Cooperative Research And Development Agreement

Exhibit 10.1-

Agreement entered into as of November 20, 2007, between the U.S. Government, as represented by the U.S. Department of Agriculture, Agricultural Research Service and HepaLife Technologies, Inc., a Florida corporation having offices at 60 State Street, Suite 700, Boston, Massachusetts.


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UNITED STATES DEPARTMENT OF AGRICULTURE


RESEARCH AGREEMENT

TYPE OF RESEARCH AGREEMENT

Cooperative Research and Development Agreement

AGREEMENT NO.

58-3K95-8-1238

TYPE OF ACTION

NEW

AGENCY (Name and Address)


Agricultural Research Service

1400 Independence Avenue SW

Washington, D.C. 20250-0302

PERIOD OF AGREEMENT


11/20/07 through 11/19/09

FEDERAL OBLIGATION


$ 0

CHANGE IN FEDERAL OBLIGATION

This Agreement is authorized by the Federal Technology Transfer Act, 15 USC 3710a, et seq., and is governed by its terms.

Items

Descriptions

1. Technology Transfer Coordinator

Robert Griesbach

2. Cooperator

HepaLife Biosystems, Inc.

60 State Street, Suite 700

Boston, MA 02109

Tax ID # 98-0532750

3. Principal Investigator

Frank Menzler, Chief Executive Officer

4. USDA Laboratory

Animal Biosciences and Biotechnology Laboratory

10300 Baltimore Ave., Bldg. 200, Rm. 13A

Beltsville, MD 20705

5. USDA Researcher (ADODR)

Neil Talbot/Thomas Caperna

6. National Program Leader & Area

Dr. Ronald D. Green

7. Accounting Code

891-1265-522

8. Amount

$519,130.00

9. Finance Office

Budget & Fiscal Office, Beltsville Area

10300 Baltimore Ave., Bldg. 003, Room 301

Beltsville, MD 20705

10. Cris No.

1265-31000-087-00D

11. Title of Project

OPTIMIZATION OF THE ARS PICM-19 CELL LINE FOR AN IN VITRO MODEL OF PIG LIVER FUNCTION AND APPLICATION TO AN EXTRA CORPOREAL LIVER ASSIST DEVICE

12. Log #

34241


Incorporated into this Agreement are the following:


1.

Articles

2.

Schedule 1 Certifications

3.

Schedule 2 Statement of Work

4.

Schedule 3 Estimated Budget

FOR THE UNITED STATES DEPARTEMENT OF AGRICULTURE

SIGNATURE

/s/ Martha B. Steinbock

TYPED NAME

Martha B. Steinbock

Deputy Assistant Administrator

FOR THE COOPERATOR

(Signature of person(s) authorized by the governing body of the COOPERATOR to incur contractual obligations)

SIGNATURE

/s/ Frank Menzler

TYPED NAME AND TITLE

Frank Menzler

Chief Executive Officer


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ARTICLES


Article 1. Definitions


1.1

ARS means the United States Department of Agriculture, Agricultural Research Service.


1.2

COOPERATOR means HepaLife Biosystems, Inc..


1.3

Agreement means this Cooperative Research and Development Agreement.


1.4

Confidential Information means trade secrets or commercial or financial information that is privileged or confidential under the meaning of 5 USC 552(b)(4).


1.5

Subject Invention means any invention or other intellectual property conceived or first reduced to practice under this Agreement which is patentable or otherwise protectable under Title 35 of the United States Code, under 7 USC 2321, et seq., or under the patent laws of a foreign country. Specifically not included in the definition of Subject Inventions are inventions made outside the Scope of Agreement or prior to the execution of this Agreement. Included in this definition are ARS patents; #5,532,156 " Hepatocyte Cell line Derived from the Epiblast of Pig Blastocysts Licensed to Cell Applications, Inc. and Genespan Corp. and #5,866,420 " Artifical Liver Device" .


1.6

Scope of Agreement means those activities set forth in Schedule 2, entitled " Statement of Work."


1.7 Period of Agreement means that period set forth under the Period of Agreement on the ARS Office of Technology Transfer cover form for the Agreement.


Article 2. Publications


2.1

Subject to the requirements of confidentiality and preservation of rights in Subject Inventions, either party may publish the results of this Agreement, PROVIDED:


a.

The other party is allowed to review the manuscript at least sixty (60) days prior to submission for publication by submission to the Authorized Agent.


b.

The publication shall acknowledge this Agreement and the contributions of each party' s personnel.


c.

The final decision as to the publication content rests with the party that writes the publication.


2.2

Publication and/or other disclosure of the results of this Agreement shall be delayed as necessary to preserve both United States of America and foreign patent rights in a Subject Invention.


a.

Such a delay will only be granted if requested in writing; and


b.

The requesting party demonstrates promptness and diligence in seeking patent protection on the Subject Invention.


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Article 3. Confidentiality


3.1

Confidential Information, which is owned by one party to this Agreement and disclosed to the other, shall be labeled " CONFIDENTIAL" by the submitter and shall not be disclosed by the recipient without permission of the owner, EXCEPT in accordance with Article 2.


3.2

To the extent either party orally submits its Confidential Information to the other party, the submitting party will prepare a document marked " CONFIDENTIAL" embodying or identifying in reasonable detail such orally submitted Confidential Information and provide the document to the other party within thirty (30) days of disclosure.


3.3

Neither party shall be bound by confidentiality if the Confidential Information received from the other party:


a.

Already is available to the public or known to the recipient;


b.

Becomes available to the public through no fault of the recipient; or


c.

Is nonconfidentially received from another party legally entitled to it.


