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EXHIBIT 10.27
LICENSE AND DEVELOPMENT AGREEMENT
FOR SPECIFIC MEDICAL TECHNOLOGY
FOR THE DETECTION OF ONCOGENIC HPV VIRUS
This Agreement, effective as of this 23rd day of June, 2000, by and
between INVIRION, a United States corporation organized and existing under the
laws of the State of Illinois, having a place of business at 2350 Pilgrim
Highway, Frankfort, Michigan 49635 (hereinafter "Invirion") and AMPERSAND
MEDICAL CORPORATION, a Delaware corporation, having a place of business at 414
North Orleans, Chicago, Illinois 60610 (hereinafter "Ampersand").
WHEREAS, Invirion possesses, and Ampersand recognizes and acknowledges,
that Invirion has developed and possesses extensive technical information and
knowledge, is able to provide certain technical assistance and services, and is
the owner of medical technology; all relating to viral detection concerning
human papilloma virus ("HPV") using a unique and proprietary in-vitro
hybridization technique and marker(s); and
WHEREAS, Ampersand desires to acquire and Invirion is willing to grant,
transmit to and provide Ampersand the medical technology, technical assistance,
technical information and knowledge and services as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, it is hereby agreed as follows:
ARTICLE I -- DEFINITIONS
As used herein unless the context otherwise requires:
1.1 "MEDICAL TECHNOLOGY" means technical information or knowledge now
possessed by Invirion, including information heretofore disclosed to Ampersand
in anticipation of this Agreement, relating only to a HPV detection method using
fluorescence oligonucleotide
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detection with simultaneous antibody staining and an identification of the
necessary reagent or reagents to perform the HPV detection.
1.2 "PRODUCT" means any probes, markers, formulations, chemicals,
compounds, reagents, procedures, processes, methods, tests, formulas, and
processing or devices designed, made, assembled, converted, processed, used or
sold by Ampersand for use in utilizing, in accordance with, or embodying said
MEDICAL TECHNOLOGY.
1.3 "NET SALES" means the total price invoiced or received, for any
test performed or product made, sold, or produced to Ampersand's customers less
charges for transportation and packaging, taxes, commissions, with credit given
for return.
ARTICLE II -- LICENSE GRANT
2.1 Invirion grants to Ampersand the worldwide and exclusive right and
license to assemble, make, convert, process, use, and sell PRODUCT utilizing the
MEDICAL TECHNOLOGY.
2.2 Except as specifically provided herein, no right or license is
granted hereby, by implication or otherwise, under any patent, patent
application, technical information, know-how, trade secret, medical technology,
copyright, trademark, trademark application or registration or trade name of
Invirion. Specifically excluded from this Agreement is any technology owned,
developed, or created by Invirion concerning other viral detection products and
related products.
2.3 No right or license is granted by Ampersand to Invirion or by
implication for any patent, patent application, technical information, know-how,
trade secret, medical technology, copyright, trademark, trademark application or
registration or trade name owned by Ampersand.
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ARTICLE III -- ROYALTY & PAYMENTS
3.1 Ampersand agrees to pay Invirion a license fee of five hundred
thousand dollars ($500,000), in addition to the funds set forth in the
Development Agreement set forth in Exhibit A, which is incorporated herein by
reference, as follows according to the following benchmarks:
1. an initial payment of $100,000 upon the execution of the Agreement,
and upon confirmation by Ampersand's attorneys that:
(a) Invirion technology is not in violation and/or
conflict with any known third party's patents and,
(b) that Invirion has full ownership of such medical technology
(See Paragraph 9.2 below); and
(c) Invirion shall also deliver to Ampersand a formulation with
sample of a HPV cocktail containing approximately 400 probes.
2. $150,000 after Invirion provides Ampersand with an HPV probe
containing less than 200 different probes that is capable of
detecting all known oncogenic serotypes. Upon the completion
of this benchmark, Ampersand will also deliver to Invirion a
warrant to purchase 150,000 shares of Ampersand stock. A copy of
the warrant and its terms and conditions is attached hereto as
Exhibit B, which are incorporated herein by reference.
