EXHIBIT 10.7
CONSULTING AGREEMENT BY AND BETWEEN
IVIVI TECHNOLOGIES, INC. AND XX. XXXXXX XXXXXXX
CONSULTING AGREEMENT dated as of January 1, 2004 between Ivivi Technologies,
Inc. (the "Company"), and Xx. Xxxxxx Xxxxxxx (the "Consultant").
WHEREAS, Xxxxxx Xxxxxxx, MD ("Xxxxxxx") is an expert in the field of plastic and
reconstructive surgery; and
WHEREAS, The Company is desirous of engaging the Consultant in order to achieve
certain objectives in the field of pulsed magnetic frequencies (the "Field"),
upon the terms and conditions specified below.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. CONTRACT FOR SERVICES. Effective as of the date of this Agreement,
the Company hereby contracts for services with the Consultant, and the
Consultant hereby accepts the contract for services by the Company, upon the
terms and subject to the conditions hereinafter set forth.
SECTION 2. TERM AND TERMINATION
(a) TERM. The term of this Agreement shall be for the period commencing
as of the date of this Agreement and ending on December 31, 2009 (the "Initial
Term.), and upon the expiration of the Initial Term, the term shall
automatically be extended for successive one year periods (each a "Term") unless
this Agreement is otherwise terminated as provided herein.
(b) TERMINATION. The Company or the Consultant may terminate this
Agreement by providing written notice of such termination to the other party at
least thirty (30) days prior to the end of the Initial Term or any successive
Term, unless this Agreement is otherwise terminated under Sections 6, 7, 8, or
9.
SECTION 3. SERVICES.
(a) DESCRIPTION OF SERVICES. The Consultant shall provide the following
services (the "Consultant Services"):
1. Serve as Medical Director and Chairman of the Medical
Advisory Board of the Company, or in such other position as the Company and the
Consultant shall agree in writing, and organize telephonic, electronic and
person to person meetings with the Company's Medical Advisory Board, provided
that such person to person meetings shall be limited to no more than four (4) in
any 12 month period.
2. Review technological developments in, arising from or
related to the Field and report to the Company on such developments on a
periodic basis.
3. Act as principal investigator and provide recommendations
to the Company for future clinical and research applications in the Field.
4. Provide instruction and assistance to the Company for all
technical and medical aspects of submissions to the United States Food and Drug
Administration (the "FDA") and compliance with FDA regulations in the Field.
5. Provide instruction and assistance to the Company for all
technical and medical aspects of marketing Company technology in the Field.
6. Represent the Company at strategic meetings or conferences
as Medical Director, provided however that the Consultant will not be required
to attend more than six (6) strategic meetings in a twelve (12) month period.
7. Attend Board of Director meetings if requested by either
the Chairman of the Board or the President of the Company, provided two weeks
notice is given either in writing or verbally.
8. Respond to questions and inquiries made by the Company or
other professionals employed or retained by the Company regarding the Field or
Company products related to the Field, either orally or in writing as such
questions may be requested from time to time.
9. Provide reasonable endorsement of Company products related
to the Field.
10. Advise on new Company product development in the Field.
11. Evaluate products in the Field for efficacy and design.
12. Serve on the Board of Directors of the Company if selected
or elected, but only if: (a) the Company has obtained Directors and Officers
("D&O") liability insurance and has named the Consultant as a named insured on
such insurance policy, and (b) the Company agrees to pay the Consultant an
honorarium for his service on the Board of Directors equal to the largest
honorarium paid to any other Director serving on the Board of Directors.
(b) TIME COMMITMENT. The Consultant will provide the Consultant
Services for a maximum of fifty (50) hours per month during the Initial Term and
each successive Term thereafter. The Consultant will provide the Company with
periodic reports as to the Consultant Services and, if requested, will provide
the amount of time expended and the areas of Consultant's services that consumed
the time.
(c) TIME AND SCHEDULE CONFLICTS. The Company recognizes and
acknowledges that the Consultant has been and is currently engaged as the
Chairman of the Department of Plastic Surgery of the Montefiore Medical Center,
and that the Consultant's relationship with the Montefiore Medical Center is
essential to the Consultant's professional success and to the Consultant's
contributions to the Company under this Agreement. The Company and the
Consultant shall cooperate to attempt to avoid scheduling activities and
imposing duties upon the Consultant under this Agreement that will impose upon
the Consultant's responsibilities to the Montefiore Medical Center.
