LETTER AGREEMENT BETWEEN Consortium Service Management Group, Inc. (“CSMG”) and Live Tissue Connect, Inc. (“LTC”)
EXHIBIT
10.1
LETTER
AGREEMENT BETWEEN Consortium Service Management Group, Inc. (“CSMG”) and Live
Tissue Connect, Inc. (“LTC”)
January
4, 2008
The
following is the agreed structure between CSMG and LTC for the continuation
of
the R&D and marketing of the Live Biological Tissue Bonding project (“Tissue
Bonding Project”).
On
May
23, 2002 CSMG formed a subsidiary LTC, taking in outside shareholders that
will
own 14% of LTC. LTC and CSMG agree that it is imperative that the work of the
Tissue Bonding Project continue and CSMG agrees to continue the project and
advance funds as available to continue the project. It is agreed that effective
from 5-23-06 all expenses and costs advanced by CSMG on the Tissue Bonding
Project, paid by CSMG shall be carried on the books of LTC as a liability and
accrue interest and begin accruing at the rate of 8% per annum on July 1, 2008.
These costs effective July 1, 2008 including but are not limited to legal fees,
patent costs, R&D costs, Kiev office support costs, travel, consulting, U.S.
and Ukraine demonstration costs, equipment costs and U.S. development costs
that
are paid for by CSMG. Such expenses shall be reimbursed to CSMG from sources
approved by the Board of Directors from cash flow, debt instruments, IPO, equity
or debt placements or other means.
In
addition, once LTC is funded, LTC shall pay to CSMG the following amounts for
services:
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1)
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A
minimum management fee of $200,000.00 for the first year beginning
on the
date of the initial filing of S1and shall be negotiated each year
thereafter but shall not be less than $200,000 annually.
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2)
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All
costs of IAW Ukraine development estimated at $ 480,000.00 per year
($40,000 per month beginning September 2008) depending on devices
being
developed to be undertaken by IAW.
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3)
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A
$300,000 one time fee on the 80th
day following FDA approval
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4)
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Reimbursement
of all Tissue Bonding Project expenses since 5-23-06 for LTC. Interest
in
the form of an 8% interest accrual will begin July 1, 2008 and to
be paid
from financing or revenues as those funds are available to
LTC.
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5)
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After
first 510K submittal and beginning in July 2008, LTC is to pay the
greater
of a minimum annual royalty fee of $220,000.00 or a minimum royalty
of 2%
of the adjusted retail price of all sales including those products
marketed and distributed by other companies for sales and 2 % any
LTC
license fees received from other companies. First payment shall be
paid no
later than the 80th
day following FDA approval.
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6)
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LTC
shall pay a portion of the annual costs of the CSMG Kiev office for
Kiev
support attributed to LTC work which is estimated at LTC share of
$60,000.00 per year.
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Executed
this 44th
day of
January 2008.
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FOR
LTC:
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/s/
Xxxxxx Xxxxxxxx
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/s/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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Executive
Vice President
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Chairman
and CEO
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CSMG
OFFICES: Corpus
Christi, TX - Kiev, Ukraine - Washington, DC - Atlanta, GA
Contact:
Xxxxxx X. Xxxxxxx Chairman and CEO 000 Xx. Xxxxxxxxx, Xxxxx 000 Xx., Xxxxxx
Xxxxxxx, XX 00000-0000
Telephone
000-000-0000 FAX: 000-000-0000 E-Mail xxxxxxxx@xxxxx.xxx
WEB
Site:
xxx.xxxxxxxxxxxxxxxxxxxxx.xxx
