99.1
COOPERATION AGREEMENT
Cooperation Agreement (this "Agreement") dated March 3, 2006, among
Mediscience Technology Corp., a New Jersey corporation ("Mediscience"), Xxxxx
Xxxxxxxxx ("Katevatis", the Chairman and Chief Executive Officer of Mediscience,
each with an office at 0000 Xxxxxxxxxx Xxx, Xxxxxx Xxxx XX 00000, Alfanix
Technology, Ltd., a New York corporation ("Alfanix"), and Xxxxxx X. Xxxxxx
^Xxxxxx"), the President and Chief Executive Officer of Alfanix, each with an
office at 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
RECITALS:
WHEREAS, Mediscience and Alfanix (collectively, the "Corporate Parties" and
individually, a "Corporate Party"), desire to create a contractual, corporate,
mutually operational/oversight relationship between the Corporate Parties
whereby both focus their attention and respective resources on Cancer Diagnostic
Ratiometer ("CD-R") technology, the successful FDA clinical trials of the CD-R
and subsequent initial and continual market entry of Mediscience's broad IP
platform applications; and
WHEREAS, Mediscience owns certain worldwide, irrevocable licenses in technology
and wishes to enter into this Agreement to accelerate the commercialization of
this technology with the help of Alfanix; and
WHEREAS, Alfanix acknowledges that Mediscience's defined field of use of its
technology (the "Field of Use") is medical applications for cancer diagnosis
using fluorescence related to and embodied in the CD-R technology; and
WHEREAS, Mediscience is a public company whose shares of common stock are
admitted to trading on the OTC Bulleting Board under the symbol "XXXX.XX"; and
WHEREAS, because Mediscience as a public company, it is in the best position to
secure funding for the Corporate Parties; and
WHEREAS, Alfanix represents extremely valuable and continual operational support
and professional shop knowledge under the supervision of Xxxxxx, which are not
available in any one individual; and ,,
WHEREAS, the Corporate Parties recognize that the synergy between them is
regarded as vital for the Mediscience paradigm IP technology of molecular
optical fluorescence spectroscopy for cancer diagnosis; and
WHEREAS, Mediscience desires the operational/oversight relationship with Alfanix
to enhance significant and potential funding efforts, and to continue the
desired market entry of the CD-R as Mediscience's first of a number of
Mediscience-desired IP platform applications in its Field of Use. NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Katevatis and
Xxxxxx (collectively, the "Individual Parties" and individually, an "Individual
Party") and the Corporate Parties hereby agree as follows intending to be
legally bound.
x.Xx order to facilitate the ability of Mediscience to raise the substantial
funds that will be required for the clinical trials of the CD-R, the Individual
Parties hereby agree to waive their respective anti-dilution rights, if and to
the extent necessary in the opinion of the investment banking firm to be
retained by Mediscience to raise up to $10,000,000 (the "Investment Banker"). At
present, it appears that Source Capital Group, Inc. ("Source") will be the
Investment Banker, but the foregoing sentence shall apply to whatever Investment
Banker is ultimately retained by Mediscience. Such waivers of anti-dilution
rights shall not become effective until the investment banking firm has
submitted suggessted terms of the "bridge" financing and such terms have been
approved by Mediscience.
2 In order to facilitate the ability of Mediscience to raise the substantial
funds that will be required for the clinical trials of the CD-R, Alfanix hereby
agrees, at Mediscience expense, to reasonably participate and conduct a
reasonable number of presentations on behalf of Mediscience of the CD-R
technology to the Investment Banker and any of its potential investors.
3 For adequate consideration and Mediscience's best interests Katevatis hereby
agrees to step down as Chief Executive Officer to be compensated Chairman of
Mediscience to allow for the election of an experienced Chief Executive Officer
by the Board of Directors of Mediscience.
4 The Individual Parties hereby express their solidarity with respect to the
accrued but unpaid amounts due to each of the Individual Parties by Mediscience,
as such amounts are disclosed in the Annual Report on Form 10-KSB of Mediscience
for its fiscal year ended February 28, 2005. The Individual Parties hereby
jointly appeal to the investment banker to be retained by Mediscience to have
both the contemplated "bridge" financing and "permanent" financing
oversubscribed, with the funds derived from such oversubscriptions above
$6,000,000 to be used to pay down a minimum of $250,000 of the approximately
$1,500,000 owed by Mediscience to each of the Individual Parties. The Individual
Parties hereby further express their solidarity by agreeing to share equally all
funds made available by the Board of Directors of Mediscience to pay down the
amounts owed to the Individual Parties.
5 Alfanix will contractually assist Mediscience, on a best effort basis, in
supervising the construction of FDA-required CD-R units, and improving the
algorithms used by the CD-Rs, by testing the CD-R unit and developing algorithms
in the Dominican Republic, and other jointly approved Latin American Countries
(e.g. Ecuador and Mexico) as sampling zones for the examination of women with
cervical cancer.
6 Alfanix will supply a budget to be paid/compensated on a negotiated basis for
what it is asked and agrees to do for Mediscience related to the CD-R contract
including, without limitation, training in the operation of the CD-R any
Mediscience personnel and/or principal investigators participating in the
clinical trials in the United States of the CD-R.
7 Mediscience will supply a budget upon the request of Alfanix to be
paid/compensated on a negotiated basis for what it is asked and agrees to do for
Alfanix
8. Mediscience will include in its three-year budget line items to support work
Alfanix is asked to perform by Mediscience.
