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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and
IVPSA, with its principal location at ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ (hereinafter, "OPTIONEE"). Collectively, both entities may hereinafter
be referred to as "Party" or "Parties."
RECITALS:
---------
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
-----------
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.
1 of 7
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 ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ while an
employee of CCF.
2. OPTION GRANT
------------
2.1 Option Period For a period of twelve (12) months immediately
-------------
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
-----------------------------------
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%.
2 of 7
3. PAYMENTS
--------
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
----------------------------
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
-----------
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 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 other remedies
that may be available to the Non-Defaulting Party.
(b) Termination pursuant to this section shall not relieve the Defaulting
Party from liability and damages to the Non-Defaulting Party for default.
Waiver by either party of a single default or a succession of defaults shall
not deprive such party of any right to terminate this Agreement arising by
reason of a subsequent default
5.3 Termination Without Cause. Either party may terminate this Agreement
--------------------------
at any time prior to the expiration of the Option Period, by providing thirty
(30) days written notice of same to the non-terminating party..
5.4 Effects of Termination. Any termination of this Agreement for any
----------------------
reason, does not relieve either party of any obligation or liability accrued
prior to the termination or rescind anything done by either party and the
termination does not affect in any manner any rights of either party arising
under this Agreement prior to the termination. Upon expiration of this
Agreement, the obligations set forth in Sections 8, 9.2, 9.3, 9.7 and 9.13,
9.14 shall survive.
3 of 7
6. ASSIGNABILITY
-------------
This Agreement shall be binding upon and shall inure to the benefit of the
Parties and their respective assigns and successors in interest. The Agreement
may not be assigned by either Party without the consent in writing of the other
Party.
7. ADDRESSES
---------
All notices, reports or other required, material communications pursuant to
this Agreement shall be sent to such Party via (i) United States Postal Service
certified mail, return receipt requested, postage prepaid, (ii) overnight
courier, charges prepaid or (iii) facsimile transmission, addressed to it at
its address set forth below or as it shall designate by written notice given to
the other Parties. Notice shall be sufficiently made or given (a) on the date
of mailing, (b) when deposited with the overnight courier, or (c) when a
facsimile printer reflects receipt.
CCF:
CCF Innovations - Mailstop D20
The Cleveland Clinic Foundation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile No. 216-445-6514
With copy to:
Office of General Counsel
The Cleveland Clinic Foundation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Legal Officer
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
OPTIONEE:
IVPSA Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ _89107
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
8. DISPUTE RESOLUTION
------------------
8.1 Except in the event that a party shall reasonably determine that it
must seek a preliminary injunction, temporary restraining order or other
provisional relief, upon the occurrence of a dispute between parties,
including, without limitation, any breach of this Agreement or any obligation
relating thereto, the matter shall be referred first to authorized officers of
CCF and OPTIONEE, or their designees. The authorized officers or their
designees as the CCF may be, shall negotiate in good faith to resolve such
dispute in a mutually satisfactory manner for thirty (30) days. If such
efforts do not result in mutually satisfactory resolution of the dispute, the
matter shall be handled by arbitration in accordance with Section
4 of 7
8.2 Any arbitration shall be conducted in Cleveland, Ohio in accordance
with the Commercial Dispute Resolution Procedures of the American Arbitration
Association and in the English language. The arbitrators shall include one
nominee of CCF and one nominee of OPTIONEE and a third person selected by said
nominees. The parties agree that any arbitration panel shall include members
knowledgeable as to evaluation of the biotechnology industry. Judgment upon
the award rendered may be entered in the highest court or forum, state or
federal, having jurisdiction; provided however, that the provisions of this
Section 8 (Dispute Resolution) shall not apply to any dispute or controversy as
to which any treaty or law prohibits such arbitration.
8.3 Notwithstanding the foregoing, nothing in this Section 8 shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.
9. ADDITIONAL PROVISIONS
---------------------
9.1 Use of Parties' Names. Each Party agrees that it shall not use in any
---------------------
way the name or logo of the other Party without the prior consent of the Party
whose name is to be used.
9.2 Independent Contractors. The Parties hereby acknowledge and agree that
-----------------------
each is an independent contractor and that no Party shall be considered to be
the agent, representative, master or servant of any other Party for any purpose
whatsoever, and that no Party has any authority to enter into a contract, to
assume any obligation or to give warranties or representations on behalf of any
other Party. Nothing in this relationship shall be construed to create a
relationship of joint venture, partnership, fiduciary or other similar
relationship between or among the Parties.
9.3 Indemnification OPTIONEE shall indemnify, hold harmless and defend CCF
---------------
and its respective trustees, officers, employees and agents (the "Indemnitees")
against any and all claims and suits of third parties ("Third Party Claims"),
and any damages, costs, fees, and expenses incurred by the Indemnitees in
connection with such Third Party Claims, resulting from or arising out of this
Option Agreement (each a "Loss"). OPTIONEE shall have no obligation to
indemnify any Indemnitees to the extent that a Loss arises out of the gross
negligence or intentional misconduct of an Indemnitee or the breach of this
Agreement by an Indemnitee.
9.4 Representations and Warranties. Each Party represents and warrants
------------------------------
that it has the right, power and authority to enter into this Agreement. CCF
represents and warrants to OPTIONEE that it owns the Licensable Technology.
CCF represents that to its knowledge, as of the Effective Date of this
Agreement, there are no third party infringement claims against the Licensed
Patents.
