EXHIBIT 10.17B
12/30/01
EXECUTION COPY
AMENDED AND RESTATED
LICENSE AND JOINT DEVELOPMENT AGREEMENT BETWEEN
NIMCO, ALTEA AND SPECTRX
This Amended and Restated License and Joint Development Agreement (this
"Agreement") is made as of the 30th of December, 2001 ("EFFECTIVE DATE"), by and
between SpectRx, Inc. ("SRX"), a Delaware Corporation having its principal
offices at 6025A Unity Drive, Norcross, Georgia and both Non-Invasive-Monitoring
Company, Inc. ("NIMCO") and Altea Technologies, Inc. ("ALTEA"), both Delaware
Corporations having their principal place of business at 2056 Weems Road,
Tucker, Georgia 30385 (each a "Party", collectively "the Parties").
WHEREAS, the Parties are parties to that certain License and Joint
Development Agreement dated March 1, 1996 (the "ORIGINAL AGREEMENT");
WHEREAS, the Parties have agreed to amend and restate the ORIGINAL
AGREEMENT as set forth herein; and,
WHEREAS, the Parties also entered into an Agreement with Abbott
Laboratories ("ABBOTT") dated October 10, 1996 (the "ABBOTT AGREEMENT") and wish
to preserve the rights of ABBOTT and of the Parties under the ABBOTT AGREEMENT.
NOW THEREFORE, in consideration of the foregoing and the mutual
promises contained herein and other good and valuable consideration, receipt of
which is hereby acknowledged, the Parties agree to be bound by the following
terms and conditions.
1.0 DEFINITIONS
As used herein:
1.1 "ALTEA MONITORING PATENTS" means those patents, patent
applications and patent disclosures set forth on Schedule A2
1.2 "ALTEA SOLE PATENTS" means those patents, patent applications
and patent disclosures set forth on Schedule B1.
1.3 "AFFILIATE" means, with respect to a Party hereto, any
subsidiary controlled by such Party and any entity directly or
indirectly controlled by, under common control with, or
controlling such Party. For this purpose, "control" means
direct or indirect ownership of fifty percent (50%) or more of
the securities or other ownership interests representing the
equity, voting stock, general partnership or membership
interest of such entity or the power, whether through
ownership of voting securities, by contract or otherwise, to
direct or cause the direction of the management and policies
of such entity, directly or indirectly, except that a
supermajority vote requirement in a shareholder agreement or
operating agreement for a limited liability company relating
to certain major transactions or
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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.
decisions outside the ordinary course of business shall not be
deemed to give control to the entity benefiting from such
supermajority voting requirement of such entity. The
AFFILIATES of each Party under this Agreement as of the
EFFECTIVE DATE are set forth on Schedule F. Each Party shall
promptly notify the other of any entities which either become
Affiliates or cease to be Affiliates of the notifying party
and such entities shall be added to or deleted, respectively,
from Schedule F.
1.4 "BLOCKED PRODUCTS" means, for each BLOCKING PATENT, a product
of a Party that is (i) based on MONITORING APPLICATIONS
disclosed or claimed in any LICENSED PATENTS (in the case of
SRX (or ALTEA and NIMCO, in the event of any termination of
SRX's rights to LICENSED PATENTS for MONITORING APPLICATIONS
under this Agreement)) or DELIVERY APPLICATIONS (in the case
of ALTEA and NIMCO) disclosed or claimed in any LICENSED
PATENTS, (ii) has entered clinical testing, is awaiting
regulatory clearance, has obtained regulatory clearance or is
commercially sold prior to the earlier of issuance or
publication of the relevant BLOCKING PATENT, and (iii) which
infringes at least one claim of the BLOCKING PATENT. For the
avoidance of doubt, (x) a "product" under this Section shall
include families of products encompassing the same methodology
(e.g., microporation), even if a specific product within such
family would not otherwise be a BLOCKED PRODUCT, provided that
(i) such product was already in development as evidenced by
contemporaneously generated written evidence kept in the
ordinary course of business and (ii) at least one such product
within such family is otherwise a BLOCKED PRODUCT, and (y) a
product shall be deemed to be a BLOCKED PRODUCT if it is in
the same family as another BLOCKED PRODUCT except for the
substitution of a drug or analyte.
1.5 "BLOCKING PATENTS" means any patents other than JOINT PATENTS
owned by a Party based on inventions made by a SUBCONTRACTOR
under an obligation to assign to such Party after the
EFFECTIVE DATE or an employee, consultant or other person
under an obligation to assign to such Party, invented after
the EFFECTIVE DATE and prior to the earlier of (i) any
termination of SRX's rights to LICENSED PATENTS for MONITORING
APPLICATIONS under this Agreement or (ii) five (5) years after
the EFFECTIVE DATE, in either case that are not LICENSED
PATENTS, and that would be infringed by, in the case of SRX
(or ALTEA or NIMCO, in the event of any termination of SRX's
rights to LICENSED PATENTS for MONITORING APPLICATIONS under
this Agreement), the use of any MONITORING APPLICATION
disclosed or claimed in any LICENSED PATENTS or, in the case
of ALTEA or NIMCO, the use of any DELIVERY APPLICATION
disclosed or claimed in any LICENSED PATENTS. BLOCKING PATENTS
shall not include any patents that are licensed or assigned to
a Party by a THIRD PARTY (except any SUBCONTRACTOR or
employee, consultant or other person under an obligation to
assign patents to such Party) or that are owned by an
AFFILIATE of a Party
* 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.
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prior to that AFFILIATE becoming an AFFILIATE of a Party or
which are owned by an entity that acquires or merges with a
Party.
1.6 "DELIVERY APPLICATION" means introduction of substances into
an organism.
1.7 "JOINT PATENTS" means those patents, patent applications and
invention disclosures (i) jointly owned by SRX and ALTEA and
assigned into joint ownership pursuant to the ORIGINAL
AGREEMENT, (ii) assigned into joint ownership pursuant to
Article 2 of this Agreement and as set forth on Schedule A1 or
(iii) subsequently assigned into joint ownership pursuant to
Section 2.3 of this AGREEMENT. JOINT PATENTS includes any and
all continuations, reissues, reexaminations and extensions of
the patents, patent applications and invention disclosures
described in (i)-(iii) above, in the United States and
throughout the world, but excludes any continuations-in-part
to the extent they contain new matter not described or
disclosed in another patent or patent application that
constitutes a JOINT PATENT.
1.8 "LICENSED PATENTS" means JOINT PATENTS and ALTEA MONITORING
PATENTS.
1.9 "MONITORING APPLICATION" means extraction of substances from
an organism.
1.10 "NET SALES" from a product covered by any VALID CLAIM of the
LICENSED PATENTS, including all disposable and non-disposable
components associated therewith, means the total gross
realization for commercial sale or other commercial transfer
or application, including lease and related arrangements, to a
THIRD PARTY (except a SUBCONTRACTOR) of such product,
including all disposable and non-disposable components
associated therewith, by SRX or ALTEA, or their AFFILIATES or
their SUBCONTRACTORS, less only deductions for the following
to the extent actually paid, and not reimbursed by the THIRD
PARTY:
(a) customary trade, quantity, or cash discounts actually allowed
and taken;
(b) any freight or other transportation costs, insurance charges,
duties and tariffs separately invoiced to and paid;
(c) returns which are accepted by SRX or ALTEA or their AFFILIATES
or their SUBCONTRACTORS from such THIRD PARTY in accordance
with normal practice and for which credit is given to such
THIRD PARTY; and,
(d) sales or use taxes which are required to be paid, when paid.
* 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
Where a product covered by a VALID CLAIM of the LICENSED
PATENTS is sold, leased or otherwise commercially transferred
as one of a number of items without a separate price, or the
consideration shall include any non-cash element or is
transferred in any manner other than an invoiced sale, NET
SALES shall be calculated for such product, including all
disposable and non-disposable components associated therewith,
as if sold or otherwise commercially transferred with an
invoiced sale or lease price at that time in that country.
For the avoidance of doubt, NET SALES shall only be calculated
once for each product covered by a VALID CLAIM of the LICENSED
PATENTS, including all disposable and non-disposable
components associated therewith.
1.11 "NIMCO and/or ALTEA" means the relevant Party having ownership
rights in any item of technology.
1.12 "SRX SOLE PATENTS" means those patents, patent applications
and patent disclosures listed on Schedule B2.
1.13 "SUBCONTRACTOR" means any THIRD PARTY that has entered into an
agreement with SRX or ALTEA relating to any LICENSED PATENTS
pursuant to which it makes payments to SRX or ALTEA as the
context indicates (including those that have been AFFILIATES
but cease to be AFFILIATES during the TERM as well as any
THIRD PARTY that is a licensee or sublicensee of a THIRD PARTY
that has been granted rights pursuant to Section 3.3).