3. $150,000 after Invirion provides Ampersand with a new HPV probe
that detects HPV in Caski cells.
4. $100,000 after Invirion demonstrates that the new HPV probe format
is compatible with Ampersand's detection equipment and provides
Ampersand with complete documentation required for regulatory
compliance. Upon the completion of this
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benchmark, Ampersand will also deliver to Invirion a warrant to
purchase 150,000 shares of Ampersand stock. A copy of the warrant
and its terms and conditions is attached hereto as Exhibit C, which
are incorporated herein by reference.
A description of the work to be performed, a specification for
implementing HPV detection, and a time line setting forth the completion dates
for the above referenced benchmarks is set forth in the attached Exhibit D.
3.2 In the event that Ampersand is sold or merged with another entity,
or Ampersand's rights in the License Agreement are assigned, transferred, or
conveyed to another entity, the warrants identified in Exhibits B and C shall
fully vest to Invirion.
3.3 A royalty of seven percent (7%) on NET SALES received by Ampersand
of HPV related products using the MEDICAL TECHNOLOGY. In the event that Invirion
is late in meeting the benchmarks set forth above, for each two month period
that lapses the royalty rate set forth in paragraph 3.3 shall be reduced by one
quarter percent (1/4%). This penalty shall not be assessed if Invirion
establishes that the delay is the result of or is caused by circumstances beyond
its control.
ARTICLE IV -- RECORDS AND REPORTS
4.1 Ampersand shall keep complete and proper records of all said
PRODUCTS assembled, converted, processed, made, used, sold or sold for use or
otherwise used or disposed of or transferred by Ampersand with credit shown for
returns for which credit is given to customers as well as all tests performed,
such records to show separately the quantity of PRODUCTS assembled, made,
converted, processed for or sold to each customer or otherwise used or disposed
of as well as tests performed, net price totals, all amounts invoiced for or
associated with or related to any processing or processing charge and the date
of invoice and shipment. Sales shall be considered as
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made on the date of invoice or shipment, whichever shall first occur. On or
before the last day of January, April, July and October of each year during the
term hereof and the thirtieth (30th) day after termination hereof, Ampersand
shall send Invirion a report, in writing, certified by the chief financial
officer of Ampersand as to its correctness, showing separately the Net Sales or
Process Charge of said PRODUCT assembled, converted, processed, made, used, sold
or otherwise used or disposed of or transferred by Ampersand under or utilizing
rights granted hereunder and computing the amount due Invirion for the preceding
calendar quarter. Unless Ampersand shall be otherwise directed in writing by
Invirion, each such report shall be accompanied by the proper amount then
payable to Invirion as shown in such report.
4.2 Invirion shall have the right, during reasonable business hours, to
have the correctness of any such report audited, at its expense, by an
independent public accountant chosen by Invirion who shall examine Ampersand's
records only on material pertinent to this Agreement. Such records of Ampersand
shall be kept available by Ampersand for at least four (4) years after
termination of the calendar year in which they are made.
4.3 Unless Ampersand shall be otherwise directed in writing by
Invirion, all payments called for under this Agreement shall be in United States
currency payable to Invirion (to an account from time to time identified by
Invirion in writing) without deduction for taxes of any kind.
4.4 Ampersand shall pay Invirion interest at the rate of ten percent
(10%) per annum compounded quarterly on any remuneration that is more than
forty-five (45) days overdue hereunder from the earliest date such payment is
due to the date of payment. This interest payment shall be in addition to any
other remedy provided by Invirion by law or this Agreement.
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ARTICLE V -- TECHNICAL ASSISTANCE
5.1 Ampersand agrees that said MEDICAL TECHNOLOGY is confidential and
agrees not to disclose or use said MEDICAL TECHNOLOGY to the extent that it is
not generally known, in the trade, except to the extent provided or required by
the applicable laws.
5.2 Invirion shall retain and own the rights in any improvements
conceived, introduced, or developed relating to the PRODUCTS and/or MEDICAL
TECHNOLOGY relating to non-HPV technology and Ampersand shall be the owner of
all rights concerning HPV technology.
