LICENSE AGREEMENT
THIS AGREEMENT (the "Agreement"), is made this 21st day of July 1993, by
and between HemoCleanse, Inc., an Indiana corporation ("HCI"), having an address
of 0000X Xxxx Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx 00000, and IDT, Inc., a
Pennsylvania corporation ("IDT"), having an address as Xxx Xxxxxx, Xxxxxxxx
0000, Xxxxxx Xxxxx, 0000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, HCI exclusively owns certain technology, patents, processes,
methods, designs, technical know-how, and associated rights and tangible
property required to manufacture, market and sell an extracorporeal medical
device, known as the BioLogic-DT ("DT"), that utilizes sorbent chemicals, cation
and anion exchangers, and other physiological substances in a closed-loop
dialysate suspension to selectively remove from the blood and transfer to the
blood across a membrane toxins and chemicals, thus performing both
detoxification and physiological chemical balancing of the blood simultaneously
(the "Technology"); and
WHEREAS, HCI possesses the expertise and know-how to convert the DT into
an extracorporeal hyperthermia device, known as the
BioLogic-HT ("HT"), by modifying the dialysate suspension heating system
to permit greater heat transfer to the blood, changing the method and rate of
blood pumping and altering the chemical composition of the dialysate suspension
to maintain physiological chemical balancing during hyperthermia while removing
toxins caused by hypertherrnia (the "Modified Technology"); and
WHEREAS, IDT is engaged in research regarding the treatment of disease or
other medical condition through the use of hyperthermia, whether or not in
conjunction with radiation, chemotherapy, or other methods, including, without
limitation, the treatment of Kaposi's sarcoma and Acquired Immune Deficiency
Syndrome ("Relevant Field of Use") and such procedure requires the Modified
Technology; and
WHEREAS, the parties believe that the Modified Technology can be utilized
and optimized as a unique treatment system for an effective extracorporeal
hyperthermia treatment procedure; and
WHEREAS, IDT desires to secure from HCI, and HCI is willing to provide
IDT with, an exclusive license to commercialize the Modified Technology subject
to certain terms and conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the recitals and covenants
and undertakings of the parties contained herein, the parties agree as follows:
ARTICLE I
TERM
1.1 This Agreement shall begin on the date first written above and
shall continue until terminated by agreement of the parties or as otherwise
provided herein.
ARTICLE H
GRANT OF LICENSE
2.1 LICENSE. HCI hereby grants to IDT, subject to the conditions
outlined in Article III an exclusive, except as Paragraphs 2.2 and 10.2
otherwise provided, non-transferable worldwide license to commercialize, use,
market, sell and exploit the Modified Technology for use within the Relevant
Field of Use, such Modified Technology to include all inventions, improvements,
enhancements and modifications thereto made, conceived or acquired by HCI after
the date of this Agreement and any patent based on and covering the same which
HCI now or thereafter owns, controls or has the right to commercially exploit.
2.2 SUB-LICENSES. The exclusive rights and license herein granted
shall include the right of IDT to sub-license the Modified Technology to others
for use or resale within the Relevant Field of use subject to all terms and
conditions of this Agreement.
ARTICLE III
CONSIDERATION FOR GRANT
3.1 PRODUCT DEVELOPMENT EXPENSES. IDT agrees to reimburse all
reasonable out-of-pocket expenses incurred by HCI for activities related to
developing the Modified Technology including, but not limited to, device
materials and components, treatment related disposable items ("HT Treatment
Kits") used in clinical trials, travel and lodging, shipping, manufacturing
supplies and other non-personnel operating costs. Expenditures in excess of One
Hundred Dollars ($100.00) must be pre-approved by IDT in writing.
3.2 PATENT Costs. If IDT deems it necessary for HCI to patent any
portion of the Modified Technology to assure protection of their exclusive
license, HCI, at IDT's expense, will prepare and file the requested patent
applications. All future costs related to such patent applications, including
maintenance fees once a patent is issued, will be borne by IDT as long as this
Agreement is in force.
3.3 NON-REFUNDABLE LICENSE FEE. On or before March 31, 1994, IDT
agrees to pay HCI the sum of Five Hundred Thousand Dollars ($500,000.00)
("License Fee") to secure the exclusive worldwide rights to the Modified
Technology for use within the Relevant Field of Use.