"SUBCONTRACTOR" shall not be deemed to include any THIRD PARTY
that both (i) does not pay fees to SRX or ALTEA or their
respective AFFILIATES or SUBCONTRACTORS based on a percentage
of their sales and (ii) purchases products for resale without
changing, combining or repackaging the product as delivered by
SRX or ALTEA or their respective AFFILIATES.
1.14 "TERM" means the period commencing on the EFFECTIVE DATE and
terminating on the earlier of (a) the date of the last to
expire of LICENSED PATENTS containing a VALID CLAIM, or (b)
the date of earlier termination pursuant to this Agreement.
1.15 "TERRITORY" means the entire world.
1.16 "THIRD PARTY" means a party other than the Parties or their
AFFILIATES.
1.17 "VALID CLAIM" means (a) a claim of a pending patent
application that was filed and is being prosecuted in good
faith or (b) a claim of an issued and unexpired patent that
has not been revoked or held invalid or unenforceable by a
decision of a court or other governmental agency of competent
jurisdiction from which no appeal can be or is taken within
the time allowed for such appeal, and
* 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
that has not been disclaimed, denied or admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise.
2.0 ASSIGNMENT OF RIGHTS
2.1 Each of SRX and ALTEA hereby assigns and shall assign to the
other an undivided joint interest (to the extent not already
so assigned as of the EFFECTIVE DATE) in each JOINT PATENT
listed on Schedule A1 as of the EFFECTIVE DATE and any patent,
patent application or patent disclosure determined to be a
JOINT PATENT pursuant to Section 2.3 of this AGREEMENT,
together with all patents that issue therefrom and all
continuations, continuations-in-part, reissues, reexaminations
and extensions, in the United States and throughout the world,
but excluding any continuations-in-part to the extent they
contain new matter not claimed or disclosed in another patent,
patent application or invention disclosure that constitutes a
JOINT PATENT. For the avoidance of doubt, the obligations of
SRX and ALTEA under this Section shall not include any ALTEA
MONITORING PATENTS, ALTEA SOLE PATENTS or SRX SOLE PATENTS.
2.2 ALTEA shall retain ownership of all ALTEA MONITORING PATENTS
and ALTEA SOLE PATENTS. SRX shall retain ownership of all SRX
SOLE PATENTS.
2.3 [*]
2.4 Each Party that is required to assign rights pursuant to
Section 2.1 agrees to execute all papers and instruments as
necessary to vest such of its rights transferred pursuant to
Section 2.1 in such other Party that is the assignee of such
rights, no later than thirty (30) days after the EFFECTIVE
DATE (or thirty (30) days after the date when such a patent,
patent application or patent disclosure is determined to be a
JOINT PATENT pursuant to Section 2.3) and at its own expense,
in a form reasonably acceptable to the other Party that is the
assignee of such rights, and shall take steps to diligently
record the same with the United States Patent and Trademark
Office and each such similar foreign body, and shall perform
any other reasonable acts required to so vest such rights.
Each such Party shall promptly provide copies of such executed
papers or instruments and any correspondence related to the
filings required pursuant to this Section to the other
Parties. In the event that any patent, patent application or
patent disclosure on Schedule C1 or Schedule C2 is determined
to be a JOINT PATENT, then any out-of-pocket costs of filing
and prosecution for such patent, patent application or patent
disclosure that have previously been paid by ALTEA shall be
reimbursed to ALTEA by SRX.
* 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.
5
3.0 GRANT OF LICENSE, SUBCONTRACT RIGHTS AND KNOW-HOW
3.1 License.
(a) NIMCO and/or ALTEA hereby grant to SRX the exclusive right and
license to use and exploit any LICENSED PATENTS to make, have
made, use, market, lease and sell products for MONITORING
APPLICATIONS and to practice MONITORING APPLICATIONS in the
TERRITORY during the TERM. The right and license granted in
this Article 3 are subject to the other provisions of this
Agreement.
(b) SRX hereby grants to ALTEA the exclusive right and license to
use and exploit any LICENSED PATENTS to make, have made, use,
market, lease and sell products for DELIVERY APPLICATIONS and
to practice DELIVERY APPLICATIONS in the TERRITORY during the
TERM. The right and license granted in this Article 3 are
subject to the other provisions of this Agreement.
3.2 Blocking Patents. NIMCO and/or ALTEA and SRX agree that no
Party (or any AFFILIATES or THIRD PARTIES to which any Party
transfers, assigns or licenses its rights under any BLOCKING
PATENTS) shall make any claim of infringement or initiate any
legal action or lawsuit for infringement relating to any
manufacture, use, marketing, sale or lease of any BLOCKED
PRODUCTS for the life of any BLOCKING PATENTS; provided that
NIMCO and ALTEA's obligations under this Section shall
terminate in the event SRX's rights to practice the LICENSED
PATENTS for MONITORING APPLICATIONS terminate or expire prior
to the end of the TERM.
3.3 SUBCONTRACT Rights. SRX and ALTEA shall be allowed to grant
rights to SUBCONTRACTORS under this Agreement to the extent of
such Party's respective rights under this Article 3, subject
to such Party remaining primarily liable for its performance
under the terms of this Agreement. Any such SUBCONTRACTOR
shall be permitted to further license its rights pursuant to
this Section. Each of SRX and ALTEA shall use commercially
reasonable efforts to monitor its SUBCONTRACTORS to ensure
that such SUBCONTRACTORS comply with the terms of this
Agreement and shall take all commercially reasonable steps to
correct or stop any activities of such SUBCONTRACTORS that
violates the terms of this Agreement.
3.4 Exchanged Information. Each of NIMCO, ALTEA and SRX shall
provide to the other during the TERM the categories of
information listed on Schedule D (the "EXCHANGED
INFORMATION").
3.5 Limitations. No Party shall have any royalty, licensing or
other obligation under this Agreement with respect to any
future inventions not included in the
* 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.
6
LICENSED PATENTS or BLOCKING PATENTS or be required to provide
any know-how other than the EXCHANGED INFORMATION.
4.0 DILIGENCE.
4.1 SRX shall diligently proceed with the development and
commercialization, either directly or indirectly with
SUBCONTRACTORS, of MONITORING APPLICATIONS covered by the
LICENSED PATENTS using resources, including money, personnel
and equipment, at least equal to what would normally be
applied to such products at similar stage of development and
commercial potential in the diagnostics industry and no less
than those applied by SRX to comparable products at similar
stages of development and commercial potential. [*]
5.0 PAYMENTS AND ROYALTIES
5.1 Royalties
(a) Earned Royalty Amounts.
(i) SRX shall pay to ALTEA earned royalties on MONITORING
APPLICATIONS of [*] during each calendar quarter of
the TERM.
(ii) ALTEA shall pay to SRX earned royalties on DELIVERY
APPLICATIONS of [*] during each calendar quarter of
the TERM.
(b) Minimum Royalty Amounts.
(i) Prepaid Minimum Royalties. SRX shall pay to ALTEA
minimum royalties as set forth on the table below and
shall provide to ALTEA, on or before the due date
specified for each payment, a notice that such
payment has been made, which shall include copies of
the wire transfer instructions showing that the
payment is set to arrive no later than such due date.
SRX may at any time provide written notice to ALTEA
that SRX wishes to terminate its rights to the
LICENSED PATENTS ("MONITORING RIGHTS TERMINATION
NOTICE"), as least as far in advance of the date for
payment of minimum royalties as specified in the
table below and shall thereafter not be liable for
payment of minimum royalties or the amounts set forth
below.
* 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.
7
PREPAID MINIMUM ROYALTIES
DUE DATE AMOUNT MINIMUM ADVANCE MONITORING RIGHTS
TERMINATION NOTICE
January 2, 2002 $[*] N/A
(or the EFFECTIVE DATE, if later)
[*] $[*] [*]
[*] $[*] [*]
[*] $[*] [*]
(ii) Ongoing Minimum Royalties. Beginning with the first
calendar quarter of 2005, SRX shall pay to ALTEA
minimum royalties forty-five (45) days following
March 31st, June 30th, September 30th and December
31st of each calendar year during the TERM, with each
quarterly payment equal to [*], adjusted for the
increase in the United States Consumer Price Index
(CPI) from December 31, 2001 to January 1 of the
beginning of each calendar year, for so long as SRX
still has rights under the LICENSED PATENTS.
(iii) Limitation. In the event that SRX rights to practice
LICENSED PATENTS for MONITORING APPLICATIONS
terminate for any reason, no additional obligation
for or in relation to minimum royalties shall accrue
from the date of such termination, except as set
forth in Section 10.4(c).
(c) Calculation of Royalties.
