EXHIBIT 10.15
RESEARCH AND DEVELOPMENT AGREEMENT
This RESEARCH AND DEVELOPMENT AGREEMENT (the "Agreement") is made and
entered into as of September 29, 1995, by and between Poly U/A Systems, Inc., a
Delaware corporation ("PSI"), and International Remote Imaging Systems, Inc., a
Delaware corporation ("IRIS"), with reference to the following facts:
A. Simultaneously with entering into this Agreement, IRIS and PSI have
entered into the Technology License Agreement.
B. Pursuant to the Technology License Agreement, IRIS has granted to PSI,
and PSI has acquired from IRIS, an exclusive, worldwide license to certain
technology for the purpose of developing, manufacturing and marketing the
Proposed Products. Also pursuant to the Technology License Agreement, PSI has
granted to IRIS an exclusive, worldwide license to use all new technology
developed during the course of performing such services for purposes other than
developing, manufacturing or marketing the Proposed Products.
C. IRIS has the experience, facilities, equipment and employees to
provide the research, development, clinical evaluation and pre-market testing to
enable PSI to develop, manufacture and market the Proposed Products.
D. PSI desires to engage IRIS to perform such services, and IRIS is
willing to provide such services, on the terms and conditions set forth herein.
NOW, THEREFORE, based upon the above premises and in consideration of the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows (capitalized terms not defined herein shall have
the meanings set forth in Schedule A attached hereto):
1. RESEARCH AND DEVELOPMENT.
1.1 RESEARCH AND DEVELOPMENT SERVICES. PSI hereby engages IRIS, and
IRIS hereby agrees to undertake, good faith efforts towards research,
development, clinical evaluation and pre-market testing of the IRIS Technology
for the purpose of enabling PSI to develop, manufacture and market the Proposed
Products (the "Research and Development"). Such services shall be provided as
follows:
1.1.1 WORKPLAN AND BUDGET. Within thirty (30) days of the date
hereof, IRIS will submit to PSI a workplan and budget acceptable to PSI covering
the period beginning on November 1, 1995 for the anticipated duration of the
Research and Development (the "Workplan and Budget"). IRIS and PSI may make
changes in the Workplan and Budget from time to time as approved by an
authorized representative of each party.
1.1.2 RESEARCH AND DEVELOPMENT. During the term of this
Agreement, IRIS shall use commercially reasonable efforts to (a) conduct the
Research and Development on behalf of PSI in a prudent and skillful manner in
accordance, in all material respects, with the Workplan and Budget and
applicable laws, ordinances, rules, regulations, orders, licenses and other
requirements now or hereafter in effect and (b) diligently execute the Workplan
and Budget and report to PSI any significant deviations therefrom in a timely
manner. IRIS shall, at PSI's expense as described below, furnish all labor,
supervision, services, supplies and materials necessary to perform the Research
and Development in accordance with the Workplan and Budget. In addition to its
undertakings pursuant to the Technology License Agreement, IRIS agrees to use
commercially reasonable efforts to attempt to obtain, on behalf of and at the
expense of PSI, any patent or technology license or sublicense from any Person,
including IRIS, that IRIS reasonably determines to be necessary or useful to the
Research and Development.
1.1.3 OTHER ACTIVITIES; SUBCONTRACTS. During the term of this
Agreement, IRIS shall devote such time and effort to the Research and
Development as may be necessary to fulfill its duties as described in this
Section 1; PROVIDED, HOWEVER, that IRIS shall not be required to devote itself,
on a full time basis, to the Research and Development and that IRIS shall have
the right to engage in its own research and development activities and in other
business activities with other Persons, and PSI shall not, by virtue of this
Agreement, have any right, title or interest in or to such independent
activities or to the income or profits derived therefrom and nothing set forth
in this Agreement shall limit or reduce the ability of IRIS to carry on such
other activities. PSI acknowledges and agrees that, in performing the Research
and Development, IRIS may, and is hereby authorized to, without the prior
consent of PSI, engage or agree or otherwise collaborate with other Persons,
including, without limitation, Affiliates of IRIS or research institutions
performing other research and development activities for IRIS, to provide
assistance in carrying out the Research and Development; PROVIDED, FURTHER, that
any payments to Affiliates charged to PSI shall not exceed the direct and
indirect costs of such Affiliates in performing such services.
