Exhibit 10.1

 

 
August 18, 2010

David Koos
Entest BioMedical, Inc.
4700 Spring Street, Suite 203
La Mesa, CA  91942
Facsimile: 619-330-2328

Re:           Letter Agreement between Entest BioMedical, Inc. (“Entest”) and
TheraCyte, Inc. (“TheraCyte”)

Dear David,

Upon execution of this Letter Agreement by Entest and TheraCyte (together, the
“Parties”), and the receipt of 20,000 newly issued Entest BioMedical Inc.’s
shares (OTCBB: ENTB) by TheraCyte from Entest, the Parties agree to the
following:

 
1.
TheraCyte will provide up to 25 TheraCyte implantable cell encapsulation devices
(the “Devices”) to Entest solely for use by Entest in a ten (10) dog safety
study to determine safety of the utilization of the Devices in veterinary cancer
applications (the “Safety Study”).  Entest will pay $400 per device (or $10,000
for 25 devices).  The Parties will develop a mutually-agreeable schedule for the
delivery of the Devices.   The Devices shall be provided to Entest in sterile
packaging and in accordance with TheraCyte’s normal manufacturing
process.  TheraCyte is providing the devices for use in the Safety Study without
warranty, express or implied, and specifically disclaims any warranty for any
specific use or purpose, or its fitness for any use or purpose.  TheraCyte
further disclaims any and all liabilities that may result from the use of the
Devices by Entest.  Entest hereby agrees to pay the aforementioned $10,000 to
TheraCyte for the 25 devices on or prior to October 1, 2010.

 

 
2.
During the Safety Study, the parties agree to negotiate in good faith a license
and supply agreement whereby TheraCyte would agree to supply Devices to Entest
exclusively for use in Entest’s therapy  for veterinary cancer (“Therapy”), and
would grant to Entest a non-exclusive, non-transferable, license to use
TheraCyte’s  existing patents, trade secrets and know-how related to the Devices
(“Licensed Technology”) in connection with the Therapy, using  Devices
exclusively supplied by TheraCyte (“Veterinary License and Supply Agreement”). 
The license would cover intellectual property relating to the now-existing
Device but would exclude intellectual property relating to improvements made to
the now-existing Device.  Consideration to TheraCyte pursuant to the Veterinary
License and Supply Agreement would be 100,000 shares of ENTB common stock upon
execution of the Veterinary License and Supply Agreement, an additional 100,000
shares of ENTB common stock upon Entest reaching an aggregate of $5,000,000 in
total revenues, and an additional 100,000 shares of ENTB common stock upon
Entest reaching an aggregate of $10,000,000 in total revenues, plus an 8%
royalty on net Therapy sales by Entest during the term of the Veterinary License
and Supply Agreement (which is understood to be inclusive of any royalties due
to others by TheraCyte as a result of such sales), plus a purchase price per
Device manufactured and sold by TheraCyte to Entest.  The purchase price per
Device would be $350.  Assuming favorable completion of the Safety Study and the
Parties reaching mutually-agreeable terms on items not listed here, the
Veterinary License and Supply Agreement would be effective upon execution by
both Parties and have a term ending December 5, 2017.

 

 
1

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

 

 
 
3.
At any time after six months from their date(s) of issuance, TheraCyte shall
have the right to sell any all shares of ENTB common stock issued pursuant to
this letter agreement and/or the Veterinary License and Supply Agreement back to
Entest for a purchase price of $1 per share, or to others subject only to the
conditions in Rule 144 of the Securities Act of 1933.  Entest also agrees to
grant to TheraCyte piggyback rights to sell its unregistered shares in any
registered public offering of Entest.

*           *           *           *           *

Please confirm that the foregoing correctly and completely sets forth our
understanding by signing and returning to us the enclosed duplicate of this
engagement agreement.

Sincerely,

THERACYTE, INC.

By /s/Paul D. Quadros

Paul D. Quadros
Title:

Agreed and accepted as of the date first above written.

 
ENTEST BIOMEDICAL, INC.

 
By /s/David Koos

David Koos

Chairman & CEO

 
2

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