(i) Prior to January 1, 2005, if earned royalties from
SRX for a calendar quarter are in excess of the
amounts set forth below, SRX shall pay the earned
royalty payment described in Section 5.1(a)(i), less
the amounts set forth below, subject to (iii) below;
CALENDAR QUARTER EARNED MINIMUM CALENDAR QUARTER EARNED MINIMUM CALENDAR QUARTER EARNED MINIMUM
2002 Q1 [*] 2003 Q1 [*] 2004 Q1 [*]
2002 Q2 [*] 2003 Q2 [*] 2004 Q2 [*]
2002 Q3 [*] 2003 Q3 [*] 2004 Q3 [*]
2002 Q4 [*] 2003 Q4 [*] 2004 Q4 [*]
TOTAL [*] [*] [*]
* 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.
8
(ii) Beginning on January 1, 2005:
(a) if earned royalties from SRX for a calendar
quarter are in excess of the minimum payment
due for that quarter by SRX to ALTEA, SRX
shall pay the earned royalty payment
described in Section 5.1(a)(i) in full and
no minimum payment pursuant to Section
5.1(b) shall be due for that quarter subject
to (iii) below; or
(b) if earned royalties from SRX for a calendar
quarter are less than the minimum payment
due for that quarter by SRX to ALTEA, then
SRX shall pay the minimum payment described
pursuant to Section 5.1(b) for that quarter
subject to (iii) below;
(iii) notwithstanding (i) and (ii) above, the application
of minimum payments towards earned royalties for each
calendar quarter shall be reconciled not only for
that quarter but also for the preceding calendar
quarters (Q) in that same calendar year. By way of
example, for 2005, assuming the earned royalties
shown:
PAYMENT DUE TO ALTEA
MINIMUM EARNED 45 DAYS
PAYMENT ROYALTY AFTER END OF Q
Q1 $ [*] [*] $ [*]
Q2 $ [*] $ [*] $ [*]
Q3 $ [*] $ [*] $ [*]
Q4 $ [*] $[*] $[*]
TOTAL FOR 2005 $[*] $[*] $[*]
5.2 Timing and Duration of Royalty Payments. Royalties shall be
paid in the amounts described in Section 5.1(b)(ii) or Section
5.1(c) in United States dollars each calendar quarter, on or
before the latter of (i) forty five (45) days after the end of
each calendar quarter of each year during the TERM or (ii), as
to the portion of any royalties payable by a Party with
respect to NET SALES by a SUBCONTRACTOR, the earlier of (x)
fifteen (15) days after the receipt from the SUBCONTRACTOR of
a PARTY of the monies on which such royalties are due or (y)
one hundred eighty (180) days from the end of any calendar
quarter for
* 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.
9
which royalties are due regardless when such monies are
received from a SUBCONTRACTOR.
5.3 Credits; Carry-Over.
(a) Prosecution of Patents. Beginning on January 1, 2005, SRX or
ALTEA shall be able to credit up to fifty percent (50%) of the
costs and expenses paid by such Party per calendar year for
the prosecution of LICENSED PATENTS pursuant to Section
8.1(e), not including any maintenance fees paid by such Party,
up to a maximum of twenty percent (20%) of earned royalties
due by such Party in any given year; provided that such credit
shall only apply to those earned royalty amounts that are due
[*], adjusted for the increase in the United States Consumer
Price Index (CPI) from December 31, 2001 to January 1 of the
beginning of each calendar year. For the avoidance of doubt,
credits for prosecution of patents can be carried over from
year-to-year until fully utilized.
(b) [*]
(c) Maximum Credits. In no event shall SRX be permitted to combine
credits under Section 5.3(a) and 5.3(b) after January 1, 2005,
such that the payments due in any calendar quarter to ALTEA
from SRX are lower than the minimum payments that would be due
for such calendar quarter pursuant to Section 5.1(b)(ii).
5.4 Payment Information.
(a) For all payments due from SRX to ALTEA under this AGREEMENT,
SRX shall make such payments by wire transfer to the account
specified below or any other account as may be specified by
ALTEA from time to time.
[*]
(b) For all payments due from ALTEA to SRX under this AGREEMENT,
ALTEA shall make such payments by wire transfer to the account
specified below or any other account as may be specified by
SRX from time to time.
[*]
5.5 Late Payments. Except for the payments described in Section
5.1(b)(i), any payment that is not paid by its due date shall
be charged interest on the unpaid balance at the annual rate
of the prime rate quoted by the Wall Street Journal plus seven
percent (7%) compounded daily or the highest rate available
under applicable laws, whichever is lower; provided, however,
that the interest rate shall be the prime rate quoted by the
Wall Street Journal plus two percent (2%) in the event such
payment is required after an audit conducted pursuant to
Section 6
* 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.
10
that has revealed an underpayment of less than five percent
(5%) and such underpayment was not willful.
5.6 Exchange Rate. All payments provided in this Agreement shall
be made in USD and based on the exchange rate for the last
business day of the calendar month in which such sales
occurred, as calculated using the midpoint of the rates quoted
by the Wall Street Journal, or the rate quoted by Citibank
N.A. or another mutually acceptable United States bank in the
absence of a quotation by the Wall Street Journal.
5.7 No Multiple Royalties. No multiple royalties shall be payable
because any product is covered by more than one patent claim.
6.0 RECORDS
6.1 Records of Sales. SRX and NIMCO and/or ALTEA shall at all
times during the TERM and for a period of two (2) years after
termination or expiration of this Agreement keep at its
principal place of business true and accurate records of all
sales or other commercial applications or for which royalties
may be due pursuant to Article 5 in such form and manner that
all payments owed hereunder to SRX or ALTEA may be readily and
accurately determined; provided, however, that this Section
shall not require a Party to keep records in a manner other
than that normally used in the ordinary course of business.
6.2 Inspection by NIMCO and/or ALTEA. Once annually, an
independent accountant or auditor chosen by NIMCO and/or ALTEA
shall have the right, at NIMCO and/or ALTEA's expense, during
normal business hours and after providing at least ten (10)
business days' notice, during the TERM and for two (2) years
thereafter, to examine those records of SRX or any of its
respective AFFILIATES which may reasonably be needed for the
purpose of verifying the amounts owed to NIMCO and/or ALTEA
under this Agreement, and the accuracy of the reports
furnished by SRX under Article 7 and such independent
accountant or auditor shall maintain the confidentiality of
all confidential information obtained by it from examination
of SRX's records and shall use such information only for the
purposes of this Agreement. If the results of such inspection
show that SRX had underpaid NIMCO and/or ALTEA by five percent
or greater ( =5%) in any calendar year, then costs of such
inspection shall be paid for by SRX. In any event, SRX shall
pay the outstanding balance owed to NIMCO and/or ALTEA
including interest determined pursuant to Section 5.5.
6.3 Inspection by SRX. Once annually, an independent accountant or
auditor chosen by SRX shall have the right, at SRX's expense,
during normal business hours and after providing at least ten
(10) business days' notice, during the TERM, and for two (2)
years thereafter, to examine those records of ALTEA or NIMCO
or any of their AFFILIATES which may reasonably be needed for
the purpose of verifying
* 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.
11
the amounts owed to SRX under this Agreement and the accuracy
of the reports furnished by ALTEA under Article 7 of this
Agreement and such independent accountant or auditor shall
maintain the confidentiality of all confidential information
obtained by it from examination of ALTEA's records and shall
use such information only for the purposes of this Agreement.
If the results of such inspection show that ALTEA had
underpaid SRX by five percent or greater (=5%) in any year,
then costs of such inspection shall be paid for by ALTEA. In
any event, ALTEA shall pay the outstanding balance owed to SRX
including interest determined pursuant to section 5.5.
7.0 REPORTS
7.1 Quarterly Reports of SRX. When making each payment pursuant to
Section 5.2, SRX shall prepare and deliver to NIMCO and/or
ALTEA a true and accurate report, giving such particulars of
the business (including the identities and quantities (unless
a SUBCONTRACTOR does not provide quantity information) of each
product sold) conducted by SRX, its AFFILIATES, and its
SUBCONTRACTOR(S) during the preceding calendar quarter as is
required to calculate the payment and royalties due ALTEA
hereunder. If no payment is due for a particular calendar
quarter, SRX shall so report.
7.2 Quarterly Reports of ALTEA. When making each payment pursuant
to Section 5.2, ALTEA shall prepare and deliver to SRX a true
and accurate report, giving such particulars of the business
(including the identities and quantities (unless a
SUBCONTRACTOR does not provide quantity information) of each
product sold) conducted by ALTEA, its AFFILIATES, and its
SUBCONTRACTOR(S) during the preceding calendar quarter as is
required to calculate the payment and royalties due SRX
hereunder and if, for any calendar quarter after ALTEA has an
obligation to pay under Section 5.1(a)(ii), no payment is due
for a particular calendar quarter, ALTEA shall so report.
