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Exhibit 10.26
AMENDMENT TO PATENT AND TECHNOLOGY LICENSE AGREEMENT
This AMENDMENT TO PATENT AND TECHNOLOGY LICENSE AGREEMENT ("Amendment") is
made and entered into as of this 9TH day of June, 2000 by and between ACCUMED
INTERNATIONAL, INC., a Delaware corporation ("AccuMed") and AMPERSAND MEDICAL
CORPORATION ("Ampersand" or "Licensee"), a Delaware corporation, as Assignee of
INPATH, LLC. ("Inpath"), a wholly owned subsidiary of Ampersand.
WHEREAS, as of September 4, 1998 AccuMed and Inpath entered into that
certain Patent and Technology Licence Agreement (the "License Agreement").
WHEREAS, on November 19, 1999 Inpath purported to terminate the License
Agreement.
WHEREAS, AccuMed challenged the validity of the November 19, 1999
termination of the License Agreement by Inpath.
WHEREAS, on March 29, 2000 the parties hereto entered into a Letter
Agreement ("Letter Agreement") pursuant to which the parties agreed to resolve
all differences among them as set forth in the Letter Agreement and in this
Amendment, the Assignment and the related Additional License and Purchase
Agreement described therein.
WHEREAS, in conjunction with this Amendment, Inpath has assigned all of
its rights, title, interest and obligations under the License Agreement and this
Amendment to Ampersand.
WHEREAS, pursuant to the Letter Agreement, AccuMed agreed to the
Assignment of the License Agreement by Inpath to Ampersand.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, AccuMed and Ampersand hereby agree as follows:
1. Definitions. The capitalized terms used in this Amendment shall have
the respective meanings ascribed to them in the License Agreement unless
otherwise expressly defined in this Amendment.
2. Reinstatement of License Agreement. AccuMed and Ampersand agree to
reinstate and modify the September 4, 1998 License Agreement as set forth
herein.
3. The following definitions outlined in the License Agreement are hereby
replaced with the following:
"Foreign Patents" means, collectively (i) the letters patent corresponding
to the U.S. Patents, issued or applied for in a country other than the
United States; (ii) the continuations, continuations-in-part, or divisions
thereof~ and (iii) any and all improvements, modifications, extensions,
renewals, or reissues of such Patent, subject to the provisions of Section
5.1 governing the prosecution thereof.
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"Sales" means all recorded booked revenues for actual sales upon which
payment has been collected by Licensee or an Affiliated Person of Licensee
(whether in cash or by way of other benefit, advantage, or concession (in
which case the applicable revenue will be the monetary equivalent or value
of same).
"U.S. Patents" means (i) AccuMed's Patent entitled "A Method and Apparatus
For Imaging and Sampling Diseased Tissue Using Autofluorescence" U.S.
patent number 5,999,844 dated 12/07/99; (ii) the continuations,
continuations-in-part or divisions thereof, if any; and (iii) any and all
improvements, modifications, extensions, renewals or reissues of such
Patent, if any.
4. Section 2.1 of the License Agreement is replaced with the following:
2.1 Grant of License in Patents. AccuMed hereby grants to Licensee, and
Licensee accepts from AccuMed, an exclusive, non-transferable (except as
provided in Section 10.8 herein), non-divisible license to make, have
made, use, offer to sell and sell Licensed Products covered by the U.S.
Patents and Foreign Patents for use in cervical and ovarian gynecological
applications for Point of Care and concurrent with a patient's medical
office visit in a physician's office and the non-exclusive license to
make, have made, use, offer to sell and sell Licensed Products covered by
the U.S. Patents and Foreign Patents for use in cervical and ovarian
gynecological applications for Point of Care in labs outside of the
physician's office.
5. Section 2.2 of the License Agreement is replaced with the following:
2.2 Grant of License in Technology. AccuMed hereby grants to Licensee,
and Licensee accepts from AccuMed, and exclusive, non-transferable (except
as provided in Section 10.8 herein), non-divisible license to make, have
made, use, offer to sell and sell Licensed Products utilizing the
Technology for use in cervical and ovarian gynecological applications for
Point of Care and concurrent with a patient's medical office visit in a
physician's office and the non-exclusive license to make, have made, use,
offer to sell and sell Licensed Products utilizing the Technology for use
in cervical and ovarian gynecological applications for Point of Care in
labs outside of the physician's office.
