Exhibit 10.11
CONSULTING AGREEMENT
This Consulting Agreement (the
“Agreement”) is entered into, effective as of June
_____, 2008 (the “Effective Date”), by and among
BioDrain Medical, Inc. , a Minnesota corporation, having an
address at 699 Minnetonka Highlands Lane, Orono, MN, 55356-9728
(hereinafter “BioDrain”) on the one hand, and, on the
other hand, Marshall C. Ryan (hereinafter “
Ryan ”), individually, and Mid-State Stainless,
Inc. , (hereinafter “ Mid-State ”), a
Wisconsin corporation, having an address at 330 West Benson Avenue,
P.O. Box 228, Grantsburg, WI 54840 (Ryan and Mid-State are
hereinafter collectively referred to as “Consultant”).
BioDrain and Consultant may be referred to in this Agreement,
individually, as a “Party”, and jointly, as
“Parties.”
RECITALS
WHEREAS, BioDrain desires to retain Consultant, and
Consultant desires to be so retained, to consult with and assist
BioDrain in developing and commercializing an apparatus for the
disposal of liquid surgical waste.
NOW, THEREFORE, in furtherance of the above recitals and
subject to the terms and conditions set forth herein, the Parties
agree as follows:
1.
Definitions. In
this Agreement, the terms defined parenthetically elsewhere and the
following terms shall have the meanings there or here supplied.
Terms may be used in the singular or the plural.
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1.1. Change in
Control. “Change in
Control” as used herein shall mean an occurrence after the
Effective Date of this Agreement, where any one person or entity
(other than the current officers and directors of BioDrain and
their affiliates) becomes the owner of fifty percent (50%) or more
of the combined voting power of BioDrain’s outstanding
securities ordinarily having the right to vote at elections of
directors, not including shares issuable pursuant to options,
warrants, convertible debt or similar instruments.
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1.2 Customer.
“Customer” as used
herein shall mean any individual or entity other than a
Party.
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1.3. Developments.
“Developments” as used
herein shall mean any invention, discovery, concept, improvement,
innovation, or idea, whether or not patentable and whether or not
reduced to practice, of Consultant (whether alone or jointly with
BioDrain personnel) that relies upon or builds upon the disclosure
or teachings of the Patents or that otherwise relates to the
Technology.
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1.4. IP Rights.
“IP Rights” as used
herein shall mean all patents, copyrights, trade secrets,
trademarks, service marks, trade dress, mask works, and all other
intellectual property or proprietary rights of every kind or
nature, however designated, throughout the world, including all
rights to file for applications therefore with any governmental
agencies and to receive registrations, renewals, reissues and/or
reexaminations thereon, together with all world wide rights to
income, royalties, damages and payments due or
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payable with respect thereto, and
to all causes of action (either in law or in equity) associated
therewith, including all rights to sue, counterclaim, and recover
for infringement thereof.
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1.5. Net Sales.
“Net Sales” as used
herein shall mean the total invoiced amount of any Product Sold to
Customers by BioDrain and/or its licensees, less all discounts and
allowances actually shown on the invoice, and less any bona fide
returns actually made or allowed as supported by credit memoranda
actually issued to Customers, and excluding all shipping charges,
duties, sales taxes and excise taxes.
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1.6. Patents.
“Patents” as used herein
shall mean United States Patent Application No. 10/524,086 having a
filing date of February 9, 2005 and entitled “Method and
Apparatus For Disposing of Liquid Surgical Waste For Protection of
Healthcare Workers” and European Patent No. EP1539580 issued
April 4, 2007 entitled “Method and Apparatus For Disposing of
Liquid Surgical Waste For Protection of Healthcare Workers”
and any patents or patent applications of the United States,
foreign country or international patent authority which relate or
claim priority thereto, including, but not limited, to all
continuations, continuations-in-part, divisionals, reexaminations
and reissues thereof.
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1.7. Products.
“Products” as used
herein shall mean all current and all future commercial embodiments
of any device within the scope of any claims of the
Patents.
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1.8. Services.
