Exhibit 10.2
EXCLUSIVE OPTION AGREEMENT
This Exclusive
Option Agreement (hereinafter called "Agreement"), to be
effective as of the 14th day of April, 2008 (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 referred 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 follows:
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.
F. "Licensable
Technology" shall mean Licensable Patents and Licensable
Know How.
G. "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
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following 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
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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 eighty thousand dollars ($80,000) 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% nor more than
10%.
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3. PAYMENTS
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3.1 Option Fee. Within fifteen (15) days of the
Effective Date of this
Agreement, OPTIONEE shall pay CCF a nonrefundable fee equal to ten
thousand
dollars ($10,000).
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
$6,500 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
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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
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(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 explanation satisfactory
to the Non-
Defaulting Party for the cure or other resolution of the default,
then this
Agreement shall be terminated as of the date of the notice.
All termination
rights shall be in addition to and not in substitution for any