6. The following sentence is added to the end of Section 2.5:
"The parties acknowledge and agree that AccuMed has no obligation, express
or implied, to (i) develop any improvements to the U.S. Patents, the
Foreign Patents, the Technology on the Copyrighted Works or (ii) to file
any patent applications for any further developments, inventions or
discoveries known to AccuMed.
7. Section 2.6 of the License is stricken in its entirety.
8. Section 3.1 of the License Agreement is modified to add the
following sentence:
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As of the date of the Amendment hereto, all of the Guaranteed License
Issue Fees due to be paid hereunder have been paid and no further amounts are
outstanding.
9. Section 3.2 of the License Agreement is replaced with the following:
3.2 Required Royalty; Minimum Guaranteed Payments; Advanced Required
Royalty Payments.
(a) For the rights and privileges granted to Licensee under this
Agreement, Licensee (subject to paragraph (b) of Section 5.1,
Section 5.2, and Section 5.3) shall pay to AccuMed from and after
the date hereto until the licenses hereunder are terminated in
accordance with this Agreement, a royalty rate equal to 4% of all
Sales ("Required Royalty"). The parties acknowledge and agree that
"the date hereto" referred to herein is the date of the License
Agreement, namely September 4, 1998.
(b) Notwithstanding the amount of any sales or Required Royalty,
Licensee shall pay AccuMed, a minimum guaranteed payment of
$5,000,000 ("Minimum Guaranteed Payment") payable by Licensee only
out of the booked revenues for Sales at the Royalty Rate outlined in
(a) herein as Required Royalty Payments for the term of the
Agreement. In the event that the Minimum Guaranteed Payment of
$5,000,000 is not paid in full at the time of the termination of
this Agreement, then the difference between the amounts actually
paid by Licensee to AccuMed as Required Royalty Payments and
$5,000,000 shall be immediately due and payable by Licensee to
AccuMed.
(c) Upon the signing by all parties of the Amendment, and related
documents, Licensee shall pay or provide to AccuMed the following:
(i) $500,000 in cash, which cash payment shall represent an
advanced, non-refundable Required Royalty Payment hereunder;
(ii) a $100,000 convertible promissory note payable to
AccuMed (with conversion rights at $3.50/share into registered
shares of Ampersand) bearing interest of 11% and due or convertible
on March 29, 2001. The principal amount of the note shall represent
an additional advanced, non-refundable Required Royalty Payment
hereunder; and
(iii) 128,571 shares of Ampersand common stock which stock
Ampersand will price protect to a share price of not less than $3
.50/share to a measurement date sixty days following the date on
which the shares being issued become registered and are freely
tradable. If the market price at the measurement date is less than
$3.50 per share, Ampersand shall at its option (x) make a cash
payment to AccuMed in an amount representing the difference in
market price and $3.50 per share multiplied by 128,571 shares or (y)
issue an additional number of Ampersand shares to AccuMed which
number shall be arrived at by multiplying the difference in the then
market price per share and $3.50 and dividing the resultant sum by
the then market price per
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share. The issuance of common stock by Ampersand to AccuMed as
outlined herein, to a value of $450,000, shall represent an
additional advanced, non-refundable Required Royalty Payment
hereunder.
(d) The cash payments and issuance of stock outlined in (c)(i) -
(iii) herein represent the payment by Licensee of advanced Required
Royalty Payments to AccuMed. Ampersand shall not be required to make
any additional payments to AccuMed for Required Royalty Payments
until the total of the Required Royalty Payments called for
hereunder from Ampersand, exceeds the amount of advanced Required
Royalty Payments actually made by Ampersand to AccuMed pursuant to
paragraphs c(i)-(iii) herein.
(e) The shares of Ampersand stock to be issued to AccuMed herein
shall be registered with an appropriate Registration Statement
(excluding the S-8 underlying the Employee Equity Incentive Plan)
which is presently being prepared by Ampersand. AccuMed will not be
subject to any restrictions in the disposal of shares it holds,
other than those regarding unregistered shares prior to the
effective date of the Registration Statement outlined herein and
those imposed by applicable securities laws.
