Exhibit 10(i)(a)
OPTION AGREEMENT TO PURCHASE EXCLUSIVE
LICENSE TO USE PATENT RIGHTS
This option agreement (the "AGREEMENT") is between OmniCorder Technologies, Inc.
of 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx, 00000, hereinafter called
SPONSOR, and Xxxxxxx Xxxxx of 000 Xxxx Xxx Xxxx, Xxxxxxx, Xxx Xxxx 00000,
hereinafter called SCIENTIST is as follows:
In consideration of good and valuable services, including extensive efforts by
SPONSOR to market the technology of Dynamic Area Telethermometry, and the
consideration of One Dollar ($1.00), paid to SCIENTIST, receipt of which is
hereby acknowledged, SCIENTIST hereby gives and grants to SPONSOR, and assigns,
the exclusive option, to license on an exclusive basis, U.S. PATENT application
#08/368,161, filed January 3, 1995 entitled "Detection of cancerous lesions by
their effect on the periodic modulation of perfusion in the surrounding
tissues", hereinafter called PATENT.
The option is given on the following terms and conditions:
ONE: PRICE AND TERMS OF PAYMENT:
The purchase price for the exclusive license to use PATENT and all proprietary
rights therein or based thereon and all uses and products and benefits therein
and derived therefrom (the "LICENSE") shall be Three Hundred Shares (or, Twenty
Percent) of SPONSOR'S Common Stock which will be transferred to the SCIENTIST
upon the exercise of this AGREEMENT, and SPONSOR shall pay SCIENTIST a Royalty
Fee of $300 for each complete DAT Breast Cancer Screening System installed at a
client site, in perpetuity, paid annually on February 1st each year, for the
systems installed the previous year.
TWO: OTHER GOOD AND VALUABLE CONSIDERATIONS:
The payment by the SPONSOR to the SCIENTIST, upon the execution of this
AGREEMENT to purchase the LICENSE, of the good and valuable considerations as
set forth in this paragraph are conditional as herein described.
1. The SPONSOR shall provide the UB Foundation with a research grant, (the
"GRANT") of five hundred and fifty thousand dollars ($550,000) to be used
for the single purpose of research related to Dynamic Area Telethermometry
and its use in breast cancer detection. The GRANT will be deposited in
escrow with an Escrow Agent mutually acceptable to both SPONSOR and
SCIENTIST at the time of the transfer of LICENSE. The Escrow Agent will
transfer the GRANT to the UB Foundation upon the delivery, by the UB
Foundation of; (i) research proposal describing the project schedule and
budget, and naming the SCIENTIST as the Principal Investigator with whom
the control of the GRANT resides; (ii) written approval by the U.B.
Foundation and which stipulates that all discovery, inventions, techniques,
processes, formulas, apparatus or patents arising out of the research
conducted under the GRANT are the sole property of the SPONSOR and that,
(iii) and further stipulates that in the event of the resignation or
termination ("TERMINATION") of the SCIENTIST from the State University of
New York at Buffalo ("S.U.N.Y.") and severance of his relationship with the
UB Foundation, any unused portions of the GRANT will be transferred
directly to the SCIENTIST to continue the same research; (iv) in the event
of the death or incapacitation or unwillingness ("INCAPACITY") of SCIENTIST
all unused portions of the GRANT will be returned to the SPONSOR. The GRANT
shall be held in escrow for a period not to exceed six months, (the
"TERM"). If, due to INCAPACITY the SCIENTIST does not accept the GRANT by
the end of the TERM ("GRANT REFUSAL"), the GRANT may be declared withdrawn
by the submission of a letter by the SPONSOR at which time the Escrow Agent
will refund the GRANT to the SPONSOR. In the event of GRANT REFUSAL or
INCAPACITY, withdrawal of the GRANT after the end of the TERM may occur at
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any time and shall be at the sole discretion of the SPONSOR and doing so
shall not, in anyway, affect the validity of the transfer of the LICENSE to
the SPONSOR or the SPONSOR's ownership of the LICENSE.