8.0 INTELLECTUAL PROPERTY
8.1 Patent Prosecution.
(a) The Parties shall jointly engage mutually-acceptable counsel
to perform patent filing and prosecution for all LICENSED
PATENTS. [*] Such counsel shall keep all Parties informed
regarding all relevant information related to such filing and
prosecution.
(b) [*]
(c) The patent counsel shall keep all Parties informed as to the
status of any patent, patent application or patent disclosure
being handled by such counsel. [*]
* 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.
12
(d) In the event a patent application subject to Section 8.2 is or
has been divided by patent counsel or the United States Patent
and Trademark Office or similar foreign body into a portion
related exclusively to DELIVERY APPLICATIONS of LICENSED
PATENTS and a portion not exclusively related to DELIVERY
APPLICATIONS of LICENSED PATENTS, SRX shall assign all of its
right, title and interest in and to the divisional application
related exclusively to DELIVERY APPLICATIONS of LICENSED
PATENTS to ALTEA; provided, however, that such application and
any patents issued therefrom shall be deemed to remain JOINT
PATENTS solely for the purposes of calculating and paying
royalties under Article 5. The divisional application not
related exclusively to DELIVERY APPLICATIONS of LICENSED
PATENTS shall remain a JOINT PATENT.
(e) Expenses
(i) [*] The patent counsel shall allocate maintenance
fees for issued patents based on the proportion of
issued claims related to DELIVERY APPLICATIONS of
LICENSED PATENTS and MONITORING APPLICATIONS of
LICENSED PATENTS.
(ii) In the event a patent application included in the
LICENSED PATENTS is divided pursuant to Section
8.1(d) into a portion related exclusively to DELIVERY
APPLICATIONS and a portion not exclusively related to
DELIVERY APPLICATIONS, ALTEA shall pay all costs and
expenses for patent counsel and all maintenance fees
for that divisional application related exclusively
to DELIVERY APPLICATIONS.
(iii) In the event SRX determines that it no longer desires
to pay as set forth in Section 8.1(e)(i) for the
prosecution of any LICENSED PATENT in any country,
SRX shall immediately assign all of its right, title
and interest in and to such LICENSED PATENT to ALTEA,
and SRX shall have no further rights under such
LICENSED PATENT in any such country. Notwithstanding
the foregoing, SRX shall not be required to so assign
such LICENSED PATENT in the event (i) the decision to
discontinue the prosecution of such LICENSED PATENT
is made as part of a good-faith strategic decision to
maintain the broadest possible patent protection for
the LICENSED PATENTS, and (ii) the invention claimed
by such LICENSED PATENT is contained within the
subject matter of another JOINT PATENT or SRX
immediately assigns an undivided joint interest in
such patent application to ALTEA, together with all
patents that issue therefrom and all continuations,
continuations-in-part, reissues, reexaminations and
extensions, in the United States and throughout the
world.
8.2 Enforcement and Defense of Licensed Patents.
* 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.
13
(a) Each of NIMCO, ALTEA and SRX shall give prompt notice
to the other Parties of any notice of infringement,
offer to license intellectual property or claim of
invalidity or unenforceability that it receives from
any THIRD PARTY related to LICENSED PATENTS, any
opposition, reexamination or reissue proceeding, or
any infringement, threatened infringement or
suspected infringement of any LICENSED PATENT by any
THIRD PARTY that shall at any time come to its
knowledge together with such detailed information as
shall from time to time be available to such Party
relating to such notice, offer, infringement or
threatened or suspected infringement or claim of
invalidity or unenforceability. For the avoidance of
doubt, an "offer to license" under this Section shall
not include negotiations with THIRD PARTIES to
license intellectual property conducted in the
ordinary course of business.
(b) ALTEA and SRX agree to take commercially reasonable
actions to protect their rights in the LICENSED
PATENTS in all parts of the TERRITORY in which a
patent application or patent is present or patent
application can be filed concerning LICENSED PATENTS
to which SRX or ALTEA has rights, including defending
against actions brought by THIRD PARTIES alleging the
invalidity or unenforceabiltiy of any LICENSED
PATENTS and taking commercially reasonable actions
against potential infringers, including
SUBCONTRACTORS, provided, however, that SRX shall
have no obligations pursuant to this Section 8.2(b)
subsequent to the date of termination of its rights
to the LICENSED PATENTS .
(i) If any action at issue relates exclusively
to MONITORING APPLICATIONS of LICENSED
PATENTS or to both MONITORING APPLICATIONS
of LICENSED PATENTS and DELIVERY
APPLICATIONS of LICENSED PATENTS, ALTEA and
SRX shall proceed jointly in the initiation
and management of such action in the event
that both Parties consider such action to be
commercially reasonable. [*]
(a) Factors to be included in the
assessment of whether any action is
commercially reasonable shall
include:
- [*]
- [*]
- [*]
[*] (b) [*]
(ii) If any action at issue, or any portion of an action,
relates exclusively to DELIVERY APPLICATIONS of
LICENSED PATENTS, ALTEA shall
* 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.
14
have sole control over the initiation and management
of such action, or such portion of an action; [*]
(iii) SRX shall be responsible for all costs and expenses
related to actions involving MONITORING APPLICATIONS
of LICENSED PATENTS and ALTEA shall be responsible
for all costs and expenses related to actions
involving DELIVERY APPLICATIONS of LICENSED PATENTS.
Both SRX and ALTA shall share equally in costs and
expenses in actions related to both MONITORING
APPLICATIONS of LICENSED PATENTS and DELIVERY
APPLICATIONS of LICENSED PATENTS.
(c) Notwithstanding Section 8.2(b), if one Party (the "ENFORCING
PARTY") chooses to take any action, including bringing a
counterclaim or similar claim in an existing proceeding,
related to the JOINT PATENTS and the other Party (the
"BYSTANDER PARTY") elects not to participate, the ENFORCING
PARTY electing to bring such action shall have the right to
conduct the action in the name of all Parties hereto, but
shall bear all costs and expenses related to such action,
receive all benefits received if such action is successful,
and indemnify the other Parties as described in Section 13
therefor. For the avoidance of doubt, any Party shall be
entitled to make a motion to join as a co-party in any action
brought pursuant to this Section 8.2(b).
8.3 Cooperation. In any suit any Party may commence or defend
against a THIRD PARTY pursuant to its rights under this
Agreement in order to enforce or defend the validity or
enforceability of the LICENSED PATENTS, the other Parties
shall, at the request of the Party initiating or defending
such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make
available without delay relevant records, papers, information,
samples, specimens and the like. The Party requesting any such
action shall reimburse the cooperating Party for all
reasonable out-of-pocket expenses incurred in connection with
such cooperation.
9.0 CONFIDENTIALITY
9.1 Confidentiality Nondisclosure. During the TERM and for seven
(7) years thereafter without regard to the means of
termination or expiration, neither SRX, NIMCO, nor ALTEA, nor
any of their respective AFFILIATES shall reveal or disclose to
THIRD PARTIES any confidential information received from the
other Party under this Agreement or under prior agreements
without first obtaining the written consent of the other
Party, except (i) as may be required for regulatory
submissions, subject to seeking confidential treatment where
available; (ii) as may be required to be disclosed to an
agency or as otherwise required by law, or court order,
subject to seeking confidential treatment where available.
This confidentiality obligation shall not apply to such
information (a) which is or
* 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.
15
becomes a matter of public knowledge other than through breach
of this Agreement; (b) is or was already in the possession of
the receiving Party prior to the time of receipt of such
information either under this Agreement or under prior
agreements; (c) is disclosed non-confidentiality to the
receiving Party by a THIRD PARTY having the right to do so, or
(d) is subsequently and independently developed by employees
of the receiving Party or AFFILIATES thereof who had no
knowledge of the confidential information disclosed. The
Parties shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others to whom
access to such information is granted.
9.2 Scope of Confidentiality. SRX, NIMCO, and ALTEA agree to limit
the disclosure of any technical data and information or other
confidential information received hereunder to such employees
and consultants as are reasonably necessary to carry out the
provisions of this Agreement and such employees and
consultants are likewise bound by the provisions of this
Article 9. In addition, any Party may disclose confidential
information to which such Party has rights pursuant to this
Agreement related to LICENSED PATENTS to THIRD PARTIES under
conditions at least as stringent as those in Section 9.1 at
any time. If after termination or expiration, or, in the case
of SRX, if SRX no longer has rights under Section 3.1(a), any
Party has rights to all confidential information generated
under this Agreement, then such Party shall not be restricted
in its use of such confidential information.
10.0 TERM AND TERMINATION.
10.1 Duration. The term of this Agreement shall be the TERM as
defined in Section 1.14 unless otherwise earlier terminated as
described in this Article or elsewhere in this Agreement.
