1
EXHIBIT 10.17
Agreement
This Agreement is made and effective as of the 10th day of July, 1995
by and between
Teijin Limited, a Japanese corporation, having its registered office
and principal place of business at 6-7, Minami-hommachi 1-chome, Chuo-ku, Osaka
541, Japan ("Teijin")
and
SpectRx Inc., a Delaware corporation, having its registered office at
6025A Unity Drive, Norcross, GA 30071, U.S.A. ("SpectRx").
WITNESSETH:
WHEREAS, both parties hereto are engaged in the design, development,
production and sale of certain health care medical equipment;
WHEREAS, SpectRx, as a research and development company, believes it
has enough expertise and capacity to develop and/or produce the non-invasive
HbAlc monitoring product;
WHEREAS, Teijin is interested in the commercialization of such product
in Japan and in other Asian and Oceania countries and has enough capacity to
commercialize such product; and
WHEREAS, both parties hereto are willing to conduct the joint
development of such product on terms and conditions set forth herein,
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
1.1 As used in this Agreement:
"Product" shall mean a non-invasive HbAlc monitoring product
developed by both parties hereto under this Agreement and using SpectRx's
established basic quantitative technology. The SpectRx's basic quantitative
technology is based on the measurement of fluorescent intensity and the Raleigh
scattering properties of the cornea aqueous and lens tissue of the eye.
2
ARTICLE 2
Subject Matter
2.1 Subject to the terms and conditions of this Agreement, both parties
hereto shall collaborate with each other in carrying out the Development Program
as described in Exhibit A attached hereto for the commercialization of the
Product. The Development Program will be scheduled over a period of twenty-four
(24) months commencing the date hereof.
2.2 Each party hereto will give the other party such technical and/or
business information as useful to research, develop, manufacture, use and/or
sell the Product during the term of this Agreement.
ARTICLE 3
Assignment of Joint Development
3.1 During the term of this Agreement, each party hereto shall take its
share separately of the Development Program;
for Teijin: Testing and evaluating the Product
(including the prototype model), and conduct
of necessary procedures (including clinical
trials) for the commercialization of the
Product in Japan, and giving financial
support to SpectRx described herein,
for SpectRx: Research, designing, pre-producing and
producing of the Product.
Notwithstanding the foregoing, the basic design and final
evaluation of the Product shall be made jointly by both parties hereto.
ARTICLE 4
Design and Pre-Production
4.1 SpectRx shall design the Product and shall produce some of the
prototype models of the Product at its facility in accordance with the
specifications separately agreed upon between the parties hereto and applicable
regulatory requirements.
-2-
3
ARTICLE 5
Evaluation and Acceptance
5.1 Teijin shall test and evaluate the prototype model of the Product
produced by SpectRx. If satisfactory, Teijin shall apply to the Japanese
Ministry of Health and Welfare for an import and/or manufacturing approval of
the Product with assistance of SpectRx in terms of necessary documents.
5.2 If the prototype models of the Product are in accordance with the
specifications, but found to be unsatisfactory to Teijin, Teijin may request
SpectRx to continue the development of the Product, for which terms and
conditions shall be separately negotiated.
ARTICLE 6
Funds and Share of Cost
6.1 Teijin shall provide SpectRx with funds totaling one million five
hundred thousand US dollars ($1,500,000) for the development of the Product and
rights to distribute the Product in Japan and in other Asian and Oceania
countries. Provision of the funds shall be made by interbank telegraphic
transfer in U.S. dollars to Wachovia Bank, Oakbrok Parkway, Norcross, Georgia;
Routing #061-00-00-10; SpectRx Inc. in accordance with the following schedule:
1)First payment: Two hundred thousand U.S. dollars
($200,000) upon the execution of this
Agreement;
2)Second payment: Three hundred thousand U.S. dollars
($300,000) upon the completion of the pilot
study in the Development Program;
3)Third payment: Two hundred fifty thousand U.S. dollars
($250,000) upon the mutually agreed decision
of the specifications of the Product;
4)Forth payment: Five hundred thousand U.S. dollars
($500,000) upon the completion and delivery
of the prototype models of the Product; and
5)Fifth payment: Two hundred fifty thousand U.S. dollars
($250,000) upon the obtainment of the import
approval of the Product from the Japanese
Ministry of Health and Welfare.
