DEVELOPMENT AGREEMENT
 
 
BETWEEN
 
CARDIOVASCULAR BIOTHERAPEUTICS, INC.
 
AND
 
CARDIO NEO-GENESIS LP
 
 
Dated as of November 11, 2008
 
 
 
 
 
 
 
 
Exhibit 10.1
 
 
 

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TABLE OF CONTENTS
 

       
Page
1
.
Definitions
1
   
1.1
Definitions
1
   
1.2
Singular and Plural
1
         
2
.
Description of Technology / Goal of Development
1
       
3
.
Development Services
2
   
3.1
License
2
   
3.2
Development
2
   
3.3
Disclaimer of Warranties
3
   
3.4
Rights to Property
3
   
3.5
Reports and Records
3
   
3.6
Other Activities
4
         
4
.
Development Fee
4
       
5
.
Revenue Sharing from Product Sales
4
       
6
.
Representations and Warranties of CVBT
5
   
6.1
Organization
5
   
6.2
Authorization
5
   
6.3
Intellectual Property Rights
5
         
7
.
Representations, Warranties and Covenants of CNG
5
       
8
.
Insurance
5
       
9
.
Term and Termination
6
   
9.1
Term
6
   
9.2
Events of Termination
6
   
9.3
Effect of Termination
6
         
10
.
Indemnification
6
           
10.1
Indemnification by CVBT
6
   
10.2
Indemnification by CNG
7
   
10.3
Defense of Claims
7
   
10.4
Consequential Damages
7
         
11
.
Miscellaneous
7
   
11.1
No Implied Waivers; Rights Cumulative
7
   
11.2
Force Majeure
7
   
11.3
Relationship of the Parties
7
   
11.4
Notices
8
   
11.5
Successors and Assigns
8
   
11.6
Amendments
9
   
11.7
Governing Law
9
   
11.8
Taxes
9
   
11.9
Severability
9
   
11.10
Confidentiality
10
   
11.11
Trading Limitations
10
   
11.12
Counterparts
10
   
11.13
Entire Agreement
10

 
SCHEDULES
1.1
 Definitions
2.1
 Description of Heart Drug IP
3.1
 Technology License Agreement
3.2.1
 Work Plan
4
 Development Fee

 
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DEVELOPMENT AGREEMENT
 
This Development Agreement (the “Agreement”) is made as of November 11, 2008, by
and between CardioVascular BioTherapeutics, Inc., a Delaware corporation
(“CVBT”), and Cardio Neo-Genesis LP, a Nevada limited partnership (“CNG”).
 
R E C I T A L S
 
A. CVBT has developed certain intellectual property regarding a drug candidate
for the treatment of severe coronary heart disease (“CHD”) (the “Heart Drug IP”)
and is willing to license to CNG the Heart Drug IP for the purpose of further
developing the Heart Drug IP and advancing a potential treatment for severe CHD
in the FDA Process.
 
B. CVBT has experience in the development of pharmaceutical products and has, or
has access to, the facilities, equipment, employees and other resources to
accomplish development activities, on behalf of CNG, with respect to the Heart
Drug IP.
 
C. CNG desires to engage CVBT to perform such services in connection with the
Development, and CVBT is willing to provide such services.
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and in order to induce CVBT to enter into the
Agreements, CVBT and CNG hereby agree as follows:
 
1. Definitions.
 
1.1 Definitions. All capitalized terms used herein and not otherwise defined
shall have the respective meanings, to the extent such terms are used herein,
set forth in Schedule 1.1 attached hereto, which is incorporated by this
reference as though fully set forth herein.
 
1.2 Singular and Plural. Singular and plural forms, as the case may be, of terms
defined herein shall have correlative meanings.
 
2. Description of Technology / Goal of Development. The Heart Drug IP is
described in Schedule 2.1 attached hereto and incorporated herein by this
reference. The goal of the Development is to advance the Heart Drug IP in the
FDA Process. The parties hereto understand and acknowledge that the goal of the
Development conducted under this Agreement is to result in a treatment for
severe CHD that has been authorized for commercial exploitation by the FDA and
further, both parties understand and acknowledge that there is no guarantee that
the development conducted under this Agreement will result in a treatment for
severe CHD authorized by the FDA for commercial exploitation.
 
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3. Development Services.
 
