Exhibit 10.2
TECHNOLOGY DEVELOPMENT AND OPTION AGREEMENT
This
Technology
Development and Option
Agreement (this
"Agreement") is
made effective as of August 24, 2007 (the "Effective Date"), by and among SGPF,
LLC, a Kentucky limited liability company ("SGPF"), MedPro Safety Products, Inc
("MedPro"), a Delaware Corporation.
RECITALS
A. SGPF
has an agreement to acquire the technology and related products
known as the Safety Syringe System, with and without a Distal
Protective Needle,
in a Fillable and Pre-filled Configuration, and more precisely described in
the
Patents and description contained in Exhibit A, (hereinafter
referred to as "the
Blunt Technology.")
B. SGPF
desires to engage the services and the financial support of
MedPro
to develop the Blunt Technology and MedPro is willing to provide
such assistance
in exchange
for receiving an option to acquire the Blunt Technology in
accordance with this Agreement.
AGREEMENT
Incorporating the
above recitals
herein, and in consideration of the
covenants and
obligations
contained
herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, SGPF
and MedPro hereby agree as follows:
1. Definitions
For
purposes of this
Agreement capitalized terms have the meanings set
forth in this Section or elsewhere in this Agreement.
1.1
"Affiliate"
as used in this
Agreement with respect to a person or
entity means any
corporation, company,
partnership,
joint venture, entity,
and/or firm which
controls, is
controlled by or is
under common control
with
such person or entity.
1.2 "Blunt
Product" means the
Safety Syringe System,
with and without a
Distal Protective
Needle, in a Fillable and Pre-filled Configuration, as
described on Exhibit A
to this Agreement
and covered by the Patents and the
Patent Applications.
1.3
"Blunt Technology" means (a) the technology described on the
Description of
the Safety Syringe Device and the Product, in multiple
configurations as noted in this Agreement, and as attached to this Agreement
as
Exhibit A,
and (b) all knowledge, information, know-how, discoveries,
procedures, devices,
techniques,
programs, inventions, creations, methods,
protocols, formulas,
software, designs, drawings, works of authorship and other
valuable technical and proprietary information related to such
technology, the
Safety Syringe
Device and the Product
that have been developed by or on behalf
of SGPF as of the
date of this Agreement. Such know-how described in the
previous sentence
includes, but is not limited to, proof of concept and all
efforts necessary to
ensure
manufacturability of
all of the above
mentioned.
This does NOT mean additional refinements may not be necessary.
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1.4
"Closing" shall have the meaning set forth in Section 3.3.
1.5
"Development
Agreement"
shall have the meaning
set forth in Section
2.1(ii).
1.6
"Development
Agreement Notice" shall have the meaning set forth
in
Section 2.1(ii).
1.7
"Development Costs" shall have the meaning set forth in Section
2.2.
1.8
"Encumbrances" means
any title defects,
objections, liens,
claims,
pledges, rights
of first refusal, options, charges, security interests,
mortgages or other
encumbrances
of any nature
whatsoever
which are claimed
through or by SGPF but
specifically excluding
any of the same arising under or
by reason of the TAG.
1.9
"Exercise Period" shall have the meaning set forth in section
3.3.
1.10
"Exercise Price" shall have the meaning set forth in Section
3.2
1.11
"MedPro Services" shall have the meaning set forth in Section
2.1.
1.12
"Patents" means (a) any Patents described in Exhibit A or Patents
arising out of the Patent Applications described in Exhibit A; and (b)
any and
all reissues,
extensions,
substitutions,
confirmation,
registrations,
re-validations, re-examinations, additions, continuations,
continuation-in-part
or divisionals of or
to such Patents,
together with all foreign corresponding
Patents thereof.
1.13
"Patent Applications" means (a) the Patent applications
described in
Exhibit A and (b) any other U.S. or foreign Patent applications that may be
filed with respect to
the Technology
or the Product,
and any continuations,
continuations-in-part and divisions of these applications.
1.14 "TAG"
shall mean that certain Technology Acquisition Agreement dated
February 19, 2007 among SGPF, Hooman Asbaghi and Visual
Connections.
