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Exhibit 10.03
Sublicensing Agreement
Between
Aidan, Incorporated
and
BioPulse International, Inc.
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Sublicensing Agreement
between
Aidan, Incorporated
and
BioPulse International, Inc.
This Sublicensing Agreement ("Agreement") is entered into this 3rd day
of August 2000 by and between Aidan, Incorporated, an Arizona corporation
("Aidan") and BioPulse International, Inc., a Nevada corporation
("BioPulse"), with reference to the following facts:
A. BioPulse is a Nevada corporation headquartered in South Jordan,
Utah that acts as referral agency, operations consultant, and intellectual
property licensor to treatment clinics in various locations around the
world, including clinics in Mexico, Germany, and the United States. Those
clinics focus on treatment of cancer and other debilitating diseases and
use a variety of protocols for the various treatment programs.
B. Aidan is an Arizona corporation headquartered in Tempe, Arizona.
Aidan operates a cancer treatment clinic in Tempe and owns all intellectual
property rights to certain novel host non-toxic therapies for cancer and
other diseases (the "Therapies"). These Therapies were originally
developed by The Center for the Improvement of Human Functioning, Inc.
("the Center") in Wichita, Kansas, which has exclusively licensed the
intellectual property inherent therein to Aidan.
C. Aidan and BioPulse have been cooperating to develop applications
of the Therapies under a Memorandum of Understanding dated March 23, 2000.
The parties now desire to enter into this Agreement providing for their
respective responsibilities for the development and application of the
Therapies. BioPulse and Aidan are both dedicated to providing the most
advanced treatments available to improve the quality and length of life of
people with cancer and other diseases which may be treated by the
Therapies.
1. Definitions. The Therapies shall consist of the following specific
products and procedures, and no others:
1.1 MPGC. MPGC is a preparation, created from a bacterial cell wall
extract, capable of stimulating conversion of inactive immune cells into
active immune cells that also acts as a powerful vaccine adjuvant (patent
application in process). More detailed information about MPGC is included
as Appendix A. This product is available now and can be produced in large
quantities with short notice.
1.2 PGM. PGM, also called C-Statin, is an angiogenesis inhibitor, created
from a plant extract that is capable of halting new blood vessel growth and
that has demonstrated potent anti-tumor activity in three animal tumor
models (patent-pending, claims allowed, issuance imminent). More detailed
information about PGM is included as Appendix B. This product is now
available only in limited quantities. A significant investment in a
production facility will be required before an uninterrupted supply can be
manufactured.
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1.3 Dendritic Cell. Dendritic Cell refers to a method for the production
of immune-stimulating white blood cells (dendritic cells) from human blood
(patent application in process). More detailed information about the anti-
tumor activity of Dendritic Cell is included in Appendix C, including
popular press and scientific journal articles describing dendritic cell
therapy as being a safe and effective treatment for certain cancers.
1.4 Cytokines. Cytokines refers to certain methods for the production of
anti-tumor cytokines from cancer patients' own and/or donor white blood
cells (patent pending). More detailed information about Cytokines is
included in Appendix D, including a copy of the patent application.
1.5 Tissue Vaccine. Tissue Vaccine refers to certain methods for the
production of tumor antigen from tumor tissue and body fluids from patients
(patent application in process). More detailed information about Tissue
Vaccine is included in Appendix E, including a copy of the rough draft of
the patent application in process.
1.6 Blood Vaccine. Blood Vaccine refers to a method for the production of
an antigenic anti-tumor vaccine from human blood. More detailed
information about Blood Vaccine is included in Appendix F. Aidan's Blood
Vaccine is a trade secret, and additional information has been supplied
separately to BioPulse.
1.7 Anti-mycoplasma Vaccine. Anti-mycoplasma Vaccine refers to a method
for the production of an anti-mycoplasma vaccine from human blood. More
detailed information about Anti-mycoplasma Vaccine is included in Appendix
G. Aidan's Anti-mycoplasma Vaccine is a trade secret, and additional
information has been supplied separately to BioPulse.
2. Sublicense and Supply: Aidan to BioPulse. In consideration of the
mutual promises and covenants set forth in this Agreement, including
(without limitation) the payments and other consideration specified in
paragraph 4 below, Aidan hereby sublicenses to BioPulse, on an exclusive
basis excepting experimental use in the United States of America, the
following intellectual property rights inherent in the Therapies:
(a) the rights to make, sell, offer for sale, and use the
Therapies;
(b) all patent, copyright, trademark, trade name, trade secret,
and other intellectual property rights inherent in the
Therapies; and
(c) all technical information and non-patentable know-how
regarding the methods of production and manufacture,
storage, methods of application, dosages, and all other
information necessary for BioPulse to effectively use the
Therapies.
