EXHIBIT 10.3
[ABBOTT LETTERHEAD]
September 4, 2001
VIA FACSIMILE
Mr. Mark Samuels
Chairman & CEO
SpectRx, Inc.
6025 A Unity Drive
Norcross, Georgia 30071
Re: Amendment to the Research & Development License Agreement
(October 10, 1996) as previously amended by the parties ("RDL
Agreement")
Dear Mark:
In accordance with our recent discussions, Abbott hereby delivers the
Development Program Notification to SpectRx pursuant to the RDL Agreement, and
Abbott and SpectRx (the "Parties") hereby amend the terms of the RDL Agreement
as follows:
1. Abbott and SpectRx hereby acknowledge the termination of
Abbott's rights to and all obligations for the Non-Continuous Product
(as defined in the Third Amendment to the RDL Agreement, dated November
30, 1999, ("Third Amendment")) and SpectRx affirms Abbott's right of
first negotiation pursuant to the terms of section 4.5 of the Third
Amendment for distribution of any Non-Continuous Product developed by
SpectRx.
2. The following additional amendments are made to the RDL
Agreement:
a) Abbott shall be required to pay the first $1 million
of the $2 million Milestone due under section 5.1(A)(3) of the
Third Amendment by purchasing SpectRx common stock under
Section 1 of the Common Stock Purchase
* Confidential portions omitted and filed separately with the Commission
pursuant to an application for confidential treatment pursuant to Rule 24b-2
under the Securities and Exchange Act of 1934, as amended.
Agreement (Appendix 5.1 of the Third Amendment, as further
amended by the December 27, 2000 letter agreement between
SpectRx and Abbott).
b) The second $1 million of the $2 million Milestone due under
Section 5.1(A)(3) of the Third Amendment shall not be due unless and
until ten (10) business days following delivery of written notice by
SpectRx to Abbott of a final decision or settlement of all viable
claims alleged by Altea Technologies, Inc. ("Altea") and
Non-Invasive-Monitoring Company, Inc. ("NIMCO") against SpectRx in the
Demand for Arbitration in the arbitration proceeding ("Arbitration")
currently underway with Altea and NIMCO, and provided that SpectRx's
rights to sublicense the Technology (as defined in the RDL Agreement,
as amended) are not terminated [ * ].
c) In the event that there is a final decision or settlement of
the Arbitration pursuant to which SpectRx's rights to sublicense the
Technology are terminated [ * ] then SpectRx shall, within ten (10)
business days after such decision or settlement, send Abbott a written
notice of such decision or settlement and pay to Abbott a sum equal to
the difference between $1 million and the fair market value of the
shares of SpectRx common stock purchased by Abbott under Section 2(a)
above, such fair market value to be calculated based on the average
closing sale price of SpectRx common stock as reported on the Nasdaq
National Market over the forty five (45) trading days subsequent to the
Public Disclosure of the decision or settlement. For this purpose,
Public Disclosure shall mean an appropriate filing with the SEC or/and
distribution of a press release through a widely disseminated news or
wire service that is reasonably designed to provide broad public
access.
d) Each time period specified in Section 3.7(A) of the Third
Amendment shall be extended until the earlier of (i) March 31, 2002, or
(ii) the date on which the product specifications (as defined in
Appendix 2.7 of the Third Amendment) have been successfully achieved.
e) Abbott will assume full funding responsibility for the portion
of the Development Program regarding the Continuous Product as of
September 1, 2001. As set forth in the Third Amendment, Abbott will not
be responsible for any funding regarding the Non-Continuous Product
from the date hereof.
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* Confidential portions omitted and filed separately with the Commission
pursuant to an application for confidential treatment pursuant to Rule 24b-2
under the Securities and Exchange Act of 1934, as amended.
3. In consideration of the various agreements made in this
amendment, Abbott unconditionally and irrevocably waives, for itself
and its successors and assigns, its right to cause a redemption, at its
election pursuant to Section (d)(1) of the Designations, Preferences
and Rights of Redeemable Convertible Preferred stock of SpectRx, Inc.
(the "Designations"), of, and as to, 100,000 shares of Redeemable
Convertible Preferred Stock, par value $0.001 per share (i.e., 100,000
shares of the total 525,000 shares of Redeemable Convertible Preferred
stock held by Abbott), and agrees not to make such election in respect
of such 100,000 shares. Abbott agrees, should it at any time transfer
its shares of Redeemable Convertible Preferred Stock, to inform the
transferee of the foregoing waiver, and to agree that SpectRx may place
a legend on the share certificate(s) for 100,000 of its 525,000 shares
of Redeemable Convertible Preferred Stock referencing the applicability
of the waiver provided for hereinabove and referring to this amendment.
The Parties agree that the exclusion of such 100,000 shares from
Abbott's redemption election by virtue of Abbott's waiver in respect
thereof will reduce the number of shares redeemable at Abbott's
election under Section (d)(1) of the Designations on December 31, 2002
from one-half of the shares (i.e., 262,500 shares) to 162,500 shares of
Redeemable Convertible Preferred Stock; the shares that would be
required to be redeemed in 2004 under such election would remain
unchanged, being one-half of the total (i.e., 262,500 shares). In
partial consideration for the foregoing waiver, SpectRx unconditionally
and irrevocably waives, as to the 100,000 shares of Redeemable
convertible Preferred Stock referenced above, its right to cause, at
its election pursuant to Section (d)(2) of the Designations, a
redemption of such shares. Nothing contained in the foregoing waivers
and agreements shall effect or otherwise amend or limit the redemption
election rights of Abbott, or its successors or assigns, or SpectRx,
with respect to all of the shares of Redeemable Convertible Preferred
Stock now held by Abbott other than the 100,000 shares that are the
subject of this paragraph 3. Abbott further agrees to execute and
deliver a shareholder consent which SpectRx may later require to obtain
the consent of Abbott as the holder of all of the issued shares of the
Company's Redeemable Preferred Stock to effect an amendment to the
Designations under Delaware law, in form reasonably acceptable to
Abbott, to revise the redemption provisions of such Designations to
give effect (as such an amendment to the Designations) to the waivers
and agreement set forth above, although the waivers and agreements
provided for above are effective as of the date hereof and are not in
any way conditioned upon any such amendment of the Designations.
3
* Confidential portions omitted and filed separately with the Commission
pursuant to an application for confidential treatment pursuant to Rule 24b-2
under the Securities and Exchange Act of 1934, as amended.
4. Except as set forth above, all provisions of the RDL Agreement
shall remaining full force and effect.
Sincerely,
/s/ James J. Koziarz
James J. Koziarz, Ph.D.
Corporate Vice President
Diagnostic Products R & D
Abbott Laboratories
ACCEPTED THIS 4th DAY OF SEPTEMBER, 2001
SpectRx, Inc.
/s/ Mark A. Samuels
-----------------------------------
By: Mark A. Samuels
------------------------------
Chief Executive Officer
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4
* Confidential portions omitted and filed separately with the Commission
pursuant to an application for confidential treatment pursuant to Rule 24b-2
under the Securities and Exchange Act of 1934, as amended.