Amendment No. 1 to Agreement
This Amendment No. 1 to Agreement is dated as of the 6th day of September,
2002 (the "Effective Date") by and between Cordis Corporation, a Florida
corporation ("Cordis") with an address at 40 Technology Drive, Warren, NJ 07059,
and Photoelectron Corporation, a Massachusetts corporation ("PEC") with an
address at 9 Executive Park Drive, North Billerica, MA 01862.
Reference is made to the Agreement dated as of February 5, 2001 between
Cordis and PEC (the "Agreement"). All capitalized terms used in this Amendment
and not otherwise defined shall have the meanings assigned to them in the
Agreement.
The parties desire to amend the Agreement in order to modify their
arrangements with respect to the development of the X-Ray Systems.
In consideration for the mutual covenants and promises contained in this
Amendment and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the parties agree as
follows:
1. During the period commencing on the Effective Date and ending on the
first to occur of the Completion Date or the Termination Date (as such terms are
defined below), the parties' obligations under Section III of the Agreement
shall be modified as follows:
(a) PeC will continue to develop at its expense the X-Ray Tube (the
1.0 mm x-ray cathode tube described in Exhibit B to the Agreement) to meet
the Product Specifications, although PEC shall have sole authority to
determine the amount of any resources it will devote from time to time to
its development effort.
(b) Cordis's obligations under Article III will be suspended, but
Cordis will continue to provide such support for PEC's development efforts
as Cordis shall reasonably determine in its sole discretion.
(c) As soon as reasonably practical after the execution of this
Amendment, the parties will prepare and file a joint patent application
with the U.S. Patent and Trademark Office with respect to the X-Ray System,
and each party agrees to provide all reasonable assistance with respect to
such patent application.
(d) Except as provided above, the parties' obligations under
subsections B, D, F, G and H shall be suspended.
The term "Completion Date" shall mean the date PEC completes development of
the X-Ray Tube and submits to Cordis in writing a detailed design review of the
X-Ray Tube and prototypes of the X-Ray Tube for use by Cordis in evaluating the
X-Ray Tube and for animal trials of the device, if any. The term "Termination
Date" shall mean the date, which shall not be earlier than August 1, 2004, upon
which either party delivers written notice to the other terminating the
Agreement.
2. If PEC completes development of the X-Ray Tube prior to the
Termination Date and so notifies Cordis in writing, Cordis shall have a period
of one hundred twenty (120) days
following the Completion Date (the "Review Period") to elect whether to proceed
with the terms of the original Agreement, as modified in this Amendment. During
the Review Period Cordis will have the right to request additional information
from PEC with respect to the X-Ray Tube, and PEC agrees to respond promptly to
all reasonable requests for additional information from Cordis.
3. If Cordis elects, by written notice to PEC, to proceed with the terms
of the Agreement, the Agreement shall continue in full force and effect in
accordance with its terms, except that Subsection A of Section VIII of the
Agreement will be amended to read as follows:
"A. Commencing with the date the X-Ray System becomes Available for
Sale, Cordis will pay PEC (1) with respect to the first $175,000,000 in Net
Sales, a royalty equal to 8% of the Net Sales Price received by Cordis for
each X-Ray Catheter, and (2) with respect to all Net Sales in excess of
$175,000,000, a royalty equal to 6% of the Net Sales Price received by
Cordis for each X-Ray Catheter."
4. If, by the end of the Review Period, Cordis does not elect to proceed
with the terms of the Agreement, the Agreement will be deemed to have expired
and the parties will have no further obligations to one another except as
follows:
(a) The provisions of Sections XII, XIII, XVI subsection A, XVIII and
XXI shall survive such expiration.
(b) PEC will have the exclusive right to manufacture, have
manufactured, use and distribute X-Ray Systems, subject to a royalty to be
paid to Cordis in an amount to be negotiated in good faith by the parties.
(c) Cordis will grant to PEC a non-exclusive, worldwide license to
manufacture, have manufactured, use and distribute Delivery Devices,
subject to a royalty to be paid to Cordis in an amount to be negotiated in
good faith by the parties.
(d) PEC and Cordis will negotiate in good faith with respect to the
terms under which Cordis will supply Catheter Body Subassemblies to PEC for
use with the X-Ray Systems.
(e) If, after good faith negotiations as provided above, the parties
are unable to reach agreement, either party shall have the right to utilize
the dispute resolution procedures set forth in Section XVIII of the
Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
No. 1 to as of the date set forth above.
PHOTOELECTRON CORPORATION CORDIS CORPORATION
By: /s/ Timothy W. Baker By: /s/ Susan Morano
-------------------- ----------------
Name: Timothy W. Baker Name: Susan Morano
Title: President Title: VP Business Development
-2-