The parties acknowledge that as of June 30, 1993, IDT has paid, and HCI
has received, the sum of $178,000.00 as a partial payment of the License Fee.
IDT agrees to continue to make payments on the License Fee on a semi-monthly
basis depending
upon the availability of funds and on the progress of clinical trials, on or
before the dates and at or above the amounts shown in the following schedule
until the License Fee in paid in full:
Date Amount Due
---- ----------
July 5, 1993 26,000.00
July 20, 1993 26,000.00
August 5, 1993 26,000.00
August 20, 1993 26,000.00
September 5. 1993 26,000.00
September 20, 1993 26,000.00
October 5, 1993 26,000.00
October 20, 1993 26,000.00
November 5, 1993 26,000.00
November 20, 1993 26,000.00
December 5, 1993 26,000.00
December 20, 1993 36,000.00
Notwithstanding the foregoing payment schedule, in the event the License
Fee is not paid in full by March 31, 1994, or if, at any time prior to March 31,
1994, IDT notifies HCI in writing that IDT will no longer make payments toward
the License Fee under this Paragraph, this Agreement and the License granted
hereunder shall terminate, and IDT shall have the right to convert any partial
payments of the License Fee to common stock of HCI at $3.67/share. In the event
of such conversion, IDT will also be granted a one-year warrant entitling IDT to
purchase that number of shares equal to fifty percent (50%) of the shares
received from conversion of the partial payments at an exercise price of
$3.67/share. Thereafter neither party shall have any further rights against the
other arising out of this Agreement.
3.4 MACHINE PRICE.
3.4.1 DEFINITIONS. As used in this Paragraph 3.4, the following terms
shall have the meanings indicated below:
"Machine Price Premium" means that portion of the purchase price which
IDT is required to pay for the HT in excess of 2.00 times HCI's actual
manufacturing cost ("AMC") of the HT.
"Royalty Completion Date" means the earlier of the following dates:
(i) The date on which HCI's obligation to make royalty payments (the
"Royalty Payments") to the Indiana Business Modernization and Technology
Corporation ("IBMTC") terminates; or
(ii) The date on which HCI's obligation to make the Royalty Payments to
IBMTC would terminate if HCI paid the entire Machine Price Premium to IBMTC.
3.4.2 CALCULATION OF Price. HCI agrees to sell and IDT agrees to
purchase the HT at a calculated price equal to 2.22 times the AMC of the HT
("Machine Price") until the Royalty Completion Date, at which time the Machine
Price will be a calculated price equal to two (2) times the AMC. The AMC is
defined for purpose of this agreement as the expected manufacturing cost to
manufacture the HT (or the HT Treatment Kit under Paragraph 3.5 below) under
ideal manufacturing conditions considering standard direct material cost,
standard direct labor costs and standard direct and indirect manufacturing
overhead
costs, adjusted for variances such as scrap, labor productivity, capacity
situation and quantity produced. The Machine Price will be established by HCI
in December of each year prior to the start of the next calendar year (the
"Contract Year"). Detailed accounting substantiating the Machine Price will be
provided to IDT prior to the start of each Contract Year at the request of IDT.
Should this Agreement become a nonexclusive license as provided in Paragraph
3.9, the Machine Price will not exceed the lowest price charged to any other HT
purchaser.
3.4.3 REDUCTION OF MACHINE PRICE PREMIUM. The Machine Price Premium
shall be subject to the following reduction:
In the event that the license granted to IDT hereunder becomes
nonexclusive, the Machine Price Premium shall be reduced, PRO RATA, during each
succeeding calendar quarter according to the number of HT's purchased by IDT
during the preceding calendar quarter as compared to the number of HT's
purchased during such quarter by all licensees.
3.5 DISPOSABLES PRICE.
3.5.1 DEFINITIONS. As used in this Paragraph 3.5, the following terms
shall have the meanings indicated below:
"Disposables Price Premium" means that portion of the purchase price
which IDT is required to pay for the HT Treatment Kits in excess of 3.00 times
the AMC.
"Royalty Completion Date" shall have the meaning set forth in Paragraph
3.4. 1.