3.1 License. Pursuant to the Technology License Agreement of even date herewith,
a copy of which is attached hereto as Schedule 3.1, CVBT has licensed to CNG the
Heart Drug IP on a nonexclusive basis for the purpose of permitting CNG to
participate with CVBT in the Development. CNG acknowledges that CVBT has pledged
its interest in the Heart Drug IP as collateral for a prior loan financing
entered into on March 20, 2006 as further described on Form 8-K filed on March
22, 2006 with a remaining balance due as of September 30, 2008 of $2,268,000 and
that the rights of such lender are superior to those of CNG. CNG further
acknowledges and understands that CVBT may enter into future research and
development arrangements to further the advancement of the Heart Drug IP and
related potential drug candidate, and that the rights of such research and
development partnerships will be pari passu with those of CNG.
 
3.2 Development. CNG hereby engages CVBT, and CVBT hereby accepts such
engagement, to use commercially reasonable efforts to undertake the Development.
Such services shall be provided as follows:
 
3.2.1 Work Plan. The proposed work plan is attached as Schedule 3.2.1 and
incorporated herein by this reference. The work plan may be revised by CVBT upon
written notice to CNG.
 
3.2.2 Conduct of Development. During the term of this Agreement, CVBT shall use
commercially reasonable efforts to (a) conduct the Development on behalf of CNG
in a prudent and skillful manner in accordance, in all material respects, with
the work plan then in effect and applicable laws, ordinances, rules,
regulations, orders, licenses and other requirements now or hereafter in effect
and (b) diligently execute such work plan and report to CNG any significant
deviations therefrom in a timely manner. CNG hereby appoints CVBT its exclusive
agent, for the term of this Agreement, with the sole power and authority to file
and prosecute all necessary regulatory applications and permits in CVBT’s name
required to obtain FDA and other regulatory approvals for CVBT’s Development
efforts. Without limiting the generality of the foregoing sentence, absent
specific requirements of the FDA to the contrary, CVBT is authorized by CNG to
conduct FDA trials in CVBT’s name. Using the Available Funds provided by CNG,
CVBT shall furnish all labor, supervision, services, supplies and materials
necessary to perform the Development in accordance with the work plan then in
effect. In addition, CVBT agrees to use commercially reasonable efforts, on
behalf of itself and CNG, to attempt to obtain and to sublicense any patent or
technology license or sublicense from any Person, including CVBT that CVBT
reasonably determines to be necessary or useful to enable CVBT to conduct the
Development under this Agreement.
 
3.2.3 Subcontracts. CNG acknowledges that CVBT may elect to subcontract to third
parties a portion of the Development. CNG acknowledges and agrees that in
performing the Development, CVBT may, and is hereby authorized to, without the
prior written consent of CNG, engage or agree or otherwise collaborate with
other Persons, including, without limitation, Affiliates of CVBT or entities
performing other development activities for CVBT, to provide assistance in
carrying out the Development.
 
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3.3 Disclaimer of Warranties. CVBT cannot and does not guarantee that the
Development will be successful in whole or in part or that any significant
advancement in the FDA Process will occur. To the extent that CVBT has complied
with Section 3.2.2 hereof, the failure of CVBT to further develop successfully
the Heart Drug IP will not in and of itself constitute a breach by CVBT of any
representation, warranty, covenant or other obligation under the Agreements. In
addition, neither CVBT nor CNG makes any representation or warranty or guaranty
that the development fee described in Section 4 will be sufficient for the
completion of the Development contemplated in the work plan. Furthermore,
nothing in this Agreement shall be construed as a representation made or
warranty given that any patents or other registrable technology will issue from
the Development. CNG understands that the Development shall involve technologies
that have not been approved by any regulatory authority and that CVBT does not
guaranty the safety, effectiveness, performance or usefulness of any drug or
technology that results from the Development.
 
3.4 Rights to Property. All right, title and interest to the data, know-how and
enhancements of the Heart Drug IP and any other intellectual property resulting
from the Development acquired or developed pursuant to this Agreement (the
“Program IP”) including any submissions or applications to the FDA or any
foreign equivalent made by CVBT in its name on behalf of itself or CNG shall be
the exclusive property of CNG; provided, however, that such right, title and
interest shall be subject in all events to that certain exclusive license
agreement of even date herewith attached hereto as Schedule 3.1 and incorporated
herein by this reference; and provided further, that CNG shall have no right to
physical possession of the Program IP.
 
3.5 Reports and Records.
 
3.5.1 Progress Reports. Within 30 days after the end of each calendar quarter
during the term of this Agreement, CVBT shall deliver to CNG a report setting
forth in reasonable detail a summary of the work performed pursuant to the work
plan during the immediately preceding calendar quarter.
 