2. Development of the Blunt Technology
2.1
Services to be Provided by MedPro. The following shall apply to the
development of the Blunt Technology:
(i) MedPro shall, in consultation with SGPF, manage and direct the
development of the Blunt Technology with the objective of fully
commercializing
the Blunt Technology
as quickly as
possible, including, but not limited to,
doing the following: (a) providing the administrative support need
to manage the
development of the intellectual property and Patent process;
(b) continuing to
prosecute the Patent
filings; (c) obtaining
approvals from the Food and Drug
Administration; (d)
generation of the proof of concept tooling and samples; (e)
solicitation of
agreements
for the marketing
and distribution of the Blunt
Product; and (f)
performing all acts reasonably necessary to develop the Blunt
Technology for
commercialization (the
"MedPro Services") In
providing MedPro
Services, MedPro will
devote sufficient
management
resources and
experienced
personnel to complete the development process in a
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timely manner. In
performing MedPro
Services, MedPro shall
regularly consult
with and inform SGPF
on all aspects of its
activities
and shall obtain, in
advance, SGPF's approval on all major decisions regarding the
MedPro Services.
(ii) SGPF shall retain
the unfettered authority to enter into a
Development Agreement
(as hereinafter
defined) with any
other party. In
such
event, MedPro's rights and obligations as provided in this
Agreement shall cease
in so far as such rights and obligations are inconsistent
with the terms of
the
Development Agreement,
except that nothing contained in such Development
Agreement shall
reduce or eliminate MedPro's rights in Section 3 of this
Agreement. For
purposes of this
Agreement, the term
"Development
Agreement"
means an agreement under which a party commits to SGPF that it will
generate the
concept tooling
and samples of Blunt
Products, market and distribute Blunt
Product, and perform
other acts reasonably necessary to commercialize the Blunt
Technology and Blunt
Products. At such time as SGPF enters into a
Development
Agreement, it shall provide written notice to MedPro (the
"Development Agreement
Notice").
2.2
Development Costs to be paid by MedPro. MedPro will pay all the costs
incurred in performing
the MedPro Services
(the "Development
Costs") up to a
maximum of Three
Hundred Seventy-Five Thousand Dollars ($375,000.00). For
purposes of this
Agreement, Development
Costs shall only
include reasonable
out-of-pocket expenses
(including
travel expenses) incurred by MedPro in
performing the MedPro Services.
On or
about the tenth (10th) of each month during the term of this
Agreement, MedPro
shall provide SGPF an
accounting of all
Development
Costs
incurred during the preceding calendar month.
Notwithstanding
anything to the contrary contained herein, MedPro shall
obtain the prior
approval for any
single expenditure
exceeding Ten Thousand
Dollars ($10,000.00).
3. Option to Purchase the Blunt Technology
3.1 Option
to Purchase
Technology.
On the terms set forth
below, SGPF
hereby grants to
MedPro the exclusive
option to acquire all
of SGPF's right,
title, and interest in and to the Blunt Technology.
3.2 Option
Exercise. Upon exercise of the option described in Section 3.1,
the following shall occur:
(i) MedPro
shall pay to SGPF the Exercise Price on the date of
Closing. The term "Exercise Price" shall mean the following:
(a) the sum of Two
Million Five Hundred Thousand Dollars
($2,500,000.00);
(b) all amounts
SGPF has paid on or prior to the date of
Closing under Sections
2.1(a)(ii), (iii) and
(iv) of the TAG (but specifically
excluding Section 2.1(a)(i) of the TAG); and
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(c) the sum of Two
Million Five Hundred Thousand Dollars
($2,500,000.00) in common stock of MedPro (or any other shares into
which MedPro
common stock may be converted) based on a value of $1.81 per share
of the MedPro
common stock.
The amounts specified
in 3.2(i) shall be paid to SGPF in cash by wire transfer
in immediately
available funds on the Closing Date. The stock certificates
representing the capital stock specified in Section 3.2(i) shall be
delivered to
SGPF on the Closing Date.
(ii) MedPro and SGPF shall execute an assignment agreement under
which SGPF shall assign, and MedPro shall assume, all
rights and obligations of
SGPF under the TAG which assignment and assumption shall include, but not be
limited to, the following: (A) the obligation to pay any
outstanding payment due
under Section
2.1(a)(ii) and (iii)
in the TAG; and (B) the obligation to make
any Royalty Payment
(as defined by the TAG). The assignment agreement shall
provide that MedPro shall assume and faithfully and fully
discharge and
perform
each and every obligation arising under the TAG.
(iii) SGPF and
MedPro shall execute such other documents and
instruments of
assignment
necessary or appropriate to transfer the Blunt
Technology to MedPro.