10. Paragraph 5.1 of the License Agreement is replaced with the
following:
5.1 Prosecution and Protection.
(a) AccuMed shall have the authority, in its discretion, but
no duty to prosecute the application for the issuance of Foreign
Patents. If AccuMed shall elect to prosecute a Foreign Patent under
this Section, it shall be at the sole cost and expense of AccuMed.
(b) Licensee shall notify AccuMed in writing of Licensee's
sale of Licensed Products in any Foreign Country upon or prior to
the date on which Licensee first sells Licensed Products in such
Foreign Country. If a Foreign Patent shall not already be pending or
issued in such Foreign County, AccuMed shall have twenty-one (21)
days from such written notice to notify Licensee in writing whether
or not AccuMed will commence the prosecution thereof. If AccuMed
elects, in such notice, not to prosecute a Foreign Patent in such
Foreign Country or if AccuMed fails to make a timely election, then
Licensee may elect to prosecute such Foreign Patent, at Licensee's
sole cost and expense, for and on behalf of and in the name
of AccuMed. Licensee may deduct all reasonable out-of-pocket costs
and expenses, including without limitation, attorneys' fees and
filing costs, incurred by Licensee for its prosecution (in
accordance its election under with this paragraph) of Foreign
Patents in any Foreign Country from the Required Royalties (but not
the Minimum Guaranteed Payments) applicable to that Foreign Country
under Section 3.2. AccuMed will provide to Licensee all information,
papers, instruments or affidavits required to apply for and obtain
Foreign Patents in AccuMed's name and will provide reasonable
assistance to Licensee in Licensee's efforts to prosecute any
Foreign Patents in accordance with its election under this
paragraph. Any such Foreign Patents prosecuted by
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Licensee for and on behalf of AccuMed shall be the sole and
exclusive property of AccuMed, but Licensee shall be granted a
license thereunder coincident with the grant under Section 2.1 for
all Foreign Patents.
(c) Nothing in this Section shall (i) require either AccuMed
or Licensee to prosecute patents in any Foreign Country or (ii) as
between the parties, restrict Licensee from exercising its exclusive
license rights under this Agreement in any Foreign Country or
throughout the Territory, regardless of whether Licensee or AccuMed
elects to prosecute any application for Foreign Patents therein.
11. Paragraph 5.2 of the License Agreement is replaced with the
following:
5.2 Infringement by Third Parties. Each party shall inform the other
party of any infringement or suspected infringement of the Patents or
infringement (including any misappropriation) of the Technology of which
such party becomes aware within ten (10) business days after such party
becomes aware of any such infringement or suspected infringement. For a
period of thirty (30) days after receipt by AccuMed of, or AccuMed's
sending of, such notice of infringement, AccuMed will have the exclusive
right to commence an action and otherwise assert rights in the Patents and
the Technology against any such infringers or suspected infringers and
will have the right at its sole discretion to make any settlement or
compromise with the third-party infringer, provided that the terms of any
such settlement may not modify the exclusivity of the licenses granted to
LICENSEE in this Agreement or otherwise diminish LICENSEE'S economic
rights or expectations hereunder. If AccuMed shall elect to prosecute any
such infringer, LICENSEE shall take such steps as are reasonably requested
by AccuMed to enable it to protect its rights under the Patents and under
the Technology against any such infringement or suspected infringement. If
(i) AccuMed fails to commence an action or otherwise assert its rights in
the Patents and the Technology against any such infringers or suspected
infringers within such thirty (30) day period and (ii) LICENSEE provides
AccuMed with the opinion of patent counsel mutually acceptable to the
parties stating that there is a likelihood of infringement or
misappropriation by such suspected infringers (an "Infringement Opinion"),
then LICENSEE may bring an action or proceeding (including any alternative
dispute resolution process) to enjoin the infringement, to recover damages
for it, or both and AccuMed grants LICENSEE the right to use AccuMed's
name in connection therewith and will have the right at LICENSEE'S sole
discretion to make any settlement or compromise with the third-party
infringer, in accordance with and subject to the provisions set forth
below. If an Infringement Opinion is delivered to AccuMed and,
accordingly, LICENSEE is permitted to bring such action, then LICENSEE may
elect to deduct a percentage of its out-of-pocket costs and expenses (but
otherwise will bear all other costs and expenses), which includes without
limitation court costs and attorneys' fees for such action up to a maximum
deduction of fifty percent (the "Fee Percentage") and shall notify AccuMed
of such election and the applicable Fee Percentage when the Infringement
Opinion is delivered by LICENSEE to AccuMed. LICENSEE shall be permitted
to deduct from future Minimum Guaranteed Payments and Required Royalties,
as they become due under this Agreement, that portion of its out-of-pocket
expenses in an amount equal to the Fee Percentage thereof. All proceeds of
any action or proceeding
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brought by LICENSEE or AccuMed (if any) shall be shared between AccuMed
and LICENSEE pro rata in accordance with the Fee Percentage (i.e. AccuMed
shall receive the Fee Percentage of such proceeds and LICENSEE shall
receive the remainder). If LICENSEE shall be permitted to bring an action
pursuant to this Section, AccuMed shall take such steps as are reasonably
requested by LICENSEE to enable it to protect its licensee rights under
the Patents and under the Technology against any such infringement or
suspected infringement.