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(d) COMPLIANCE WITH LAWS. The Consultant shall not be required to
perform any services which would, or would be likely to, result in a
non-compliance with or violation of any applicable law, regulation, regulatory
bulletin, and/or any other regulatory requirement.
(e) NO VIOLATION. The Consultant represents and warrants that this
Agreement and the provision of the Consultant Services thereunder do not violate
any agreement, order, policy, promise, or commitment that applies to the
Consultant.
SECTION 4. CONSULTANT AS INDEPENDENT CONTRACTOR.
The Consultant is an independent contractor with full power and authority to
enter into this Agreement and to select the means, manner and method of
performing the Consulting Services. The Consultant is not an employee or agent
of the Company and has no right to bind the Company or to transact any business
or make any representations or promises in the Company's name or in its behalf
The Consultant's employees, if any, shall at all times be under Consultant's
direction and control. Compliance by the Consultant or its employees with the
Company's stated objectives or practices shall not affect the Consultant's
status as an independent contractor and shall not relieve the Consultant of the
obligations assumed by him under this Agreement. Notwithstanding the foregoing,
(i) the Company shall have the right to direct the priority of the Consulting
Services as the Company, in its sole discretion, determines, and (ii) the
Consultant will principally perform the Consulting Services in Bronx, NY and at
such other locations throughout the world as the Consultant deems reasonably
appropriate under the circumstances, with the consent of the Company, in its
sole discretion.
SECTION 5. COMPENSATION; REIMBURSEMENT.
(a) For the consideration of this agreement, the Company has issued
80,000 shares of the company's Founders Stock to the Consultant. Said shares
shall vest over a five (5) year period with 20% of such shares having vested
immediately upon issue and 20% of the shares shall vest each January 1st of each
year thereafter commencing January 1, 2005 until 100% of said 80,000 shares is
reached (hereinafter referred to as the vesting schedule).
(b) The Company represents and warrants that, as of the date of this
Agreement, the terms and conditions relating to the Company's Founder shares
granted to Consultant under this Agreement are at least as favorable as the
terms and conditions of any grant of stock made to any Company employee or
independent contractor of grade and status comparable to the Consultant. If
after the date of this Agreement, the Company grants Founder shares of stock
under more favorable terms and conditions to any Company employee or independent
contractor of grade or status comparable to Consultant, the Company will make
the same grant of stock to Consultant, and/or will modify the terms and
conditions of the grant of stock to Consultant to the same as those contained in
the grant to the other Company employee or independent contractor.
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It is expressly understood that this provision only relates to
the terms and the conditions of any stock grant and not to the number of shares
being granted, which maybe differ, either more or less, from those issued to any
Company employee or independent contractors of grade or status comparable to the
Consultant.
(c) The Company shall promptly reimburse Consultant, in accordance with
the published guidelines of the Company, provided prior approval of the Company
is obtained, for all reasonable and necessary traveling expenses, disbursements
and other reasonable and necessary incidental expenses incurred by him for or on
behalf of the Company in the performance of his duties hereunder upon
presentation by Consultant to the Company of appropriate receipts and
documentation.
The Company shall also pay the Consultant a Per Diem Fee for
his time spent performing the Consultant Services where such performance
requires the Consultant to travel outside of Bronx, NY, or to be absent from the
Montefiore Medical Center, provided, however, that no Per Diem shall be paid for
time spent with regard to section 3.a)12. herein, or time spent at Consultant's
residence or locations selected at Consultant's convenience. No Per Diem Fee
shall be required to be paid to the Consultant for time spent attending meetings
by telephone when the Consultant is not required to be absent from the
Montefiore Medical Center. The Per Diem Fee shall be payable at the rate of $300
per hour, with a maximum of eight (8) hours per day. The Company agrees to pay
all Per Diem Fees within thirty (30) days of submission by the Consultant of a
request for payment.
(d) Consultant shall be paid a Bonus and a Royalty according to terms
and limits as set forth herein.