Notwithstanding the foregoing, the marketing, manufacturing, copyright,
patent, trademark, trade name, use, and sales rights to the oral forms of
MPGC and PGM, intended for consumer marketing and usage, shall not be
included in the sublicense under this Agreement but shall be included in a
separate agreement between the parties. Aidan agrees to provide to
BioPulse an uninterrupted supply of MPGC and PGM at a price to be
negotiated in good faith. The supply of MPGC will be immediate, and the
supply of PGM will begin within 180 days from the date of this Agreement.
Such price shall be equal to the cost of goods and reasonable
manufacturing-related overhead, packaging, shipping, taxes, other
manufacturing and supply costs, and profit. Aidan shall also provide
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initial and ongoing technical assistance for the establishment and
maintenance of a BioPulse laboratory for producing the products for the
Therapies listed in subparagraphs 1.3 1.7 above, as outlined in paragraph
6 of this Agreement.
3. Payments to Aidan. In consideration of Aidan's promises and covenants
in this Agreement, including the sublicensed rights specified in paragraph
2 above, BioPulse agrees to pay Aidan $750,000 in cash on the following
terms: $50,000 on or before the date on which the parties anticipate that
Aidan will set up the lab at the designated BioPulse clinic, pursuant to
paragraph 6 hereof, and Aidan hereby acknowledges receipt thereof; an
additional $75,000 within 30 days from the date of this Agreement; an
additional $125,000 within 60 days from the date of this Agreement; and the
final $500,000 within 180 days from the date of this Agreement. In further
consideration, and subject to the following vesting schedule, BioPulse
hereby grants Aidan an option to purchase 1,500,000 shares of BioPulse
common stock, at a price equal to the publicly quoted price for BioPulse
common stock, as of the date of this Agreement, on the open market
therefor. The stock options granted under this Agreement shall vest
according to the following schedule: the option to purchase the first
100,000 shares shall vest immediately upon the execution of this Agreement;
and the option to purchase the remaining 1,400,000 shares shall vest in
quantities of 200,000 shares each, upon the occurrence of each of the
following conditions:
200,000 shares Submission of the patent application for MPGC
(already occurred)
200,000 shares Submission of the patent application for
Cytokines (already occurred)
200,000 shares Submission of the patent application for
production of Tissue Vaccine
200,000 shares Issuance of patent for PGM
200,000 shares Issuance of patent for MPGC
200,000 shares Issuance of patent for Cytokines
200,000 shares Issuance of patent for Tissue Vaccine
All options granted under this Agreement shall be exercised upon written
notice from Aidan to BioPulse, as provided in paragraph 15.3 hereof.
Unless previously exercised, the options granted under this Agreement shall
lapse, and shall be of no further effect, on the date that is 10 years from
the date of this Agreement, regardless of whether any of the above
conditions shall have occurred as of that date. Subject to the foregoing
terms and conditions, BioPulse warrants to Aidan (a) that BioPulse, at all
relevant times, shall have issued or authorized sufficient common stock to
enable Aidan to exercise its options granted under this Agreement; and (b)
that no later than May 31, 2001, BioPulse will file a registration
statement on form S-3 or equivalent to register the common stock underlying
the options.
4. Intentionally Omitted.
5. Waiver of Restitution. Nothing in this Agreement shall be construed
as entitling BioPulse to any right to restitution of any royalties paid
hereunder, or to any right to avoid payment of royalties due hereunder, in
the event any or all of Aidan's patent applications regarding the Therapies
are denied, or in the event any patent that is issued to Aidan regarding
the Therapies is invalidated.
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6. Technical assistance. Through a lab that Aidan agrees to establish at
a BioPulse facility to be designated by BioPulse, Aidan shall provide
technical assistance and training to enable BioPulse personnel to provide
the Therapies to BioPulse patients. The parties anticipate that the
initial training will take place before July 31, 2000. Aidan will provide
no more than 20 days of on-site training during July and August 2000.
Thereafter, Aidan shall provide additional training as mutually agreed
upon, and at a per diem that is commensurate with industry standards for
biotechnology consultations.