3.5.2 CALCULATION OF Price. HCI agrees to sell and IDT agrees to
purchase the HT Treatment Kits at a calculated price equal to 3.53 times the AMC
of the HT Treatment Kit (the "Disposables Price") until the Royalty Completion
Date, at which time the Disposables Price shall be a calculated price equal to
three (3) times HCI's AMC for the HT Treatment Kit. The Disposables Price will
be established by HCI in December of each year prior to the start of the next
Contract Year. Detailed accounting substantiating the Disposables Price will be
provided to IDT prior to the start of each Contract Year upon IDT's request.
Should this Agreement become non-exclusive as provided in Paragraph 3.9, the
Disposables Price will not exceed the lowest price charges to any other HT
Treatment Kit purchaser.
3.6 AUDITS. IDT shall have the right, exercisable not more than once
in any twelve (12) month period, upon fifteen (15) business days' prior written
notice, to have HCI's manufacturing costs audited, at IDT's sole cost and
expense, by an auditor of recognized standing and reasonably acceptable to HCI.
3.7 ANNUAL MINIMUMS.
3.7.1 ANNUAL PURCHASES. Beginning either with the calendar year
following FDA approval to market the HT or with the calendar year following any
consecutive three (3) month period
during which IDT uses the HT in 375 hyperthermia procedures whichever is earlier
("Minimum Year"), IDT agrees to purchase the annual minimum number of HTs and HT
Treatment Kits each Minimum Year as set forth below that, when multiplied by the
Machine Price and Disposables Price for that Minimum Year, will produce an
annual minimum sum ("Annual Minimum"). Once determined, the Annual Minimum can
be attained by the purchase of a mixture of HTs and HT Treatment Kits during the
Minimum Year:
UNIT PROJECTIONS
Minimum Year HTs HT Treatment Kits
-----------------------------------------------------------
1 25 1,500
2 50 5,500
3 100 13,500
4 125 25,000
5 + each year 150 39,000
thereafter
3.7.2 ANNUAL MINIMUM PAYMENT. Failure of IDT to fulfill its requirement
to purchase the minimum number of HTs and HT Treatment Kits in any Minimum Year
shall not constitute an event of default under this Agreement so long as IDT
pays HCI a sum equal to the Annual Minimum for the Minimum Year not later than
forty-five (45) days following the close of said Minimum Year.
3.8 TRAINING AND CLINICAL SUPPORT. HCI agrees to provide and IDT
agrees to pay HCI for training and clinical support according to the following
schedule:
Personnel Daily Charge
---------------------------------
Xx. Xxxxxxx Xxx $l,000.00
Clinical (RNs) 500.00
In addition to these charges, IDT will also pay all travel and lodging expenses
incurred for training and clinical support.
3.9 TERMINATION.
3.9.1 Cause. In addition to termination under Paragraph 3.3, this
Agreement may be terminated upon the occurrence of either of the following:
a) At the option of HCI, upon the failure of IDT to make required
Annual Minimum payments pursuant to Paragraph 3.7; or within 15 days of written
notice of such failure from HCI; or
b) At the option of either party and upon fifteen (15) days "written
notice," with cause, in the event of the other party's material failure to
perform any of its duties or obligations under this Agreement. The notice of
termination must specify the actions or inaction constituting "cause" for
purposes of this Paragraph. If the defaulting party wishes to respond to such
notice and can cure the violation or failure and notifies the aggrieved party
within the fifteen (15) day notice period, the defaulting party will have an
additional forty-five (45) days
to effect such cure. The provisions of (a), rather than this section (b), shall
control the right of HCI to terminate this Agreement by reason of IDT's failure
to make the required Annual Minimum payment pursuant to Paragraph 3.7.
3.9.2 Effect. Termination of this Agreement pursuant to Paragraph 3.9.1
will cause the exclusive license of the Modified Technology granted to IDT
hereunder to become non-exclusive. All provisions of this Agreement shall
remain in full force and effect other than Paragraph 3.7. Provided, however, if
this Agreement is terminated pursuant to Paragraph 3.3, IDT shall have no rights
to the Modified Technology and all provisions of this Agreement shall be of no
further force and effect except for the obligations of Confidentiality under
Article VIII which shall survive.
3.9.3 IDT ROYALTY. Should this Agreement become a non-exclusive
license, HCT agrees to pay IDT a five percent (5%) royalty out of the proceeds
from gross sales of the HT and HT Treatment Kits to other parties for three (3)
years following the termination of the exclusive license.