1. The Bonus will be payable annually, within three months
following the Company's financial year end, which currently ends each March 31,
and will be calculated and paid as follows for each year until the term has
expired or until earlier termination as provided herein.
The Bonus payment shall be one-half of one percent (0.5%) of
all Company annual revenues in excess of $20 million and up to $80 million. For
revenues in excess of $80 million and up to $120 million in any given financial
year, the Consultant's Bonus will be calculated and paid at a rate of
one-quarter of one percent (.25%) on that portion of annual revenues. For annual
revenues in excess of $120 million, the Consultant will be paid a Bonus
calculated and paid at a rate of one-tenth of one percent (.1%). In each
financial year the Consultant's Bonus will be capped at a maximum payment of
$500,000.00.
2. The Consultant will be paid a Royalty equal to one-half of
one percent (0.5%) of the revenues received by the Company for practicing and/or
commercializing any New Inventions developed by the Consultant under this
Agreement. A "New Invention" is defined as any new procedure, process, method,
device or application developed by the Consultant under this Agreement and for
which either: (i) an application for an United States Patent describing such
process, method, device, or application has been filed and has not been
abandoned, (ii) the FDA provides a new and/or different label for use by the
Company, or (iii) an off-label use has been commercialized by the Company. Such
New Invention would include, but would not be limited to, any new FDA label for
work currently under way in angiogenesis. The Royalty will be paid by the
Company to the Consultant annually with payments made within three months
following the end of the financial year end.
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3. Bonuses and Royalties shall be subject to adjustment based
upon returns, allowances, or setoffs. A Royalty associated with any particular
New Invention shall be paid for up to the maximum period of time provided by the
following: (i) if the New Invention is the subject of an application for United
States Patent, the Royalty shall be paid for the period of time that the
application remains pending, and during the term of any United States Patent
that issues from such application; or (ii) if the New Invention is the subject
of a new and/or different FDA label or an off-label use that has been
commercialized by the Company, the Royalty shall be paid for a period of
seventeen (17) years commencing at the time of the FDA label grant or the
commercialization, as applicable. In no case will any Royalty be paid when such
Royalty has been terminated earlier as provided herein. No Royalties shall be
paid if Consultant engages directly or indirectly in any competitive business as
defined in Section 11, which limitation shall continue following the end of the
Initial Term and any successive Term and beyond two (2) years. Bonuses shall be
calculated and paid during the Initial Term and any successive Terms of this
Agreement or until terminated earlier as provided herein.
4. For each of the two fiscal years April 1, 2005 to March 31,
2006, and April 1, 2006 to March 31, 2007, and only for those two fiscal years,
the Consultant's combined Bonus and Royalty payment shall not exceed 10% of the
Company's pre-tax profit, after deduction of such Bonus and Royalty payment.
This limitation shall apply only to the Consultant's Bonus and Royalty payments
for the two fiscal years April 1, 2005 to March 31, 2006, and April 1, 2006 to
March 31, 2007, and shall not apply to any of the Consultant's Bonus and Royalty
payments paid in subsequent years.
(e) Consultant will not be made whole by the Company with respect to
any federal, state, local or other taxes that may be imposed relating to the
issuance of Founder Shares to Consultant. If after the date of this Agreement,
the Company grants Founder Shares of stock with a more favorable term and
condition with regard to payment or reimbursement of any taxes, to any company,
employee or independent contractor of grade or status comparable to Consultant,
the Company will make the same payment to Consultant, and/or will modify the
terms and conditions of the grant of stock to Consultant to contain the same
conditions as contained in the grant to the other Company employee or
independent contractor. It is expressly understood that this provision only
relates to the formula for the payment of such taxes and does not commit Company
to payment of a specific nor equal dollar amount as paid to any other, which may
differ, either be more or less, from that payment to any other Company employee
or independent contractor of grade or status comparable to the Consultant.
(f) At such time that a stock option plan specifically for the Company
is instituted, the Consultant will participate, according to the terms and
conditions thereof; in the company's stock option plan to the same degree as
executive employees of like grade and status. Upon establishment of a Company
stock option plan, the Consultant will participate, according to the terms and
conditions thereof.