1.1.4 REPORTS AND RECORDS.
1.1.4.1 QUARTERLY COST REPORTS. Within sixty (60) days
after the end of each calendar quarter during the term of this Agreement, IRIS
shall provide to PSI a reasonably detailed report setting forth the total
Research and Development Costs for such quarter.
1.1.4.2 SEMIANNUAL PROGRESS REPORTS. On a regular basis
(but at least twice a year), IRIS will provide to PSI a reasonably detailed
report setting forth (a) a summary of the work performed hereunder by IRIS and
its employees and agents and (b) a description of any material developments
relating thereto.
1.1.4.3 FINAL REPORT. IRIS shall prepare a final report,
within ninety (90) days after the expiration or termination of this Agreement,
setting forth in reasonable detail a summary of the work performed hereunder and
the material developments relating thereto and containing a final statement of
all Research and Development Costs.
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1.1.4.4 MAINTENANCE OF RECORDS. IRIS shall maintain, in
accordance with generally accepted accounting principles consistently applied,
true, accurate and complete records and books of account documenting all
Research and Development Costs.
1.1.4.5 INDEPENDENT AUDIT. At PSI's request and expense,
IRIS shall permit a certified independent public accountant selected by PSI to
have access, no more than once in each fiscal year during the term of this
Agreement and once during the three (3) years following the expiration or
termination hereof, during regular business hours and upon reasonable notice to
IRIS, to such records and books for the sole purpose of determining the
appropriateness of Research and Development Costs invoiced hereunder; PROVIDED,
HOWEVER, that if such certified independent public accountant reasonably
determines that Research and Development Costs have been overstated by an amount
greater than ten percent (10%) of the actual Research and Development Costs,
IRIS shall promptly refund any such overpayment to PSI and pay all reasonable
fees and disbursements of such certified independent public accountant incurred
in the course of making such determination.
1.1.5 LICENSE TO TECHNOLOGY FOR DEVELOPMENT. PSI hereby grants
to IRIS an exclusive (as against PSI and all other Persons), worldwide, royalty-
free right and license, including the right to license or sublicense to other
Persons, during the term of this Agreement, to use of the IRIS Technology and
the PSI Technology for purposes of Research and Development. This license is
granted in addition to, and not in substitution for, any other license granted
to IRIS, whether pursuant to the Technology License Agreement or otherwise.
1.1.6 SALE OF THE PRODUCT PRIOR TO REGULATORY APPROVAL. PSI
appoints IRIS as its exclusive agent for the manufacture and sale of the Product
during the term of this Agreement for the sole purpose of conducting the
clinical evaluation and pre-market testing required to obtain FDA or other
regulatory clearance for marketing the Products. PSI shall reimburse IRIS in
accordance with Section 2.4 hereof for all costs relating to the manufacture and
sale of the Product as Research and Development Costs, and IRIS shall remit to
PSI any revenues received by it from the sale of the Products.
1.2 DISCLAIMER OF WARRANTIES. IRIS cannot and does not guarantee
that the Research and Development will be successful in whole or in part, that
any of the Proposed Products will be developed or that, if developed, it will be
successful in the marketplace. To the extent that IRIS has complied with
Section 1.1.2 hereof, the failure of IRIS to successfully develop any of the
Proposed Products will not constitute a breach by IRIS of any representation,
warranty, covenant or other obligation under this Agreement or the Technology
License Agreement. In addition, neither IRIS nor PSI makes any representation
or warranty or guaranty that the Available Funds will be sufficient for the
completion of the Research and Development of, or to begin commercialization
with respect to, the Proposed Products.
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1.3 RIGHTS TO PROPERTY. Subject to the rights granted to IRIS under
this Agreement or the Technology License Agreement, all right, title and
interest in and to any Improvements shall be the exclusive property of PSI.
