EXHIBIT 10.62
AGREEMENT AND RELEASE
THIS AGREEMENT AND RELEASE ("Agreement") is entered into this 29th day of
November, 1999 by and between Positron Corporation, a Texas corporation
("Positron") and K. Xxxxx Xxxxx, M. D. ("Xxxxx").
R E C I T A L S :
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1. Positron and Xxxxx previously have entered into a series of
agreements, including:
a. Amended and Restated License Agreement dated as of June 30,
1987 by and among Positron, Xxxxx, the Xxxxxxx Foundation for Research
("Xxxxxxx") and Xxxxx X. Xxxxxxx ("Xxxxxxx") regarding the ownership,
manufacturing and marketing of certain proprietary property relating to medical
imaging, design and construction of positron imaging cameras and associated
equipment for medical and diagnostic applications ("License Agreement");
b. Royalty Exchange Agreement dated as of June 30, 1987 by and
between Positron and Xxxxx;
c. Royalty Assignment dated as of December 22, 1988 by and
between Positron and Xxxxx pursuant to which Xxxxx sold to Positron one-third of
his royalty interest under the License Agreement for good and sufficient
consideration ("Xxxxx Royalty Assignment");
d. Clarification Agreement dated as of December 22, 1988 by
and among Positron, Xxxxx, Xxxxxxx and Xxxxxxx clarifying certain terms and
conditions set forth in the Xxxxx Royalty Assignment and related Royalty
Assignments ("Clarification Agreement");
e. Master Agreement dated as of January 15, 1993 by and
between Positron and Xxxxx ("Master Agreement");
f. Consulting Agreement dated as of January 15, 1993 by and
between Positron and Xxxxx pursuant to which Xxxxx agreed to provide certain
consulting services to Positron under certain terms and conditions ("Consulting
Agreement");
g. Letter Agreement dated May 19, 1993 by and between Positron
and Xxxxx amending the Master Agreement and Consulting Agreement in certain
respects and confirming certain obligations existing between the parties as of
that date (" 1993 Letter Agreement");
h. Two convertible promissory notes dated as of October 31,
1993 indicating Xxxxx as Borrower and Positron as Holder, in the principal
amounts of $138,593.63 and $281,250.00 respectively, plus interest ("Promissory
Note(s)");
i. Agreement by and between Positron and Xxxxx dated as of
November 15, 1993 amending certain provisions of the Promissory Notes to
automatically convert the principal amounts of the Promissory Notes to Positron
common stock pursuant to an agreed formula and further, clarifying the rights
and obligations of the parties in the event of certain defined defaults by
Positron, and certain other agreements ("Conversion Agreement"); and
j. Letter Agreement by and between Positron and Xxxxx dated as
of December 16, 1998 regarding modifications to some or all of the agreements
listed above ("1998 Letter Agreement").
2. Positron and Xxxxx now wish to resolve any and all differences
between them arising out of the above listed agreements or any other matter,
without dispute, and to agree on terms and conditions of their continuing
relationship, all pursuant to the terms and conditions set forth below.
NOW THEREFORE, for good and sufficient consideration, the parties agree
as follows:
AGREEMENT
1. ROYALTIES, DIRECTOR FEES, CONSULTING FEES AND ANY OTHER SERVICE
FEES. Positron owes to Xxxxx certain sums in past due royalties pursuant to the
agreements listed above in Recital 1, which amounts have not been paid. Further,
Positron owes to Xxxxx certain sums in fees for serving as a member of the board
of directors, as a consultant and/or for other services, which amounts have not
been paid. On the other hand, Xxxxx owes to Positron certain sums of principal
and interest under the Promissory Notes, which amounts have not been paid and
which Promissory Notes are secured by Positron common stock. In full and
complete settlement of all royalties payable by Positron to Xxxxx through the
date of this Settlement Agreement, and further in full and complete settlement
of any and all sums which may be payable by Positron to Xxxxx for fees for
serving as a member of the board of directors or as a consultant or for
providing any other services through the date of this Agreement, and further in
full and complete settlement of all sums of principal and interest which Xxxxx
may owe to Positron under the Promissory Notes, the parties agree as follows:
(a) Positron will pay to Xxxxx the sum of $38,872 as promptly
as possible, but in no event later than fifteen business days following
execution of this Agreement.