3.5.2 Financial Reports. Within five (5) business days after the filing of its
Form 10-Q with the SEC for the first three calendar quarters of each calendar
year during the term of this Agreement, CVBT shall provide to CNG (a) a
reasonably detailed report setting forth in respect of such quarter the revenues
collected by CVBT based on the exploitation of any Treatment for severe CHD
developed as a partial result of the Development, and (b) a check payable to CNG
in an amount equal to the amount calculated pursuant to Section 5 hereof for
that quarterly period. Within five (5) business days after CVBT files its Form
10-K with the SEC, it shall provide to CNG an audited report of the revenues
collected by CVBT based on the exploitation of any treatment for severe CHD
developed as a partial result of the Development for the prior fiscal year of
CVBT. Any adjustments to the amounts paid or payable to CNG shall be made as a
result of such audit at the time of delivery of such audit, and an appropriate
payment will be made to CNG.
 
3.5.3 Final Report. CVBT shall prepare a final report, within 90 days after the
expiration or termination of this Agreement, setting forth in reasonable detail
a summary of the work performed since the last report provided to CNG hereunder
and the material developments with respect thereto and containing a final
statement of, and payment based on, all applicable collected revenues upon which
payment to CNG pursuant to Section 5 hereof are based and deliver such report to
CNG.
 
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3.5.4 Records/Review of Records. CVBT shall keep and maintain proper and
complete records and books of account documenting all of its collected revenues
based on the exploitation of any treatment for severe CHD developed as a partial
result of the Development. At CNG’s request and expense, CVBT shall permit a
certified independent public accountant selected by CNG to have access, no more
than once in each calendar year during the term of this Agreement and each year
for three calendar years following the termination hereof, during regular
business hours and upon reasonable notice to CVBT, to such records and books for
the sole purpose of determining the accuracy of the collected revenues reports.
If such certified independent public accountant reasonably determines that the
collected revenues reported have been, for any calendar year understated by CVBT
by an amount equal to or greater than five percent, CVBT shall promptly forward
any such underpayment to CNG and pay all reasonable fees and disbursements of
such certified independent public accountant incurred in the course of making
such determination. If such accountant reports an underpayment by CVBT of less
than five percent, CVBT shall forward such underpayment to CNG and CNG shall pay
all fees and expenses of such accountant. If such accountant reports an
overpayment by CVBT, CNG will repay such overpayment and bear all fees and
expenses of such accountant.
 
3.6 Other Activities. During the term of this Agreement, CVBT shall devote such
time and effort to the performance of services pursuant to this Agreement as may
be necessary or appropriate to fulfill its duties under this Agreement;
provided, however, it is specifically understood and agreed by CNG that CVBT
shall not be required to devote itself, on a full-time basis, to the provision
of such services and that CVBT shall have the right to engage in its own
development activities for other drug candidates and in other business
activities with other Persons, and CNG shall not, by virtue of this Agreement,
have any right, title or interest in or to such independent activities or to the
income or profits derived therefrom and, without limiting CVBT’s obligation to
use commercially reasonable efforts to provide certain services hereunder,
nothing set forth in this Agreement shall limit or reduce the ability of CVBT to
carry on such other activities.
 
4. Development Fee. The nonrefundable fee for the Development contemplated
herein is set forth on Schedule 4 hereto which is incorporated herein by this
reference. CNG hereby acknowledges that CVBT has in no way guaranteed any
particular results from the Development; that, indeed, there may be no positive
results from the Development; and that, as a consequence, it may receive no
return of, or on, the Investment.
 
5. Revenue Sharing from Product Sales. If, as a result of the Development, as
well as additional and subsequent development of the Heart Drug IP, CVBT is able
to commercialize or in any other way exploit value from the Heart Drug IP, CNG
will be entitled to Five Percent (5%) of the gross cash actually collected by
CVBT based on CVBT’s exploitation of the treatment for severe CHD (the
participation). Such exploitation may include, without limitation, direct
marketing by CVBT or its Affiliates and/or marketing, licensing, and/or
partnering arrangements with other pharmaceutical companies. Payment of such
amounts shall be made contemporaneously with the quarterly and annual revenue
reports described in Section 3.5 hereof up to a maximum amount of the total
investment in CNG by the limited partners (see Schedule 5) multiplied by twenty
(20). CVBT acknowledges that raising capital for CNG from limited partners is
expensive. CVBT accepts that CNG will pay the following marketing costs: 1) cost
of preparing documents, and annual administrative and accounting costs, all
together provided for as 2.5% of the capital raised by CNG from its limited
partners; 2) a placement fee of 8% of the money raised; 3) a due diligence fee
of 2% of the money raised; 4) a wholesale fee of 1% of the money raised; and 5)
a general partner’s profit participation of 20% of all royalties, after first
200% of the limited partners’ original investment has been paid.
 
