EX-10.9 Conditionally Exclusive License Agreement



 





EXHIBIT 10.9




February 7, 2000




Dr. Peter Law

Cell Transplants International, LLC

2015 Miller Farms Road

Germantown, TN 38138




REF: License Agreement




Dear Dr. Law,



This letter serves as a full license agreement covering all patents and patents pending and
also future developments related to heart muscle function improvement and angiogenesis. Please
sign and return this today by fax so we may proceed to send you the initial license fee payment of
$500,000, as discussed.





	1.	 	We seek to license all patents related to myogenic cell transplantation and
controlled cell fusion as may be necessary to develop a commercially viable product
within the field of “heart muscle repair and angiogenesis”.
	 
	2.	 	CTI/CTAL will grant Bioheart, Inc. a NON-EXCLUSIVE license for all patents
related to heart muscle regeneration and angiogenesis for the life of the patents.
Sublicensing of these patents by Bioheart, Inc. is not allowed.
	 
	3.	 	Bioheart agrees to provide $500,000 in research funding to CTI/CTAL within 90
days of the signing of this letter of intent to further research mutual interest.
	 
	4.	 	Bioheart will provide immediately to CTI/CTAL or Dr. Peter Law 600,000 shares
of Bioheart common stock at $1.80 per share as part of the license fee payment.
	 
	5.	 	Bioheart will provide CTI/CTAL or Dr. Peter Law, in 30 days, option to acquire
another 600,000 shares of Bioheart common stock at $1.80 per share.
	 
	6.	 	Bioheart, Inc. will pay a royalty of 5% of gross sales of products and services
that directly read upon the claims of the patents.
	 
	7.	 	Bioheart, Inc. will provide agreement which states that dilution of shares of
CTI/CTAL or Dr. Peter Law will at all times be equal to dilution of Mr. Howard
Leonhardt and the family and friends of Mr. Leonhardt.
	 
	8.	 	Dr. Peter Law will be elected to the Board of Directors of Bioheart, Inc.




 









 












	9.	 	CTI/CTAL will be responsible for pursuing and suing infringers of Dr. Law’s
patents and will thus be entitled to 100% of any damages paid in.
	 
	10.	 	Bioheart agrees to enter into a supply agreement with CTI/CTAL for cultured
myoblasts in 30 days.
	 
	11.	 	Bioheart, Inc. will pay $3,000,000 to CTI/CTAL upon INITIATION of a human
clinical trial study of Dr. Law’s patented technology with F.D.A. approval in the
United States (does not include isolated compassionate use or emergency last resort
cases which are not part of the study).
	 
	12.	 	Bioheart, Inc. will pay $5,000,000 to CTI/CTAL upon F.D.A. APPROVAL of method
of heart muscle regeneration utilizing the patented technology.
	 
	13.	 	Right of first refusal — If Dr. Law/CTAL receives a bona fide offer from a
direct competitor of Bioheart’s in heart muscle repair, Bioheart shall have 30 days to
meet this offer to bar competition from obtaining license. Bioheart will have
permission to express this covenant of the agreement to investors as a “semi-exclusive
license”.





Kindest Regards,




	 	 	 
	Howard J. Leonhardt
	 	 
	 

	 	 
	Chairman & CEO

	 	Dr. Peter Law, Chairman & CEO
	 

	 	Cell Transplants International, LLC






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Dr. Peter Law

Cell Transplants International, LLC

2015 Miller Farms Road

Germantown, TN 38138




REF: License Agreement




Dear Dr. Law:



This letter (“Addendum”) amends and supplements that certain full license agreement (“Agreement”)
covering all patents and patents pending and future developments related to heart muscle function
regeneration and Angiogenesis dated February 7, 2000 between Bioheart, Inc. (“Bioheart” or the
“Company”), Dr. Peter Law and Cell Transplants International, LLC (“CTI”). Except as noted below,
the provisions of the Agreement remain in full force and effect. This Addendum shall be deemed
effective as of February 7, 2000.





	1.	 	Dr. Law and CTI shall each execute and deliver to Bioheart the following
agreements concurrently with their execution and delivery of this letter agreement:






	 	(a)	 	a Scientific Advisory Board Consultation Agreement in the form
attached hereto as Exhibit A;
	 
	 	(b)	 	a Supply Agreement in the form attached hereto as Exhibit B;
	 
	 	(c)	 	an Inventions and Proprietary Rights Assignment and
Confidentiality Agreement in the form attached hereto as Exhibit D; and
	 
	 	(d)	 	a Warrant Certificate in the form attached hereto as Exhibit E
(the “Warrant”).






It shall be an express condition precedent to the effectiveness of this Addendum
that each of the above-identified agreements be executed and delivered by the
parties hereto. This Section 1 supersedes Section 10 of the Agreement.




	2.	 	In consideration of Dr. Law’s and CTI’s execution, delivery and performance of
the above-identified agreements as well as the Agreement, as amended and supplemented
hereby, Bioheart, Dr. Law and CTI agree as follows:






	 	(a)	 	the aggregate license/research and development fees payable by
Bioheart under this first paragraph and Section 3 of the Agreement is a total
sum of




 









 