7. Marking Obligations. Aidan shall notify BioPulse when patents
covering MPGC and PGM have been issued. From that date forward,
immediately upon the issuance of patents covering MPGC or PGM, BioPulse
shall mark the packaging in which it supplies MPGC or PGM made under this
sublicense with the following legend, in a conspicuous position on the
package, in print no smaller than 10 pica:
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| Made under license under U.S. Patent |
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| [set forth applicable patent number]. |
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Pending issuance of the patent covering PGM, BioPulse shall mark the
packaging in which it supplies PGM made under this sublicense with the
following legend, in a conspicuous position on the package, in print no
smaller than 10 pica:
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| Made under license. Patent pending. |
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Pending issuance of a patent covering MPGC, BioPulse shall mark the
packaging in which it supplies MPGC made under this sublicense with the
following legend, in a conspicuous position on the package, in print no
smaller than 10 pica:
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| Made under license. |
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| Patent application in process. |
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Aidan shall notify BioPulse when Aidan's patent application covering MPGC
has been filed. From that date forward, until Aidan has notified BioPulse
that a patent covering MPGC has been issued, BioPulse shall mark the
packaging in which it supplies MPGC made under this sublicense with the
following legend, in a conspicuous position on the package, in print no
smaller than 10 pica:
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| Made under license. Patent pending. |
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8. Enforcement. BioPulse shall promptly notify Aidan of suspected patent
infringement by third parties, and shall reasonably cooperate with Aidan in
pursuing infringement claims against third parties. Aidan, while it has no
obligation to sue third parties for patent or other infringement, retains
the exclusive right to file and control infringement litigation involving
the Therapies or the intellectual property rights sublicensed under this
Agreement; however, should Aidan elect not to pursue patent enforcement
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actions, it hereby authorizes BioPulse to do so on Aidan's behalf. Aidan
or BioPulse will bear their respective costs from any infringement
litigation brought by either or both of them, and any recovery shall be
granted to the party which suffered the damages as shown during such
litigation. Aidan's decision not to enforce any patents or other
intellectual property rights covering any of the Therapies against a third
party shall not relieve BioPulse of the obligation to pay royalties to
Aidan.
9. Indemnity. BioPulse shall indemnify and hold Aidan harmless against
any and all claims brought by any third person resulting from BioPulse's
use of the Therapies, or from BioPulse's exercise of any rights sublicensed
under this Agreement, excepting claims arising from intellectual property
issues caused by the act or omission of Aidan, such as those that may arise
under paragraph 13.
10.1 Termination. In the event that BioPulse breaches any of its covenants
or warranties under this Agreement, including (without limitation) its
covenant to timely make the payments specified in this Agreement, and such
breach is not cured within 30 days after written notice from Aidan, or in
the event that BioPulse shall cease doing business due to insolvency or
bankruptcy, then all of BioPulse's rights under this Agreement, including
(without limitation) the rights sublicensed to BioPulse by Aidan under this
Agreement, shall immediately terminate, and the rights sublicensed to
BioPulse hereunder shall immediately revert to Aidan. This shall be
Aidan's sole recourse against BioPulse for a termination due to nonpayment
by BioPulse.
10.2 Effect of Termination. Upon termination of this Agreement under this
paragraph 10.1, all rights granted and obligations undertaken hereunder
shall terminate forthwith except: (a) Aidan's rights and BioPulse's
obligations under paragraphs 3 and 4 hereof, including (without limitation)
BioPulse's obligation to pay to Aidan all amounts due under paragraphs 3
and 4 hereof; (b) Aidan's rights and BioPulse's obligations under paragraph
9 hereof; and (c) BioPulse's rights and Aidan's obligations under paragraph
13 hereof.
11. Confidentiality. The parties have previously executed confidentiality
agreements covering certain business plans, practices, and the Therapies.
The parties agree that the provisions of these agreements shall remain in
full force and effect.
12. Research. The parties agree that it is important to continue the
research and development of the Therapies. In the course of implementing
this Agreement, the parties shall continue to discuss the best methods for
accomplishing this objective, including project-oriented research contracts
between BioPulse and Aidan and/or third parties, consulting agreements
between BioPulse and Aidan, and any other means for continuing to improve
the Therapies. Notwithstanding these discussions, ownership of the
Therapies and of all rights sublicensed hereunder shall at all times remain
with Aidan, until expressly and specifically transferred by Aidan in a
writing signed by an authorized agent of Aidan.
13. Representations and Warranties. Aidan represents and warrants (a)
that the Center or Aidan is the exclusive owner of the entire right, title
and interest in and to the Therapies, free and clear of the rights and
claims of any third party; (b) that the Center has granted to Aidan an
exclusive license to the entire right, title and interest in the Therapies
that the Center holds; (c) that all documents relating to such grant by the
Center are attached as Appendix H; (d) that BioPulse's use of the
Therapies, as contemplated herein, will not infringe any rights of any
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third parties; (e) that Aidan will indemnify and hold BioPulse harmless
against and in respect of any loss, liability, cost, damage or expenses
which BioPulse shall have incurred as a result of any claim of infringement
by the Center or any third party; (f) that Appendices A through G contain
copies of all patents, patent applications, studies, research, and
documents publicly available relating to the Therapies; and (g) that to the
best knowledge of Aidan, Aidan has observed only the following side effects
from the proper use of the Therapies, all of which were temporary: fever
chills, flu-like symptoms, and hypotension, and Aidan makes no
representation that other side effects may not arise. Aidan agrees to
immediately notify BioPulse of any additional side effects or other
unintended consequences arising from the use of the Therapies that come to
the attention of Aidan. Aidan expressly represents that none of the
Therapies have received approval for use from the U.S. Food and Drug
Administration. Except as expressly set forth in this Agreement, Aidan
makes no warranty or representations, express or implied, regarding the
Therapies or any of the intellectual property rights sublicensed hereunder.