ARTICLE IV
REPRESENTATIONS BY HCI AND IDT
4.1 HCI represents to IDT that HCI has the right to grant the
exclusive license granted hereunder; that it has executed no agreement or other
document in conflict herewith; that its officers have the full right, authority
and authorization to
execute this Agreement and to grant the exclusive rights granted to IDT
hereunder; and that no consent or authorization of any third party is required
as a condition precedent to its execution or performance of this Agreement.
4.2 IDT hereby represents to HCI that it has executed no agreement or
other document in conflict herewith that its officers have the full right,
authority and authorization to execute this Agreement; and that no consent or
authorization of any third party is required as a condition precedent to its
execution or performance of this Agreement.
4.3 IDT warrants to HCI that no Modified Technology will be sold or
otherwise distributed except in full compliance with all legal and regulatory
requirements. IDT assumes all responsibilities of every kind and nature
associated with satisfying all legal and regulatory requirements that must be
met before the HT can be sold for Relevant Fields of Use.
ARTICLE V
INFORMATION AND OWNERSHIP REGARDING THE INVENTIONS
5.1 HCI shall furnish to IDT all information and documents regarding
the Modified Technology necessary to enable IDT to exercise all of its rights
hereunder.
5.2 The Technology, Modified Technology, and all inventions,
improvements, enhancements and modifications thereto made, conceived or acquired
by HCI after the date of this Agreement and any patent based on and covering the
same which HCI
now or thereafter owns, controls or has the right to commercially exploit shall
remain the sole and exclusive property of HCI, subject to the license hereby
granted. HCI shall, upon demand, execute and deliver to IDT, or cause to be
executed and delivered to IDT, such documents as may be deemed necessary or
advisable by counsel for IDT for filing in the appropriate public offices to
evidence the grant of the exclusive license hereby granted to IDT.
ARTICLE VI
INFRINGEMENT, INDEMNIFICATION AND INSURANCE
6.1 INFRINGEMENT. HCI shall defend, at its own expense, all charges
and claims of infringement that may be brought against IDT related to the
exercise of the exclusive license granted to IDT pursuant to this Agreement. IDT
shall prosecute, at its own expense, any infringing on the rights granted to IDT
pursuant to this Agreement.
6.2 INDEMNIFICATION.
6.2.1 Each party (the "Indemnifying Party") agrees to indemnify, defend
and hold harmless the other (the "Indemnified Party") from and against any and
all claims, damages, liabilities, losses, costs and expenses (including, without
limitation, legal, accounting, and other fees and expenses for investigating and
defending any actual or threatened claims) arising out of any breach or default
hereunder by the
Indemnifying Party, including, without limitation, any breach of any
representation or warranty hereunder.
6.2.2 Whenever any claim shall arise for indemnification hereunder, the
Indemnified Party shall notify the Indemnifying Party in writing of the claim,
and, when known, the facts constituting the basis for such claim. In the event
of any claim for indemnification hereunder resulting from or in connection with
any claim or legal proceedings by a third party, the notice to the Indemnifying
Party shall specify, if known, the amount or an estimate of the amount of the
liability arising therefrom. The Indemnifying Party, at its sole cost and
expense, may, upon written notice to the Indemnified Party in writing, assume
its obligations to indemnify the Indemnified Party with respect to all elements
of such claim. The Indemnified Party shall be entitled to participate in (but
not control) the defense of such action, with its counsel and at its own
expense. If the Indemnifying Party does not assume the defense of any such
claim or litigation resulting therefrom, the Indemnified Party may defend
against such claim or litigation in such manner as it may deem appropriate,
including, but not limited to, settling such claim or litigation, after giving
notice of the same to the Indemnifying Party, on such terms as the Indemnified
Party may deem appropriate.
6.3 INSURANCE. IDT agrees to purchase, at its sole cost,
comprehensive general liability insurance (occurrence, and/or
claims-made form) for bodily injury and property damage, including contractual
and product liability, in an amount of not less than $500,000 combined single
limits License Agreement and provide HCI with a certificate of insurance naming
HCI as an additional insured. When HCI receives FDA approval to market the
BioLogic-HT, DDT will cause the combined single limits of such insurance to be
increased to not less than $2,000,000 before marketing such device. At such
time as IDT has had $5,000,000 in gross sales of sucb device, DDT will cause the
combined single limits of such insurance to be increased to not less than
$500,000. Such contract of insurance shall be primary with respect to any other
insurance available to HCI and shall contain a waiver of subrogation by IDT's
insurance carrier against HCI and its insurance carrier with respect to all
obligations assumed by IDT pursuant to this Agreement. Such insurance shall
contain provisions to the effect that policy limits may not be reduced, terms
changed, or the policy cancelled with less than thirty (30) days written notice
to HCI.