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(g) Representations and warranties promulgated by SEC, and Lock-Up
Provision Requirements. This Agreement is subject to and contingent upon the
simultaneous execution of a Lock-Up Agreement, and SEC Representations and
Warranty Letter, in the forms attached hereto.
SECTION 6. INVOLUNTARY TERMINATION.
(a) If the Consultant is incapacitated or disabled by accident,
sickness or other cause so as to render him mentally or physically incapable of
performing the services required to be performed by him under this Agreement for
a period of 90 days or longer during any six-month period (such condition being
herein referred to as a "Disability"), prior to the Consultant resuming the
Consulting Services, the Company may terminate this Agreement (an "Involuntary
Termination"). Until the date of such Involuntary Termination, Consultant shall
be entitled to receive his compensation and other benefits as set forth in this
Agreement notwithstanding any such physical or mental, disability until the date
of the Involuntary Termination including those shares of stock that are vested
prior to the date of the Involuntary Termination, provided however that the
balance of the company's Founders shares issued to the Consultant shall vest
according to the vesting schedule in Section 5(a) and the Consultant shall
continue to receive the royalty payments as set forth in Section 5(ed) (subject
to any limitations set forth herein).
(b) If Consultant dies during the Initial Term or any successive Term,
the Consultant's engagement hereunder shall be deemed to cease as of the date of
the Consultant's death, and the termination of his engagement occasioned thereby
shall be deemed an Involuntary Termination, and the Consultant's heirs,
executors or estate shall receive the same compensation payable as in the event
of disability.
SECTION 7. TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
Consultant's engagement hereunder for "Cause" (a "Termination for Cause") and
upon such termination the Term shall terminate. For purposes of this Agreement,
"Cause" shall be limited to:
(a) The continued failure by Consultant to follow the lawful duties
delegated to him by the President or Board of Directors (other than any failure
resulting from an illness or other similar incapacity or disability), at any
time that is thirty (30) days after a written notice of such failure is
delivered to Consultant on behalf of the Board of Directors that specifically
identifies the manner in which it is alleged that Consultant has not
substantially performed such duties;
(b) The commission by Consultant of (i) willful or gross misconduct in
performing his duties on behalf of the Company, resulting or reasonably likely
to result in material financial injury to the Company or (ii) misappropriation
of funds, properties or assets of the Company, (iii) use of illegal drugs, (iv)
Consultant's expression of any statement or commission of any action that is a
libelous per se or slanderous per se statement concerning the Company (including
its subsidiaries and affiliates); or any act of moral turpitude.
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(c) Consultant's conviction of, or guilty or nolo contendere plea to, a
crime constituting a felony or misdemeanor or the equivalent (except for minor
traffic violations);
(d) In any case described in this Section 7, Consultant shall be given
written notice authorized by a vote of at least a majority of the members of the
Board of Directors of the Company (the "Board") that the Company intends to
terminate Consultant' engagement for Cause. Such written notice, given in
accordance with Section 17 of this Agreement, shall specify the particular act
or acts, or failure to act, which is or are the basis for the decision to so
terminate Consultant' engagement for Cause. Consultant shall be given the
opportunity (along with counsel) within 30 calendar days of the receipt of such
notice to meet with the Board to defend such act or acts, or failure to act, and
Consultant shall be given 3020 business days after such meeting to correct such
act or failure to act (criminal convictions excluded). Upon failure of
Consultant, within such latter 3020 day period, to correct such act or failure
to act, Consultant's engagement by the Company may be terminated for Cause.
(e) Upon Termination for Cause, the Consultant shall forfeit all
Founders shares of stock that have not then vested and the Consultant shall
forfeit all future Annual Bonuses pursuant to Section 5(de). All Royalties shall
continue to be paid subject to the other terms and limitations as provided
herein.
SECTION 8. TERMINATION BY THE COMPANY WITHOUT CAUSE; TERMINATION BY THE
CONSULTANT FOR GOOD REASON.