2. PAYMENT FOR SERVICES; TIMING OF PAYMENTS.
2.1 PAYMENTS. As consideration for conducting the Research and
Development and subject to Sections 2.2 and 2.4, PSI shall reimburse IRIS for
all Research and Development Costs incurred since the Offering Start Date in
excess of $500,000 up to a maximum aggregate amount equal to the Available
Funds. "Available Funds" shall mean Funds less Expenses. "Funds" shall mean
the net proceeds of the Offering and any interest earned on the Funds.
"Expenses" shall mean the sum of (a) all general and administrative expenses
incurred by PSI (including payments under the Administration and Services
Agreement), (b) all royalty, license and similar fees incurred in connection
with the use or acquisition of technology useful in the Research and Development
and (c) $25,000 to be retained by PSI as working capital. PSI agrees to expend
all of the Available Funds on the Research and Development conducted by IRIS
pursuant to this Agreement.
2.2 TIMING OF PAYMENTS AND IRIS FUNDING. IRIS shall submit to PSI on
a monthly basis an invoice for all Research and Development Costs incurred
during the previous month (or, in the case of the first invoice, since the
Offering Start Date). Within ten (10) days of receipt of such invoice, PSI
shall pay to IRIS all amounts due thereunder. IRIS shall credit the account of
PSI with $15,000 in the first thirty-three (33) invoices and $5,000 on the
thirty-fourth (34th) invoice to account for the obligation of IRIS under Section
2.1 to fund $500,000 of the Research and Development Costs. To the extent such
credit exceeds the total Research and Development Costs reflected on an invoice
(together with amounts due and unpaid from previous invoices), the excess of
such credit shall be carried forward to the next monthly invoice until IRIS has
funded $500,000 of Research and Development Costs. Thereafter, IRIS shall have
no further obligation to fund Research and Development Costs.
2.3 CALCULATION OF COSTS. Direct costs attributable to performing
the Research and Development (including employee salaries and benefits) shall be
allocated on a reasonable and consistent basis and charged to PSI. The
expenditures and estimated expenditures of conducting the Research and
Development hereunder shall be determined using the internal cost accounting
system of IRIS. Allocation of all indirect costs, including general and
administrative costs, will be made by IRIS on a reasonable basis consistent with
its internal cost accounting system.
2.4 PERFORMANCE OF RESEARCH AND DEVELOPMENT ON A CREDIT BASIS. If
the Available Funds are exhausted on or before July 31, 1998, IRIS shall have
the option (but not the obligation) of continuing the Research and Development
on a credit basis until July 31, 1998, and PSI shall be liable for one hundred
percent (100%) of the Research and Development Costs related thereto in excess
of the remaining IRIS funding commitment under Sections 2.1 and 2.2 (if any)
plus interest at a rate equal to the lesser of eight percent (8.0%) or the
maximum rate of interest permissible under applicable law. Such Research
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and Development Costs shall be payable upon demand by IRIS and shall accrue
interest from the date such Research and Development Costs are due under the
related invoice. Any Research and Development conducted pursuant to the terms
of this Section 2.4 may be terminated (i) by IRIS without cause at any time and
(ii) by PSI pursuant to Section 7.3.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF IRIS. IRIS
represents, warrants and covenants to PSI as follows:
3.1.1 IRIS is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware with corporate
powers adequate for executing and delivering, and performing its obligations
under, this Agreement;
3.1.2 the execution, delivery and performance of this
Agreement by IRIS have been duly authorized by all necessary corporate action;
3.1.3 this Agreement has been duly executed and delivered by
IRIS and is a legal, valid and binding obligation of IRIS, enforceable against
IRIS in accordance with its terms;
3.1.4 the execution, delivery and performance of this
Agreement by IRIS do not conflict with or contravene any provision of the
charter documents or by-laws of IRIS or, in any material respect, any agreement,
document, instrument, indenture or other obligation of IRIS;
3.1.5 IRIS will propose the Workplan and Budget and any
amendments or modifications thereto in good faith;
3.1.6 except as otherwise provided herein, IRIS shall not
during the term of this Agreement initiate or undertake any research and
development for its own account or for the account of any other party for the
purpose of developing, manufacturing or marketing any of the Proposed Products;
and
3.1.7 IRIS shall not enter into any agreement or make any
commitment that would contravene any material provision of, or materially
derogate any of the rights of PSI under, this Agreement.