ARTICLE VII
ENHANCEMENTS
7.1 If following the date of this Agreement, HCI becomes the owner of
or acquires the marketing rights to any further improvements or supplements to
the Modified Technology which can be utilized within the Relevant Field of Use,
then HCI shall communicate such improvements and supplements to IDT and IDT
shall have the right to include the same in this Agreement. It is the intention
of the parties that all improvements and supplements necessary or desirable to
enhance the commercial marketability of the Modified Technology within the
Relevant Field of Use or to enable the same to obtain or maintain a competitive
advantage shall be included within the scope of the license granted hereunder.
ARTICLE VIII
CONFIDENTIALITY
8.1 DEFINITION OF CONFIDENTIAL INFORMATION. As used in this
Agreement, "Confidential Information" shall mean all information which is
transmitted in written, graphic or photographic form and marked as
"Confidential" in accordance with Paragraph 8.1 hereof except Information which
(a) can be shown by the receiving party to have been in its possession prior to
disclosure to it by the transmitting party; (b) at the time of disclosure
hereunder is, or thereafter becomes, through no fault of the receiving party,
part of the public domain by publication or otherwise; (c) is furnished to the
receiving party by a third party after the time of disclosure hereunder as a
matter of right, who owes no obligation of confidentiality to the transmitting
party with respect to the Confidential information; or (d) is independently
developed by employees, agents or vendors of the receiving party who have not
had access to the Confidential Information received from the transmitting party.
8.2 EXCHANGE OF INFORMATION. The contents of this Agreement and all
Confidential Information exchanged between HCI and IDT pursuant to this
Agreement, or which has previously been exchanged between HCI and IDT relating
to the subject matter hereof, shall be kept confidential by each party with the
same degree of care normally accorded by such party to its own confidential
information except for purposes authorized by this Agreement. Each party's
Information shall be supplied to the other party in written, graphic,
photographic or other tangible form and any Confidential Information so supplied
shall be marked "Confidential" and shall be identified as being disclosed under
this Agreement. Any Information which is disclosed in oral form shall be
confirmed in written summary form within thirty (30) days after its disclosure
to the receiving party and, if Confidential, shall be so marked. Neither party
shall disclose such Confidential Information to any person or firm, for a period
of five (5) years after the termination of this Agreement, unless previously
authorized in writing by the other party to do so; provided, however, that each
party may disclose said Confidential Information to responsible officers and
employees of that party who require said information for the purposes
contemplated by this Agreement, provided that said officers and employees shall
have assumed like obligations of confidentiality.
8.3 PRESS RELEASES. The parties agree that neither IDT nor HCI will
issue a press release relating to this Agreement without
the prior written consent of the other party. Such consent will not be
unreasonably withheld.
ARTICLE IX
MANUFACTURING RIGHTS
9.1 The parties acknowledge and agree that HCI has retained the
right to manufacture the BioLogic-HT and the HT Treatment Kit, and that HCI
will sell IDT such quantities of these products as IDT requires from time to
time. Notwithstanding the foregoing, in the event that HCI for any reason
ceases to manufacture the HT and HT Treatment Kits or ceases to sell the same
to IDT, then, without further consideration and after giving HCI notice and
reasonable opportunity to cure, the exclusive license granted hereunder to
IDT shall be expanded to include the right of IDT to manufacture or to have
manufactured the HT and HT Treatment Kits for use within the Relevant Field
of Use.
ARTICLE X
ASSIGNABILITY
10.1 This Agreement shall be binding upon, and shall inure to the
benefit of HCI and its assigns and successors in interest.
10.2 This Agreement shall be binding upon and shall inure to the
benefit of IDT and any successor to substantially all of its entire business.
Moreover, IDT shall have the right to assign its right, benefits, obligations
and duties under this Agreement to any third party which controls, is controlled
by, or is under
common control of IDT. In that event, notice of such assignment shall be given
to HCI and thereafter all references herein to "IDT" shall mean such assignee.