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6. Representations and Warranties of CVBT. CVBT represents and warrants to CNG
as follows:
 
6.1 Organization. CVBT is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with full corporate power
and authority adequate for executing, delivering and performing its obligations
under the Agreements.
 
6.2 Authorization. The execution, delivery and performance of the Agreements
have been duly authorized by all necessary corporate action on the party of CVBT
and the Agreements shall constitute legal, valid and binding obligations of
CVBT, enforceable against CVBT in accordance with its terms, subject to laws of
general application related to bankruptcy, insolvency and the relief of debtors.
 
6.3 Intellectual Property Rights. To the best of its knowledge, CVBT believes it
has sufficient legal and/or beneficial title and ownership to the technology
described on Schedule 2.1 hereof to license to CNG the Heart Drug IP as
contemplated by this Agreement in Section 3.1 and in the Technology Agreement.
CVBT is not aware of, and has not received any communications alleging that, it
has violated, or that CNG, by participating in the development of the Heart Drug
IP as contemplated in this Agreement, would violate, any intellectual property
rights of any third party. To the best of CVBT’s knowledge, there is no material
unauthorized use, infringement or misappropriation of any of the technology
described in Schedule 2.1 hereto. CVBT is not aware of, nor has it received any
communications challenging, the ownership, validity or effectiveness of the
technology in Schedule 2.1.
 
7. Representations, Warranties and Covenants of CNG. The representations,
warranties and covenants of CNG set forth in Section 3.2 of the Technology
Agreement are incorporated herein by this reference.
 
8. Insurance. CVBT shall, to the extent available at commercially reasonable
rates, maintain, with insurers or underwriters of good repute, such insurance
relating to the Development, against such risks and pursuant to such terms,
including deductible limits or self-insured retentions, as is customary for
comparable businesses undertaking research and development programs of a similar
nature, and shall, to the extent reasonably possible and not unreasonably
expensive, cause CNG to named as an additional insured on its applicable
insurance policies.
 
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9. Term and Termination.
 
9.1 Term. This Agreement shall be effective as of the date hereof and, unless
earlier terminated, shall continue in full force and effect until such time as
the maximum revenue sharing amount set forth in Section 5 has been paid.
 
9.2 Events of Termination.
 
9.2.1 Mutual Agreement. By mutual agreement, the parties hereto may at any time
terminate this Agreement and the Development on mutually acceptable terms.
 
9.2.2 Termination of Development. At any time, and upon notice to CNG, CVBT may
elect to terminate the Development process due to insufficient progress or
outright inability to make progress toward a commercially marketable Treatment
for severe CHD.
 
9.2.3 Termination After Full Payment. This Agreement shall terminate upon
payment in full by CVBT to CNG of the maximum amount set forth in Section 5
hereof.
 
9.3 Effect of Termination. If this Agreement is terminated pursuant to Sections
9.2.1, 9.2.2 or 9.2.3, neither party shall have any liability to the other
except as agreed upon pursuant to the termination, and the ownership of the
Heart Drug IP and the Program IP, including, without limitation, any patents
derived therefrom, will revert to CVBT without further action on the part of any
of the parties. To the extent that evidence of such reversion is required to be
placed in a writing, CNG will, at CVBT’s request, execute and deliver to CVBT
specific assignments of the Heart Drug IP or the Program IP and execute,
acknowledge and deliver to CVBT such other documents and take such further
actions as CVBT may consider necessary or appropriate to confirm or vest title
in such intellectual property in CVBT. If the agreement is terminated pursuant
to Section 9.2.2, Section 5 will survive the termination. Under no circumstances
will CVBT have an obligation to refund any portion of the development fee.
 
10. Indemnification.
 
10.1 Indemnification by CVBT. CVBT shall indemnify the CNG Indemnitees, pay on
demand and protect, defend, save and hold harmless each CNG Indemnitee from and
against any and all Claims incurred by or asserted against any CNG Indemnitee of
whatever kind or nature, including, without limitation, any claim or liability
based upon (a) negligence warranty, strict liability, violation of government
regulation or infringement of patent or other propriety rights, arising from or
occurring as a result any of the Development or any other services to be
performed by CVBT during the term of the Agreements pursuant to the Agreements,
including, without limitation, any workers’ compensation claim by any CVBT
employee or consultant or other Person or (b) any breach of the Agreements by
CVBT, except, with respect to CNG Indemnitees in cases in which Claims of CNG
Indemnitees are based upon the gross negligence or willful misconduct of an CNG
Indemnitee. An CNG Indemnitee shall promptly notify CVBT of any Claim with
respect to which an CNG Indemnitee is seeking indemnification hereunder, upon
becoming aware thereof, and permit CVBT at CVBT’s cost to defend against such
Claim and shall cooperate in the defense thereof.
 
