Letter of Intent


     

      
        

      

    

    
Exhibit 10.1

     

     

    SAMARIUM
      TECHNOLOGY GROUP, LTD.

    


    


    January
      31, 2007

    


    LETTER
      OF INTENT

    


    


    Cryobanks
      International, Inc.

    


    
      	
              PERSONAL
                AND CONFIDENTIAL

            


    

    


    Cryobanks
      International, Inc.

    270
      S.
      North Lake Blvd.

    Altamonte
      Springs, Florida 32701

    


    On
      the
      terms and subject to the conditions set forth below, Samarium Technology Group,
      Ltd., a BVI Company (the “Investor”)
      will
purchase
      Nine Million Dollars ($9,000,000)
      of Class
      A Secured Convertible Debentures of Cryobanks International, Inc. (the
“Issuer”)
      on the
      principal terms set forth below. Except for the Confidentiality Provision,
      this
      letter is non binding and subject to the parties entering into formal agreements
      setting forth their respective rights and obligations. Such agreements will
      contain customary representations, warranties and indemnifications. This
      term sheet will expire on January 31, 2007.
      The
      material terms of the offering are set forth below:

    


    

      
        	
                Issuer

                 

              	
                Cryobanks
                  International, Inc.

              
	
                 

                Investor

                 

              	
                 

                Samarium
                  Technology Group, Ltd. or its designees

                 

              
	
                 

                Securities

                 

              	
                 

                Class
                  A Secured Convertible Debenture

                 

              
	
                 

                Debenture
                  Terms

                 

              	
                 

                The
                  Convertible Debenture shall bear interest at the rate of ten percent
                  per
                  annum, and shall be convertible into 7.50% of the common stock
                  of the
                  Issuer on a fully diluted basis. The Convertible Debenture shall
                  be all
                  due and payable on December 31, 2008. The Convertible Debenture
                  shall
                  automatically convert into registered, freely tradeable common
                  stock of
                  BioStem, Inc. upon the completion of the merger of BioStem and
                  Cryobanks
                  pursuant to that certain Agreement and Plan of Merger, dated November
                  22,
                  2005, as amended to date, and the subsequent effectiveness of a
                  registration statement on Form S-4 (or such other available registration
                  statement as may be available in the opinion of the Issuer’s counsel) (the
                  “Effective Date”).

                 

              


      

    

     

    
 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    


    
      	
               

              Closing

               

            	
               

              At
                Closing, the Investor shall wire good and immediately available funds
                in
                the amount of $9,000,000 to the attorney-client trust account of
                the
                Issuer at Corporate Legal Services, LLP. $2,000,000 of such funds
                shall be
                released immediately to the Issuer. The balance of the funds shall
                not be
                released until the Effective Date.

               

            
	
               

              Registration

               

            	
               

              The
                Issuer shall take all action necessary to complete the purchase of
                not
                less than eighty percent (80%) of the outstanding common stock of
                the
                Issuer by BioStem, Inc. within thirty days following the Closing,
                complete
                the merger with BioStem, Inc. as set forth in the Agreement and Plan
                of
                Merger, and complete the filing of the registration statement on
                Form S-4
                within sixty days of the Closing. Issuer shall take such action as
                is
                necessary to cause the registration statement to be declared effective
                within 150 days following the Closing. In the event the registration
                statement is not declared effective within such 150 day period, the
                Convertible Debenture shall thereafter bear interest at fifteen percent
                (15%) per annum, and the Issuer shall commence monthly interest only
                payments starting the first day of the month following the expiration
                of
                such 150 day period.

               

            
	
               

              Board
                Representation

               

            	
               

              Upon
                the Closing, Issuer shall take such action as is required to increase
                the
                number of directors on the Issuer’s board of directors to five, and
                Investor shall appoint two members to the Issuer’s board of directors who
                shall commence their service immediately following the
                Closing.

               

            


    

     

     

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                 

                Warrants

                 

              	
                 

                The
                  Investor shall receive a five-year warrant (the “Class A Investor
                  Warrant”) to purchase up to 3.5% of the outstanding common stock of the
                  Issuer on a fully diluted basis (including without limitation the
                  shares
                  issuable upon conversion of the Secured Debenture), at an exercise
                  price
                  equal to the per-share conversion price of the Senior Debenture.
                  

