Exhibit 10.1 - Exclusive Option Agreement
06011-001
EXCLUSIVE OPTION AGREEMENT
This Exclusive
Option Agreement (hereinafter called "Agreement"), to be
effective as of the 15th day of March, 2007 (hereinafter called
"Effective
Date"), is by and among The Cleveland Clinic Foundation
(hereinafter, "CCF")
with its principal location at 9500 Euclid Ave., Cleveland, Ohio
44195 and
IVPSA, with its principal location at 500 N. Rainbow, Suite 300,
Las Vegas,
NV 89107 (hereinafter, "OPTIONEE"). Collectively, both entities
may
hereinafter be referenced to as "Party" or "Parties."
RECITALS:
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Whereas, CCF
owns the Licensable Technology as defined below;
Whereas,
OPTIONEE specializes in developing technology and bringing new
technologies to market;
Whereas,
OPTIONEE desires to investigate and conduct due diligence with
respect to the commercial viability of the Licensable Technology
prior to
executing the License Agreement;
NOW, THEREFORE,
for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which
are hereby
acknowledged, and intending to be legally bound hereby, the Parties
hereto
expressly agree as fellows:
1.
DEFINITIONS
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A. "Affiliates"
means any corporation or other business entity which
controls, is controlled by or is under common control with
OPTIONEE. For
purposes of this Section 1.1, "control" shall mean direct or
indirect
ownership of (i) at least fifty percent (50%) of the outstanding
stock or
other voting rights entitled to elect directors, or (ii) in any
country where
the local law shall not permit foreign equity participation of at
least fifty
percent (50%) then the maximum percentage of such outstanding stock
or voting
rights permitted by local law.
B. "Confidential
Information" means any confidential or proprietary
information furnished by one party (the "Disclosing Party") to the
other
party (the "Receiving Party") in connection with this Agreement,
provided
that such information is specifically designated as
confidential.
Confidential Information shall include, but not be limited to, the
following
when specifically designated as confidential: business information,
trade
secrets, technical information, know-how, engineering process,
intellectual
property, business plans and strategies, business operations and
systems,
marketing techniques, material pricing policies, information
concerning
employees, customers, licensees and/or vendors, patent
applications, patent
prosecution, inventions, ideas, procedures, formulae or data, The
term
Confidential Information shall not be deemed to include information
which (a)
is now, or hereafter becomes, through no act or failure of the
Receiving
Party, in the public domain; (b) is known by the Receiving Party at
the time
of receipt of such information; (c) is hereafter furnished to the
Receiving
Party by a. third party, who is not subject to any restriction on
disclosure
at the time of disclosure to the Receiving Party; or (d) has been
developed
by the Receiving Party completely independent of the delivery of
Confidential
Information hereunder.
C. "Field" shall
mean clinical use as a catheter for insertion into the
vascular system of a patient to direct fluid flow, sampling of
fluids and
oxygenation monitoring.
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D. "Licensable
Know How" shall mean any and all information, including but
not limited to, confidential, proprietary and trade secret
information owned,
controlled, originated, conceived, reduced to practice, developed
or
otherwise in the possession of CCF as of the Effective Date
necessary to
practice Licensable Patents, including without limitation, all
methods,
processes, processing techniques, products, compositions, formulas,
test
data, and designs.
E. "Licensable
Patents" shall refer to and mean US Patent Application #
60/797,433 entitled "Intra-jugular Catheter" and any U.S. or
foreign patent
applications, reissues, extensions, renewals, reexaminations,
certificates of
invention, substitutions, divisions, continuations, and
continuations-in-part
thereof having the Principal Investigator as an inventor and having
the same
priority date as the parent applications.
G. "Licensable
Technology" shall mean Licensable Patents and Licensable
Know How,
H. "Principal
Investigator" shall mean Dr. Rafi Avitsian while an employee
of CCF.
2. OPTION
GRANT
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2.1 Option
Period For a period of twelve (12) months immediately following
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the Effective Date of this Agreement ("Option Period"), CCF agrees
that it
will not enter into any exclusive agreement with any third party
with respect
to the transfer of rights in the Field to the Licensable
Technology, whether
by license or otherwise,
2.2 Negotiation
for a License Agreement During the Option Period, Parties
-----------------------------------
shall negotiate a License Agreement having terms and conditions
generally
agreeable to CCF not limited to but including an upfront license
fee,
milestones and a royalty. Binding obligations for such a license
agreement
will only be created by the execution and delivery of a definitive
written
agreement between the Parties and shall be dependant on OPTIONEE
providing a
product development plan for the Licensable Technology that is
acceptable to
CCF at its sole discretion. If an agreement has not been reached
within said
Option Period, the parties shall have no further obligations under
this
Agreement and CCF shall be free to license any and all rights under
the
Licensable Technology to any third party without any further
obligation to
OPTIONEE.
The license
agreement shall include at least the following provisions.
license fees, royalty payments, required terms for granting
sublicenses (if
any), a commitment by OPTIONEE and any sublicensee to exert their
best
efforts to introduce the licensed material into public use as
rapidly as
practicable, the right of CCF to terminate the license should
OPTIONEE not
meet specified due-diligence milestones, and indemnity and
insurance
provisions satisfactory to CCF. Provided other terms of a license
agreement
negotiated by the Parties upon OPTIONEE's exercise of the Option
generally
conform with CCF's standard practices and license terms, such
license
agreement shall include financial terms to be negotiated within the
following
ranges: (i) OPTIONEE shall pay CCF a License Fee in amounts that
total not
less than seventy-five thousand dollars ($75,000) nor more than one
hundred
thousand dollars ($100,000); and (ii) OPTIONEE shall remit
royalties to CCF
on a quarterly basis based on a percentage of net sales of the
products
subject to the license agreement of not less than 7.5% nor more
than 15%.
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3. PAYMENTS
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3.1 Option Fee.
Within fifteen (l5)days of the Effective Date of this
Agreement, OPTIONEE shall pay CCF a nonrefundable fee equal to
thirty-six
thousand dollars ($36,000).
3.2 Patent
Prosecution and Maintenance. CCF shall notify OPTIONEE of
any
and all costs associated with prosecuting and maintaining the
Licensable
Patents throughout the Option Period, and OPTIONEE shall reimburse
CCF up to
$2,500 any and all reasonable costs associated therewith,
Reimbursement
payments shall be due within 15 days of receiving invoices from
CCF. If
OPTIONEE fails to make such reimbursement payments, it shall
automatically
relinquish all rights under this Agreement.
4. INTELLECTUAL
PROPERTY RIGHTS
----------------------------
Title to all
Licensable Technology (including but not limited to
prototypes developed by the OPTIONEE) shall remain in CCF. Any
materials
developed by OPTIONEE shall be returned to CCF at the end of the
Option
Period.
5.
TERMINATION
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5.1 Term Unless
otherwise terminated by operation of law or by acts of the
----
parties in accordance with the terms of this Agreement, this
Agreement shall
automatically terminate upon conclusion of the Option Period.
5.2 Termination
for Breach
----------------------
(a)
This Agreement shall be terminable upon the material breach of
either party. In the event of a material breach by a party
("Defaulting
Party") the other party ("Non-Defaulting Party") shall give the
Defaulting
Party written notice of the default and its termination of this
Agreement,
subject to a thirty (30) day right to cure. If the Defaulting Party
(i) fails
to cure the breach within thirty (30) days after receipt of notice
from the
Non-Defaulting Party, or (ii) fails to provide a written
