedies otherwise available to it,
including without limitation, injunctive relief.
6. Indemnification and Insurance.
6.1. Indemnification by Licensee. Licensees shall defend, indemnify, and
hold Cytomedix, its directors, officers, employees, and agents
harmless from and against all losses, liabilities, damages and
expenses (including attorneys' fees and costs), including those for
death, personal injury, illness, or property damage, arising from
any use of the Licensed Patent Rights.
6.2. Insurance. During the term of this Agreement, Licensees shall
maintain liability insurance in the minimum amount of $3 million in
the aggregate and $1 million per occurrence.
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7. Releases.
7.1. With the exception of the obligations and promises of the parties to
each other under this Agreement, and subject to Section 7.2 hereof,
Cytomedix, on behalf of itself, its predecessors and successors, and
each of their affiliates, officers, directors, employees and agents,
hereby irrevocably and unconditionally release and forever discharge
Licensees, and each of their officers, directors, employees, agents,
shareholders, representatives, parent companies, subsidiaries,
Affiliates, partners, predecessors, and all other persons acting by
or on their behalf (collectively, the "PPAI Releasees"), of and from
any claims that Cytomedix has ever had or may now have against the
PPAI Releasees related to the claims that were asserted in the
Illinois Action.
7.2. Notwithstanding the terms of Section 7.1, Cytomedix does not release
customers or agents of Licensees or suppliers of any processes or
products that are covered by the claims of the Licensed Patents;
provided, however, that such customers, agents, or suppliers shall
be released from any claims that Cytomedix has ever had or may now
have against them based on their practice, performance, manufacture,
use, or sale of Platelet Therapies using Platelet Services supplied
by Licensees or PPAI Branded Platelet Products.
7.3. With the exception of the obligations and promises of the parties to
each other under this Agreement, Licensees, on behalf of themselves
and all other PPAI Releasees, and all predecessors and successors,
and each of their shareholders, affiliates, members, officers,
directors, employees and agents, hereby irrevocably and
unconditionally release and forever discharge Cytomedix, its
officers, directors, employees, agents, shareholders,
representatives, parent companies, subsidiaries, affiliated
companies, predecessors, and all other persons acting by or on
behalf of Cytomedix (collectively, the "Cytomedix Releasees"), of
and from any claims that either Licensee has ever had or may now
have against Cytomedix or any of the other Cytomedix Releasees
related to the counterclaims and affirmative defenses that were
asserted in the Illinois Action.
8. Disputes and Dispute Resolution.
8.1. Except as specified elsewhere in the Agreement, any dispute arising
out of or relating to the formation or performance of this Agreement
(including, without limitation, the breach, termination, or validity
of this Agreement, or the determination of whether a product is a
Platelet Product) which has not been resolved by good faith
negotiation between representatives of Licensees and Cytomedix who
have authority to fully and finally resolve the dispute within
thirty (30) days after the delivery of a dispute notice by one Party
to the other, shall be finally resolved by binding arbitration in
Chicago, Illinois by three arbitrators in accordance with the
American Arbitration Association ("AAA") Commercial Arbitration
Rules then currently in effect (the "Rules"); provided, however,
that if one Party fails to participate in the negotiation as agreed
herein, the other Party can commence binding arbitration prior to
the expiration of the time period set forth above. The three
arbitrators' award shall be binding on the Parties. One arbitrator
shall be selected by each Party. The third arbitrator shall be
chosen by agreement of the Parties. If, within thirty (30) days
after a Party notifies the other that arbitration must be commenced,
either Party has not selected its arbitrator or if the Parties fail
within such time to agree upon the third arbitrator, such
arbitrator(s) shall be appointed by AAA in accordance with its
Rules. The arbitrators shall have no jurisdiction or authority to
award treble, punitive or exemplary damages against either Party.
The prevailing Party in any arbitration hereunder shall be awarded
its reasonable attorneys fees and costs in addition to any other
relief to which it may be entitled under this Agreement, but such
attorney fees and costs shall not exceed fifty percent (50%) of the
amount in dispute. The binding arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. ss.ss.1-16, and judgment upon the
award rendered by the arbitrators, or a majority thereof, may be
entered by any court having jurisdiction thereof. If a Party is
forced into court to enforce an arbitration award, it shall be
entitled to recover its reasonable attorney fees and costs. In any
arbitration, the parties shall be entitled following initiation of
the action to the same discovery that they would be allowed under
the Federal Rules of Civil Procedure; provided, however, that the
parties shall cooperate in good faith to cause such discovery to be
completed within ninety (90) days following initiation of the
arbitration action.
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8.2. Damages. Licensees and Cytomedix each agree to waive any right to
receive treble, punitive, consequential, special or indirect damages
relating in any way to this Agreement.
9. Miscellaneous.
9.1. Confidentiality. Licensees may disclose the terms of this Agreement
to Bank of America and to the U.S. Trustee in connection with the
Bankruptcy Action. Licensees agree to otherwise keep the terms of
this Agreement confidential and shall not disclose them without the
express written permission of Cytomedix, except in response to a
Court order (for which Cytomedix received reasonable advance
notice), or in any action concerning the enforcement of this
Agreement, or as otherwise required by law. Cytomedix may disclose
any aspect or part of this Agreement as it deems necessary or
appropriate to its business affairs.