2. The SPONSOR shall provide the SCIENTIST with the use, at the earliest
possible date, but within 12 months following the exercise of this OPTION,
and for the period of the GRANT, of an infrared camera manufactured by
"Amber Company" which utilizes a Quantum Well Infrared Photodetector
developed by the "Jet Propulsion Laboratory" in Pasadena CA, or a device
with substantially the same performance specifications ("DEVICE"). The
SPONSOR will make every effort to make the DEVICE available to the
SCIENTIST at the earliest date. In the event of TERMINATION or GRANT
REFUSAL or INCAPACITY the SPONSOR shall be relieved of the requirements of
this paragraph, which shall not, in any way, affect the validity of the
transfer of the LICENSE to the SPONSOR or the SPONSOR's ownership of the
LICENSE.
3. The SPONSOR shall provide the SCIENTIST's company, AMARA, Inc., with a
consulting contract, the duration of which shall be 12 months. The
conditions of the consulting contract shall provide for (i) up to fifty-two
(52) person-days of employment at a rate of five hundred dollars ($500) per
person-day; (ii) travel related expenses not to exceed twenty five thousand
dollars ($25,000); (iii) and an equipment and supplies budget of $50,000.
In the event of TERMINATION or GRANT REFUSAL or INCAPACITY or refusal by
AMARA Inc. to accept this consulting contract, the SPONSOR shall be
relieved of the requirements of this paragraph which, shall not, in anyway,
affect the validity of the transfer of the LICENSE to the SPONSOR or the
SPONSOR's ownership of the LICENSE.
4. SPONSOR shall elect SCIENTIST as a member of its Board of Directors in a
manner consistent with the Bylaws of the SPONSOR and the Laws of Delaware.
If, due to INCAPACITY, the SCIENTIST does not accept the position as a
member of the SPONSOR's Board of Directors, the transfer of the LICENSE to
the SPONSOR or the SPONSOR's ownership of the LICENSE shall not, in anyway,
be affected.
5. Upon the resignation of the SCIENTIST from the State University of New York
at Buffalo (S.U.N.Y.) SPONSOR shall offer an employment contract
("CONTRACT") to SCIENTIST with the title and responsibilities of Vice
President of Research and Development and Chief Scientific Officer and
SPONSOR shall provide the SCIENTIST; (i) with monetary compensation at a
rate approximately equivalent to that is being provided to him by S.U.N.Y.;
(ii) with an employment benefits package consistent with that received by
all other senior executives employed by SPONSOR; (iii) with the right to
pursue other professional activities, so long as said activities do not
inhibit or interfere with his responsibilities as an employee or Board of
Directors member. In any event, these other professional activities shall
not consume more than thirty percent of SCIENTIST's normal workweek; (iv)
with this CONTRACT having a duration of not less than five years. In the
event that SCIENTIST becomes an employee of SPONSOR before the consumption
of all GRANT funds, all unexpended GRANT funds will be applied to the
research budget of SPONSOR's Research and Development Department of which
SCIENTIST will head under this CONTRACT. The INCAPACITY of the SCIENTIST to
accept the CONTRACT as described herein, shall not, in any way, affect the
validity of the transfer of the LICENSE to the SPONSOR or the SPONSOR's
ownership of the LICENSE.
THREE: LICENSE TERMINATION
If SPONSOR violates any of the terms of this AGREEMENT or in the event of
Abandonment of LICENSE, as specifically defined in Section "FOUR", or does not
provide any required payments within 60 days written notice from the SCIENTIST
that such payments are due, the LICENSE shall terminate and all rights therein
shall revert to SCIENTIST. The SPONSOR shall, thereafter, have no rights in the
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PATENT or proprietary rights therein or based thereon. In this event, SCIENTIST
will abide, respect, comply and uphold any and all sub-licensing agreements made
between any and all third parties. SCIENTIST will retain any and all funds
received pursuant to this AGREEMENT as compensation.
FOUR: ABANDONMENT OF LICENSE
For the purposes of this agreement and for provision of LICENSE termination as
set forth in Section THREE, LICENSE will be considered in the state of
Abandonment by the SPONSOR if all of the following conditions apply: (i) SPONSOR
fails to pay SCIENTIST a royalty fee for more than 18 months; (ii) SPONSOR fails
to enter into any negotiation with the purpose of selling, marketing, promoting
or sub-licensing LICENSE for more than 18 months; (iii) SPONSOR fails to expend
any time, money or resources to sell or promote the LICENSE for more than 18
months; (iv) SPONSOR fails to expend any time, money or resources to improve or
enhance the LICENSE or the products derived from the LICENSE for more than 18
months.