3.3
Time/Method To
Exercise. MedPro shall
have the right to exercise the
option described in
Section 3.1 beginning on execution date of this Agreement
and ending on the
sixtith (60th) day
after delivery
by SGPF to MedPro of
the
Development Agreement Notice ("Exercise Period"). To exercise the
option, MedPro
shall provided written
notice to SGPF, prior to the end of the Exercise Period,
referencing this
Section 3.3 and stating that it intends to exercise its option
pursuant to Section 3.1. The option exercise shall be consummated pursuant to
Section 3.2 (the
"Closing") at a mutually agreeable time and place (but in
the
absence of such an agreement on the first business day following the
expiration
of the Exercise Period at the offices of MedPro in Lexington,
Kentucky).
Notwithstanding
anything to the contrary contained herein, in the event
SGPF receives a notice
from MedPro that it intends to exercise the option
described in
Section 3.1 and SGPF believes, in good faith, that the
representations
contained in
Section 4.4 may be inaccurate at the time of
Closing, SGPF may
defer the Closing for up to one hundred eighty (180) days to
attempt to cure the inaccurate representation. If SGPF is unable to so cure
in
such time,
the option notice shall deemed to be have never been given in
response to the Development Agreement Notice
3.4
Termination of
Agreement. This
Agreement shall
terminate,
and all
rights and obligations of the parties hereunder shall cease, upon
the expiration
of the Exercise Period if MedPro has not exercised its option to
purchase within
the specified time after receiving a Development Agreement
Notice.
4. Representations and Warranties of SGPF
SGPF
represents
and warrants to MedPro as of the date hereof, which
representations and warranties are material, are being relied upon by SGPF
(not
withstanding any independent investigation) and will survive the
date hereof, as
follows:
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4.1
Organization,
Power. SGPF is a limited liability company duly
organized, validly
existing and in good standing under the laws of the state of
Kentucky and has all
requisite corporate
power and authority to carry on its
business as it is now being conducted, to own, lease and operate its
properties
and assets,
to enter into this Agreement and to carry out the transactions
contemplated hereby.
4.2
Authorization, Execution. The execution and delivery of this
Agreement
and the consummation of the transactions contemplated hereby will be duly
authorized by the
Members of SGPF. This
Agreement has been duly executed and
delivered by SGPF,
and constitutes a valid and legally binding obligation
enforceable against SGPF in accordance with its terms.
4.3
Conflicts.
Neither the execution
and delivery of this
Agreement nor
the performance of the provisions hereof or the transactions
contemplated hereby
by SGPF (a) violates or conflict with any organizational, charter or governing
documents; (b)
violates or conflicts with any applicable law, rule,
regulation,
writ, judgment, injunction, decree, determination,
award or other order
of any
court, government
or governmental agency or instrumentality, domestic or
foreign, or (c)
results in any breach of any of the terms of or constitutes a
default under or results in the creation or imposition of any
mortgage, deed of
trust, pledge,
lien, security interest or other charge or
Encumbrance of any
nature pursuant to the
terms of any contract,
agreement or instrument to which
SGPF is a party or by
which it or its properties or any of the Technology,
Technology Rights or Product is bound.
4.4
Technology Rights. At the time of the exercise of the option
described
in Section 3.1 only, the following representations shall apply
(a) SGPF will be the exclusive record and beneficial owner of the
Blunt Technology free
and clear of all
Encumbrances. SGPF has
full rights and
powers to, and at the
Technology Transfer
Time will deliver to SGPF, good and
marketable title
to all of the Technology Rights, free and clear of any
Encumbrance.
(b) The use of Blunt Technology as used by SGPF will not infringe
or
violate any trade secrets, plans and specifications, patents, copyrights, trade
names, registered and
common law trademarks,
trademark
applications,
service
marks, service mark applications, computer programs and other
computer software,
inventions, know-how,
technology,
proprietary processes
and formulae or other
intellectual property rights of any other person or entity.
(c) Except as provided
in the TAG, SGPF will
not be obligated
or
under any liability whatsoever to make any payments by way of
royalties, fees or
otherwise to any
person claiming to be an owner of, licensor of, or other
claimant to, any of the Blunt Technology.
4.5
Statements. Neither
this Agreement nor any exhibit, certificate, list
or other document
furnished or to be furnished by or on behalf of SGPF pursuant
to this Agreement contains or will contain any untrue statement of
material fact
or omits or will omit to state a material fact necessary to make the
statements
contained herein and therein, in light of the circumstances under
which they are
made, not misleading.
There is no material fact as of the date hereof which has
not been disclosed to MedPro.