10.2 Termination for Breach. In the event that either Party
materially breaches this Agreement , the other Party shall
have the right and option, in addition to all other legal and
equitable rights and remedies available to it, to terminate
this Agreement by giving written notice to the other Party in
the event such breach is not cured within thirty (30) days of
receiving such notice. If the Party so notified believes there
has been no material breach or the Parties disagree as to
whether such breach has been cured, such Party may pursue
arbitration as provided in Section 14.4, and the Party
claiming breach may only terminate this Agreement in the event
such arbitration determines that a default has occurred and
such default is not cured within thirty (30) days after the
decision of the arbitration panel. [*] For the avoidance of
doubt, the failure to pay minimum royalties when due pursuant
to Section 5.1(b) shall be deemed to be a material breach of
this Agreement, subject to the provisions of Section 10.5(c)
below.
10.3 Termination by SRX. SRX shall have the right at its sole
discretion to terminate this Agreement upon three (3) months
prior written notice, except that such notice
* 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.
16
period shall be six (6) months if such notice is given at any
time after the end of the first calendar year in which NET
SALES of a LICENSED PRODUCT licensed to SRX pursuant to
Section 3.1(a) of this AGREEMENT have [*].
10.4 Termination of Rights to Licensed Patents by SRX.
(a) SRX shall have the right at its sole discretion to terminate
its rights to the LICENSED PATENTS by at least one (1) month
notice prior to June 25, 2002 and two (2) months notice prior
October 26, 2002 and March 26, 2003.
(b) SRX's rights to the LICENSED PATENTS shall terminate
immediately upon the failure of SRX to make when due the
payments specified in Section 5.1(b)(i) on or before the date
specified and the failure of SRX to, upon notice from ALTEA,
cure such failure within five (5) days of such notice.
(c) In the event SRX's rights to the LICENSED PATENTS terminate as
specified in Section 10.4(b), either (i) [*] or (ii) this
Agreement shall immediately terminate, and SRX shall not be
required to pay the amounts set forth in this Section. In
either case, SRX shall not be required to pay the amounts set
forth in Section 5.1(b)(i).
10.5 Effect of Termination.
(a) Transfer of Technology to ALTEA. SRX shall immediately, upon
the earlier of (x) any advance notice by SRX of termination
(unless such notice is given pursuant to Section 10.2 and
ALTEA immediately provides written notice to SRX of its
intention to cure such breach within thirty (30) days or to
pursue arbitration), (y) the date of any termination (but not
expiration) of this Agreement or (z) the termination of SRX's
rights to the LICENSED PATENTS pursuant to Section 10.4,
assign and transfer to ALTEA all of its right, title and
interest in and to all its LICENSED PATENTS and any ownership
and possession of any know-how, data, documents, patents and
patent applications and all associated facts related thereto
necessary to practice the LICENSED PATENTS, as well as any
all, data, documents, regulatory submissions or regulatory
approvals and any correspondence related thereto, any internal
memoranda of SRX relating to its SUBCONTRACTORS and all
correspondence between SRX and any of its SUBCONTRACTORS
(except (i) any documents for which SRX has a valid claim of
privilege or (ii) any documents that contain any confidential
information of a THIRD PARTY and that SRX is prohibited from
disclosing pursuant to written contractual confidentiality
obligations to such THIRD PARTY that predate the dates set
forth in Section 10.5(a)(x), (y) or (z), and as to which SRX
provides a log to ALTEA identifying all such documents), and
ALTEA shall have the right to commence the development and/or
commercialization in the field of MONITORING APPLICATIONS.
ALTEA shall treat all information transferred pursuant to this
Section 10.5(a) as confidential pursuant to Article 9.
* 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.
17
(b) License to SRX. In the event that SRX terminates this
Agreement pursuant to Section 10.2, ALTEA and NIMCO shall
immediately grant to SRX an exclusive, paid-up, royalty-free
right and license (including the right to grant sublicenses)
to use and exploit any ALTEA MONITORING PATENTS to make, have
made, use, market, lease and sell products and to practice
MONITORING APPLICATIONS in the TERRITORY and ALTEA shall
immediately provide to SRX copies of any know-how, data,
documents, patents and patent applications and all associated
facts related thereto necessary to practice ALTEA MONITORING
PATENTS for MONITORING APPLICATIONS, as well as any all, data,
documents, regulatory submissions or regulatory approvals and
any correspondence related thereto, any internal memoranda of
ALTEA relating to its SUBCONTRACTORS relating to such patents
for such applications and all such correspondence between
ALTEA and any of its SUBCONTRACTORS (except (i) any documents
for which ALTEA has a valid claim of privilege or (ii) any
documents that contain any confidential information of a THIRD
PARTY and that ALTEA is prohibited from disclosing pursuant to
written contractual confidentiality obligations to such THIRD
PARTY that predate obligations under this Section 10.5(b), and
as to which ALTEA provides a log to SRX identifying all such
documents). SRX shall treat all information transferred
pursuant to this Section 10.5(b) as confidential pursuant to
Article 9.
(c) Payment Obligations. In all cases upon expiration or
termination of this Agreement or the termination of SRX's
rights to the LICENSED PATENTS (whether or not this Agreement
as a whole terminates), no further payments shall be due by
any Party, except for (i) any payments owed or accrued up to
and including the date of such expiration or termination,
including any penalties, late payment fees or interest, and
(ii) if SRX's rights to LICENSED PATENTS for MONITORING
APPLICATIONS have terminated but this Agreement does not
expire or terminate, any payments due to SRX by ALTEA pursuant
to Section 5(a)(ii) of this Agreement . For the avoidance of
doubt, if this Agreement terminates in accordance with Section
10.4(c), SRX shall not be required to pay any amounts set
forth in part (i) of that Section.
10.6 The expiration or termination of this Agreement shall not
affect any rights and obligations of the Parties under this
Agreement that are intended by the Parties to survive such
termination. Without limiting the generality of the foregoing,
the following provisions of this Agreement shall survive
expiration or termination hereof: Article 1 (to the extent
definitions apply to termination or expiration events),
Article 9, Article 12, Section 3.2, Section 10.5 and Section
14.17.
10.7 In the event that the Agreement shall terminate or SRX shall
cease to have rights to the LICENSED PATENTS in circumstances
where ABBOTT shall obtain any rights to LICENSED PATENTS
directly from NIMCO and ALTEA, then this Agreement shall be of
no effect to the extent it would modify in any way
* 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.
18
the rights of or any payments due from or other obligations of
ABBOTT to or from NIMCO or ALTEA.
10.8 Neither Party shall be entitled to any compensation whatsoever
as a result of termination or expiration of this Agreement,
but without limiting either Party's damages for any breach of
this Agreement.
11.0 WARRANTIES AND CONVENANTS
11.1 General. [*]
11.2 NIMCO and ALTEA Representations, Warranties and Covenants. As
of the EFFECTIVE DATE, [*] NIMCO and/or ALTEA warrant,
represent and covenant to SRX that (i) they are owners of the
interests to be conveyed in the LICENSED PATENTS and that they
are not aware of any THIRD PARTY claims or rights to such
interests, except as noted in Section 11.1 and Exhibit 2; and
(ii) they have disclosed (or shall disclose pursuant to
Section 2.3) all patents, patent disclosures and patent
applications or any other invention, as listed on Schedules A,
B or C1 or as to be listed on Schedule C2 pursuant to Section
2.3(b), which relate in any way to either MONITORING
APPLICATIONS or DELIVERY APPLICATIONS and which either ALTEA
or NIMCO or any of their AFFILIATES has any ownership rights
or which any employee, consultant or other person (including a
SUBCONTRACTOR) is under an obligation to assign to ALTEA or
NIMCO.
11.3 SRX Representations, Warranties and Covenants. SRX warrants
and represents that it is fully aware of and has reviewed [*]
and the LICENSED PATENTS, and that it is entering into this
Agreement with this knowledge. As of the EFFECTIVE DATE, [*]
SRX warrants, represents and covenants to ALTEA and NIMCO that
(i) SRX is the owner of the interests to be conveyed in the
JOINT PATENTS and that it is not aware of any THIRD PARTY
claims or rights to such interests; and, (ii) it has disclosed
(or shall disclose pursuant to Section 2.3) all patents,
patent disclosures and patent applications or any other
invention, as listed on Schedules A, B or C1 or as to be
listed on Schedule C2 pursuant to Section 2.3(b), which relate
in any way to either MONITORING APPLICATIONS or DELIVERY
APPLICATIONS and in which it or any of its AFFILIATES has any
ownership rights or which any employee, consultant or other
person (including a SUBCONTRACTOR) is under an obligation to
assign to SRX [*]
11.4 NO PARTY MAKES ANY WARRANTY, OTHER THAN AS STATED IN SECTIONS
11.1, 11.2 AND 11.3, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LICENSED PATENTS. EACH PARTY EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT.