ALL IMPLIED WARRANTIES, INCLUDING (WITHOUT LIMITATION) THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE
HEREBY EXCLUDED.
14. General Provisions.
14.1 The term of this Agreement shall end on the last to expire of any of
the patents obtained for any of the Therapies.
14.2 This Agreement shall be governed by the laws of the State of Arizona
and the United States of America. In the event any judicial action or
arbitration is brought to enforce or interpret the terms of this Agreement,
or otherwise arising out of or relating to the parties' rights and
obligations hereunder, the substantially prevailing party shall be entitled
to its reasonable attorneys' fees, expert witness fees, and costs and other
expenses of litigation.
14.3 Any notice expressly provided for under this Agreement shall be in
writing, shall be given either manually or by mail, telegram, telex,
telefacsimile or cable and shall be deemed sufficiently given if and when
received by the party to be notified at its address set forth below in this
paragraph 14.3 or if and when mailed by certified or registered mail,
postage prepaid, addressed to such party at such address. Either party
may, by notice to the other, change its address for receiving such notices.
Notices to Aidan shall go to:
Aidan, Incorporated
621 S. 48th Street
Suite 111
Tempe, Arizona 85281
Notices to BioPulse shall go to:
BioPulse International, Inc.
10421 South Jordan Gateway, Suite 500
South Jordan, Utah 84095
14.4 This Agreement shall not be assignable by either party without the
prior consent of the other, which consent may be withheld or conditioned in
such party's sole and absolute discretion; provided, however, this
Agreement shall be freely assignable by either party, in whole or in part
(i) to any majority-owned subsidiary of such party, provided that the
assignor guarantees its assignee's performance of the Agreement, or (ii) to
any entity which succeeds to all or any substantial part of the assignor's
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business. Nothing in this Agreement shall be construed as providing
BioPulse any right to sublicense any of the intellectual property rights
inherent in any of the Therapies, or as preventing Aidan from sublicensing
any such rights not exclusively sublicensed to BioPulse hereunder.
14.5 This Agreement sets forth the entire understanding between the parties
as to the subject matter hereof, and supersedes all other documents, verbal
consents or understandings, including (without limitation) the Memorandum
of Understanding dated March 23, 2000. This Agreement may not be modified
or amended except through a writing signed by both parties.
14.6 Nothing in this Agreement shall be construed as creating a
partnership, joint venture or other agency relationship between Aidan and
BioPulse. This Agreement conveys no authority, express or implied, to bind
either party to any third person, or to cause or allow them to accept
service of process or any other notices of any nature on the other party's
behalf. There are no intended third-party beneficiaries under this
Agreement.
14.7 Any and all disputes pertaining to the rights and obligations of the
parties under this Agreement, or otherwise arising out of or relating to
this Agreement, shall be submitted to arbitration before the American
Arbitration Association, and shall be settled thereby in accordance with
that organization's Patent Arbitration Rules and/or Commercial Arbitration
Rules (as applicable). Such arbitration shall be conducted in Phoenix,
Arizona, before a panel of three arbitrators, at least one of whom shall be
a practicing attorney or retired judge having experience with and knowledge
of medical patents. Judgment on the award rendered by the arbitrators may
be entered by any court having jurisdiction thereof. Either party may
apply to the arbitrators seeking injunctive relief until the arbitration
award is rendered or the controversy is otherwise resolved. Either party
also may, without waiving any remedy under this Agreement, seek from any
court having jurisdiction any interim or provisional relief that is
necessary to protect the rights or property of that party, pending the
establishment of the arbitral tribunal or pending the arbitral tribunal's
determination of the merits of the controversy.
IN WITNESS WHEREOF, the parties have executed this Agreement and have made
it effective as of the date first above written.
AIDAN, INCORPORATED BIOPULSE INTERNATIONAL, INC.
By: /S/ Neil Rordan By: /S/ Jonathan Neville
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Name: Neil Rordan Name: Jonathan Neville
Title: President Title: President
August 3, 2000 August 3, 2000
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