(b) Positron grants to Xxxxx, and will instruct its transfer
agent to issue to Xxxxx, 168,000 shares of Positron unregistered common stock,
to be issued as promptly as practicable following execution of this Agreement.
(c) On and after the date of this Agreement, any and all
royalties payable by Positron to Xxxxx pursuant to the License Agreement, the
Royalty Assignment, or pursuant to any other agreements listed above in Recital
1, shall be calculated at the rate of one percent (1%) of gross revenues derived
from the initial sale, use, lease, licensing or rental of the Proprietary
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Property as set forth in the License Agreement. In addition to any other waivers
and releases set forth in this Agreement, Xxxxx waives any and all demand rights
he may have, pursuant to the Conversion Agreement or any other agreement,
regarding increasing the royalty payments otherwise due and payable from
Positron to Xxxxx from 1% to 1.5%.
(d) The parties further agree that Gross Revenues, as used in
the License Agreement and in this Agreement, serves as the basis for calculating
royalties payable to Xxxxx, and shall be defined as revenues actually collected
by Positron, less: (i) cash or trade discounts; (ii) credits for return of
defective or trade-in products; (iii) sales and use taxes; and/or (iv)
transportation charges. The foregoing notwithstanding, the parties further agree
that Gross Revenues does not include, and is not intended to include: (v)
maintenance charges; (vi) service revenue; (vii) revenue derived from
pass-through sales of other components and third party vendors' software and
operating systems; and/or (viii) resale of refurbished products previously sold
and thereafter returned to the Company and on which royalties were paid based on
the prior sale.
2. FUTURE SERVICES. Positron seeks to encourage Xxxxx to continue his
work in developing clinical software and to provide additional know-how and
proprietary property to the Company as it relates to the clinical application of
PET technology in cardiology. Further, Positron seeks to encourage the
University of Texas PET Imaging Center to support Xxxxx'x efforts to do so. In
order to provide this encouragement to their mutual benefit, the parties agree
as follows:
(a) Positron will provide to Xxxxx original source code for all
the software and cardiology algorithms ("Software") currently developed for and
in use with the PET system currently utilized by Xxxxx in the PET Imaging Center
at the University of Texas ("University PET System"). A list of the Software
components intended to be covered by this limited non-exclusive license is
attached hereto as Attachment A. Such Software is provided for the purpose of
supporting the research activities engaged in directly and/or specifically
directed by Xxxxx at the University's PET Imaging Center. The original source
code for such Software is provided on condition that neither Xxxxx nor the
University will use the Software, or any derivative thereof, for any purpose
other than the research and development purposes set forth herein ("Acceptable
Purposes") and further on condition that Xxxxx will provide to Positron the
source code for any and all enhancements made to the Software pursuant to this
license . Acceptable Purposes specifically exclude any commercial use, sale or
distribution whatsoever of the Software or any derivative, or other transfer of
the Software or any derivative to any third person for other than research and
development purposes, or use by Xxxxx and/or the University of the software or
any derivative for other than an Acceptable Purpose as it relates to the
clinical application of PET technology in cardiology. The foregoing
notwithstanding, the parties agree that Acceptable Purposes" includes utilizing
the Software at other Positron centers using Positron PET machines and related
equipment.
(b) Xxxxx will provide and deliver to Positron any and all
software developments, derivatives, and/or protocol developments
("Enhancements") he prepares or develops with or from the Software. Positron is
authorized to and will use such Enhancements in or as part of its business, and
will include such Enhancements in the Proprietary Property to which the License
Agreement and this Agreement apply.
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(c) Xxxxx agrees to serve on Positron's Medical Advisory Board,
at no additional charge or fee, for a minimum of three (3) years from the date
of this Agreement ("Service Period"). During the Service Period, Xxxxx shall
devote such time and effort as is mutually agreed by Xxxxx and Positron to be
appropriate and necessary to achieve the purposes of such service, which
purposes are deemed to be the enhancement of clinical utilization of PET
technology in cardiology.