* 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.
19
11.5 IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES EXCEPT FOR DAMAGES ARISING OUT OF
BREACH BY THAT PARTY OF THIS AGREEMENT.
12.0 INDEMNIFICATION
12.1 SRX shall (and shall require its SUBCONTRACTORS to) indemnify,
hold harmless, and defend NIMCO and ALTEA, their directors,
officers, employees, permitted successors and assigns,
AFFILIATES, and agents from and against any and all monetary
losses including but not limited to any claims (including but
not limited to claims for injury to tangible property or the
environment, and claims for injury to persons and other
product liability claims), legal actions, lawsuits, and the
like made or filed by THIRD PARTIES (including but not limited
to directors, officers, employees, and agents of SRX) against
or naming NIMCO and/or ALTEA, their directors, officers,
employees, permitted successors and assigns, AFFILIATES,
consultants and agents (collectively "NIMCO/ALTEA LOSSES"),
and shall pay reasonable attorneys fees of NIMCO and ALTEA
directly connected with such NIMCO/ALTEA LOSSES, relating to
any activities undertaken by SRX, its AFFILIATES or
SUBCONTRACTORS relating to any aspect of use of the LICENSED
PATENTS or the subject matter of this Agreement, including any
NIMCO/ALTEA LOSSES relating to the enforcement of the LICENSED
PATENTS by SRX without the agreement of ALTEA pursuant to
Section 8.2(c), provided that any activities undertaken by
Jonathan Eppstein (JAE) as part of his employment by SRX prior
to the EFFECTIVE DATE or its successors or assigns and any
activities undertaken by NIMCO or ALTEA or their AFFILIATES or
SUBCONTRACTORS with the prior consent of SRX, with prior or
subsequent confirmation in writing, shall be deemed to be
activities of SRX for the purposes of this indemnity.
12.2 NIMCO and/or ALTEA shall (and shall require their
SUBCONTRACTORS to) indemnify, hold harmless, and defend SRX,
its directors, officers, employees, permitted successors and
assigns, AFFILIATES, and agents from and against any and all
monetary losses including, but not limited to any claims
(including but not limited to claims for injury to tangible
property or the environment, and claims for injury to persons
and other product liability claims), legal actions, lawsuits,
and like made or filed by THIRD PARTIES (including but not
limited to directors, officers, employees, and agents of NIMCO
and/or ALTEA other than JAE in his role as employee of SRX or
is successors or assigns) against or naming SRX, its
directors, officers, employees, permitted successors and
assigns, AFFILIATES, consultants and agents (collectively "SRX
LOSSES"), and shall pay reasonable attorneys fees of SRX
directly connected with such SRX LOSSES relating to any
activities undertaken after March 1, 1996 by NIMCO or ALTEA,
their AFFILIATES or SUBCONTRACTORS relating to any aspect of
use of the LICENSED PATENTS or the subject matter of this
Agreement, including any
* 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.
20
SRX LOSSES relating to the enforcement of the LICENSED PATENTS
by NIMCO or ALTEA without the agreement of SRX pursuant to
Section 8.2(c), other than as indemnified and defended by SRX
pursuant to Section 12.1. For purposes of clarification, the
agreement of the Parties is that Section 12.1 shall without
limiting its generality indemnify and defend NIMCO and ALTEA
against all product liability claims arising out of
commercialization of LICENSED PATENTS by SRX or its AFFILIATES
or SUBCONTRACTORS and that Section 12.2 shall without limiting
its generality indemnify and defend SRX against all product
liability claims arising out of commercialization of LICENSED
PATENTS by ALTEA or its AFFILIATES or SUBCONTRACTORS.
12.3 [*]
12.4 [*]
12.5 [*]
13.0 RELEASE OF CLAIMS
13.1 [*]
14.0 MISCELLANEOUS AND GENERAL
14.1 Independent Contractor.
(a) SRX's relationship to NIMCO and ALTEA hereunder, whether as a
licensee, licensor or joint owner, shall be that of an
independent contractor only. SRX shall not be the agent of
NIMCO or ALTEA and shall have no authority to act for or on
behalf of NIMCO or ALTEA in any matter. Persons retained by
SRX as employees or agents shall not by reason thereof be
deemed to be employees or agents of NIMCO or ALTEA.
(b) NIMCO or ALTEA's relationship to SRX hereunder, whether as a
licensee, licensor or joint owner, shall be that of an
independent contractor only. NIMCO or ALTEA shall not be the
agent of SRX and shall have no authority to act for or on
behalf of SRX in any matter. Persons retained by NIMCO as
employees or agents shall not by reason thereof be deemed to
be employees or agents of SRX.
14.2 Patent Marking. SRX and ALTEA agree to mark the products
covered by LICENSED PATENTS sold in the United States with all
applicable United States patent numbers. All products shipped
to or sold in other countries shall be to the extent practical
marked in such a manner as to conform with the patent laws and
practice of the country of sale.
* 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.
21
14.3 Interpretation. In this Agreement, the singular shall include
the plural and vice versa, the word "including" shall be
deemed to be followed by the phrase "without limitation", and
the term "product" shall be deemed to mean "product, use or
application".
14.4 Resolution of Disputes. In the event the Parties have a
dispute or claim of any kind arising under this Agreement that
they are unable to resolve through direct communications, such
dispute shall be resolved through arbitration pursuant to the
commercial rules of the American Arbitration Association,
except as specifically set forth in this Section or Section
2.3, with one arbitrator chosen by NIMCO and/or ALTEA, one
arbitrator chosen by SRX, and the third arbitrator chosen by
the proceeding first two arbitrators. The Parties shall be
permitted to take discovery as described in the commercial
rules of the American Arbitration Association; provided,
however, that (i) the Parties shall within ten (10) days enter
into a protective order in substantially the same form that
the Parties have executed for the arbitration pending as of
the EFFECTIVE DATE and (ii) each Party shall be limited to a
total of no more than three (3) individual depositions of no
more than one (1) day (with customary breaks totaling no less
than forty-five (45) minutes each day) and no more than
twenty-four (24) total hours of depositions. Each Party shall
choose its arbitrator no later than ten (10) business days
after notice of a dispute has been provided, and such
arbitrators shall choose the third arbitrator within ten (10)
days thereafter. Responses to written discovery requests shall
be provided within twenty (20) days. Any discovery, including
depositions, shall be completed no later than sixty (60) days
after the notice of dispute has been provided. The hearing
shall be held no later than ninety (90) days after the notice
of dispute has been provided, and the arbitrators shall render
their decision no later than fifteen (15) days thereafter. The
losing Party shall pay all costs of the arbitration, including
the other Party's reasonable costs including attorney fees,
or, if the arbitration is decided partially in favor of each
Party, the arbitrators will apportion costs according to the
outcome. The arbitrators shall provide detailed written
reports explaining the reasoning behind their ruling.
14.5 No term or condition of this Agreement shall be considered
waived unless reduced to writing and duly executed by an
officer of the waiving Party. Any waiver by any Party of a
breach of any term or condition of this Agreement will not be
considered as a waiver of any subsequent breach of this
Agreement, of that term or condition or any other term or
condition hereof.
14.6 Neither Party shall by virtue of this Agreement have any power
to bind the other to any obligation, nor shall this Agreement
create any relationship of agency, partnership or joint
venture.
14.7 Legal Compliance. SRX and ALTEA shall comply with all rules
and regulations in any country of the TERRITORY in which the
Parties, their AFFILIATES or
* 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.
22
their SUBCONTRACTOR(S) are selling, leasing or otherwise
commercially transferring products covered by the LICENSED
PATENTS.
14.8 Notices. Any notices required or permitted to be given
hereunder shall be in writing in the English language and
shall be delivered in person or by Federal Express (or other
reputable express courier service documenting proof of
receipt). The Parties may change the address at which notice
is to be given by giving notice to the other Party as herein
provided. All notices shall be deemed effective upon the
courier confirmed receipt by the Party to whom it is
addressed, or upon personal delivery.
If to SRX: Mr. Mark A. Samuels
SpectRx, Inc.
6025A Unity Drive
Norcross, Georgia 30071
Facsimile: (770) 242-8723
With a copy to: Joseph Bankoff, Esq.
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Facsimile: (404) 572-5100
If to NIMCO: Dr. Deborah A. Eppstein
Non-Invasive Monitoring Company, Inc.
2401 Foothill Drive
Salt Lake City, Utah 84109
Facsimile: (801) 464-6116
With a copy to: Jonathan A. Eppstein
Non-Invasive Monitoring Company, Inc.
2056 Weems Rd.
Tucker, Georgia 30084
Facsimile: (770) 270-0399
and a copy to: Stephen Johnson, Esq.
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022-4675
Facsimile: (212) 446-4900
* 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.
23
and a copy to: Jack Almond, Esq.