(a) It is expressly acknowledged that non-extension of the Initial Term
or any successive Term and the Company or Consultant notifying the other that it
does not wish to extend the Initial Term or any successive Term of the
engagement shall constitute a Type I
Termination Without Cause. Terminations Without Cause Related to a Change in
Control shall constitute Type II Terminations Without Cause. Upon a Change in
Control either party may terminate the engagement hereunder at any time upon
notification, in accordance with Section 17. Termination shall be deemed to be
effective upon notice or at a stated time period within six (6) months of said
notice as determined by the party giving notice. For purposes of this Agreement
"Change in Control' is defined as:
i. Any "person" (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as
amended) becomes the "beneficial owner"(as defined in
Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing forty-five
percent (45%) or more of the total voting power
represented by the Company's then outstanding voting
securities; or
ii. The consummation of a merger or consolidation of the
Company with any other corporation, other than a
merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being
converted into voting securities of the surviving
entity) at least fifty-five percent (55%) of the
total voting power represented by the voting
securities of the Company or such surviving entity
outstanding immediately after such merger or
consolidation; or
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iii. The consummation of the sale or disposition by the
Company of all or substantially all of the Company's
assets.
(b) Consultant may terminate his engagement with the Company hereunder
at any time during the Initial Term or any successive Term for "Good Reason" (a
"Termination for Good Reason"). It is expressly acknowledged that non-extension
of the Initial Term or any successive Term or the Company notifying the
Consultant of termination shall not constitute grounds for a Termination for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean: (1) a
reduction in or continuing, uncured failure to pay compensation (ii) a material
breach by the Company of any material provision of this Agreement, or (iii) the
Company' (including any officer, director, employee, agent or representative
thereof) expression of any statement or commission of any action that could
reasonably be construed to be a false or misleading statement of fact or a
libelous, slanderous or disparaging statement of or concerning Consultant that
is damaging to Consultant, or (iv) the Company requiring the Consultant to
perform any duties or responsibilities which would result in a non-compliance
with or violation of any applicable law, regulation, regulatory bulletin, and/or
any other regulatory requirement. Company shall be given 20 days notice by
Consultant and an opportunity to cure during said 20 day period.
(c) 1. Upon a Type I Termination or a "Termination for Good Reason,"
the Consultant shall be entitled to all shares of stock granted to the
Consultant in Section 5(a), provided however, that the Company's Founders Shares
issued to the Consultant shall vest according to the vesting schedule in Section
5(a).The Consultant shall also receive any Bonuses earned prior to the
termination as provided in Section 5(d)(1), and shall continue to receive the
Royalty as set forth in Section 5(d)(2), subject to other terms and limitations
as provided herein.
2. Upon a Type II Termination, all Founders Stock issued to the
Consultant shall be deemed 100% vested effective the date of the Type II
Termination, and the Consultant shall continue to receive all Royalties as set
forth in Section 5(d)(2), subject to other terms and limitations as provided
herein. In addition, if it is the Company (or its successor) that exercises its
Type II Termination rights, the Consultant shall continue to receive all Bonuses
for the then-current Initial Term or successive Term as provided in Section
5(d)(1). If it is the Consultant who exercises his Type II Termination rights,
then the Consultant shall only receive the Bonus earned prior to the
termination, and shall not receive any additional Bonuses that otherwise would
have been earned for the remainder of the Initial Term or successive Term.
SECTION 9. VOLUNTARY TERMINATION. Any termination of the engagement of the
Consultant may be made, either by the Company or the Consultant, hereunder
otherwise than as a result of an Involuntary Termination, a Termination For
Cause, a Termination Without Cause or a Termination for Good Reason and shall he
deemed to be a "Voluntary Termination" and upon such termination the
Consultant's engagement shall terminate. A Voluntary Termination shall not be,
and shall not be deemed to be, a breach of this Agreement. A Voluntary
Termination shall be deemed to be effective no earlier than thirty (30) days
after the Company's or the Consultant's receipt of written notice delivered in
accordance with the provisions of Section 17 hereof of such termination to the
Company or the Consultant. If the Company is the party initiating the Voluntary
Termination, then the Consultant shall continue to receive all shares of stock
granted to him according to the vesting schedule provided in Section 5(a), and
shall receive all Bonuses for the remainder of the then-current Initial Term or
successive Term as provided in Section 5(d)(1). If the Consultant is the party
initiating the Voluntary Termination, then the Consultant shall forfeit any
shares of stock that have not vested as of the date of the Voluntary
Termination, and the Consultant shall receive all earned Bonuses as provided in
Section 5(d)(1), but will not receive any Bonuses for the remainder of the
then-current Initial Term or successive Term. The Consultant shall receive all
Royalties as provided in Section 5(d)(2) regardless of which party initiated the
Voluntary Termination, subject to other terms and limitations as provided
herein.