(d) To encourage the University to allow Xxxxx to continue his
research and development activities as contemplated by this Agreement, Positron
agrees to provide to the University PET Imaging Center, and the University
accepts pursuant to the conditions set forth herein, for a period of five years
from the effective date of this Agreement ("Maintenance Period"), maintenance
services regarding the POSICAM (TM) PET System at no charge for labor. Costs of
hardware components will be charged at Positron's cost. At Positron's request,
the University will advance or otherwise pay the costs to obtain hardware
components necessary to provide the maintenance services contemplated herein.
Further, Positron will continue during the Maintenance Period to provide to the
University any software upgrades and other software enhancements to the system
as it typically provides to other third party maintenance customers, and
University agrees to and will execute Positron's standard maintenance and
service agreement consistent with the terms herein. University specifically
waives any rights to any and all rights to any software, derivatives, know-how,
or proprietary property developed either by Positron or by Xxxxx during the
Maintenance Period.
The foregoing notwithstanding, the provisions of this subsection 3(d)
shall have no force and effect unless and until the University of Texas and/or
the University of Texas Health Science Center at Houston agrees, acknowledges
and approves this Agreement.
3. ISSUANCE AND REGISTRATION OF COMMON STOCK.
(a) Xxxxx represents and warrants that he is acquiring the
common stock pursuant to this Agreement for his own account for investment only
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the 1933 Securities Act. Xxxxx further represents and warrants that he is an
"accredited investor" as that term is defined in Rule 501(a)(3) of Regulation D
as promulgated by the SEC.
(b) Positron agrees to include the common stock delivered in
connection with this Agreement, as well as any other Positron common stock
currently held by Xxxxx in his name, in the next registration statement Positron
files with the Securities and Exchange Commission ("SEC") relating to an
offering for its own account or the account of others under the 1933 Securities
Act (other than on Form S-4 or Form S-8 or their then equivalents relating to
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans). If the registration referred to herein is to be
an underwritten public offering for the account of Positron and the managing
underwriter(s) determine, in their reasonable good faith opinion, that a
limitation on the number of shares of common stock which may be included in the
registration statement is necessary to facilitate and not adversely affect the
proposed offering, then Positron will include the common stock held by Xxxxx in
the next registration statement Positron
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thereafter files with the SEC. The foregoing notwithstanding, Positron agrees to
include the common stock delivered in connection with this Agreement, as well as
any other Positron common stock currently held by Xxxxx in his name, in the next
registration statement relating to an offering for the account of others under
the 1933 Securities Act.
4. RELEASE OF CLAIMS.
(a) Positron (on behalf of and including its respective
officers, directors, shareholders, employees, agents, administrators,
representatives, successors and assigns, in the aggregate "Positron Related
Parties") on the one hand, and Xxxxx (on behalf of and including his marital
community, agents, administrators, representatives, executors and assigns, in
the aggregate "Xxxxx Related Parties") on the other hand, hereby mutually
release and discharge each other and their respective Related Parties from all
liability, claims, demands, actions, or causes of action of any kind or
character, whether fixed or contingent (collectively "Claims") arising from the
beginning of time to the date of this Agreement, and from whatever sources,
including but not limited to claims relating to any of the agreements listed in
Recital I to this Agreement, except for any provisions that by their specific
terms are intended to survive termination of the respective agreement, and
except for the provisions of this Agreement.
(b) Positron and Xxxxx understand and acknowledge that the
provisions of this Section 6 and of Section 1 above are intended to and do apply
to and include all known and unknown or unsuspected consequences or results
arising from or relating to the transactions, occurrences or agreements listed
in Recital 1. Positron and Xxxxx, on behalf of themselves and their respective
Related Parties represent and warrant that the releases of claims contained
herein are intended to be full and general releases, and they hereby expressly
waive any and all rights and benefits under any statute or principal of law
reserving any rights to any claims which Positron and/or Xxxxx or either one of
them does not know or suspect to exist in its/his favor at the time of executing
the release, and which, if known by it/him, must have materially affected this
settlement and release.