FIVE: PERIOD OF AGREEMENT AND EXTENSION
This AGREEMENT may be exercised by giving notice thereof to SCIENTIST, at 000
Xxxx Xxx xxxx, Xxxxxxx, Xxx Xxxx, 00000, at any time during the primary period
from the date of this instrument until 12 o'clock a.m. June 27, 1997; or during
the extension period, if the AGREEMENT is extended, as herein provided, until 12
o'clock a.m. March 27, 1998. The OPTION may be so extended by SPONSOR giving
SCIENTIST written notice of extension prior to the TERMINATION of the primary
period, and paying to SCIENTIST at the time of notice, the additional
consideration of One Hundred Thousand ($100,000) Dollars.
SIX: EXECUTIVE OF EFFECTUAL TRANSFER
If the AGREEMENT is exercised, SCIENTIST will, within 10 days after the delivery
to him of the notice of exercise and the placement of funds in the escrow
account pursuant to paragraph TWO, execute effectual transfer of the above
LICENSE. This assignment will take place at the earliest possible date. The
SPONSOR shall pay all customary and reasonable fees associated with the LICENSE
agreement. The LICENSE rights conveyed shall be free and clear of all liens,
encumbrances and restrictions.
SEVEN: NOTICES
Any notice hereunder shall be given in writing to the party for whom it is
intended in person or by registered mail at the following address, or such
future address as may be designated in writing to the SCIENTIST, at the address
set forth above, to the SPONSOR at: 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000.
EIGHT: ASSIGNMENT AND SUCCESSION
This AGREEMENT and the contract resulting from the exercise thereof shall bind
and inure to the benefit of the heirs, administrators, executors, successors,
and assigns of the respective parties except for those "Other Good and Valuable
Considerations" set forth in Section "TWO", which are not transferable. All
other rights of purchase hereunder may be assigned without restriction except as
provided for in Section "NINE".
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NINE: SUB-LICENSING
SPONSOR has the right to sub-license the LICENSE to any and all parties freely
and without restriction except when the sub-license agreement with the third
party permits:
(i) a selling price of a regional sub-license agreement between SPONSOR and a
third party of less than an amount equal to the total population within the
region, covered by this sub-license, multiplied by $0.10; (ii) the transaction
fee, to be received by the SPONSOR from either the third party or the subject or
patient, for each cancer screening test, is less than $1.00. In either case the
SPONSOR must have the approval of the SCIENTIST prior to entering into the
sub-license agreement with the third party. The provisions of Section "NINE" are
not transferable to the SCIENTIST's heirs, administrators, executors, successors
and assigns. In the event of the death or incapacity of the SCIENTIST, the
SPONSOR shall be immediately relieved of any restriction or limits set forth in
Section "NINE".
TEN: RIGHT OF SCIENTIST TO INSPECT BOOKS AND RECORDS
SCIENTIST shall be provided the opportunity to annually inspect the books and
records of the SPONSOR for the purpose of confirming SPONSOR's compliance with
the provisions set forth in Sections "ONE" and "NINE". This inspection shall
occur at the offices of the SPONSOR and at the expense of the SCIENTIST.
ELEVEN:
If any provision if this AGREEMENT is held to be illegal, invalid, or
unenforceable under present or future state or federal laws or rules and
regulations promulgated thereunder effective during the term hereof, such
provisions shall be fully severable, and this AGREEMENT shall be construed and
enforced as if such illegal, invalid, or unenforceable provisions had never
comprised a part hereof, and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provisions or by its severance herefrom. Furthermore, the parties
hereto agree to negotiate in good faith to modify and amend this AGREEMENT, so
as to effect the original intent of the parties as closely as possible with
respect to those provisions which were held to be illegal, invalid or
unenforceable.
TWELVE:
SCIENTIST warrants that he believes that he is the owner of the PATENT rights
and has the right to enter into this AGREEMENT without any breach of his
obligations to others.
Each party shall hold harmless and indemnify the other party against any and all
claims, judgments, costs, awards, expenses (including reasonable attorneys'
fees) and liabilities of every
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kind arising from execution and performance as a result of that execution of
this AGREEMENT.
Each party will pay its own expenses, including attorneys fees, related to this
AGREEMENT.
Executed in duplicate on March 19, 1997
/S/ Xxxxxxx Xxxxx (Signature of SCIENTIST)
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/S/ Xxxx X. Xxxxx (Signature of SPONSOR)
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