9.2. Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to
the other party shall be in writing and delivered to such other
party at its address indicated below, or to such other address as
the addressee shall have last furnished in writing to the addressor.
Said notice shall be deemed to have been given on the date of its
receipt by the addressee.
If to PPAI: Perfusion Partners & Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
If to Cytomedix: Cytomedix, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO
If to Transcorporeal: Transcorporeal, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
9.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without regard to
the conflicts of law principles thereof. In the event legal action
is brought by any party to enforce its rights under this Agreement,
the losing party shall pay all of the prevailing party's reasonable
attorneys' fees and legal fees incurred in such matter. The parties
hereto agree that the District Court for the Northern District of
Illinois shall be the exclusive venue in which any litigation
arising under or related to this Agreement may proceed.
10
9.4. Assignment. Licensees may not assign any of their respective rights
or obligations under this Agreement to any person or entity without
prior written consent of Cytomedix. Cytomedix may assign its rights
under this Agreement in its sole and absolute discretion.
9.5. Waiver. Failure by any party to insist upon strict compliance with
any of the terms, covenants, or conditions of this Agreement shall
not be deemed a continuing waiver of such term, covenant, or
condition, nor shall any waiver or relinquishment of any right or
power herein at any time be deemed a waiver or relinquishment of the
same or any other right or power, whether or not similar. Waiver of
a breach hereunder may be effected only by a writing signed by the
waiving party and shall not constitute a waiver of any other breach.
9.6. Entire Agreement. This Agreement embodies the entire agreement
between the parties and supersedes any prior representations,
understandings and agreements between the parties regarding the
subject matter hereof. There are no representation, understandings
or agreements, oral or written, between the parties regarding the
subject matter hereof that are not fully expressed herein.
9.7. Severability. The parties agree that if any part, term, or provision
of this Agreement shall be found illegal or in conflict with any
valid controlling law, the validity of the remaining provisions
shall not be affected thereby. Additionally, in the event the
legality of any provision of this Agreement is brought into question
because of a decision by a court of competent jurisdiction,
Cytomedix may, by written notice to Licensees, revise the provision
in question or may delete it entirely so as to comply with the
decision of said court.
9.8. Independence of the Parties. This Agreement shall not constitute the
designation of any party as the representative or agent of the
other, nor shall any party by this Agreement have the right or
authority to make any promise, guarantee, warranty, or
representation, or to assume, create, or incur any liability or
other obligation of any kind, express or implied, against or in the
name of, or on behalf of, the other, except as expressly provided
herein.
9.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
indicated below.
Cytomedix, Inc. Transcorporeal, Inc.
Perfusion Partners & Associates, Inc.
By:/s/▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Individually and as
President of PPAI and Transcorporeal
Date: June 26, 2005 Date: June 23, 2005
By:/s/▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, Individually and as
Vice-President of PPAI and
Transcorporeal
Date: June 23, 2005
12
EXHIBIT A
Licensed Patents
U.S. Patent No. 5,165,938 entitled "Wound Healing Agents"
Australia Patent No. 596, 954 entitled "Wound Healing Agents"
Canada Patent No. 1,261,259 entitled "Wound Healing Agents"
Europe Patent No. 202,298 entitled "Wound Healing Agents" (validated in
Belgium, France, Germany, Great Britain, Netherlands, and Sweden)
Israel Patent No. 77,096 entitled "Wound Healing Agents"
Ireland Patent No. 57,894 entitled "Wound Healing Agents"
Japan Patent No. 1,986,949 entitled "Wound Healing Agents"
13
EXHIBIT B
Schedule of PPAI Branded Platelet Products
Item Description Manufacturer Number:
---------------- -------------------
Secquire Kit (15 Kits/case) SK50-20
Secquire Limited (24/case) SK50-LI DT-8405
Secquire Centrifuge Machine CL05-1017
Secquire Centrifuge Machine ▇▇▇▇-▇▇▇▇-▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Systems R-52151
(20-40 ml Change Over Kit)
Aero Carrier Bucket (10-20 ml) AC-5101
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇-▇▇ ▇▇) ▇-▇▇▇▇▇
Change Over Kit)
Four Place Swinging Bucket Rotor BR-05-103B
Shield Bucket SB-05-170
Dual Tip Applicator 26 ga x 3" SA-0105
Dual Tip Applicator 26 ga x 4" SA-0106
Dual Tip Applicator 26 ga x 7" SA-3612
Dual Tip Applicator 20 ga x 2.5" SA-0205
Dual Tip Applicator 20 ga x 4" SA-3618
Dual Tip Applicator 20 ga x 7" SA-3619
Dual Tip Applicator 20 ga x 10.25" SA-3620
Dual Tip Applicator Endoscopic SA-3650
Dual Spray Tip Applicator SA-3660
Ratio Applicator Procedural Kit SA-4400
11:1 Ratio (No Tips)
Aerosol Applicator, 11:1 Ratio SA-6111
Aerosol Regulator SA-6030
Table Ratio Kit TRK-11
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EXHIBIT C
Schedule of Platelet Services (including Contracts to Provide Platelet
Services)
Platelet Service Contracts
▇▇▇ Memorial Health Systems, Fort ▇▇▇▇▇, FL
Florida Hospital, Sebring, FL
Winter Haven Hospital, Winter Haven, FL
15
EXHIBIT D
Schedule of Websites or Domain Names
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
16