AGREEMENT FOR TERMINATION OF DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
AGREEMENT
FOR
TERMINATION OF
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
This Agreement is made effective as of November 19, 2002 (the Effective Date) by and between SpectRx, Inc. and Xxxxx Xxxxx, Inc.
RECITALS
The parties entered into a Development and Commercialization Agreement effective as of December 31, 1998 (the Development Agreement), which is attached hereto for reference; and
The parties desire to terminate the Development Agreement by mutual consent in accordance with section 15.1 of the Development Agreement and to resolve matters relevant to such termination.
In consideration of the mutual covenants continued herein, and other sufficient consideration, the Parties agree as follows:
1. Definitions.
1.1 Except as provided herein, terms defined in the Development Agreement, designated by capitalization of their initial letters, will have the same meanings when used in this Agreement.
1.2 Section 1.21 of the Development Agreement is amended effective as of the Termination Date as follows: "Non-Product Field means all fields of use of the Developed Technology other than the Product Field."
1.3 Section 1.25 of the Development Agreement is amended effective as of the Termination Date as follows: "Product Field means any device or method for diagnosing cervical cancer that uses [*] to reveal the morphological, biochemical, or other characteristics of the target. The Product Field excludes the use of [*] for diagnosing cervical cancer [*] made by the target cells."
2. Termination of the Development Agreement.
2.1 The Development Agreement is hereby terminated with retroactive effect as of December 10, 2001 (the Termination Date), and except as provided herein, all obligations of the parties under the Development Agreement are cancelled as of the Termination Date, including without limitation the obligation to equally co-fund Expenditures for the Project.
SpectRx and Xxxxx Xxxxx Termination Agreement 1
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
3. Equalization of Expenditures and Ownership of Project Assets.
3.1 The Parties acknowledge that Expenditures for the first 3 quarters of 2001 previously have been equalized between the Parties in accordance with the Cash Expenditure Equalization Procedure. The Parties agree that the sum of [*] (the Equalizing Payment) is payable from Xxxxx Xxxxx to SpectRx to equalize Expenditures for the 4th quarter of 2001, through the Termination Date.
3.2 Xxxxx Xxxxx hereby transfers and conveys to SpectRx, Xxxxx Allyn's ownership rights and title in all assets presently in the possession of SpectRx which were acquired with Expenditures for the Project. SpectRx agrees that Xxxxx Xxxxx shall be entitled to a credit / setoff in the amount of [*], to be applied against the Equalizing Payment [(*)] described in section 3.1 above.
3.3 Xxxxx Xxxxx will pay to SpectRx coincident with the execution of this agreement the sum of [*] as the net payment in full and final satisfaction of the Equalizing Payment payable under the Development Agreement, based on the Cash Expenditure Equalization Procedure for 2001.
4. Rights to Separately-Owned Intellectual Property.
4.1 Each Party shall retain sole ownership of the intellectual property reduced to practice by its personnel outside of the scope of the Project, as provided in Sections 7.1 and 7.2 of the Development Agreement. Exhibit A attached to this Agreement identifies the primary Separately-Owned Intellectual Property related to the Development Agreement.
5. Rights to Developed Technology.
5.1 All intellectual property created, developed, or reduced to practice by the Parties in performance of the Project after the effective date of the Development Agreement and through the Termination Date is classified as Developed Technology, owned jointly by the Parties. Developed Technology does not contain any Derived Technology which would be solely owned by either Party. Developed Technology created, developed, or reduced to practice by SpectRx in performance of the Project after the Termination Date shall be classified as SpectRx Intellectual Property. Exhibit B attached to this Agreement identifies the primary Developed Technology, including, as of the Termination Date, the Patents and Trade Secrets protecting the Developed Technology and the "patentable" items for which patent applications are filed or may be filed to protect the Developed Technology. Promptly after the Effective Date of this Agreement the Parties each shall undertake the actions necessary to provide to the other Party the documentation and know how (The required effort for providing know how shall be all pertinent documentation and a summary explanation of the documentation, if required.) reasonably required to enable the other Party to utilize and practice the Developed Technology.