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10.2 Indemnification by CNG. CNG shall indemnify the CVBT Indemnitees, pay on
demand and protect, defend, save and hold harmless each CVBT Indemnitee from and
against any and all Claims incurred by or asserted against any CVBT Indemnitee
of whatever kind or nature, including, without limitation, any claim or
liability based upon negligence, warranty, strict liability, violation of
government regulation or infringement of patent or other propriety rights,
arising from or occurring as a result of any breach of the Agreements by CNG,
except, with respect to CVBT Indemnitees, in cases in which Claims are based
upon the gross negligence or willful misconduct of a CVBT Indemnitee. An
Indemnitee hereunder shall promptly notify CNG of any Claim with respect to
which such Indemnitee is seeking indemnification hereunder, upon becoming aware
thereof, and permit CNG at CNG’s cost to defend against such Claim and shall
cooperate in the defense thereof.
 
10.3 Defense of Claims. None of CVBT or CNG shall enter into, or permit, any
settlement of any Claim for which indemnification is being sought by such party
hereunder without the express written consent of each other party (or a CVBT or
CNG Indemnitee, as the case may be), which consent shall not be unreasonably
withheld or delayed. Each party may, at its option and expense, have its own
counsel participate in any proceeding which is under the direction of another
party (the “Indemnifying Party”) and will cooperate with the Indemnifying Party
and its insurer in the disposition of any such matter; provided, however, that
if the Indemnifying Party shall not defend such Claim, the other party shall
have the right to defend such Claim itself and recover from the Indemnifying
Party all reasonable attorneys’ fees and expenses incurred by it during the
course of such defense.
 
10.4 Consequential Damages. None of the parties to this agreement shall be
entitled to recover from another party hereto any special, incidental,
consequential or punitive damages.
 
11. Miscellaneous.
 
11.1 No Implied Waivers; Rights Cumulative. No failure on the part of CVBT or
CNG to exercise and no delay in exercising any right, power, remedy or privilege
under this Agreement or provided by statute or at law or in equity or otherwise,
including, without limitation, the right or power to terminate this Agreement,
shall impair, prejudice or constitute a waiver of any such right, power, remedy
or privilege or be construed as a waiver of any breach of this Agreement or as
an acquiescence therein, nor shall any single or partial exercise of any such
right, power, remedy or privilege preclude any other or further exercise thereof
or the exercise of any other right, power, remedy or privilege.
 
11.2 Force Majeure. CVBT and CNG shall each be excused for any failure or delay
in performing any of their respective obligations under this Agreement, if such
failure or delay is caused by a force, effect, cause or circumstance beyond the
control of the nonperforming party.
 
11.3 Relationship of the Parties. Nothing contained in this Agreement is
intended or is to be construed to constitute CVBT and CNG as partners or joint
venturers or one party as an employee of any other party. Except as expressly
provided herein, no party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of or in the name of any
other party or to bind any other party to any contract, agreement or undertaking
with any third party.
 
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11.4 Notices. All notices, requests and other communications to CVBT or CNG
hereunder shall be in writing (including telecopy or electronic mail (“e-mail”)
transmissions), shall refer specifically to this Agreement and shall be
personally delivered or sent by telecopy, facsimile or e-mail transmission or by
registered mail or certified mail, return receipt requested and postage prepaid,
or by reliable overnight courier service, in each case to the respective address
specified below (or to such address as may be specified in writing to the other
party hereto):
 

If to CVBT, addressed to:
CardioVascular BioTherapeutics, Inc.

1635 Village Center Circle
Suite 250
Las Vegas, Nevada 89134
Attention: Mickael A. Flaa, CFO
Fax No.: 702-304-2120
E-mail: mflaa@cvbt.com
 
with a copy to the attention of General Counsel (using the same information
above except if via email, then also to vroth@cvbt.com)
 

If to CNG, addressed to:
Cardio Neo-Genesis, LP

3428 Bedfordshire Place
Las Vegas, Nevada 89129
Attention: Jody L. Mack
Fax No.: 702-341-6519
E-mail: moxy2010@gmail.com
 
Each party shall provide each other party with copies of any notices sent
hereunder, with such copies sent at the same time as the original notice. Any
notice or communication given in conformity with this Section 11.4 shall be
deemed to be effective when received by the addressee, if delivered by hand,
telecopy or electronic transmission, three days after mailing, if mailed and one
business day after delivery either to a reliable overnight courier service or
via any electronic means permissible under this Agreement provided the sender
has confirmation of successful transmission.
 