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SECTION 10. EFFECT OF TERMINATION OF ENGAGEMENT.
(a) Upon the termination of the Consultant's engagement hereunder
pursuant to a Voluntary Termination, a Termination For Cause, a Termination
Without Cause, or a Termination for Good Reason, neither the Consultant nor his
beneficiary or estate shall have any further rights or claims against the
Company under this Agreement except to receive all compensation owed to the
Consultant as provided in Section 5, subject to any limitations provided in
Sections 7 through 9 herein, as applicable.
(b) The Consultant's obligations provided for in this Agreement,
including but not limited to Sections 11 and 12, shall not be affected by any
set-off, counterclaim, recoupment, defense or other right which the Consultant
has or may have against Company.
SECTION 11. NON-COMPETITION; NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) NON-COMPETITION.
1. OBLIGATIONS. Consultant shall not during the Initial Term
or any successive Term, and for a period of two (2) years worldwide, following
the end of the Initial Term or any successive Term: (i) directly or indirectly
engage in any Competitive Business (as defined below), whether such engagement
shall be as an employee, employer, owner, consultant, partner or other
participant in any Competitive Business, (ii) assist others in engaging in any
Competitive Business in the manner described in the foregoing clause (i), (iii)
induce employees of the Company its parent or subsidiaries to terminate their
employment or engage in any Competitive Business or (iv) solicit customers or
vendors of the Company to alter or terminate their business relationship with
the Company, its parent or subsidiaries; provided, however, that Consultant may
own directly or indirectly, solely as a passive investment, securities of any
Competitive Business traded on any national securities exchange if Consultant is
not a controlling person of, nor a member of a group which controls such person
and does not, directly or indirectly, own 5% or more of any class of securities
of such Competitive Business. As used herein, the term "Competitive Business"
shall mean any business which would be determined to be a direct competitor in
non-invasive electro therapies and as set forth in the most recent business plan
but only if and only to the extent such businesses are a substantial business
conducted by the Company, its parent or any of its subsidiaries at the time of
any termination of the Consultant's engagement.
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2. REMEDY FOR BREACH. In the event that the Consultant
materially breaches the Non-Competition provisions of Section 11.a.1., the
Consultant shall forfeit all non-vested Founders shares of stock, and all unpaid
and future Bonuses and Royalties.
(b) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
1. DISCLOSURE AND IDENTIFICATION. The Company and the
Consultant recognize that the work to be conducted under this Agreement may
require the transfer of confidential or proprietary information between the
parties (the "Confidential Information"). Any such Confidential Information
disclosed by a party to another party or its employees, agents and contractors,
shall be used only in connection with the legitimate purposes of this Agreement,
shall be disclosed by the receiving party only to those who have a need to know
it and are obligated to keep same in confidence, and shall be safeguarded with
reasonable care; provided, however, that the disclosing party marks the
Confidential Information as such at the time of disclosure (or, if disclosed
verbally, such Confidential Information is reduced to writing and so marked
within a reasonable period of time thereafter).
2. DESIGNATION. Confidential Information that is disclosed in
writing shall be marked with a legend indicating its confidential status (such
as "Confidential" or "Proprietary'). Confidential Information that is disclosed
orally or visually shall be documented in a written notice prepared by the
Disclosing Party and delivered to the Receiving Party within thirty (30) days of
the date of disclosure; such notice shall summarize the Confidential Information
disclosed to the Receiving Party and reference the time and place of disclosure.
3. OBLIGATIONS. In consideration of the disclosure of any
Confidential Information to the other, it is agreed that during the term of this
Agreement and thereafter for a period of five (5) years, the Receiving Party
shall (i) maintain all Confidential Information in strict confidence, except
that the Receiving Party may disclose or permit the disclosure of any
Confidential Information to its directors, officers, employees, consultants, and
advisors who are obligated to maintain the confidential nature of such
Confidential Information and who need to know such Confidential Information for
the performance of the work that is the subject of this Agreement; (ii) use all
Confidential Information solely for the performance of the work that is the
subject of this Agreement; (iii) take precautions as normally taken with the
Receiving Party's own confidential and proprietary information to prevent
disclosure to third parties, and (iv) allow its directors, officers, employees,
consultants, and advisors to reproduce the Confidential Information only to the
extent necessary for the performance of the work that is the subject of this
Agreement, with all such reproductions being considered Confidential
Information.