9.5 Disclaimer of Further Warranties. Other than as specifically provided
--------------------------------
in section 9.4, CCF makes no warranties or representations, express or implied,
with respect to the Licensable Technology including, but not limited to,
warranties of fitness or merchantability.
9.6 Non-Waiver. The Parties covenant and agree that if a Party fails or
----------
neglects for any reason to take advantage of any of the terms providing for
the termination of this Agreement or if a Party, having the right to declare
this Agreement terminated, shall fail to do so, any such failure or neglect
by such Party shall not be a waiver or be deemed or be construed to be a
waiver of any cause for the termination of this Agreement subsequently
arising, or as a waiver of any of the terms, covenants or conditions of this
Agreement or of the performance thereof. None of the terms, covenants and
conditions of this Agreement may be waived by a Party except by its written
consent.
5 of 7
9.7 Confidentiality. CCF and OPTIONEE agree for the Term and three (3)
---------------
years thereafter to hold all Confidential Information in confidence, and
to use the same only in accordance with this Agreement, unless required to
do so by federal or state securities laws. OPTIONEE shall have the right to
share Confidential Information with affiliates, partners, and consultants,
provided such third party enters into a confidentiality agreement with
OPTIONEE having terms at least as protective as set forth in this Agreement.
Except as required by applicable law, CCF and the OPTIONEE will hold, and
will cause its respective directors, officers, employees, accountants,
counsel, financial advisors and other representatives and affiliates to
hold, any nonpublic information in confidence.
9.8 Publications and Copyrights. CCF will be free to publish the results of
---------------------------
its research during the Term of this Agreement.
9.9 Reformation. The Parties hereby agree that no Party intends to violate
-----------
any public policy, statutory or common law, rule, regulation, treaty or
decision of any government agency or executive body thereof of any country or
community or association of countries, and that if any word, sentence,
paragraph or clause or combination thereof of this Agreement is found, by a
court or executive body with judicial powers having jurisdiction over this
Agreement or any of the Parties hereto, in a final, unappealable order to be
in violation of any such provision in any country or community or association
of countries, such words, sentences, paragraphs or clauses or combination
shall be inoperative in such country or community or association of countries,
and the remainder of this Agreement shall remain binding upon the Parties
hereto.
9.10 Execution in Counterparts. This Agreement may be executed in one or
-------------------------
more counterparts, each of which shall be deemed to be an original and executed
versions sent by facsimile transmission shall also be deemed to be originals.
9.11 Disclaimers. The parties acknowledge and agree that, unless and until
-----------
the Option is exercised, neither OPTIONEE nor any affiliate of OPTIONEE has any
right or interest in the Licensable Technology.
9.12 Governing Law This Agreement shall be governed by the laws of the
-------------
State of Ohio.
9.13 Press Releases. Both OPTIONEE and CCF will not, without the other
--------------
party's prior review and express written consent, issue any press release, or
issue or make any other public comment, or publish or broadcast any
advertisement in any media, or disseminate any sales promotion or solicitation
materials, that in any way refers to the other party, or any subsidiary or
affiliate of the other party, or to the specific terms of this Agreement unless
such item is substantially similar to that which has already been approved by
the other party.
9.14 Access to Records. If Section 952 of the Omnibus Reconciliation Act
-----------------
of 1980, which amended Section 1861(v)(1) of the Social Security Act, and the
regulations promulgated there under, applies to this Agreement, each party will
make available to the Secretary of Health and Human Services, and to the
Comptroller General of the United States upon written request, such books,
documents and records necessary to verify the nature and extent of the costs of
the services provided hereunder. Access will be granted until the expiration of
four (4) years after the furnishing of services hereunder. Access will also be
granted to any books, documents or records related to this Agreement between a
party and organizations related to that party, but only an as needed basis.
9.15 Compliance with Laws. By entering into this Agreement, the parties
--------------------
specifically intend to comply with all applicable laws, rules and regulations
as they may be amended from time to time. In the event that any part of this
Agreement is determined to violate federal, state, or local laws, rules, or
regulations, the parties agree to negotiate in good faith revisions to the
provision or provisions that are in violation. In the event the parties are
unable to agree to new or modified terms as required to bring the entire
Agreement into compliance, either party may terminate this Agreement without
penalty upon thirty (30) days written notice to the other party.
6 of 7
9.16 Debarment. IVPSA hereby represents and warrants that it has not been
---------
debarred, suspended, excluded or otherwise determined to be ineligible to
participate in federal healthcare programs (collectively, "Debarred") and
acknowledges that CCF shall have the right to terminate this Agreement
immediately in the event that IVPSA is Debarred.
9.17 Conflict. CCF maintains and adheres to a Conflict of Interest Policy.
--------
In that connection, OPTIONEE represents that no CCF employees, officers or
directors are employees, consultants, officers or directors of OPTIONEE or
serve on any boards or committees of or in any advisory capacity with OPTIONEE.
Any payments made to such parties are at fair market value for services
rendered.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement in multiple originals by their duly authorized officers and
representatives on the respective dates shown below, but effective as of the
Agreement Date.
IVPSA CORPORATION THE CLEVELAND CLINIC FOUNDATION
(A Nevada Corporation)
By: /s/ ▇ ▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- ------------------------
Name: ▇ ▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- ------------------------
Title: President/CEO Title: COO
--------------------- ------------------------
Date: April 21, 2008 Date: April 30, 2008
--------------------- ------------------------
APPROVED AS TO FORM
CCF-OFFICE OF
GENERAL COUNSEL
BY KDS
---
DATE 4/25/08
-------
CMSI# IVPS 25818
----------
7 of 7