11.5 Successors and Assigns. The terms and provisions of this Agreement shall
inure to the benefit of, and be binding upon, CVBT, CNG, and their respective
successors and assigns; provided, however, that CVBT and CNG may not assign or
otherwise transfer any of their respective rights and interests, nor delegate
any of their respective obligations, hereunder, including, without limitation,
pursuant to a merger or consolidation, without the prior written consent of the
other party hereto; provided further, however, that CVBT may fully assign its
rights and interests, and delegate its obligations, hereunder, effective upon
written notice thereof (a) to an Affiliate if such Affiliate assumes all of the
obligations of CVBT hereunder and this Agreement remains binding upon CVBT; or
(b) to any Person that acquires all or substantially all of the assets of CVBT,
or which is the surviving Person in a merger or consolidation with CVBT, if such
Person assumes all the obligations of CVBT hereunder. Any attempt to assign or
delegate any portion of this Agreement or the results of the Development in
violation of this Section 11.5 shall be null and void. Subject to the foregoing
any reference to CVBT or CNG hereunder shall be deemed to include the successors
thereto and assigns thereof.
 
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11.6 Amendments. No amendment, modification, waiver, termination or discharge of
any provision of this Agreement, nor consent by CVBT or CNG to any departure
there from, shall in any event be effective unless the same shall be in writing
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by CVBT and CNG,
and each amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given and shall not be deemed to be a wavier, termination or discharge for any
subsequent individual or repeated similar or different instance or purpose. No
provision of this Agreement shall be varied, contradicted or explained by any
other agreement, course of dealing or performance or any other matter not set
forth in an agreement in writing and signed by CVBT and CNG.
 
11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, as applied to contracts made
and performed entirely within the State of Delaware. Except as otherwise
provided herein, any claim or controversy arising out of or related to this
contract or any breach hereof shall be submitted to a court of competent
jurisdiction in the State of Nevada, and the parties hereby consent to the
jurisdiction and venue of such court.
 
11.8 Taxes. If a law or governmental regulation requires withholding of taxes on
any payment due hereunder, such taxes shall be deducted from any amount to be
remitted hereunder and shall be paid to the proper taxing authority, and proof
of payment shall be provided to the party on whose behalf such taxes were paid
as evidence of such payment in such form as required by the tax authorities
having jurisdiction thereover.
 
11.9 Severability. If any provision hereof should be held invalid, illegal or
unenforceable in any respect in any jurisdiction, then, to the fullest extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intentions of the parties hereto as nearly as may be possible and (b)
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, CVBT and CNG hereby waive any provision of
law that would render any provision hereof prohibited or unenforceable in any
respect.
 
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11.10 Confidentiality. Any party receiving Confidential Information shall
maintain the confidential and proprietary status of such Confidential
Information, keep such Confidential Information and each part thereof within its
possession or under its control sufficient to prevent any activity with respect
to the Confidential Information that is not specifically authorized or
contemplated by this Agreement, use all commercially reasonable efforts to
prevent the disclosure of any Confidential Information to any other Person, and
use commercially reasonable efforts to ensure that such Confidential Information
is used only for those purposes specifically authorized or contemplated herein;
provided, however, that such restriction shall not apply to any Confidential
Information that is (a) independently developed by the receiving party outside
the scope of this Agreement (provided, however, that such restriction shall
apply to any technology grants by CVBT to CNG under this Agreement), (b) in the
public domain at the time of its receipt or thereafter becomes part of the
public domain through no fault of the receiving party, (c) received without an
obligation of confidentiality from a third party having the right to disclose
such information, (d) released from the restrictions of this Section 11.10 by
the express written consent of the disclosing party, (e) disclosed to any
permitted assignee, permitted sublicensee or permitted subcontractor of CVBT
under the Agreements (if such assignee, sublicensee or subcontractor is subject
to the provisions of this Section 11.10 or substantially similar provisions) or
(f) required by law, statute, rule or court order to be disclosed provided the
receiving party promptly provides sufficient notice to the disclosing party so
that the disclosing party may seek a protective order or other confidential
treatment (the disclosing party shall, however, use commercially reasonable
efforts to obtain confidential treatment of any such disclosure). The
obligations set forth in this Section 11.10 shall survive the expiration or
termination of this Agreement. Without limiting the generality of the foregoing,
CVBT and CNG each shall use commercially reasonable efforts to obtain, if not
already in place, confidentiality agreements from their respective employees,
subcontractors and agents, similar in scope to this Section 11.10, to protect
the Confidential Information.
 