ARTICLE XI
GOVERNING LAW
11.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of Indiana; provided, however, that any patent
question or controversy shall be resolved in the courts having jurisdiction over
the patent in question in accordance with the laws applicable to such patent.
ARTICLE XII
NOTICES
12.1 For purposes of notices given pursuant to this Agreement, the
addresses as set forth in Section 12.2 shall be used unless changed by written
notice given by one party to the other.
12.2 For the purpose of notices under Section 12.1 above, the following
addresses shall be used:
For HCI: HemoCleanse, Inc.
0000X Xxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000-0000
ATTN: Xxxxxx X. Xxxxxx, President and CEO
Facsimile No. (000)000-0000
For IDT: IDT, Inc.
Xxx Xxxxxx, Xxxxxxxx 0000, Xxxxxx Xxxxx
0000 Xxxxxxx Xxx Xxxx
Xxxxxxxxxx, XX 00000
ATTN: N. Xxxxx Xxxxxxx, President
Facsimile No. (000) 000-0000
12.3 All notices hereunder shall be in writing and shall be deemed
given when (a) personally delivered; (b) when received, if mailed by certified
mail, return receipt requested, postage prepaid; (c) when received, when sent by
courier service, UPS, or equivalent carrier; or (d) on the first business day
after receipt of facsimile copy when transmitted by confirmed facsimile, with
hard copy mailed by United States mail.
ARTICLE XIII
COUNTERPARTS
13.1 This Agreement may be executed in more than one counterpart, each
of which shall be deemed an original document, and all of which taken together
shall be one and the same Agreement.
ARTICLE XIV
MISCELLANEOUS
14.1 HEADINGS. The headings used in this Agreement are for purposes of
convenience and ready referral and shall not be deemed to limit the construction
of any paragraph to which they appertain.
14.2 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect or limit the validity or enforceability of
any other provision hereof
14.3 No Waiver. No waiver by either party or any breach of the terms
of this Agreement shall be deemed a waiver of any subsequent breach thereof
14.4 Entire Understanding. This Agreement embodies the entire
understanding and agreement between the parties and supersedes all previous
negotiations, representations and writings, written or oral, with respect to the
subject matter hereof This Agreement may be amended or modified only by an
instrument in writing, duly signed by the parties hereto.
ATTEST: HEMOCLEANSE, INC,
______________________/s/ By: Xxxxxx X. Xxxxxx/s/
President and CEO
ATTEST: IDT, INC.
_____________________/s/ By: N. Xxxxx Xxxxxxx/s/
N. Xxxxx Xxxxxxx
President
AMENDMENT TO LICENSE AGREEMENT
THIS AMENDMENT TO LICENSE AGREEMENT (the "Amendment") is made as of the
13th day of May, 1998 by and between HEMOCLEANSE, INC., an Indiana
corporation ("HCI") and IDT, INC., a Pennsylvania corporation ("IDT").
WITNESSETH:
WHEREAS, the parties have previously entered into a certain License
Agreement dated July 21, 1993 (the "Original Agreement") relating to HCI's
licensing to IDT of certain technologies described therein; and
WHEREAS, the parties now wish to amend the Original Agreement in certain
respects, as described herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS. Except as set forth below, capitalized terms
used in this Amendment not otherwise defined herein shall have the meanings
assigned to such terms in the -Original Agreement. The following capitalized
terms shall have the meanings set forth below:
"SB" means HCI's product now known as the ThermoChem-SB",
which utilizes the Modified Technology and which is more fully described on
Exhibit A to this Amendment.
"HT" means HCI's product now known as the ThermoChem-HT",
which utilizes the Modified Technology and which is more fully described on
Exhibit A to this Amendment.
"HT Treatment Kit" means the HCI product now known as the
ThermoChem-HT Treatment Kit which contains the disposable components used
with the HT.
"SB Treatment Kit" means the HCI product now known as the
ThermoChem-SB Treatment Kit which contains the disposable components used
with the SB.
"System" means HCI's ThermoChem System-TM-, comprised of the
SB, the HT, the SB Treatment Kit and the HT Treatment Kit.
2. EXPANSION OF RELEVANT FIELD OF USE. The Relevant Field of Use
is hereby expanded to include the treatment of disease or other medical
condition through the use of hypothermia, in addition to hyperthermia.