Rogers & Hardin
700 International Towers
229 Peachtree Street NE
Atlanta, GA 30303
Facsimile: (404) 525-2224
If to ALTEA: Dr. Deborah A. Eppstein
Altea Technologies, Inc.
2401 Foothill Drive
Salt Lake City, Utah 84109
Facsimile: (801) 464-6116
With a copy to: Jonathan A. Eppstein
Non-Invasive Monitoring Company, Inc.
2056 Weems Rd.
Tucker, Georgia 30084
Facsimile: (770) 270-0399
and a copy to: Stephen Johnson, Esq.
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022-4675
Facsimile: (212) 446-4900
and a copy to: Jack Almond, Esq.
Rogers & Hardin
700 International Towers
229 Peachtree Street NE
Atlanta, GA 30303
Facsimile: (404) 525-2224
Any Party hereto may change the address to which notices to such Party are to be
sent by giving notice to the other Party at the address and in the manner
provided above. Any notice herein required or permitted to be given may be
given, in addition to the manner set forth above, by telex, facsimile or cable,
provided that any notice made by telex, facsimile or cable shall be deemed to
have been given when actually received (and not when the sending Party receives
automatic acknowledgement by such telex, facsimile or cable device).
14.9 Force Majeure. If either Party is prevented from complying,
either totally or in part, with any of the terms or provisions
of this Agreement, by reason of force majeure, including, but
not limited to fire, flood, earthquake, explosion, storm,
strike, lockout or other labor trouble, riot, war, terrorism,
rebellion, accident, acts of God and/or any other cause or
externally induced casualty beyond its reasonable control,
whether similar to the foregoing matters or not, then, upon
* 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.
24
written notice by the Party liable to perform to the other
Party, the requirements of this Agreement or such of its
provisions as may be affected, and to the extent so affected,
shall be suspended during the period of such disability;
provided that the Party asserting force majeure shall bear the
burden of establishing the existence of such force majeure by
clear and convincing evidence; and provided further, that the
Party prevented from complying shall use its best efforts to
remove such disability within thirty (30) days, and shall
continue performance with the utmost dispatch whenever such
causes are removed, and shall notify the other Party of the
event not more than five (5) working days from the time of the
event. When such circumstances arise, the Parties shall
discuss what, if any, modification of the terms of this
Agreement may be required in order to arrive at an equitable
solution. Notwithstanding the foregoing, in the event that a
material event of force majeure shall continue for a period of
longer than six (6) months, then the Party unaffected by such
event may terminate this Agreement by not less than ninety
(90) days written notice of termination to the other Party.
14.10 License of Intellectual Property. For purposes of Section
365(n) of the United States Bankruptcy Code, all rights and
licenses granted under this Agreement are, and shall be deemed
to be, licenses of rights to "Intellectual Property" as
defined under Section 101(35A) of such code. The Parties agree
that any licensee of such rights under this Agreement, shall
retain and may fully exercise all of its rights and elections
under the United States Bankruptcy Code, including but not
limited to the right to continue to exercise the rights
licensed under this Agreement following the bankruptcy of the
other Party.
14.11 Assignments and Inurement. Except to the extent otherwise
herein provided, no Party shall grant, transfer, convey, or
otherwise assign any of its rights or delegate any of its
obligations, except upon the occurrence of the sale of all or
substantially all the assets of a Party as relates to LICENSED
PATENTS to a THIRD PARTY, provided such THIRD PARTY agrees to
comply with the terms of this Agreement; provided however that
the Parties agree that SRX shall not be permitted to partially
assign its rights or delegate its obligations under this
Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and permitted assigns of the
Parties hereto. Notwithstanding the foregoing, any Party shall
be permitted to perform this Agreement in whole or in part
through its AFFILIATES, provided that such Party shall be
responsible and liable for performance by that AFFILIATE.
14.12 Entire Agreement. This Agreement supersedes all prior
agreements, both verbal and written, between NIMCO and SRX,
and between ALTEA and SRX, with respect to the subject matter
hereof including the ORIGINAL AGREEMENT (except pursuant to
Section 10.7) and constitutes the entire agreement between the
Parties with respect to the subject matter hereof, and shall
not be modified, amended or terminated except as herein
provided or except by another agreement in writing executed by
the affected Parties hereto.
* 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.
25
14.13 Headings. The section and paragraph headings are for
convenience only and are not a part of this Agreement.
14.14 Severability. All rights and restrictions contained herein may
be exercised and shall be applicable and binding only to the
extent that they do not violate any applicable laws and are
intended to be limited to the extent necessary so that they
will not render this Agreement illegal, invalid or
unenforceable. If any provision or portion of any provision of
this Agreement not essential to the commercial purpose of this
Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the
intention of the Parties that the remaining provisions or
portions thereof shall constitute their Agreement with respect
to the subject matter hereof, and all such remaining
provisions or portions thereof shall remain in full force and
effect. To the extent legally permissible, any illegal,
invalid or unenforceable provision of this Agreement shall be
replaced by a valid provision which will implement the
commercial purpose, to the extent possible, with similar
economic benefits to each of the Parties of the illegal,
invalid or unenforceable provision. In the event that any
provision essential to the commercial purpose of this
Agreement is held to be illegal, invalid or unenforceable and
cannot be replaced by a valid provision which will implement
the commercial purpose of this Agreement, NIMCO and/or ALTEA
or SRX shall have the right to terminate this Agreement and
the rights granted herein shall terminate unless the Parties
agree to other terms with comparable economic benefit to each
Party.
14.15 Choice of Law. This Agreement is acknowledged to have been
made under and shall be construed in accordance with the laws
of the State of Delaware, United States of America as they
apply to contracts made and performed entirely within such
state.
14.16 Public Statements. The Parties agree to make no public
statements except (i) the separate press releases set forth on
Exhibit 3 or any other press releases as may be mutually
agreed or (ii) on the topics set forth in Exhibit 4, except as
may be required by law, rule or registration. Statements to
potential investors or SUBCONTRACTORS shall not be deemed to
be in violation of this Section, provided, however, that any
financial terms disclosed to SUBCONTRACTORS shall (to the
extent not previously disclosed in permitted press releases)
be subject to confidentiality requirements consistent with
those set forth in Article 9 of this AGREEMENT. In the event
that any Party intends to disclose this Agreement to the
United States Securities and Exchange Commission or any stock
exchange, the Parties shall confer with respect to the terms,
context, format, and text of such disclosure, provided that
if, upon advice of counsel, the Party subject to compliance
with the rules and regulations of the United States Securities
and Exchange Commission and any such applicable stock
exchanges determines that those rules and regulations require
a specific portion of the Agreement to be disclosed, then such
disclosure shall be permitted.
* 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.
26
14.17 Further Assurances. Each Party (the "ASSIGNING PARTY") agrees
to execute in a form reasonably acceptable to the others and
deliver at the reasonable request of another Party, its
successors, assigns or other legal representatives, (the
"REQUESTING PARTY") all papers and instruments prepared by
such REQUESTING PARTY, and to perform any other reasonable
acts such REQUESTING PARTY may require as necessary to vest
all of the ASSIGNING PARTY's rights, title and interest that
may be required under this Agreement by such REQUESTING PARTY.
IN WITNESS WHEREOF, the Parties have hereunto signed this Agreement
with the EFFECTIVE DATE hereinbefore referred to:
SpectRx, Inc. Altea Technologies, Inc.
By: /s/ Thomas H. Muller, Jr. By: /s/ Deborah Eppstein
-------------------------------------- ---------------------------
Title: Executive Vice President and Chief Title: Chief Executive Officer
----------------------------------- ------------------------
Financial Officer
-----------------------------------
Title:
Non-Invasive Monitoring Company, Inc.
By: /s/ Deborah Eppstein
-----------------------------------------
Title: Chief Executive Officer
--------------------------------------
* 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.
27
SCHEDULE A1
JOINT PATENTS
[*]
* 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.
28
SCHEDULE A2
ALTEA MONITORING PATENTS
[*]
* 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.
29
SCHEDULE B1
ALTEA SOLE PATENTS
[*]
* 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.
30
SCHEDULE B2
SRX SOLE PATENTS
[*]
* 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.
31
SCHEDULE C1
LIST OF DISPUTED INTELLECTUAL PROPERTY
[*]
* 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.
32
SCHEDULE C2
LIST OF INTELLECTUAL PROPERTY DISCLOSED AFTER THE EFFECTIVE DATE
[*]
* 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.
33
SCHEDULE D
EXCHANGED INFORMATION
SRX and ALTEA shall each provide the other an update by January 31 and July 31
of each year during the TERM. Such updates shall provide a summary of technology
development of LICENSED PATENTS, clinical and regulatory status and clinical
results, and shall be treated as confidential pursuant to Article 9.
* 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.