11.11 Trading Limitations. In addition to being Confidential Information, the
results of the Development will be deemed material nonpublic information until
disclosed to the public by CVBT in a report to the Securities and Exchange
Commission (the “SEC”), or, if applicable and/or permissible and/or appropriate,
in a press release or published on CVBT’s web site in an event where a filing
with the SEC is not required or is discretionary. If CNG is in possession of, or
otherwise has knowledge of, the results of the Development before such public
disclosure by CVBT, CNG acknowledges and agrees that it may not trade in CVBT
securities. Further, CNG agrees to obtain a similar acknowledgment and agreement
from its partners.
 
11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which counterpart, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.
 
11.13 Entire Agreement. This Agreement, together with any agreements referenced
herein, constitute, on and as of the date hereof, the entire agreement of CVBT
and CNG with respect to the subject matter hereof, and all prior or
contemporaneous understandings or agreements, whether written or oral, between
CVBT and CNG with respect to such subject matter are hereby superseded in their
entirety.
 
 
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10

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
 

   CARDIOVASCULAR BIOTHERAPEUTICS, INC.            By /s/ Mickael A. Flaa    
Mickael A. Flaa
Its Chief Financial Officer
                 Cardio Neo-Genesis, LP            By   Neo Cardio Partners, LLC
     Its General Partner                    By /s/ Jody L. Mack        Jody L.
Mack
Its Manager

 
11

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SCHEDULE 1.1
 
DEFINITIONS
 
“Affiliate” of a person shall mean a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with such Person. “Control” (and, with correlative meanings, the terms
“controlled by” and “under common control with”) shall mean the possession of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting stock, by contract or
otherwise. In the case of a corporation, “control” shall mean, among other
things, the direct or indirect ownership of more than 50% of its outstanding
voting stock.
 
“Agreements” means the Development Agreement and the Technology License
Agreement.
 
“Available Funds” shall mean the Investment proceeds.
 
“Claim” shall mean any and all liabilities, damages, losses, settlements,
claims, actions, suits, penalties, fines, costs or expenses (including, without
limitation, reasonable attorneys’ fees).
 
“Confidential Information” shall mean the Heart Drug IP described in Schedule
2.1 hereof and all Program IP developed by CVBT (and its Affiliates) and
disclosed to CNG pursuant to the Agreements.
 
“CVBT Indemnitee” shall mean CVBT, its successors and assigns, and the
directors, officers, employees, agents and counsel thereof.
 
“Development” shall mean the further development of the Heart Drug IP for the
purpose of advancing the FDA Process toward development of a treatment for
severe CHD approved for commercialization by the FDA.
 
“Development Agreement” shall mean the Development Agreement dated as of
November 11, 2008 between CVBT and CNG, as amended, modified or supplemented
from time to time.
 
“FDA” shall mean the United States Food and Drug Administration or any successor
agency or authority, the approval of which is required to market biologic
products in the United States.
 
“FDA Process” shall mean the clinical trials and other activities necessary to
obtain FDA approval for commercialization.
 
“Form 10-K” shall mean CVBT’s annual report on Form 10-K to the SEC pursuant to
the Securities Exchange Act of 1934, as amended.
 
1.1-1

--------------------------------------------------------------------------------

 
“Form 10-Q” shall mean CVBT’s quarterly report on Form 10-Q to the SEC pursuant
to the Securities Exchange Act of 1934, as amended.
 
“Force Majeure” shall mean any act of God, any accident explosion, fire, storm,
earthquake, flood, drought, peril of the sea, riot, embargo, war or foreign,
federal, state or municipal order of general application, seizure, requisition
or allocation, any failure or delay of transportation, shortage of or inability
to obtain supplies, equipment, fuel or labor or any other circumstance or event
beyond the reasonable control of the party relying upon such circumstance or
event.
 
“Investment” means the amount actually provided by CNG pursuant to its agreement
in Section 4 hereof.
 
“Person” shall mean any individual, partnership, corporation, firm, association,
unincorporated organization, joint venture, trust or other entity.
 
“Program IP” shall have the meaning ascribed to it in Section 3.4 hereof.
 
“CNG Indemnitee” shall mean CNG, its successors and assigns, and the directors,
officers, employees, agents and counsel thereof.
 
“SEC” means the U.S. Securities and Exchange Commission.
 