SpectRx and Xxxxx Xxxxx Termination Agreement 2
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
5.2 Each Party shall have the right to use and practice the Developed Technology in Non-Product Fields without restriction as provided in section 7.3 of the Development Agreement.
5.3 SpectRx shall have the right to use Developed Technology in the Product Field subject to the terms and conditions set forth in Sections 5.5 and 5.6 following, and WA shall have the right to use Developed Technology in the Product Field subject to the terms and conditions set forth in Sections 5.4 and 5.6 following.
5.4 Prior to [*], Xxxxx Xxxxx will not conduct research on, develop, make, market, distribute, import, sell, or otherwise use a device that screens for, detects, or diagnoses cervical cancer using Developed Technology in vivo. However, during this period, Xxxxx Xxxxx shall have the right to:
a) Use Developed Technology to conduct research on, develop, make, market, distribute, import, sell, or otherwise use devices using optical spectroscopy to perform screening tests (in vitro only) for cervical cancer based on detection of specific biomolecules or intra-cellular structures, and
b) Use technology other than Developed Technology to conduct research on, develop, make, market, distribute, import, sell, or otherwise use devices to perform tests for cervical cancer, without limitation (regardless of whether tests are in vivo or in vitro or use optical spectroscopy or other means of testing).
Xxxxx Xxxxx will not be restricted by this covenant after its expiration on [*].
5.5 For so long as Xxxxx Xxxxx has not commercialized, directly or indirectly through a licensee or sublicensee, a product using Developed Technology in the Product Field, SpectRx will pay Xxxxx Xxxxx [*] if it commercializes a product in the Product Field that infringes a valid claim of a Developed Technology Patent or that embodies a trade secret included within Developed Technology. If such product is first commercialized outside of the US, the [*] will be payable in one installment, due two years after the first sale, and if such product is first commercialized in the US, the [*] will be paid in two installments of [*] each, the first payable one year after the first sale and the second payable two years after the first sale.
SpectRx and Xxxxx Xxxxx Termination Agreement 3
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
5.6 If one Party commercializes a product, directly or indirectly through a licensee, in the Product Field that infringes a valid claim of a Developed Technology Patent or embodies a Trade Secret comprising Developed Technology (a DT Product) and at the time of such commercialization, the other Party has not commercialized a DT Product, the Party commercializing the DT Product will pay the other Party a royalty of [*] of the net sales of the DT Product up to the following maximum amounts: a) for SpectRx, its Expenditures under the Development Agreement in the amount of [*], and b) for Xxxxx Xxxxx, its Expenditures under the Development Agreement in the amount of [*], less the sum of i) [*] plus ii) the amount of the setoff / credit for expenses of prosecution and maintenance of Patents as described in Section 5.7 below. (Net sales means gross sales less returns, customary trade discounts, and separately-stated amounts for freight, insurance, excise tax, and tariffs.) If either Party licenses the Developed Technology to a third party which commercializes a DT Product, for purposes of this Agreement, net sales of the DT Product by the third party licensee shall be treated as net sales of the DT Product by the Party licensing the Developed Technology, and such net sales will be subject to the royalties described in this section. If the Party receiving the royalties pursuant to this section subsequently also commercializes a DT Product, that Party will refund to the Party that paid the royalties the amount of the royalties paid under this section. The refund will be paid in equal monthly installments over a period equal to the longer of: i) 12 months, or ii) the period required to amortize the refund with payments of [*] per month.
Each party must permanently and legibly xxxx all products embodied by Developed Technology and documentation manufactured or sold by it under this Agreement with a patent notice as may be permitted or required under Xxxxx 00, Xxxxxx Xxxxxx Code.