6.2 Teijin shall have the right to evaluate the progress and result of
the Development Program at any milestone described in Section 6.1 hereof. If
such progress and result are unsatisfactory to Teijin, Teijin may terminate the
Development Program at any milestone in spite of Section 16.1 hereof, thereafter
Teijin will have no obligation to pay the remainder of the above funding and
SpectRx will have no obligation to pay royalty or refund any of the money
hereunder and all terms and conditions of this Agreement will be terminated
except Article 14 hereof.
6.3 Each party hereto shall bear any cost arising from its own
activities hereunder.
-3-
4
ARTICLE 7
Purchase of Prototype Model
7.1 Teijin will purchase at least one set of the prototype model of the
research grade Product from SpectRx. The price of such prototype model does not
exceed eighty-five thousand U.S. dollars ($85,000) per set. A deposit of fifty
percent (50%) of the purchase price, forty-two thousand five hundred U.S.
dollars ($42,500) in case of one set order, is required with the order, delivery
to be one hundred twenty (120) days from receipt of the order and deposit for
each hand research instrument made by SpectRx hereunder.
ARTICLE 8
Result and Patent
8.1 The result made solely by Teijin by non-invasive testing using the
research instrument made by SpectRx hereunder in the eye will be jointly owned
by both parties hereto. The result made jointly by Teijin and SpectRx using the
research instrument made by SpectRx hereunder in the eye shall be jointly owned
by both parties hereto.
8.2 The patent on jointly owned result (hereinafter "Joint Patent")
shall be filed by both parties hereto in any country. Any expenses to be
incurred in filing and maintaining the Joint Patent shall be born equally by
both parties hereto. If either of the parties hereto has no intention to file
the Joint Patent in a country or countries, such party (hereinafter
"Non-desiring party") shall notify its intentions to the other party as soon as
possible. After receipt of such notice from the Non-desiring party or after
failure of either party to notify the other party of its intention to join
within thirty (30) days from the delivery of written notice by such other party
expressing its desire to file the Joint Patent in a country or countries
(hereinafter "Desiring Party"), whichever comes earlier, the Desiring party has
the right to file the Joint Patent in its single name in such country or
countries.
8.3 Should either party hereto intend to withdraw or abandon its
patent, the party shall notify the other party of its intentions and provide an
opportunity for such other party to acquire the subject patent in its single
name.
-4-
5
ARTICLE 9
Product Infringement of Intellectual Property Rights
9.1 SpectRx agrees to produce the Product without knowingly infringing
any third party patent, patent application and/or other intellectual property
rights, and indemnify and save Teijin harmless from any liability, costs and/or
expenses resulting from any claim that such Product infringe any third party
patent, patent application and/or other intellectual property rights, while
Teijin agrees to monitor the patent situation including new patent applications
in Japan. Teijin shall notify SpectRx of any potential infringement as soon as
it is discovered, and both parties hereto will discuss on measures to cope with
such potential infringement.
ARTICLE 10
Commercial Production
10.1 Once the Product is granted the necessary approval for import into
and/or, distribution in Japan, Teijin and SpectRx shall enter an OEM Supply
Agreement.
10.2 At the time of this Agreement, Teijin wishes to launch the Product
in Japanese market, once the approval of the Product is successfully obtained
and enough clinical data for marketing use is accumulated, at the earliest time
after Teijin obtains the import and/or distribution approval from Japanese
government.
10.3 In case that Teijin desires to manufacture the Product, SpectRx
will consider granting to Teijin an exclusive right and license, which will not
be unreasonably withheld, to manufacture, have manufactured, use and/or sell the
Product in Japan under SpectRx's technology. However, SpectRx will retain the
right to manufacture the electro optical sensor module for sale in Japan only or
in other markets to be negotiated on a case by case basis.