“Technology Agreement” shall mean the Technology License Agreement dated as of
November 11, 2008 among CVBT and CNG, as amended, modified or supplemented from
time to time.
 
1.1-2

--------------------------------------------------------------------------------

 
SCHEDULE 2.1
 
DESCRIPTION OF HEART DRUG IP
 
CVBT has a proprietary position regarding the use of FGF-1 to promote
angiogenesis in the heart. In particular, Patent No. 7,252,818 listed in the
Table below, covers injection of the FGF-1 protein into the heart muscle by any
method, which effectively blocks others from utilizing our approach. CVBT, in
joint ownership with Phage Biotechnology, also holds numerous U.S. and foreign
patents on the manufacturing process to produce FGF-1.

CVBT Patents and Patent Applications
Current as of the date of this agreement

Domestic Patents

Holder
Patent
Patent Number
Issue Date
Expiration
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
6,268,178
July 31, 2001
May 25, 2019
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
6,794,162
September 21, 2004
May 17, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
6,773,899
August 10, 2004
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Method of Producing Biologically Active Human Acidic Firbroblast Growth Factor
and its Use in Promoting Angiogenesis
6,642,026
November 4, 2003
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Method of Producing Biologically Active Human Acidic Firbroblast Growth Factor
and its Use in Promoting Angiogenesis
7,252,818
August 7, 2007
August 27, 2023
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Kluyveromyces Strains Metabolizing Cellulosic and Hemicellulosis Materials
7,344,876
March 18, 2008
January 16, 2024

 
3.1-1

--------------------------------------------------------------------------------

 
Foreign Patents

Holder
Country
Patent
Patent Number
Issue Date
Expiration
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Australia
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
2001284914
May 26, 2006
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Australia
Method of Producing Biologically Active Human Acidic Fibroblast Growth Factor
and its Use in Promoting Angiogenesis
2001288256
July 13, 2006
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Austria
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Austria
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
E358135
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Belgium
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Belgium
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Switzerland
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Germany
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Germany
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
60127561.6
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Europe
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
March 28, 2007
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Europe
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
France
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
France
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
United Kingdom
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
United Kingdom
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Ireland
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Ireland
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Italy
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Korea
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
10-0761486
September 18, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Liechtenstein
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1180153
April 13, 2005
May 24, 2020
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Netherlands
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Spain
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021
CardioVascular BioTherapeutics, Inc./Phage Biotechnology Corporation
Switzerland
Phage-Dependent Super-Production Of Biologically Active Protein And Peptides
1309604
March 28, 2007
August 15, 2021

 
3.1-2

--------------------------------------------------------------------------------

 
SCHEDULE 3.1
 
TECHNOLOGY LICENSE AGREEMENT
 
 
 
3.1-3

--------------------------------------------------------------------------------

 
SCHEDULE 3.2.1
 
WORK PLAN
 
We have initiated our Phase II Clinical Trial in patients with severe angina and
coronary heart disease. Screening of patients has commenced and it is
anticipated the first patients will be dosed in early November, 2008. We
estimate it will take approximately 12 months to enroll and treat the proposed
120 patients that will be included in this double-blind, placebo-controlled
trial examining three doses of FGF-1. This would allow us to start our pivotal
Phase III trial in 2010, which should run for approximately 12-24 months,
followed by preparation and submission of a New Drug Application (NDA) to the
FDA. A timetable for these activities is given below in the product development
table (Table I).

The international clinical research organization, Kendle, is running the Phase
II clinical trial for CVBT, and with the input of the Cordis Corp, the
manufacturer of the NOGA catheter system, has lined up a very impressive list of
hospitals and medical centers which are working their way through the approval
process to participate in the heart trial.
 
[image.jpg]
 
3.2.1-1

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SCHEDULE 4
 
DEVELOPMENT FEE
 
Up to $15,000,000
 
$173,000 payable upon execution of the sponsor agreement, up to $15,000,000 on a
best-efforts basis not later than April 30, 2009. Scheduled closings at 3:00
p.m. Thursdays unless the parties agree otherwise.
 

 
Schedule of Amounts Paid
 

       
Acknowledged Receipt by CVBT
         
Date
 
Amount
 
Name
 
Initials
             
11/11/08
 
$173,000
 
Mickael A. Flaa
                 
Total
 
$173,000
       

 

 
/s/ Mickael A. Flaa
     
By CVBT on 11/11/08
  (date)

 
3.2.1-2

--------------------------------------------------------------------------------

 
SCHEDULE 5
 
Schedule of Units Issued in CNG
 
 
 
 
 
3.2.1-3

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