5.7 SpectRx will determine the elements of Developed Technology reduced to practice prior to the Termination Date for which patent applications should be prosecuted (Patents), and the jurisdictions in which such applications should be pursued. SpectRx shall be entitled to set off against the amounts payable to Xxxxx Xxxxx as mentioned in section 5.6 above, 50% of the out of pocket expenses incurred to prosecute, have issued, and maintain such Patents not to exceed [*], plus 50% of the out of pocket expenses of legal or administrative proceedings relating to the Patents, not to exceed [*]. One half of the amount to be set off shall be applied against the first installments of royalties payable to Xxxxx Xxxxx, and one half of the amount the set off shall be applied against the last installments of royalties payable to Xxxxx Xxxxx. The parties will be co-owners of any patents issued for Developed Technology, as provided in the Development Agreement.
SpectRx and Xxxxx Xxxxx Termination Agreement 4
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
5.8 If either Party desires to grant an exclusive license of the Developed Technology to any qualified third party for use in the Product Field or any Non-Product Field, the Parties will negotiate in good faith to cooperatively grant such licenses (although the terms of licenses as to which any party may agree shall be determined by such party in its sole discretion), but only on the condition that neither Party contemplates exploiting the Developed Technology by making, having made, marketing, importing, distributing, selling, or otherwise using a product in the field of use proposed for the third party license.
6. Rights to Other Non-Developed Technology
6.1 There exists certain technology that the Parties have agreed to define as non-developed technology ("Other Non-Developed Technology") that is not included in either Separately Owned Intellectual Property or Developed Technology. Exhibit C attached to this Agreement identifies the primary Other Non-Developed Technology related to the Development Agreement.
6.1 Each Party will cross-license the other Party for use of the Other Non-Developed Technology as follows:
6.2.a. For Xxxxx Xxxxx, for all applications other than for In-Vivo Spectroscopy for Cervical Cancer.
6.2.b. For SpectRx, for all applications.
6.1 There will be no royalty on the use of the cross-license
7. Release of Claims between the Parties.
7.1 Each Party hereby releases the other Party from any and all liabilities and causes of action based on: a) claims arising out of termination of the Development Agreement or b) claims arising out of a default in performance under the Development Agreement that are based on acts or omissions that are known or disclosed to the non-defaulting party before the time of executing this Agreement, including without limitation: i) indemnity for legal expenses incurred in litigation between the Parties and Ampersand Medical Corp, et al, and ii) theft of assets in SpectRx's possession that were jointly acquired and owned by the Parties under the Development Agreement for use in the Project.
Parties agree to notify each other promptly of each infringement or possible infringement of the patent rights of which either party becomes aware.
SpectRx and Xxxxx Xxxxx Termination Agreement 5
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
PARTIES HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND PATENT VALIDITY, WITH RESPECT TO PATENT RIGHTS AND KNOW-HOW RELATING TO DEVELOPED TECHNOLOGY, DERIVED TECHNOLOGY, AND TECHNOLOGY OTHERWISE PROPRIETARY TO EACH PARTY. FURTHERMORE, PARTIES AGREE NOT TO DIRECTLY OR TO ASSIST THIRD PARTIES TO CHALLENGE VALIDITY OF PATENTS GRANTED NOW OR IN THE FUTURE OF DEVELOPED TECHNOLOGY, DERIVED TECHNOLOGY AND TECHNOLOGY OTHERWISE PROPRIETARY TO EACH PARTY RELATED TO THE DEVELOPMENT AND COMMERCIALIZATION AGREEMENT AND THE TERMINATION AGREEMENT THEREOF.
This release does not apply to: a) obligations required by this Agreement, b) claims based on acts or omissions which constitute a breach of the Development Agreement and were unknown to the non-defaulting party before the time of execution of this Agreement, and c) claims based on acts or omissions which occur after the execution of this Agreement and constitute breaches of the Articles or Sections of the Development Agreement that survive expiration, as identified in Section 9.1 following.