3. FAILURE TO COMMERCIALIZE. A new paragraph 2.3 shall be added
to the Original Agreement, as follows:
"2.3 CONVERSION. In the event that IDT fails to commercialize
the Modified Technology within the Relevant Field of Use for a period of
thirty-six (36) months following the receipt of approval from 'the United
States Food and Drug Administration to market the HT and the HT Treatment Kit
or the System, the rights granted to IDT under Paragraphs 2.1 and 2.2 hereof
shall convert from exclusive to non-exclusive rights.
4. SALE OF SB AND TREATMENT KIT COMPONENTS. A new Subparagraph
3.4.4 shall be added to the Original Agreement, as follows:
"3.4.4 PRICING OF SB AND SB TREATMENT KIT. HCI agrees to
sell to IDT such quantities of SBs as IDT wishes to purchase from time to
time the AMC of the SB during the preceding calendar year. HCI agrees to
sell to IDT such quantities of the SB Treatment Kits as IDT wishes to
purchase from time to time, at a price equal to 2.0 times the AMC of such
Treatment Kits during the preceding calendar year.
5. ELIMINATION OF ANNUAL MINIMUMS. Paragraph 3.7 of the Original
Agreement dealing with annual minimum purchases is hereby deleted, and all
references in the Original Agreement to Paragraph 3.7 or to the Annual
Minimum purchase requirement shall be of no further force and effect.
6. MANUFACTURING RIGHTS. Paragraph 9.1 of the Original Agreement
is hereby amended and restated in its entirety as follows:
"9.1 HCI hereby grants to IDT the exclusive right and license
to manufacture or have manufactured HTs and HT Treatment Kits for sale or use
within the Relevant Field of Use (the "Manufacturing Rights'). The
Manufacturing Rights shall include, without limitation, access to HCI's
technical file relating to the HT and the HT Treatment Kit. In consideration
therefor, and in further consideration of the other covenants set forth
herein, IDT shall pay HCI the following amounts:
(a) A license fee in the sum of $700,000 to be paid to
HCI by IDT causing its wholly-owned subsidiary, Infectious Disease Treatment,
Inc. (the "Subsidiary") to xxxx as "Paid In Full" and to deliver to HCI that
certain original Convertible Promissory Note dated April 1, 1998 from HCI to
the Subsidiary in the principal sum of $664,000 (the "Canceled Note"), and by
delivering to IICI that certain original Convertible Promissory Note dated
April 1, 1998 from HCI to the Subsidiary in the principal sum of $75,000, to
be reissued by HCI to the Subsidiary in the principal sum of $39,000 (the
"Reduced Note"); and
(b) Royalty payments of 6% of the net sale price (after
cost of goods sold, and exclusive of sales tax, freight and similar
out-of-pocket charges) on all sales by IDT of HTs and HT Treatment Kits
manufactured by, or on behalf, IDT pursuant to the Manufacturing Rights.
Such royalties shall commence at such time as regulatory approval is obtained
from either the United States Food and Drug Administration or the European
Union for commercial marketing of the HT in the United States or Europe.
Royalties shall be paid by IDT to HCI by the fifteenth (15th) day of the
month following the calendar month during which the net sale price is
received by IDT.
7. APPLICATION OF INTEREST. At IDT's option, IDT may apply, from
time to time, any or all interest accrued under the Canceled Note (prior to
the date of cancellation thereof) or the Reduced Note or any other promissory
note now or hereafter made and delivered by 14CI to IDT, toward the purchase
price of spare parts or components for the H'Ts.
8. MISCELLANEOUS.
(a) This Amendment may be executed in more than one
counterpart, each of which shall be an original document, and all of which
taken together shall be one and the same agreement.
(b) This Amendment shall be governed by and construed in
accordance with the laws of the State of Indiana.
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(c) The Original Agreement, as amended by this Amendment,
shall remain in full force and effect in accordance with its terms, and it is
hereby ratified and confirmed by the parties.
(d) HCI will give IDT limited clinical and engineering
support at no cost to IDT, other than reasonable out-of-pocket travel
expenses, until the ThermoChem-HT development is completed.
IN WITNESS WHEREOF, the parties have executed this Amendment by their duly
authorized representatives as of the date first above written.
ATTEST HEMOCLEANSE, INC.
By
------------------------------ -------------------------------------
Xxxxxx X. Xxxxxx, President and CEO
IDT, INC.
By
------------------------------ -------------------------------------
N. Xxxxx Xxxxxxx, President
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