Limited Exclusive License
Exhibit 10.6
Limited Exclusive License
Made this 7th day of July, 2005 between Neuralstem, Inc. (NS) and High Med Technologies, Inc. (HM).
Whereas NS is the owner of certain neural stem cell technology, described more fully on exhibit A attached hereto and incorporated by reference herein, and;
Whereas NS desires to contract with HM for services relating to sales, distribution and marketing of its cells for limited purposes, and;
Whereas HM desires to provide these services under the terms and conditions of this agreement, now therefore;
For good and valuable consideration exchanged between the parties, the Parties agree as follows:
Term: The term of the agreement shall be for 5 years. The term of the agreement shall be extended automatically to the life of the patent(s) shown in Exhibit A when the Annual Revenue Target for Year 5 set forth in Exhibit B has been met.
Scope: HM shall, during the term of the agreement, have the exclusive right (outside of Neuralstem itself) to create, manufacture, develop, sublicense, or offer for sale the Neuralstem Technology, described more specifically on exhibit A, or products created using Neuralstem Technology, solely for the purpose(s) of research, and further limited to in vitro research that do not involve injection of the cells or cell-derived materials into live animals or human beings. It is the express intent of the parties that HM may NOT knowingly create, manufacture, develop, sublicense or offer for sale the Neuralstem Technology or products created using Neuralstem Technology for research or research purposes where the cells and cell-derived materials will be used in whole or in part as a therapeutics to treat a disease. HM shall promptly report to Neuralstem any knowledge of a breach of this license limitation by a HM customer.
Limited Exclusivity: During the term of the agreement Neuralstem shall not enter into an agreement with any other entity which would allow the other entity to offer the technology described in exhibit A, for the purposes covered by the scope of this agreement, The parties acknowledge and agree that nothing in this agreement is meant to keep Neuralstem itself, from making any kind of deal with any individual outside. party for any use of any Neuralstem Technology. Neuralstem acknowledges that it has no current plans to establish a similar business "in house", nor to compete with MI in this area during the term of the agreement.
Compensation: During the term of the agreement HM shall pay to Neuralstem the following:
80% of any revenue obtained by HM from a license or other supply deal where HM does not have to manufacture and supply the product to the customer, where revenue means the net proceeds received by HM from the sale of a license or a product minus applicable sales tax, returns, discounts, third party sales commissions, stacking royalties, and third party OEM supplies;
20% of any revenue obtained by HM from a license or other supply deal where HM does have to manufacture and supply the product to the customer, where revenue means the net proceeds received by HM from the sale of a license or a product minus applicable sales tax, returns, discounts, third party sales commissions, stacking royalties, and third party OEM supplies;
In cases where Neuralstem licenses or sells Neuralstem Technology within the scope of this agreement to a buyer who is or has been a customer of HM, Neuralstem shall pay to HM 20% of any revenue obtained from the buyer.
Neuralstem makes no representations or warranties with respect to the product, or intellectual property related to the product and or its use. HM senior management is fully aware of and informed on any and all intellectual property issues surrounding the technology and assumes any risk related thereto, HM shall bear it's own legal costs with respect to any patent related litigation or other proceedings brought against HM.
Revenue Targets: The parties agree that in order for HM to maintain its limited exclusive license, it shall meet or exceed the revenue targets contained on Exhibit B hereto ("Annual Revenue Targets") and incorporated by reference herein.
In the event that HM does not meet Annual Revenue Target, Neuralstem shall have 15 days in which to notify HM that the exclusivity of its license is revoked. Then and in that event, HM shall continue to have a non exclusive license to provide the same services and products, for the same scope of work, as contained in this license, for the remainder of the term.
In the event that Neuralstem does NOT so notify HM, the exclusivity shall continue and the next annual target year shall be assessed independently, not cumulatively.
Sale of HM: In the event of a sale or other disposition of all or substantially all of the assets of HM, or an event in which control of more than 50% of HM's voting stock changes hands, Neuralstem shall have the option of converting the license to a non exclusive license, or of taking a percentage of the sales proceeds as outlined on Exhibit C hereto and incorporated by reference herein,
/s/ I. Xxxxxxx Xxxx
Neuralstem Representative
I. Xxxxxxx Xxxx President & CEO
Name and Title
July 8, 2005
Date
/s/ Xxxx X. Xxxx
High Med Technologies Representative
Xxxx K, Johe President & CEO
Name and Title
July 7, 2005
Date
Exhibit A
Neuralstem Technology: The following patents, patent filings, and future improvements thereof:
File Appln. Inventor Status
No. No.