8. Public Disclosures.
8.1 The Parties jointly will develop guidelines for, or the specific content and form of, disclosures to the Parties' personnel and independent contractors who have provided services related to the Project, informing them of the circumstances relating to and terms and conditions of this Agreement. SpectRx has developed a communication outline for the purpose of disclosure of the circumstances relating to this Agreement. However, the communication outline shall not be issued until after review by Xxxxx Xxxxx and incorporation of any reasonable changes requested by Xxxxx Xxxxx which are not inconsistent with applicable securities laws and regulations. Except as provided in this section and in article 11 of the Agreement, the Parties shall endeavor to maintain in confidence the circumstances relating to and the terms and conditions of this Agreement. Notwithstanding any provision of this Agreement to the contrary, neither Party shall have any liability to the other for any disclosures of the termination of the Development Agreement and the Project.
9. General Provisions.
9.1 Section 15.6 of the Development Agreement is restated as follows:
Articles XI, XIII, XIV, XVI, XVII, and Sections 7.1, 7.2, and 12.2 shall survive termination of this Agreement.
SpectRx and Xxxxx Xxxxx Termination Agreement 6
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
9.2 The Parties will in good faith attempt to resolve disputes under this Agreement by discussions between their executive management. If any dispute is not resolved by this means, the dispute shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof, including an injunction. The arbitration shall be conducted by a single arbitrator in Washington, D.C. The expenses of the arbitration shall be borne between the Parties as determined by the arbitrator, except that each Party shall bear the cost of its own experts, evidence, and legal counsel.
9.3 All notices and other communications required or desired to be served, given, or delivered hereunder shall be made in writing or by a telecommunications device capable of creating a written record and shall be addressed to SpectRx or Xxxxx Xxxxx to be notified as follows:
|
If to SpectRx: | SpectRx, Inc.
|
(B) |
If to Xxxxx Xxxxx: | Xxxxx Xxxxx, Inc.
|
or, at such other address designated by such Party in a written notice to the other Party. Notices shall be deemed to have been duly given (i) if delivered personally or otherwise actually received, (ii) if sent by overnight delivery service, (iii) if mailed by first class United States mail, postage prepaid, registered or certified, with return receipt requested, or (iv) if sent by telecopy for which confirmation of receipt is recorded. Notice mailed as provided in clause (iii) above shall be effective upon the expiration of three (3) business days after its deposit in the United States mail, and notice sent as provided in clause (iv) above shall be effective upon successful transmission. Notice given in any other manner described in this paragraph shall be effective upon receipt by the addressee thereof. Changes in addresses, addressees, phone numbers, and telecopy numbers may be specified by written notice.
SpectRx and Xxxxx Xxxxx Termination Agreement 7
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
9.4 The section headings used herein are for reference and convenience only, and shall not enter into the interpretation of this Agreement. Any exhibits referred to in this Agreement and attached, or to be attached hereto, are incorporated herein by reference.
9.5 No delay or omission by either Party in exercising any right or power occurring upon any noncompliance or default by the other Party with respect to any of the terms of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either Party of any obligation to be performed by the other shall not be construed as a waiver of any succeeding breach of this Agreement. Unless stated otherwise, all remedies provided for in this Agreement shall be cumulative and in addition to any remedies available at law, in equity, or otherwise.
9.6 This Agreement shall be governed by and construed in accordance with the laws of Georgia, excluding its laws governing conflict of laws.
9.7 This Agreement and the other agreements specifically referred to herein constitute the entire agreement between the Parties, and supercede all prior agreements or understandings. No change, waiver, or release relating to this Agreement shall be valid unless it is in writing and executed by the Party against whom it is to be enforced.
8.8 If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and there shall be substituted for the provision at issue a valid and enforceable provision as similar as possible to the invalid provision.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the Effective Date.
| SPECTRX, INC.
By: /s/ XXXXXX X. XXXXXX, XX. Print Name: Xxxxxx X. Xxxxxx, Xx. Title: Exec. VP and CFO |
XXXXX XXXXX, INC.