	 	 	 	$1,000,000, of which Dr. Law and CTI acknowledge that $500,000 of this fee
has been paid previously by Bioheart as noted in the first paragraph of the
Agreement. The $500,000 balance of said fees shall be paid upon execution
of this contract. In addition to the obligations under Section 9 of the
Agreement, Dr. Law and CTI shall undertake reasonably diligent and prompt
efforts to enforce said patents by instituting litigation against all third
parties, whether now known or identified in the future with respect to whom
Dr. Law and/or CTI have a reasonable basis for claiming infringement.
Additionally, Dr. Law and/or CTI will continue to provide Bioheart with all
pertinent and critical information in order to file an IND with the FDA and
to have it approved by the FDA. Dr. Law and/or CTI will agree to allow
Bioheart Quality Assurance expert complete access to the CTI facilities in
order for them to (i) assist CTI in compiling adequate QC documentation and
(ii) ensure that CTI will be able to provide Bioheart with FDA QC validated
cells. Additionally, Dr. Law and/or CTI will agree to provide a license, in
reasonable form, to Duke University to continue Bioheart research. This
Section 2(a) supercedes Section 3 of the Agreement in its entirety; and
	 
	 	(b)	 	Bioheart will issue to CTI a 5-year warrant exercisable for
1,200,000 shares of Bioheart common stock at an exercise price of $8.00 per
share, pursuant to the terms of the Warrant, instead of the 600,000 shares and
600,000 options referenced in Sections 4 and 5 of the Agreement. This Section
2(b) supersedes Sections 4 and 5 of the Agreement in their entirety; and
	 
	 	(c)	 	Bioheart will pay $3,000,000 to CTI upon commencement of a bona
fide Phase II human clinical trial study that utilizes technology claimed under
U.S. Patent No. 5,130,141 with F.D.A. approval in the United States (it being
understood that such a study does not include isolated compassionate use or
emergency last resort cases which are not part of study). This Section 2(c)
supersedes Section 11 of the Agreement.






	3.	 	Additionally, if Dr. Law or CTI desires to license or otherwise convey any
rights in and to any of their technology, inventions or patent rights to a third party
in the field of heart muscle regeneration or Angionesis efforts (whether in response to
a bona fide other from such third party or otherwise), Bioheart shall have a right of
first refusal over any such third party to obtain either exclusive or non-exclusive
license and acquire such rights Dr. Law and CTI shall provide written notice to
Bioheart regarding such proposed transaction, terms and, if such proposed transaction
is in response to a bona fide third party offer, the terms of such offer. Bioheart
shall have the first right to complete the proposed transaction with Dr. Law and/or CTI
on the proposed terms by providing written notice to Dr. Law and/or CTI, as the case
may be, of its acceptance of such proposed terms, which




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	 	 	notice shall be provided no later than thirty (30) days after Bioheart’s receipt of
notice regarding such proposed transaction. Bioheart’s failure to provide such
acceptance notice to Dr. Law and/or CTI, as the case may be, within such thirty (30)
day period shall be deemed to constitute rejection of such offer, in which event Dr.
Law and/or CTI shall be entitled to proceed with its/their proposed transaction with
such third party; provided, however, that if the terms of such transaction are
modified or a new offer is made, or if the transaction does not occur within 30
days, the Company shall be entitled to again receive a new notice and a right of
first refusal pursuant to the provisions set forth above with regard to such
modified terms or new offer. It shall be an express condition precedent to
completion of any transaction with a third party that such third party acknowledge
Bioheart’s license rights in and to such technology, and if such transaction
involves the assignment of patent rights by Dr. Law and/or CTI to such third party,
that such third party assume all obligations of Dr. Law and/or CTI as licensor with
respect to Bioheart’s rights in and to the technology being transferred. The
parties hereto acknowledge and agree that Dr. Law and CTI shall not in any event
consider or accept any such third party offers or otherwise enter into or consummate
any such transaction wherein the aggregate consideration payable is less than
$14,000,000. The parties hereto further acknowledge that the value of the
consideration required to be paid by Bioheart, Inc. in connection with an offer to
license any of Dr. Law and/or CTI’s technology, inventions or patent rights to a
third party in the field of heart muscle regeneration and/or Angiogenesis,
exercising its right of first refusal hereunder (whether paid in cash or in the form
of equity securities) shall be equal to the lesser of the bona fide terms offered to
or by such third party or $25,000,000, and in any event Bioheart shall only be
required to pay the cash portion and the common stock traded on an internationally
recognized stock exchange of the consideration that would be paid by such third
party in such proposed transaction. Bioheart will have permission to express this
covenant of the agreement to investors as a “conditionally exclusive license.” This
Section 3 supersedes Section 13 of the Agreement.





[The remainder of this page intentionally left blank; signatures on following page.]




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If the foregoing terms are acceptable to you, please acknowledge your acceptance and agreement by
executing both enclosed originals of this letter agreement and returning one executed original to
my attention.




Kindest Regards,




BIOHEART, INC.




 




John L. Babitt

Chief Financial Officer




Accepted by:




__________________________

Dr. Peter K. Law, Ph.D., individually




CELL TRANSPLANTS INTERNATIONAL LLC




__________________________

By: Dr. Peter K. Law, PhD., Chairman and Executive Officer




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January 18, 2001




VIA FACSIMILE




Mr. John Babitt

Bioheart, Inc.

2400 North Commerce Parkway

Suite 408

Weston, FL 33326




Dear John:



This letter will confirm our previous telephone conversation wherein we discussed Peter Law’s
decision to decline membership on the Board of Directors of Bioheart, Inc. due to potential
conflicts of interest which might arise. You acknowledged the potential conflicts of interest and
agreed that the parties’ relationship more appropriately proceeds without a board position for Dr.
Law. This letter will specifically reference the February 7, 2000 letter agreement between the
parties and confirm that Bioheart, Inc. has satisfied its obligation to offer a board seat to Peter
Law and that Peter Law remains in compliance with that letter agreement despite his declining the
board seat.



If you have any questions in this regard, please feel free to call me. Thanks.




Sincerely,




Anthony C. Pierrangelo




ACP/mbh

cc: Dr. Peter Law