Article 4. Meetings, Reports and Records


4.1

Frequent and effective communication is essential to the successful accomplishment of the objectives of this Agreement. To this end, the scientific representatives of ARS and COOPERATOR shall meet (meetings need not be in person if agreed upon) at least once every six (6) months to exchange results, perform critiques, and make plans and recommendations. Written progress reports shall be supplied by each party to the other at least fifteen (15) calendar days prior to each semi-annual meeting.


4.2

Any such plan or recommendation that is outside the Scope of Agreement shall be reduced to writing and referred to the Authorized Agent of each party for appropriate action. Any such plan or recommendation so referred shall not be binding upon either party unless incorporated into this Agreement by written amendment.


4.3

Each party shall keep complete records relating to this research. All such records shall be available for inspection by either party at reasonable times. The records, or true copies of them, shall be delivered to either party upon request.


4.4

The results of this Agreement and research data that are collected, compiled, and evaluated under this Agreement shall be shared and mutually interchanged by COOPERATOR and ARS.


4.5

A final report summarizing all data shall be submitted by each party, separately or jointly, to both party' s Authorized Agents within sixty (60) days of the completion of this Agreement.


Article 5. Research Exclusion


5.1

The results of this Agreement owned or co-owned by the U.S. Government may be made available to others by ARS for bona fide noncommercial research purposes if:


a.

Confidentiality is not breached; or


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b.

Patent or Plant Variety Protection Certificate rights are not compromised.


5.2

Plants and animals, their genetic materials or information relating thereto, or parts thereof, covered by Plant Variety Protection Certificates, Plant Patents, or Utility Patents, owned or co-owned by ARS, may be made available by ARS to third parties for bona fide research purposes including the development of new animals or plants.


Article 6. Ownership of Inventions


6.1

All rights, title, and interest in any Subject Invention made solely by employee(s) of ARS shall be owned by ARS.


6.2

All rights, title, and interest in any Subject Invention made jointly by at least one (1) employee of ARS and at least one (1) employee of COOPERATOR shall be jointly owned by ARS and COOPERATOR.


6.3

All rights, title, and interest in any Subject Invention made solely by employees of COOPERATOR shall be owned by COOPERATOR.


Article 7. Subject Invention Licenses


7.1

COOPERATOR is granted an option to negotiate an exclusive license in each Subject Invention owned or co-owned by ARS for one or more field(s) of use encompassed by the Scope of Agreement. This license shall be consistent with the requirements of 35 USC 209(a), 209(b) (manufactured substantially in the U.S.), and 209(f) and other such terms and conditions as may be reasonable under the circumstances, as agreed upon through good faith negotiations between COOPERATOR and ARS.


7.2

This option shall terminate whenever COOPERATOR fails to:


a.

Submit a complete application for an exclusive license within (sixty to one-hundred & twenty 60-120) days of being notified by ARS of an Inventions availability for licensing; or


b.

Submit a good faith written response to a written proposal of licensing terms within (forty-five to sixty 45-60) days of such proposal.


7.3

COOPERATOR grants ARS, on behalf of the U.S. Government, a royalty free, nonexclusive, worldwide, irrevocable, nontransferable license for any COOPERATOR solely owned Subject Invention. The purpose of this license shall be to practice the Subject Invention or have it practiced, by or on behalf of the U.S. Government, for research or other U.S. Government purposes. 15 USC 3710a(b)(2).


Article 8. Subject Invention Information


8.1

The Authorized Agents or designees of each party shall promptly make written disclosure to each other of each Subject Invention.


8.2

This information shall be treated in confidence by the receiving party, EXCEPT: it may be shared with those having a need to know.


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8.3

Each party shall provide, when requested by the other, all information in its possession, or true copies thereof, pertaining to a Subject Invention which may be necessary or useful in the preparation, filing, and prosecution of patent or Plant Variety Protection Certificate applications covering the Subject Invention.


Article 9. Intellectual Property Protection Applications


9.1

ARS and COOPERATOR agree to cooperate with the other in the preparation, filing, and prosecution of Patent or Plant Variety Protection Certificate applications on Subject Inventions in the United States of America and any other country.


9.2

ARS shall provide COOPERATOR' S Authorized Agent or their designee with a copy of any such application on a Subject Invention within fourteen (14) calendar days of filing.


9.3

ARS shall have the first option to prepare and prosecute patent or Plant Variety Protection Certificate applications on Subject Inventions that are owned or co-owned by the U.S. Government, which option may be waived in whole or in part.


Article 10. Use of Name or Endorsements


COOPERATOR shall not in any way state or imply that this Agreement or the results of this Agreement are an endorsement of its organizational units, employees, products, or services except to the extent permission is specifically granted by ARS.


Article 11. Regulatory Compliance with Government Rules & Regulations


11.1

COOPERATOR is responsible for obtaining appropriate opinions, permits, or licenses from Federal or State agencies, which regulate research materials, or commercial products that may arise from the research work performed within the Scope of Agreement.


11.2

In carrying out its responsibilities under this Article, COOPERATOR shall:


a.

Consult and coordinate regulatory approval actions with ARS; and


b.

Give ARS' Authorized Agent or designee a copy of any applications andopinions, permits, or licenses issued.


11.3

Both parties acknowledge and agree to comply with all applicable laws and regulations of the Animal Plant Health and Inspection Service, the Center for Disease Control, and /or Export Control Administration pertaining to possession or transference of technical information, biological materials, pathogens, toxins, genetic elements, genetically engineered microorganisms, vaccines, and the like.


Article 12. Liability


It is understood and agreed that neither party to this Agreement shall be responsible for any damages or injuries arising out of the conduct of activities governed by this Agreement, except to the extent that such damages and/or injuries were caused by the negligent or wrongful acts or omissions of its employees, agents or officers. ARS' liability shall be limited by the Federal Tort Claims Act, 28 USC 2671, et seq.


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Article 13. Termination


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