9 Alfanix notes that recently, new IP and pending patent applications cover new
aspects of emission spectroscopy for tissue diagnoses with Xxxxxx-Shifted
fluorescence spectroscopy and combination of fluorescence and phosphorescence
spectroscopy for cancer diagnosis, respectively. Under a separate contract,
Alfanix will determine how to adapt the Xxxxxx-Shifted or phosphorescent patents
to the CD-R for cancer diagnosis and then, if suitable, Alfanix will build and
test the new units. These new Mediscience IP properties may expand upon the
seminal fluorescence work that the current Mediscience CD-R unit is based on.
10. Mediscience hereby hires Alfanix to manage the construction of 8 CD-Rs for
which Mediscience hereby agrees to pay Alfanix $200,000 per year for a minimum
of three years. At Mediscience's option, Alfanix will arrange and submit its
itemized budget with deliverables for 8 CD-Rs to be constructed at CCNY on best
effort basis at a fixed cost of $611,000.
11. To establish relationships in Latin America, Mediscience hereby agrees to
pay Alfanix $15,000 concurrently with the execution and delivery of this
Agreement and to pay Alfanix an additional $15,000 upon the earlier to occur of
(i) 60 days after the date of this Agreement and (ii) the receipt by Mediscience
of at least $500,000 in "bridge" financing.
12 Subject to Mediscience's receipt of at least $2,000,000 in "permanent"
financing and Alfanix's obtaining all required approvals to do so, Mediscience
hereby agrees to pay Alfanix $351,000 to conduct a one-year program in the
Dominican Republic to arrange and supervise the examination of a population of
women believed to have a higher incidence of cervical cancer than a
similarly-sized group in the United States. The purpose of this program is to
enable Alfanix to determine optimal algorithms for use of the CD-R to detect
cervical cancer. Mediscience hereby agrees, at its own expense, to provide
Alfanix with two CR-Rs and liability insurance that covers Alfanix and those
using the CD-Rs in the Dominican Republic for this one-year program. Mediscience
also hereby agrees, at its own expense, to provide Alfanix and those using the
CD-Rs in the United States with liability insurance coverage.
13. Subject to Mediscience's receipt of at least $4,000,000 in "permanent"
financing (including the $2,000,000 referred to in Section 12) and Alfanix's
obtaining all required approvals to do so, Mediscience hereby agrees to pay
Alfanix $351,000 to conduct a one-year program in another Latin American country
(expected to be either Ecuador or Mexico) to arrange and supervise the
examination of a population of women believed to have a higher incidence of
cervical cancer than a similarly-sized group in the United States. The purpose
of this program is to further enable Alfanix to determine optimal algorithms for
use of the CD-R to detect cervical cancer. Mediscience hereby agrees, at its own
expense, to provide liability insurance that covers Alfanix and those using the
CD-Rs in such second Latin American country. Mediscience hereby grants Alfanix
the right to use one of the CD-Rs made available to Alfanix pursuant to Section
12 in this second program or to have up to two additional CD-Rs manufactured at
CCNY at the expense of Mediscience. Alfanix agrees to arrange on best effort
basis for the manufacture of these additional CD-Rs at CCNY at a fixed cost of
$76,375 each.
14. Mediscience hereby agrees to grant Alfanix the exclusive right to sell CD-Rs
in the
Dominican Republic, on proof of documented official Government approval to sell
CD-Rs in the Dominican Republic for medical use or research. Mediscience hereby
grants Alfanix the nonexclusive right to sell CD-Rs in Ecuador and Mexico, which
right becomes exclusive on proof of documented official Government approval to
sell CD-Rs in such countries for medical use or research. Mediscience hereby
agrees to grant Alfanix the exclusive right to sell CD-Rs in each other Latin
American country on proof of documented official Government approval in such
country to sell CD-Rs in such country for medical use or research. If there
exists a reciprocity agreement among any Latin American countries where CD-Rs
could be marketed then exclusive rights will be granted for each such country.
15. Alfanix hereby represents to Mediscience that it does not have any agreement
to provide similar management and/or consulting services to any other party,
firm, company or project on matters using fluorescence for diagnosis of cervical
cancer.
16. This Agreement shall inure to the benefit of and be binding upon the
respective heirs, executors, successors, representatives, and assigns of the
parties, as the case may be.
17. The relationship between the Corporate Partners created by this Agreement
shall be that of independent contractor, and neither Alfanix nor Mediscience
shall have authority to bind or act as agent for the other Corporate Party or
its employees for any purpose.
18. This Agreement may not be modified in any respect by any verbal statement,
representation, or agreement made by any employee, officer, or representative of
either Corporate Entity, but may only be amended by a written amendment
specifically referring to this Agreement, which is executed on behalf of the
Corporate Parties by the Chief Executive Officers thereof and by the Individual
Parties if such amendment adversely affects the rights of either Individual
Party.
19. The Corporate Parties have prepared a joint press release approved by the
Corporate Parties and the Individual Parties (collectively, the "Parties"), a
copy of which is attached hereto an Annex A.
20. The Parties intend to be legally bound under the laws of the State of New
York without regard to conflict of law issues, and to submit any and all
disputes of whatsoever nature to full, final and binding arbitration in the City
of New York before a single arbitrator in accordance with the commercial
arbitration rules of the American Arbitration Association.
21. The foregoing provisions of this Agreement accurately set forth the goal and
objectives of the Parties, and each of the Parties willingly executes this
Agreement as of the date first above written.
Mediscience Technology Corp Alfanix Technology, Ltd
Name: Xxxxx Xxxxxxxxx Esq. Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Title: President and Chief
Executive Officer Executive Officer