5.3 All expenses and research necessary to complete the benchmarks set
forth in Paragraph 3.1 will be at Invirion's expense. Invirion also agrees to
provide Ampersand with bi-monthly status reports as to the progress made with
respect to the benchmarks set forth in Paragraph 3.1.
ARTICLE VI -- TERM AND TERMINATION
6.1 As to all grants, obligations and provisions relating to said
MEDICAL TECHNOLOGY, this Agreement shall continue in full force and effect,
unless otherwise provided or sooner terminated as herein provided.
6.2 Invirion may terminate this Agreement forthwith upon written notice
to Ampersand if:
(1) Ampersand remains in default in making any payment or report
required hereunder, or fails to comply with any other provision
hereof for a period of thirty (30) days after written notice of
such default or failure is given by Invirion to Ampersand.
(2) Ampersand shall become insolvent, make an assignment for the
benefit of creditors
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or the like, or commit any act of bankruptcy or the like, or if
any order for the compulsory liquidation, reorganization or the
like of Ampersand shall be made by any court, governmental agency
or the like.
6.3 Any termination of this Agreement shall not relieve Ampersand of
liability for any payments accrued prior to the effective date of such
termination, or for any payments on PRODUCT manufactured, used or sold under
this Agreement prior to the effective date of such termination and sold
thereafter.
6.4 Upon termination for breach by Ampersand or otherwise pursuant to
Section 7.2, Ampersand shall have no right or license in or to said MEDICAL
TECHNOLOGY and hereby agrees to cease and desist using said MEDICAL TECHNOLOGY.
ARTICLE VII -- ASSIGNMENT
7.1 This Agreement may, at any time, be assigned by Invirion without
such assignment operating to terminate, impair or in any way change any of the
obligations or rights which Ampersand would have had, or any of the obligations
or rights which Invirion would have had if such assignment had not occurred,
From, and after, the making of any such assignment by Invirion, the assignee
shall be substituted for Invirion as a party hereto and Invirion shall no longer
be bound hereby. The Agreement may not be assigned to a competitor of
Ampersand's.
7.2 This Agreement shall inure to the benefit of, and be binding upon,
the successors and assigns of both parties.
ARTICLE VIII -- MISCELLANEOUS
8.1 All notices or communications which either party may desire, or be
required, to give to the other shall be in writing and shall be deemed to have
been duly served if and when forwarded
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by registered or certified mail to such address as shall have been designated by
notice from the addressee for addressing of notices to it, or if no such
designation shall have been made, then to the address of the party appearing
above.
8.2 The failure to act upon any default hereunder shall not be deemed
to constitute a waiver of such default.
8.3 The validity, legality and enforceability of any provision hereof
shall not be affected or impaired in any way by any holding that any other
provision contained herein is invalid, illegal or unenforceable in any respect.
8.4 All disputes arising in connection with this Agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or several arbitrators appointed
according to said Rules. The arbitrator(s) shall apply substantive State of
Illinois (USA) law to any dispute in accordance with international conventions.
The arbitration shall take place in the State of Illinois (USA).
ARTICLE IX -- INDEMNIFICATION AND WARRANTY
9.1 Ampersand hereby releases and agrees to hold Invirion harmless and
indemnify and defend Invirion from any and all claims, including, but not
limited to, product liability claims, actions, losses, damages and liability
resulting from or arising out of the manufacture, use or sale by Ampersand of
the PRODUCT.
9.2 To the best of Invirion's knowledge and belief, the manufacture,
use, and sale of the PRODUCTS and/or MEDICAL TECHNOLOGY will not infringe any
valid and enforceable patents owned by others and that it is the lawful owner of
the MEDICAL TECHNOLOGY and has the full right to transfer and/or convey the
MEDICAL TECHNOLOGY to Ampersand free from any claims from others.
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IN WITNESS WHEREOF, the parties have executed Agreement as of the
date first written
INVIRION CORPORATION
By: ______________________________
Dated:____________________________
AMPERSAND MEDICAL CORPORATION
By: _____________________________
Dated: __________________________
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