12. Section 6.3(a) of the License Agreement is replaced by the
following:
(a) Licensee Covenant. Licensee shall not, directly or indirectly,
whether through an Affiliated Person or otherwise, until the termination
of this Agreement, and for a period of one year thereafter, without the
prior written approval of AccuMed, employ, engage, or seek to employ or
engage, directly or indirectly, any employee of AccuMed or its
subsidiaries.
13. Paragraph 9.2 of the License Agreement is replaced by the following:
9.2 Effect of Patent Invalidation. If any Patents shall issue and,
thereafter, if all claims of all of the Patents should be finally
determined to be invalid by a decision of a court of competent
jurisdiction that is final and to which no right of appeal exists, then
the rate of the Required Royalty shall be reduced from four percent (4%)
to three and three-quarters percent (3.75%). Licensee acknowledges that
the licenses hereunder in the Technology independent of any issued and
valid Patent are valuable and reasonable consideration for the Required
Royalty and Minimum Guaranteed Payments. Licensee shall pay (subject to
paragraph (b)of Section 5.1, Section 5.2, and Section 5.3) all Required
Royalties (at the four percent (4%) rate) due and payable before any such
final determination of invalidity and during the pendency of any validly
challenge, and Licensee is not entitled to any refund or credit for any
past due Minimum Guaranteed Payments, Required Royalties, or the
Guaranteed License Issue Fee payments. Licensee shall pay all Royalty
Payments accruing during the pendency of any challenge to the validity of
any of the Patents.
14. Paragraph 9.3 of the License Agreement shall be replaced by the
following:
9.3 Termination by Licensee. Licensee shall not be entitled to terminate
its obligations under this Agreement until AccuMed's receipt of the
Minimum Guaranteed Payment of $5,000,000. Thereafter, Licensee, at its
election may (x) terminate the exclusivity of the licenses granted
hereunder upon thirty (30) days written notice to AccuMed that in
Licensee's reasonable determination the commercial exploitation of the
Licensed Product is not commercially viable; or (y) terminate this
Agreement in its entirety. In the event that Licensee terminates the
exclusivity in accordance with (x) herein, Licensee shall continue to be
obligated to make Required Royalty Payments. In the event that Licensee
seeks to terminate this Agreement in its entirety, Licensee is still
required to pay the Minimum Guaranteed Royalty Payment of $5,000,000
called for in section 3.2 of this Agreement and such amount shall be due
and payable before any such termination shall be deemed effective. In the
event that Licensee seeks to terminate this Agreement or its exclusivity,
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Licensee shall not be entitled to the refund of any Minimum Guaranteed
Payments (including those advanced pursuant to Section 3.2 herein,
Required Royalty Payments or the Guaranteed License Issue Fee that have
been paid to date.
15. In Section 9.4 of the License Agreement, delete "(or, at AccuMed's
discretion, destroy and certify to AccuMed the destruction of)".
16. With reference to Section 10.4 of the License Agreement, the parties
acknowledge and agree that, upon execution of this Agreement and payment of the
amounts owing to Xxxxx X. Xxxxxxxx as outlined in paragraph 5 of the Letter
Agreement, the Letter Agreement will be superseded.