ARTICLE 11
Distribution Rights
11.1 Teijin and its subsidiary(ies) have the exclusive rights for sale
and distribution of the Product in Japan. Such rights are granted after the
fifth payment is made per Section 6.1 hereof. Further, Teijin is hereby granted
the first refusal right to sell and/or distribute the Product in other Asian and
Oceania countries.
11.2 SpectRx shall not supply the competitive product of the Product to
any third party for the market of Japan and permitted countries, as far as
Teijin has the exclusive rights for sale and distribution of the Product in such
countries.
-5-
6
11.3 Information gained from early introduction of the Product into
Japanese market will help the introduction of the Product in non-Japanese
markets. As such, if SpectRx sells the Product in other countries than Japan,
SpectRx will pay to Teijin a commission of two percent (2%) of invoiced sales of
the Product sold by SpectRx to customers other than Teijin.
ARTICLE 12
Further Development
12.1 If either party hereto desires to proceed the further development
of the other product based on the similar technology of the Product, the other
party would have the first refusal right to commercialize the other product with
such party. In case that both parties hereto agree to develop such other
product, a new agreement shall be executed by the parties hereto.
ARTICLE 13
Warranty
13.1 Teijin and SpectRx hereby warrant to each other that:
a) their obligations hereunder are not subject to prior
commitments or obligations to any third party;
b) SpectRx has not entered into any agreement with other
party(ies) relating to research, development, manufacture, use and/or sale of
the Product for the market of Japan and permitted countries;
c) they act in good faith in connection with the obligations
hereunder.
13.2 An agreement dated December 2, 1994 exists between SpectRx and
Boehringer Mannheim Corporation as defined in Exhibit B attached hereto. SpectRx
hereby warrant to Teijin that such agreement between SpectRx and Boehringer
Mannheim Corporation does not infringe upon the rights SpectRx is granting to
Teijin for a "non-invasive quantitative replacement for the hemoglobin Alc
test".
ARTICLE 14
Confidentiality
14.1 Each of the parties hereto agrees that any data and information of
a technical or commercial nature which is furnished to the other in written or
tangible form by either party hereto under or in connection with this Agreement
will be maintained by the receiving party in confidence and not disclosed to any
third party for the duration hereof and a period of five (5) years thereafter
and will not be used by the receiving party except as permitted in this
Agreement. Neither party
-6-
7
hereto shall be under any obligation to maintain in confidence any portion of
the received information which is (i) already in possession of the receiving
party; (ii) independently developed by the receiving party; (iii) publicly
disclosed by the disclosing party; (iv) rightfully received by the receiving
party from a third party:,or (v) disclosed pursuant to the requirement or
request of a governmental agency or third party to the extent such disclosure is
required by operation of law, regulation or court order.
14.2 Any data and/or information which is orally transmitted at the
time as being of a proprietary or trade secret nature, shall be considered by
the receiving party to be proprietary data and/or information, provided that the
disclosing party notifies the receiving party in writing, within thirty (30)
days of the oral transmission, identifying specifically the data and/or
information so transmitted.
ARTICLE 15
Force Majeure
15.1 If either party's performance hereunder is prevented, restricted
or interfered with by reason of fire, explosion, strike, labor dispute, casualty
or accident, unavailability of raw materials, flood, war, civil commotion, acts
of God, any law, order or decree of any government or subdivision thereof or any
other cause whatsoever, whether similar or dissimilar to those above enumerated,
beyond the reasonable control of such party, the party who affected shall be
excused from performance hereunder to the extent and for the duration of such
prevention, restriction or interference.
ARTICLE 16
Term and Termination
16.1 This Agreement shall come into force on the date first above
written. Unless the parties executes a written termination agreement of this
Agreement, this Agreement shall remain in force.