003 08/719,450 Johe U.S. Patent 5,753,506
ISOLATION, PROPAGATION, AND DIRECTED DIFFERENTIATION OF STEM CELLS FROM EMBRYONIC AND ADULT CENTRAL NERVOUS SYSTEM OF MAMMALS
005 PCT/US97/07669 Johe WO 97/44442
ISOLATION, PROPAGATION, AND DIRECTED DIFFERENTIATION OF STEM CELLS FROM EMBRYONIC AND ADULT CENTRAL NERVOUS SYSTEM OF MAMMALS
011 EP 97923569.4 Johe pending in Europe
ISOLATION, PROPAGATION, AND DIRECTED DIFFERENTIATION OF STEM CELLS FROM EMBRYONIC AND ADULT CENTRAL NERVOUS SYSTEM OF MAMMALS
012 CA 2,257,068 Johe pending in Canada
ISOLATION, PROPAGATION, AND DIRECTED DIFFERENTIATION OF STEM CELLS FROM EMBRYONIC AND ADULT CENTRAL NERVOUS SYSTEM OF MAMMALS
028 90/006,459 Johe reexamination denied
ISOLATION, PROPAGATION, AND DIRECTED DIFFERENTIATION OF STEM CELLS FROM EMBRYONIC AND ADULT CENTRAL NERVOUS SYSTEM OF MAMMALS
I.A.2.
004 08/919,580 Johe U.S. Patent 6,040,180
(Continuation-in-part of U.S. Patent 5,753,506)
IN VITRO GENERATION OF DIFFERENTIATED NEURONS FROM CULTURES OF MAMMALIAN MULTIPOTENTIAL CNS STEM CELLS
007 PCT/US98/09236 Johe WO 98/50525
EMBRYONIC AND ADULT CNS STEM CELLS
013 EP 98920291.6 Johe
pending in Europe
EMBRYONIC AND ADULT CNS STEM CELLS
014 CA 2,259,484 Johe pending in Canada
EMBRYONIC AND ADULT CMS STEM CELLS
1. B .1.
016 09/398,897 Yang et al. pending in U.S.
(Continuation-in-xxx of U.S. Patent Application 09/053,414, now abandoned, which is a continuation-in-part of U.S. Patent 5,753,506)
STABLE NEURAL STEM CELL LINES
017 PCT/US99/22007 Yang et al. WO 00/17323
STABLE NEURAL STEM CELL LINES
000 00000/99 Yang et al Austra. Patent 755849
STABLE NEURAL STEM CELL LINES
020 CA 2,343,571 Yang et al, pending in Canada
STABLE NEURAL STEM CELL LINES
021 EP 99948396.9 Yang et al, pending in Europe
STABLE NEURAL STEM CELL LINES
022 JP 2000-574224 Yang et al. pending in Japan
STABLE NEURAL STEM CELL LINES
1.B.2.
024 10/047,352 Yang et al. pending in U.S,
(Continuation-in-xxx of U.S., Patent Application 09/053,414, now abandoned, which is a continuation-in-part of U.S. Patent 5,753,506)
STABLE NEURAL STEM CELL LINES
Exhibit B
Annual Revenue Target
Year 1 (ending in Dec, 31, 2006): 100 units
Year 2 (ending in Dec. 31, 2007): 200 units
Year 3 (ending in Dec. 31, 2008): 300 units
Year 4 (ending in Dec. 31, 2009): 400 units
Year 5 (ending in Dec. 31, 2010): 800 units
Exhibit C
Schedule of Payment upon Sale of HM:
90% of the proceeds received from the sale of HM business assets and rights within the Scope of this Agreement, if the sale occurs within the first 12 months of the signing of this agreement;
50% of the proceeds received from the sale of HM business assets and rights within the Scope of this Agreement, if the sale occurs between 13th and 36th month of the signing of this Agreement;
10% of the proceeds received from the sale of HM business assets and rights related to the Scope of this Agreement, if the sale occurs after 36 months of the signing of this Agreement;