“Services” as used
herein shall have the meaning as ascribed in Section 2.
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1.9. Sold or Sale.
“Sold” or
“Sale” as used herein shall mean the date when a
Customer is invoiced for the Products.
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1.10. Technology.
“Technology” as used
herein shall mean the collection and/or disposal of liquid surgical
waste.
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1.11. Term.
“Term” as used herein
shall mean the period commencing on the Effective Date and ending
when there are no Patents which remain in force anywhere in the
world, unless sooner terminated pursuant to Section 7
(Termination).
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1.12. Work Product.
“Work Product” shall
mean any work of authorship (within the purview of the copyright
laws of the United States of America), any invention, discovery,
concept, improvement, innovation, or idea, (whether or not
patentable, whether or not put into writing, and whether or not put
into practice), whether conceived, produced or developed solely by
efforts of Consultant or jointly with BioDrain personnel, in
connection with Consultant’s performance of the Services,
including, but not limited to, all data, files, records, reports,
compilations, methods, processes, procedures, systems, operations,
techniques, formulas, designs, drawings, diagrams, models, samples,
flow charts, algorithms, data, plans, lists, contracts, and
computer programs, including any source code, object code,
enhancements and modifications, all databases, all files, including
input and output materials, all documentation related to such
computer programs, databases and files, all media upon which any
such computer program, database, files and documentation are
located (including tapes, disks and other storage
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devices) and all related material
used by, developed for, or paid for by Consultant in connection
with the performance of the Services.
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2.
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Obligations of
Consultant
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2.1 Duties of
Consultant. During the
Term, Consultant will assist BioDrain in developing Products, serve
as an advisor on current and future Products, assist BioDrain in
securing any government or regulatory approvals or certifications,
and upon request by BioDrain, respond to questions about the
Products from third parties (collectively, the
“Services”). All requests for such Services shall be
made in writing by BioDrain. Consultant shall provide competent,
professional services, using its own appropriate independent skill
and judgment, and the manner and means that appears best suitable
to it to perform the Services. Consultant shall, at all times, use
best efforts to provide the Services. Consultant shall choose its
own place and time of performance of work.
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2.2 Other
Obligations. In the
performance of the Services, Consultant:
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(a) shall conduct all of its
business in a businesslike and professional manner.
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(b) shall not, without
BioDrain’s prior written approval, make representations,
warranties or guarantees concerning the Products.
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(c) shall abide by
BioDrain’s policies as provided by BioDrain in
writing.
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2.3
Non-Competition. Consultant shall not, at any time during the
Term, on its own behalf, or on behalf of any person, directly or
indirectly, in any capacity whatsoever, including, without
limitation, as an employer, employee, principal, agent, joint
venturer, partner, shareholder or other equity holder, independent
contractor, licensor, licensee, franchisor, franchisee,
distributor, consultant, supplier, trustee or by, through or in
connection with any person, carry on or be engaged in or have any
financial or other interest in or be otherwise commercially
involved in any endeavor, activity or business that is in direct or
indirect competition with the Products or the commercial activities
of BioDrain.
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2.4 Compliance with Laws and
Standards. Consultant
shall perform its obligations under this Agreement in compliance
with all applicable laws.
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2.5 Disclosure of
Developments. Consultant
shall promptly disclose in writing to BioDrain any and all
Developments during the Term and for a period of one (1) year
thereafter. Additionally, within thirty (30) days of the Effective
Date, Consultant shall deliver to BioDrain a copy of any and all
drawings and technical information within the possession or control
of Consultant together with any other information which would be
helpful to BioDrain in the understanding of the Technology,
including any information relevant to the manufacture or use of
devices based on the Technology.
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3. Compensation
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3.1 R & D
Payment. Biodrain shall
pay to Consultant a one time payment of One
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Hundred Thousand Dollars
($100,000) as full compensation for all research and development
fees and costs incurred by Consultant toward the development of the
Technology (the “R&D Payment”). The R&D Payment
shall be due and payable within twelve (12) months of the Effective
Date. Notwithstanding the f
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