(c) Positron and Xxxxx each hereby acknowledges that it/he has
read this Agreement, that it/he fully understands the contents of this
Agreement, and that this is a GENERAL RELEASE giving up rights with respect to
the agreements, transactions or occurrences that are being released under this
Agreement.
5. RESOLUTION OF DISPUTES.
(a) The parties shall submit all disputes relating to this
Agreement, or any agreement listed on Recital 1 (whether contract, tort or both)
to binding arbitration in accordance with the rules of the American Arbitration
Association ("AAA") relating to resolution of commercial disputes in Xxxxxx
County, Texas or otherwise as mutually agreed. The parties understand and agree
that they are waiving their rights to a jury trial.
(b) The party demanding arbitration shall submit a written
claim to the other party, setting out the basis of the claim and proposing the
name of an arbitrator. The responding party shall have twenty (20) business days
in which to respond to the demand in a written answer. If the response is not
timely made, or if the responding party agrees with the person
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proposed as arbitrator by the demanding party, then the person named by the
demanding party shall serve as arbitrator. If the responding party submits a
written answer rejecting the proposed arbitrator then, unless the parties agree
on an arbitrator, an arbitrator will be selected pursuant to the rules of the
AAA. Within fifteen (15) days after completion of the arbitration, the
arbitrator will submit a decision in writing. Before arbitration commences, each
party shall pay the arbitrator half of the expected cost of the arbitration. At
the conclusion of the arbitration, the arbitrator may award the prevailing party
some or all of the arbitration costs, as well as some or all of the prevailing
party's other expenses, including reasonable attorney fees and witness fees, in
such proportion as the arbitrator deems appropriate. Unless otherwise determined
by the arbitrator, each side shall bear its own expenses other than the cost of
arbitration, which shall be split.
6. MISCELLANEOUS.
(a) All notices, requests, demands, or other communications
under this Agreement shall be in writing. Notice shall be sufficiently given for
all purposes if delivered personally (upon receipt), by first class mail (three
mail delivery days after deposit), by certified mail (upon receipt, delivery
confirmed by return receipt), overnight delivery (upon receipt, by Federal
Express or comparable carrier, charges prepaid or charged to sender's account,
delivery confirmed by carrier), or by facsimile transmission (upon receipt, if
delivery confirmed by notice), to the following:
If to Positron:
0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
Phone: 000-000-0000 x 000 (Main)
0-000-000-0000 (Fax)
If to Xxxxx:
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
(b) This Agreement may be modified or amended only by mutual
agreement and in writing, signed by the party to be charged.
(c) This Agreement, including exhibits and attachments,
constitutes the final, complete and exclusive statement of the terms of the
agreement between the parties pertaining to the subject matter herein, and
supercedes all prior and contemporaneous understandings or agreements of the
parties. No party has been induced to enter into this Agreement by, nor is any
party relying on, any representation or warranty outside those expressly set
forth in this Agreement.
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(d) The parties hereto agree that each of them will use their
best reasonable efforts to obtain the approval of the Health Science Center of
the provisions of this Agreement. The parties further agree that if the Health
Science Center does not formally approve the provisions of this Agreement,
Positron's maintenance obligations as set forth in ss. 3(d) herein shall not
take effect, but the provisions of this Agreement as they relate to Xxxxx and
Positron shall be binding and inure to the benefit those parties and their
respective heirs, executors, administrators, assigns and successors in interest.
(e) This Agreement may be executed in several counterparts and
by facsimile transmission, each of which shall be deemed an original but all of
which shall constitute one instrument binding on all parties.
AGREED to this 29th day of November, 1999.
POSITRON CORPORATION
By: [ORIGINAL SIGNED: Xxxx X. Xxxxxx
Its: President
[ORIGINAL SIGNED]
K. XXXXX XXXXX, M.D.
AGREED, ACKNOWLEDGED AND APPROVED this 16th day of December, 1999.
UNIVERSITY OF TEXAS HEALTH SCIENCE
CENTER AT HOUSTON
By: [ORIGINAL SIGNED]
Its: Executive Vice President
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