17. Paragraph 10.5 of the License Agreement shall be modified to reflect
the new addresses listed below:
AccuMed International, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Chairman and CEO
Telephone No.: (000) 000-0000
FaxNo.: (312)642-3101
000 X. Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Chairman and CEO
Telephone Number: (000) 000-0000
Fax Number: (312) 000- 0000
with a copy to its counsel:
Xxxxx X. Xxxx
Schwartz, Cooper, Xxxxxxxxxxx & Xxxxxx
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
(000) 000-0000
18. Section 10.8 is replaced with the following:
10.8 Succession and Transferability. This Agreement and the License
granted hereunder shall be binding upon and inure to the benefit of
Licensee and its successors and assignees permitted hereunder and AccuMed
and its successors and assignees. Licensee shall not assign this Agreement
or the License granted hereunder, except to an Affiliated Person, in a
sale of substantially all of the assets or equity shares of Licensee, or
through a merger of
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Licensee into another entity wherein such Affiliated Person, purchaser or
entity agrees in writing to be bound by this Agreement.
19. A new paragraph 10.11 is added to the License Agreement which
provides as follows:
10.11 Mutual Release. The parties hereto mutually release and forever
discharge each other and their respective agents, officers, directors,
shareholders, partners, employees, successors, representatives, attorneys
and assigns, of and from, all actions, agreements, bills, bonds, causes of
action, claims, controversies, counterclaims, covenants, cross-claims,
damages, debts, demands, executions, indemnities, judgments, liens,
promises, suits, third-party actions, filed or unfiled, and sums of money
whatsoever, in law or in equity, arising out of the disputes which they
now have or have had to date with respect to the License Agreement, the
Patents, the Technology and the Copyrighted Works.
In WITNESS WHEREOF, the parties hereto have caused this Amendment to
Patent and Technology License Agreement to be executed as of the day and year
first above written.
AMPERSAND MEDICAL CORPORATION
By: ____________________________
Xxxxx X. Xxxxxxxx
Chairman and CEO
1NPATH, LLC
By: _____________________________
Xxxxx X. Xxxxxxxx
Chairman and CEO
ACCUMED INTERNATIONAL, INC.
By: _____________________________
Xxxx X. Xxxxxxxx
Chairman and CEO
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ASSIGNMENT OF PATENT AND TECHNOLOGY LICENSE AGREEMENT
This ASSIGNMENT OF PATENT AND TECHNOLOGY LICENSE AGREEMENT ("Amendment")
is made and entered into as of this 9th day of June, 2000, among INPATH, LLC
("Inpath"), a Delaware limited liability company, AMPERSAND MEDICAL CORPORATION
("Ampersand"), a Delaware corporation and ACCUIMED INTERNATIONAL, INC.,
("AccuMed"), a Delaware corporation.
WHEREAS, as of September 4, 1998, Inpath entered into that certain Patent
and Technology License Agreement (the "License Agreement") with AccuMed.
WHEREAS, certain disputes arose between Inpath and AccuMed with respect to
the License Agreement and related matters.
WHEREAS, on March 29, 2000, Inpath, AccuMed, and Ampersand entered into a
Letter Agreement ("Letter Agreement") pursuant to which the parties agreed to
resolve their differences with respect to the License Agreement and other
matters.
WHEREAS, pursuant to the Letter Agreement, the parties agreed that Inpath
would assign all of its rights, title, interest and obligations under the
License Agreement to Ampersand, and AccuMed agreed to accept the Assignment of
the License Agreement by Inpath to Ampersand.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledge, the parties agree as follows:
1. Inpath hereby assigns to AccuMed all of its rights, title, interest
and obligations under the License Agreement, and AccuMed hereby agrees to be
bound by the terms and obligations of Inpath outlined in the License Agreement.
2. AccuMed hereby agrees to and consents to the assignment by Inpath to
Ampersand of Inpath's rights, title, interest and obligations under the License
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment of
Patent and Technology License Agreement to be executed as of the day and year
first above written.
INPATH, LLC
By: ___________________________
Xxxxx X. Xxxxxxxx
Chairman and CEO
AMPERSAND MEDICAL CORPORATION
By: __________________________
Xxxxx X. Xxxxxxxx
Chairman and CEO
ACCUMED INTERNATIONAL, INC.
By: __________________________
Xxxx X. Xxxxxxx
Chairman and CEO