By: /s/ XXXX XX XXXXX Print Name: Xxxx XxXxxxx Title: Vice President & General Manager |
SpectRx and Xxxxx Xxxxx Termination Agreement 8
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT A - SPECTRX ONLY
| REFERENCE ID # SpectRx Reference |
TITLE |
| [*]CD001 |
Apparatus and Method for Determining Tissue Characteristics |
| [*]CD001 |
Apparatus and Method for Determining Tissue Characteristics |
| [*]CD002 |
Multi-Modal Optical Cancer Diagnostic System |
| [*]CD003 |
Multi-Modal Optical Cancer Diagnostic System |
| [*]CD001 |
Method for Protecting a Fiber Optic Probe and the Resulting Fiber Optic Probe |
| [*]CD002 | Apparatus and Method for Determining Tissue Characteristics |
| [*]CD001 |
[*] |
| [*]CD004 |
[*] |
| [*]CD003 | [*] |
| U.S. Patent No. 5,203,328 |
Apparatus and Methods for Quantitatively Measuring Molecular Changes in the Ocular Lens |
| U.S. Patent No. 5,582,168 |
Apparatus and Method for Measuring Characteristics of Biological Tissues and Similar Materials |
| [*]MG001 |
Method and Apparatus for Determining a Duration of a Medical Condition |
| [*]BR001 | Apparatus and System for Calibrating Measurement Systems |
SpectRx and Xxxxx Xxxxx Termination Agreement 9
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
| REFERENCE ID #SpectRx Reference |
TITLE |
| [*]BR001/CON | Apparatus and System for Calibrating Measurement Systems |
| [*]BR002/CON | Spectroscopic System with Disposable Calibration Device |
| [*]BR003 | Analyzing System with Disposable Calibration Device |
| [*]BR004 | Disposable Calibration Target |
| [*]BR004/CON | Disposable Calibration Target |
| [*]BR004/CIP | Disposable Calibration Device |
| [*]BR005 | [*] |
| [*]BR001 | [*] |
| [*]BR001 | [*] |
SpectRx and Xxxxx Xxxxx Termination Agreement 10
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT B - DEVELOPED TECHNOLOGY
| REFERENCE ID # SpectRx Reference |
TITLE |
| [*]CD003 | Mounting and Stabilizing Attachment Device (a.k.a. Speculum & Optical Probe Mount) |
| [*]CD005 | Optical Disease Detection Using Imaging and Spectroscopic Analysis |
| [*]CD006 | Initial Disclosure on Imaging Interferometer |
| [*]CD007 | Apparatus and Method for Determining Tissue Characteristics |
| [*]CD008 | Modifications to Stand Off, Structured Illumination and Imaging Device (Hybrid) Device to Provide for an Alternative Where a Coherent Imaging Fiber Bundle is No Longer Necessary for Collecting Light |
| [*]CD009 | Endocervical Probe Accessory for Use with Cervical Dysplasia Detection Device |
| [*]CD011 | Endocervical Probe Integration into a Standoff Ectocervix Optical Interrogation Device |
| [*]CD001 | Endocervical Probe with Contrast Medium |
| [*]CD002 | Endocervical Probe Integration with Ectocervical Probe |
| [*]CD004 | Endocervical disclosures |
| [*]CD006 | Use of Acetic Acid and Other Contrast Agenst for the Spectroscopic Imaging of Tissue |
| [*]CD007 | Endocervical probe disposable extension and cover |
[*] |
LED array for low cost, patterned illumination of the cervix |
SpectRx and Xxxxx Xxxxx Termination Agreement 11
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
| REFERENCE ID # SpectRx Reference |
TITLE |
[*] |
Subject: Probe design and methods for a cervical cancer detection "Optical Biopsy" product |
SpectRx and Xxxxx Xxxxx Termination Agreement 12
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT C -
OTHER NON-DEVELOPED TECHNOLOGY (ONDT)
| REFERENCE ID #
|
TITLE | COMMENTS |
| International Patent Application No. PCT/US99/20646 | Multi-Modal Optical Cancer Diagnostic System | ONDT limited [*] All other technology and concepts proprietary to SpectRx only. |
| International Patent Application No. PCT/US00/06428
|
Apparatus and Method for Determining Tissue Characteristics | ONDT limited [*] All other technology and concepts proprietary to SpectRx only. |
SpectRx and Xxxxx Xxxxx Termination Agreement 13
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPERATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
