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EXHIBIT 10.19B
October 21, 1998
Respironics Georgia, Inc.
1255 Kennestone Circle
Marietta, GA 30066
RE: AMENDMENT TO PURCHASING AND LICENSING AGREEMENT
This letter serves to amend certain terms (the "Amendment") of the Purchasing
and Licensing Agreement (the "Agreement") dated June 19, 1996 by and between
Respironics Georgia, Inc., f/k/a/ Healthdyne Technologies, Inc. ("RIGA"), and
SpectRx, Inc. (SpectRx"). Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such terms in the Agreement.
The parties to this Amendment agree that the Agreement is hereby amended to
include or restate, as the case may be, the following terms and conditions.
1. A number of events have led to this Amendment and will be recited
below. First, RIGA merged with Respironics, Inc. effective February 11, 1998.
Second, the Milestone Deadline set forth in Section 14.5 of the Agreement has
passed without the milestone applicable thereto being achieved. Work to date
indicates that SpectRx will be able to complete a device that measures bilirubin
in accordance with the Revised PRD for use prior to phototherapy
("Pre-Phototherapy device"). The parties have agreed to utilize the
Pre-Phototherapy device in resetting certain milestones.
2. Immediately upon completion of the Pre-Phototherapy device meeting
the revised product requirement document dated September 15, 1998 and attached
hereto as Exhibit A ("Revised PRD"), [*]
3. If SpectRx is unable to achieve the performance goals for the [*] of
the Instrument as set forth in the Revised PRD, SpectRx will then enter into a
second amendment to the Agreement augmenting the marketing license provided for
therein to grant to RIGA an exclusive license (free of license fees and for the
Term set forth in Section 14.1) within the Territory for the following three
software and hardware application [*] to the extent these applications are
developed by SpectRx:
[*]
[*]
[*]
Although SpectRx intends to undertake a reasonable business effort development
program in [*] there is no assurance of success. If successful, [*] are
[*] to be redacted
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envisioned to encompass software and possibly a Disposable specific to the
application [*]
Although no license fees are due in respect of the upgrade products, RIGA agrees
to purchase the Instruments, Disposables and Accessories, in accordance with
Section 4 of the Agreement. The parties agree to negotiate price and other
similar terms in good faith, in a like manner to and consistent with the current
provisions contained in the Agreement governing the Instrument. In the event the
Disposable is developed, SpectRx and RIGA will follow the existing formula under
the Agreement for profit and expense distribution on disposable sales.
4. The first sentence of Section 14.5 of the Agreement is deleted and
replaced by the following:
In the event that RIGA or SpectRx has not filed a 510K submission for a
Pre-Phototherapy device and received regulatory clearance necessary for
the marketing and sale of that device in Canada by January 1, 1999
("Revised Section 14.5 Deadline"), RIGA shall have the right to assume
the Commercialization Efforts with respect to the Licensed Products as
set forth in Section 3.1 and on Exhibit E. The Revised Section 14.5
Deadline shall be extended by any delay caused by RIGA: (i ) in the
filing of such 510K submission; (ii) in the work preparatory thereto
required to be performed by RIGA, such as completion of clinical trials
and reporting as to same; or (iii) in the work required to be performed
by RIGA with respect to preparation for sales in Canada. RIGA
acknowledges that both of the conditions set forth in the first
sentence have been satisfied i.e., the referenced 510K submission has
been made and Canadian clearance has been obtained.
5. The transfer price in Section 6.1 is increased from [*]
6. The fourth sentence in Section 3.2 of the Agreement is deleted and
replaced by the following sentence:
Each such milestone payment shall be due and payable only upon
completion of the corresponding milestone as set forth in Exhibit E, as
amended.
7. The word "following" is deleted from the sixth sentence in Section
3.2 of the Agreement.
8. RIGA's address for notices in Section 16-8 of the Agreement is
changed as follows:
RIGA: Respironics, Georgia, Inc.
1255 Kennestone Circle
Marietta Georgia 30066
Attention: Group Vice President
[*] to be redacted
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With a copy to: Respironics, Inc.
1501 Ardmore Boulevard
Pittsburgh, Pennsylvania 15221
Attention: General Counsel
9. Everything in Exhibit E including and following the "FDA Approval"
milestone originally scheduled for May 15, 1997 is deleted and replaced by the
Amendment to Exhibit E attached hereto.
10. Exhibit G is deleted in its entirety and replaced by the Amendment
to Exhibit G attached hereto.
11. Except as expressly provided for herein, the Agreement shall remain
in full force and effect and nothing herein shall be construed as a modification
or waiver by RIGA or SpectRx of any rights or remedies under the Agreement.
Please countersign and return one copy of this letter as confirmation of RIGA's
agreement to all statements and amended terms herein.
Sincerely,
SPECTRX, INC.
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Mark Samuels
President and CEO
Accepted and agreed to:
RESPIRONICS GEORGIA, INC.
- ---------------------------------
Name
-----------------------------
Title
----------------------------
[*] to be redacted
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AMENDMENT TO EXHIBIT E
REMAINING MILESTONES
- ---------------------------------------------------------------------------------------------------------------------------
Original Estimated Date Revised Estimated Dollars(1) Milestone
Date (In Thousands)
- ---------------------------------------------------------------------------------------------------------------------------
[*] Fourth Qtr/98 [*] FDA approval of pre-phototherapy claim
- ---------------------------------------------------------------------------------------------------------------------------
[*] TBA [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
[*] TBA [*] Acceptance by RIGA of quantities delivered
pursuant to first purchase order pre-phototherapy
claim
- ---------------------------------------------------------------------------------------------------------------------------
[*] TBA [*] Acceptance by RIGA of quantities delivered
pursuant to first purchase order [*]
- ---------------------------------------------------------------------------------------------------------------------------
[*] TBA [*] First anniversary of acceptance of first purchase
order quantities pre-phototherapy claim delivered
by SpectRx
- ---------------------------------------------------------------------------------------------------------------------------
[*] TBA [*] First anniversary of acceptance of first purchase
order quantities [*] delivered by SpectRx
- ---------------------------------------------------------------------------------------------------------------------------
- -----------------------
(1) Payment due at time of milestone completion
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AMENDMENT TO EXHIBIT G
MINIMUM UNIT SALES
INSTRUMENT
Column A OR Column B
- ---------------------------------------------------------------------------------------------------------------------------
Year after 510K Clearance for Pre-Phototherapy [*]
Pre-Phototherapy device 510K Clearance
- ---------------------------------------------------------------------------------------------------------------------------
0-1 [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
Year 2 [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
Year 3 [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
Year 4 [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
Year 5 [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
After Year 5 [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------
The minimum unit sales for the Instrument will be the relevant total under
Column A until, if ever, the [*] has received 510K clearance. Thereafter, the
minimum unit sales shall be the total under Column B.
MINIMUM UNIT SALES DISPOSABLE
RIGA's minimum unit sales for Disposables from SpectRx will be:
Year 2 Following Commercialization: [*]
Year 3 Following Commercialization: [*]
Year 4 Following Commercialization: [*]
Year 5 Following Commercialization: [*]
Year 6 Following Commercialization
and Onward: [*]
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