16.2 Section 16.1 hereof notwithstanding, either party hereto may
terminate this Agreement forthwith in the event that the other party:
a) materially and substantially breaches this Agreement and
does not cure or remedy such breach within sixty (60) days of receipt of the
first party's notification of its intention to terminate this Agreement because
of such breach as: (i) failure to complete a milestone per schedule; (ii)
failure to make a milestone payment; (iii) failure to seek Ministry of Health
and Welfare approval in Japan; (iv) failure to sell after Japanese approval at
levels agreed to in the supply agreement;
b) becomes insolvent, enters bankruptcy or ceases to pay its
debts when due.
-7-
8
16.3 In the event of termination of this Agreement pursuant to Section
16.2 hereof, all sums paid or payable shall remain the property of SpectRx and
shall not be refundable.
16.4 Upon termination of this Agreement by SpectRx pursuant to Section
16.2 hereof, Teijin will use its reasonable efforts to cause to be transferred
to SpectRx any governmental approvals obtained by Teijin and necessary for
SpectRx to market the device in Japan or other permitted markets.
16.5 Upon termination of this Agreement, all provisions end except
Article 14 hereof.
ARTICLE 17
Miscellaneous
17.1 All notices, demands and other communications hereunder shall be
made in writing and shall be addressed as follows:
If to Teijin:
attn: General Manager of Home Health Care
Planning Dept. Teijin Limited
1-1, Uchisaiwai-cho 2-chome, Chiyoda-ku,
Tokyo 100, Japan
If to SpectRx:
attn:
------------------------
SpectRx Inc.
6025A Unity Drive,
Norcross, GA 30071, U.S.A.
17.2 This Agreement shall inure to the benefit of and be binding upon
and enforceable by the parties and their successors and permitted assigns.
However, neither party may assign or delegate any of its rights or obligations
under this Agreement without the prior written consent of the other, which will
not be unreasonably withheld, except that such rights and obligations may be
assigned or delegated by either party to any affiliated party in connection with
reorganization whose performance of this Agreement is guaranteed by the
co-signing party hereto or to a corporation or other business concern which
acquires substantially all of the assets of that party.
17.3 Should it be determined, in a form and manner which render such
determination enforceable against either or both of the parties, that any
provision of this Agreement is void, invalid, unenforceable or illegal, such
determination shall not affect any other provision of this Agreement, and this
Agreement shall be constructed and performed as if such void, invalid,
unenforceable or illegal provision had never been contained herein.
-8-
9
17.4 This Agreement constitutes the entire agreement and understanding
of the parties hereto regarding all matters involving the transactions herein
described, and supersedes all prior understandings, representations or
agreements between the parties hereto regarding any such matters or
transactions.
17.5 This Agreement is executed in the English language in two
counterparts, each of which shall for all purposes be deemed an original. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Georgia, U.S.A.
17.6 The parties hereto agree to effectuate all reasonable efforts to
resolve in an amicable manner any and all disputes between them including claims
with respect to the use of the Product in the market in connection with this
Agreement. In case that such disputes are not resolved within a reasonable
period, they shall be finally settled by arbitration in accordance with the
rules of Conciliation and Arbitration of the International Chamber of Commerce
in New York, New York, U.S.A.
-9-
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
entered into as of the date first above written.
TEIJIN LIMITED SPECTRX Inc.
By: /s/ Yasuatsu Yuasa By: /s/ Keith Ignotz
------------------------------------- --------------------------------
Yasuatsu Yuasa
Title: Managing Director, Title: Chief Operating Officer
Member of the Board Member of the Board
General Manager of Home Health
Care Division
-10-
11
EXHIBIT A
SPECTRX INC. - TEIJIN LIMITED January 5, 1995
PROPOSED OPTION AND LICENSE PLAN WITH MILESTONES KDI/mlh
- ---------------------------------------------------------------------------------------------------------------
| | | |
| | | |
License Acceptance of Teijin provides final SpectRx completes Teijin conducts Beta
Japan clinical data Japan product development and prototype clinicals and
specification to delivers 3 Alpha Accepts product
SpectRx prototypes
_____d Submit application
_____ KOUSEI-SHO
rights
___pectRx
If Japan clinical is SpectRx mutually Teijin begins Alpha Teijin & SpectRx
rejected, SpectRx may agrees to Japan testing enter Supply
license to competition product specification Agreement
- ---------------------------------------------------------
| |
| |
Teijin Obtains SpectRx ships product
KOUSEI-SHO and per the Supply
other required Agreement
approvals
_____d
_____
rights
___pectRx
12
EXHIBIT B
DEVELOPMENT AND LICENSE AGREEMENT
This Agreement is entered into and made effective as of this 2nd day of
December, 1994, by and between Boehringer Mannheim Corporation, an Indiana
corporation having a principal place of business at 9115 Hague Road,
Indianapolis, Indiana 46250 ("BMC"); and SpectRx, Inc., a Delaware corporation
having a principal place of business at 6025 A Unity Drive, Norcross, Georgia
30071 ("SI").