34
SCHEDULE E
MEDIATION PROCEDURES
[TO BE AGREED WITHIN THIRTY DAYS]
* 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.
35
SCHEDULE F
AFFILIATES AS OF EFFECTIVE DATE
SpectRx
None
Altea/NIMCO
- -----------
Altea Technologies, Inc.
Altea Development Corp.
Altea Genomics, Inc.
Altea Newco Ltd.
* 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.
36
EXHIBIT 1
[*]
* 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.
37
EXHIBIT 2
[*]
* 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.
38
EXHIBIT 3
AGREED PRESS RELEASES
NEWS RELEASE DRAFT
ALTEA TECHNOLOGIES, INC.
2056 Weems Road
Tucker, GA 30084
Contact: ALTEA: Deborah Eppstein, Chairman and CEO
Phone (801) 303-0306
(a) For Immediate Release
Altea Announces Settlement of Arbitration
ATLANTA, GA. January XX, 2002.....ALTEA TECHNOLOGIES, INC. ANNOUNCED
TODAY THAT IT HAS SETTLED THE ONGOING ARBITRATION WITH SPECTRX, INC. (NASDAQ:
SPRX) RELATED TO THEIR 1996 AGREEMENT. AS PART OF THE SETTLEMENT, ALTEA WILL
RECEIVE UP TO $3 MILLION IN ADVANCE ROYALTY PAYMENTS IN 2002, WHICH IS $2
MILLION MORE THAN PREVIOUSLY DUE IN 2002.
THE PARTIES HAVE SIMPLIFIED THEIR AGREEMENT CONCERNING COLLABORATIVE ACTIVITIES,
INTELLECTUAL PROPERTY AND PAYMENTS. UNDER THE AGREEMENT, BOTH ALTEA AND SPECTRX
ARE DEVELOPING MICROPORATION TECHNOLOGIES, WITH ALTEA HAVING RIGHTS FOR DRUG
DELIVERY, AND SPECTRX HAVING RIGHTS FOR DIAGNOSTICS/MONITORING. SPECTRX IS
DEVELOPING THE MONITORING TECHNOLOGY, INCLUDING THE CONTINUOUS
GLUCOSE-MONITORING PRODUCT WITH ABBOTT LABORATORIES, INC. (NYSE: ABT).
* 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.
39
ALTEA'S PATENTED MICROPOR(TM) TECHNOLOGY CREATES MICROSCOPIC PORES IN THE
OUTERMOST LAYER OF THE SKIN, ENABLING THE SYSTEMIC UPTAKE OF TOPICALLY APPLIED
DRUGS. THE MICROPOR(TM) SYSTEM IS A PATCH-BASED TECHNOLOGY THAT GOES FAR BEYOND
CONVENTIONAL TRANSDERMAL TECHNOLOGY IN THAT IT ENABLES CONVENIENT, CONTROLLED
DELIVERY OF A WIDE RANGE OF DRUGS INCLUDING MACROMOLECULAR DRUGS. ALTEA
DEVELOPMENT CORP IS DEVELOPING MICROPOR(TM) PRODUCTS FOR PEPTIDES AND PROTEINS
(INSULIN, INTERFERON), AS WELL AS SMALL MOLECULES FOR PAIN MANAGEMENT (OPIATES),
AND HAS A CLINICAL FEASIBILITY AGREEMENT WITH NOVARTIS (NYSE: NVS). ALTEA
DEVELOPMENT CORP HAS DEMONSTRATED CONTROLLED DELIVERY OF THERAPEUTIC DOSES OF
INSULIN IN HUMAN CLINICAL FEASIBILITY STUDIES, BOTH FOR MEALTIME AS WELL AS
NIGHTTIME DOSING. AN AFFILIATED COMPANY, ALTEA GENOMICS, IS DEVELOPING VACCINES
AND GENE THERAPY PRODUCTS, AND HAS A JOINT VENTURE ON CERTAIN DNA VACCINE AND
GENE THERAPY PRODUCTS WITH ELAN (NYSE: ELN). BOTH COMPANIES ARE PRIVATELY HELD.
FOR MORE INFORMATION, PLEASE VISIT OUR WEB SITE AT www.alteatech.com.
#####################################
NOTE REGARDING PROJECTIONS AND FORWARD-LOOKING STATEMENTS
STATEMENTS IN THIS RELEASE THAT ARE NOT PURELY HISTORICAL ARE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
REFORM ACT OF 1995, INCLUDING ALTEA'S BELIEFS, EXPECTATIONS, HOPES, OR
INTENTIONS REGARDING THE FUTURE. ALL FORWARD-LOOKING STATEMENTS ARE
MADE AS OF THE DATE HEREOF AND ARE BASED ON INFORMATION AVAILABLE TO
ALTEA AS OF SUCH DATE.
SpectRx, Inc. (770) 242-8723 FRB|Weber Shandwick (212) 445-8400
Bill Wells - Media Alison Ziegler Julie Tu Judith Sylk-Siegel
Thomas H. Muller, Jr. - Financial General Contact Analyst Information Media Contact
* 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.
40
(b) SpectRx, Inc. Announces Settlement of Arbitration
NORCROSS, GA (Date xx, xxxx) -- SpectRx, Inc. (NASDAQ: SPRX)
today announced that the arbitration with Altea Technologies,
Inc. has been resolved and that all claims made against
SpectRx by Altea have been withdrawn. In exchange for Altea
dropping the claims, reducing future minimum royalty payments
and other considerations, SpectRx has agreed to make changes
in the timing of its royalty payments to Altea.
SpectRx and Altea have cross-licensed technology, which is used in the
SpectRx continuous glucose monitoring product and in Altea's drug
delivery products. The SpectRx product is currently under development
with Abbott Laboratories (NYSE: ABT).
"Reaching this agreement is significant for SpectRx
as we work to bring this important continuous glucose monitoring
product to market," said Mark A. Samuels, SpectRx Chairman and CEO.
"This settlement is in the best interest of the Company as it resolves
several outstanding issues and simplifies the agreement with Altea."
The settlement streamlines the agreement between SpectRx and
Altea and the parties have agreed to keep separate any future
intellectual property. . The new agreement provides for a reduction in
minimum royalty payments due Altea after December 31, 2004 and for
SpectRx to pay advance royalties of up to $2 million over the minimum
royalty otherwise due in 2002. The arbitration had involved
interpretation of language involving a joint development program,
assignment of certain patent rights and issues related to
commercialization.
###MORE###
SpectRx, a specialty point-of-care medical technology company, develops
and manufactures non-invasive and minimally invasive diagnostic and monitoring
systems. The company employs leading-edge biophotonics, or the use of light and
spectral energies, to develop painless point-of-care alternatives to blood- and
tissue-based procedures. Through
* 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.
41
internal product development and partnerships with major health care companies,
SpectRx focuses on key niche and large diagnostic markets, primarily oncology,
endocrinology and neonatology. The Company's handheld, FDA-cleared BiliChek(TM)
(sold internationally AS BiliCheck(TM)) is the first commercially available
noninvasive painless monitor for infant jaundice. Under development are products
for the noninvasiVE detection of cervical cancer and Type II diabetes, and a
consumer device for continuous glucose monitoring. For more information, visit
SpectRx's web sites at www.spectrx.com and www.bilicheck.com, or use Internet
keyword spectrx.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995. A number of the matters and subject areas discussed in this press
release that are not historical or current facts deal with potential
future circumstances and developments. The discussion of such matters
and subject areas is qualified by the inherent risks and uncertainties
surrounding future expectations generally and also may materially
differ from SpectRx's actual future experience involving any of or more
of such matters and subject areas. SpectRx has attempted to identify,
in context, certain of the factors that they currently believe may
cause actual future experience and results to differ from SpectRx's
current expectations regarding the relevant matter or subject area.
Such risks and uncertainties include: the early stage of its products
in development, its dependence on collaborative arrangements, its
dependence on licensed intellectual property, the uncertainty of market
acceptance of its products, the intense competition in the medical
device industry, the uncertainty of regulatory approval of its
products, the uncertainty of capital to develop products, as well as
those that are more fully described from time to time in SpectRx's
reports under the heading "Risk Factors" filed with the SEC, including
SpectRx's Annual Report on Form 10-K for the fiscal year ended December
31, 2000 and in the Forms 10-Q for the first quarter and second quarter
of 2001 filed by SpectRx.
* 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.
42
EXHIBIT 4
ALLOWED PUBLIC STATEMENTS
1. The Parties have settled certain disagreements related to the ORIGINAL
AGREEMENT and ended ongoing arbitration proceedings.
2. The Parties have revised certain portions of the ORIGINAL AGREEMENT
concerning collaborative activities and payments; ALTEA shall receive up to $2.0
million in additional payments related to MONITORING APPLICATION in 2002.
* 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.
43