                 

                 

                The
                  Investor shall also receive a five-year warrant (the “Class B Investor
                  Warrant,” and, together with the Class A Investor Warrant, the “Investor
                  Warrants”) to purchase up to 3.75% of the issued and outstanding common
                  stock of the Company on a fully diluted basis (including without
                  limitation shares issuable upon conversion of the Secured Debenture),
                  for
                  a purchase price of $0.001 per share.

                 

                 

                The
                  common stock underlying the Investor Warrants shall be registered
                  within
                  180 days of the Closing Date. In the event the Issuer fails to
                  register
                  such underlying shares, then the Investor shall have the right
                  to exercise
                  the Investor Warrant on a cashless-exercise basis at any time after
                  180
                  days of the Closing Date.

                 

              
	
                 

                Fee

                 

              	
                 

                On
                  the Closing Date, the Issuer shall pay from the escrowed funds
                  a fee of
                  thirteen percent (13%) of the proceeds received by or for the benefit
                  of
                  the Company, and a warrant to purchase 1.125 percent of the outstanding
                  shares of the Issuer’s common stock, on a fully-diluted basis, on the same
                  terms as the Investor Warrant, to Hyperion Fund, L.P. and its
                  designees.

                 

              
	
                 

                Shareholder
                  Lockup

                 

              	
                 

                All
                  shareholders of the Issuer will agree to a shareholder lockup which
                  will
                  last until one year from the effective date of the merger of Cryobanks
                  and
                  BioStem, Inc. (the “Merger Date”). The lockup shall terminate as to twenty
                  five percent (25%) of the shares held by each shareholder of Cryobanks
                  on
                  each of the 90th,
                  180th,
                  270th
                  and 365th
                  day following the Merger Date. The lockup shall not apply to shares
                  held
                  by Investor. During the shareholder lockup period, no Cryobanks
                  shareholder shall sell, transfer, hypothecate or alienate any BioStem
                  shares received in exchange for their Cryobanks shares with respect
                  to
                  which the lockup has not yet terminated.

                 

              


      

    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                 

                Registration
                  Rights

                 

              	
                 

                Promptly,
                  but no later than 60 calendar days from the Closing Date, the Company
                  shall file a Registration Statement with the United States Securities
                  & Exchange Commission (“SEC”) and use its best efforts to ensure that
                  such Registration Statement is declared effective within 120 calendar
                  days
                  from the Closing Date. The Issuer shall continuously maintain the
                  effectiveness of the registration statement for a period of twenty
                  four
                  (24) months after the effective date. The Issuer shall pay all
                  offering
                  expenses in connection with the registration.

                 

              
	
                 

                Structuring
                  Fee

                 

              	
                 

                The
                  Issuer will pay to the Investor a Structuring fee of Thirty Five
                  Thousand
                  Dollars ($35,000).

                 

              
	
                 

                Due
                  Diligence

                 

              	
                 

                Investor
                  shall have a period of thirty days to complete due diligence. All
                  obligations of Investor under this Letter of Intent shall be subject
                  to
                  Investor’s satisfaction, in its sole discretion, of Issuer’s financial
                  condition, prospects and management, and the results of Investor’s due
                  diligence investigation.

                 

              


      

      


      


      If
        the
        terms and conditions contained herein this Letter of Intent are satisfactory,
        please sign as indicated below. We appreciate this opportunity to work with
        you.
        We look forward to an expeditious and successful closing of this
        transaction.

      


      


      

        
          	 	
                  Sincerely,

                
	
                  AGREED
                    TO AND ACCEPTED:

                	 
	 	 
	
                  Cryobanks
                    International, Inc..

                	
                  Samarium
                    Technology Group, Ltd.

                
	 	 
	 	 
	
                  By:
                    /s/ Dwight C. Brunoehler      

                	
                  By:
                    /s/ Volkmar Hable      

                
	
                  Name:
                    Dwight C. Brunoehler      

                	
                  Name:
                    Volkmar Hable      

                
	
                  Title:
                    President & CEO      

                	
                  Title:
                    CEO      

                
	
                  Date:
                    1-31-07

                	
                  Date:
                    2-13-07