RECITALS:
A. BMC is in the medical diagnostics business and has experience and
expertise in the areas of testing and marketing of medical diagnostics products.
B. Pursuant to a License Agreement dated as of May 7, 1991, between
Georgia Tech Research Corporation ("GTRC") and Laser Atlanta Optics, Inc.
("LAO"), which was assigned to SI on January 16, 1993, and amended on October
19, 1993 (the "GTRC License"), SI is the exclusive licensee of GTRC for certain
know-how relating to a method and apparatus using non-invasive instrumentation
to measure molecular changes in human lenses for the purpose of detecting
diabetes.
C. SI has developed a device to detect diabetes in humans and has built
prototype devices and is conducting clinical trials of such devices.
13
D. BMC has expressed an interest in participating as a member of SI's
project team during the building of prototype devices and the execution of
definitive clinical trials; as well as in acquiring worldwide, exclusive
marketing rights to such device.
THEREFORE, in consideration of the premises and mutual
agreements expressed herein, the parties agree as follows:
1.0 DEFINITIONS
1.1 "Affiliate" shall mean, with respect to either party, any
corporation, partnership or other business entity that now or in the future
controls, is controlled by, or is under common control with, such party.
"Control" shall mean the direct or indirect ownership of fifty percent (50%) or
more of the voting interest in, or a fifty percent (50%) or more interest in the
income of, such corporation or other business entity, or such other relationship
as, in fact, constitutes actual control.
1.2 "Device" shall mean any non-invasive instrument and improvements
thereto developed by, for or with SI using the Know-How (defined below) that
measures changes in human lenses for the qualitative detection of diabetes for
screening purposes.
1.3 "Know-How" shall mean all knowledge of SI, regardless of its
source, relating to a method of using non-invasive instrumentation to measure
molecular changes in living human lenses for the purpose of detecting diabetes,
including, but not limited to, information not in the public domain obtained by
way of the GTRC License.
2.0 RIGHTS GRANTED BY SI
2.1 Effective upon payment in full to SI of the development payments
described in Section 3, SI hereby grants to BMC a license to sell and market the
Device on a world-wide and exclusive basis, subject to the terms set forth in
this Agreement (the "Marketing License"). SI may
-2-
14
not, during the term of the Marketing License, sell, market or distribute, or
give any third party rights to sell, market or distribute, any non-invasive
instrument developed by, for or with SI using the Know-How that measures changes
in human lenses for the qualitative detection of diabetes for screening
purposes. The Marketing License gives BMC the right to market the device for
screening for diabetes. The term of the Marketing License, unless sooner
terminated pursuant to the terms and conditions of this Agreement, shall be
coincident with the term of the GTRC.
-3-
15
APPENDIX "A"
1. NON INVASIVE DIABETES SCREENING INSTRUMENTS;
The instrument will have the ability to detect diabetes and is intended
to be used for screening for diabetes. The SI diabetes screening instrument will
present data useful for screening in a qualitative manner. The presentation of
data will not compromise the quantitative data presentation of the SI
instrument. The SI screening instrument will not be used, nor can the data be
presented in such a manner that it could be used to evaluate long-term glucose
control in a manner similar to the HbAlc test that the SI monitoring instrument
is designed to replace.
2. PRODUCT SPECIFICATIONS;
Details to follow