4. EXCEPTIONS. The obligations of the Receiving Party under
this Section shall not apply to the extent that the Receiving Party can
demonstrate that certain Confidential Information (i) was in the public domain
prior to the time of its disclosure under this Agreement; (ii) entered the
public domain after the time of its disclosure under this Agreement through
means other than an unauthorized disclosure resulting from an act or omission by
the Receiving Party; (iii) was independently developed or discovered by the
Receiving Party without use of the Confidential Information; (iv) is or was
disclosed to the Receiving Party at any time, whether prior to or after the time
of its disclosure under this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no obligation of
confidentiality with respect to such Confidential Information; or (v) is
required to be disclosed to comply with applicable laws or regulations, or with
a court or administrative order, provided that the Disclosing Party receives
reasonable prior written notice of such disclosure.
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5. OWNERSHIP AND RETURN. The Receiving Party acknowledges that
the Disclosing Party (or any third party entrusting its own information to the
Disclosing Party) claims ownership of its Confidential Information in the
possession of the Receiving Party. Upon the expiration or termination of this
Agreement, and at the request of the Disclosing Party, the Receiving Party shall
return to the Disclosing Party all originals, copies, and summaries of
documents, materials, and other tangible manifestations of Confidential
Information in the possession or control of the Receiving Party, except that the
Receiving Party may retain one copy of the Confidential Information in the
possession of its legal counsel solely for the purpose of monitoring its
obligations under this Agreement.
SECTION 12. THE COMPANY'S RIGHT TO INVENTIONS.
This Agreement is subject to and contingent upon the Company's entrance into an
agreement entitled "Sponsored Research Agreement" with Montefiore Medical
Center, an =executed copy of which is attached hereto as Exhibit A. The
Sponsored Research Agreement includes Article 5, including Sections 5.1 through
5.5, which relates to "Intellectual Property," and which provides that the
Company shall have title to all Inventions (as defined therein) and all related
intellectual property rights that are made in the performance of the Sponsored
Research Agreement. The Consultant has executed an acknowledgement and agreement
to Article 5 of the Sponsored Research Agreement, among other provisions.
SECTION 13. MUTUAL NONDISPARAGEMENT. In consideration of the foregoing
provisions of this Agreement each party agrees that it shall not, directly or
indirectly, make or cause others to make any statement or take any action that
could reasonably be construed to be a false or misleading statement of fact or a
libelous, slanderous or disparaging statement of or concerning Consultant, the
Company, its affiliates, its businesses or its employees, officers, directors,
agents, consultants or stockholders.
SECTION 14. ENFORCEMENT. It is the desire and intent of the parties hereto that
the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws of the State of New Jersey. If any particular
provision of this Agreement shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to delete there from the portion thus
adjudicated to be invalid or unenforceable. All actions to resolve any disputes
as may arise shall be venued in the Superior Court of New Jersey, Bergen County.
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SECTION 15. REMEDIES; SURVIVAL.
(a) Consultant acknowledges and understands that the provisions of this
Agreement are of a special and unique nature, the loss of which cannot be
accurately compensated for in damages by an action at law, and that the breach
of the provisions of this Agreement would cause the Company irreparable harm. In
the event of a breach by Consultant of the provisions of Section 11 or 12
hereof, the Company shall be entitled to an injunction restraining him from such
breach. Nothing herein contained shall be construed as prohibiting the Company
from pursuing any other remedies available for any breach of this Agreement and
Company shall have the right to pursue all monetary damages as a result of any
breach notwithstanding the grant of any injunction or equitable relief.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of this Agreement shall survive the expiration or other
termination of the Term or this Agreement until, by their terms; such provisions
are no longer operative.
(c) It is understood and agreed that the provisions of Sections 11 and
12 of this Agreement are separate and distinct from any other agreement between
the parties hereto.
SECTION 16. INSURANCE. The Company may, for its own benefit, in its sole
discretion, maintain "key-man" life and disability insurance policies covering
Consultant. Consultant will cooperate with the Company and provide such
information as the Company may reasonably request in connection with the
Company's obtaining and maintaining such policies. Consultant shall be named an
additional insured on the Company's General Liability Policy. The Company does
not currently maintain Directors and Officers ("D&O") liability insurance, or
errors and omissions ("E&O") provided however that in the event the Company
procures said coverage, the consultant shall be listed as a named insured as
long as the Company maintains the insurance and further provided Consultant is
acting as a Director and/or Officer of the Company. The Company shall furnish to
Consultant copies of each of the applicable Certificates of Insurance.
SECTION 17. NOTICES. All notices and other communications hereunder shall be in
writing and shall be delivered personally or sent by air courier or first class
certified or registered mail, return receipt requested and postage prepaid,
addressed as follows:
If to Consultant:
Xx. Xxxxxx Xxxxxxx
c/o Montefiore Medical Center
0000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
If to the Company:
Andre' Di Mino,Ivivi Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All notices and
other communications hereunder shall be deemed to have been given on the date of
delivery.
SECTION 18. BINDING AGREEMENT. This Agreement shall inure to the benefit of and
be enforceable by Consultant's personal or legal representatives, executors,
administrators, successors, heirs, distributees and devisees. If the Consultant
should die while any amount would still be payable to him hereunder, all such
amounts, unless otherwise provided herein, shad be paid in accordance with the
terms of this Agreement to the beneficiary designated by Consultant in a writing
delivered to the Company, or if there be no such designated beneficiary, to his
estate.
SECTION 19. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New Jersey applicable
to contracts made and to be performed wholly therein and without regard to
conflicts of laws and principles
SECTION 20. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of thus Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
SECTION 21. ENTIRE AGREEMENT; AMENDMENTS; EXECUTION. This Agreement contains the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes all, prior agreements or understandings among
the parties with respect thereto. This Agreement may be amended only by an
agreement in writing signed by the parties hereto. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original document but all of which shall constitute but one agreement.
SECTION 22. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 23. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 24. ASSIGNMENT. With respect to Consultant-, this Agreement is personal
in its nature and Consultant shall not assign or transfer this Agreement or any
rights and obligations hereunder. Consultant's services are deemed personal and
shall be non-delegable. This Agreement and its rights and obligations herein
(including, without limitation, Sections 3, 11 and 12) shall inure to the
benefit of, and be binding upon, each successor of the Company, whether by
merger, consolidation, recapitalization, transfer of all or substantially all
assets, or otherwise.
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SECTION 25. LEGAL FEES AND EXPENSES. If a court of a competent jurisdiction,
arbitral tribunal or similar adjudicative tribunal finally determines that the
Company or the Consultant has deliberately breached any provision of this
Agreement, the breacher shall reimburse the other party for all of their out of
pocket costs, fees (including attorneys fees) and expenses incurred by him to
enforce his or her rights under this Agreement.
SECTION 26. INDEMNIFICATION. The Company shall indemnify, defend, and hold
harmless the Consultant and his respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon any of the Indemnitees in connection with any claims, suits, actions,
demands or judgments arising out of any theory of liability (including without
limitation actions in the form of tort, warranty, or strict liability and
regardless of whether such action has any factual basis) relating to this
Agreement or concerning any product, process, or service that is made, used, or
sold pursuant to any right or license granted under this Agreement; provided,
however, that such indemnification shall not apply to any liability, damage,
loss, or expense to the extent directly attributable to (i) the negligent
activities or intentional misconduct of the Indemnitees, provided that a court
of competent jurisdiction has determined that such negligent activities or
intentional misconduct have occurred, or (ii) the settlement of a claim, suit,
action, or demand by Indemnitees without the prior written approval of Sponsor.
The provisions of this Indemnification shall survive any amendment,
modification, expiration, or other termination of this Agreement.
Xxxxxx Xxxxxxx, MD
/s/ Xxxxxx Xxxxxxx
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IVIVI TECHNOLOGIES, INC.
By: /s/ Andre' XxXxxx
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Xxxxx XxXxxx, Chairman
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