3.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PSI. PSI
represents, warrants and covenants to IRIS as follows:
3.2.1 PSI is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware with corporate
powers adequate for executing and delivering, and performing its obligations
under, this Agreement;
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3.2.2 the execution, delivery and performance of this
Agreement by PSI have been duly authorized by all necessary corporate action;
3.2.3 this Agreement has been duly executed and delivered by
PSI and is a legal, valid and binding obligation of PSI, enforceable against PSI
in accordance with its terms;
3.2.4 the execution, delivery and performance of this
Agreement by PSI do not conflict with or contravene any provision of the charter
documents or by-laws of PSI or, in any material respect, any agreement,
document, instrument, indenture or other obligation of PSI;
3.2.5 PSI shall consider and act upon the Workplan and Budget
and any amendments or modifications thereto in good faith; and
3.2.6 PSI shall not, during the term of this Agreement and
for two (2) years thereafter, without the prior written consent of IRIS, solicit
the employment of, or employ any person, in any capacity, who, at any time
during the term of this Agreement, shall have been an officer, director,
employee or agent of IRIS, except for individuals employed by PSI on the date
hereof.
4. CONFIDENTIALITY.
4.1 CONFIDENTIALITY OBLIGATIONS. The parties hereby acknowledge and
agree that the IRIS Technology and the PSI Technology (including the
Improvements) contain valuable, confidential information and trade secrets
developed or acquired, or which will be developed or acquired, through the
expenditure of significant amounts of time and money. Accordingly, except as
expressly permitted by Section 4.2 or the Technology License Agreement, IRIS and
PSI shall maintain the confidential nature of, and not disclose to any third
party, any Confidential Information. The obligations set forth in this
Section 4.1 shall survive the termination or expiration of this Agreement.
4.2 PERMITTED DISCLOSURES. The obligations of confidentiality
contained in this Agreement shall not apply to any Confidential Information if,
and to the extent:
4.2.1 reasonably necessary to market products, including,
without limitation, by making disclosures to prospective customers as will
adequately explain the nature and operation of the product;
4.2.2 reasonably necessary to effect sublicenses permitted
under this Agreement or the Technology License Agreement;
4.2.3 independently developed by the receiving party outside
the scope of this Agreement;
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4.2.4 reasonably necessary to carry out its obligations under
this Agreement;
4.2.5 reasonably necessary to secure governmental or
regulatory approvals or clearances; and
4.2.6 the disclosure is required by a judicial order or
decree of governmental law or regulation, provided that the receiving party
promptly notifies the disclosing party of such requirement and reasonable
opportunity is allowed for the disclosing party to obtain a protective order or
otherwise proceed under applicable law to protect its interests.
4.3 EMPLOYEE CONFIDENTIALITY AND ASSIGNMENT OF INVENTIONS. Prior to
allowing an employee access to any Confidential Information, the employing party
shall obtain from the employee an executed agreement regarding confidentiality
and assignment of inventions in a form reasonably satisfactory to the other
party.
4.4 INJUNCTIONS. The parties agree that, due to the unique and
proprietary nature of the Confidential Information, the remedies at law for a
breach by either party of its obligations under this Section 4 will be
inadequate and that, in the event of such breach, the other party shall be
entitled to equitable relief (including without limitation injunctive relief and
specific performance) in addition to all other remedies provided under this
Agreement or available at law. PSI acknowledges the secret nature and quality
of the IRIS Technology as legally protectable proprietary information and
intellectual property and agrees to waive proof of such fact in any litigation
or arbitration between the parties.
5. DISCLAIMER OF WARRANTY; LIMITATIONS OF LIABILITY.
5.1 DISCLAIMER OF WARRANTY. Except as provided in Section 3, the
parties hereto disclaim any and all representations and warranties, express or
implied, concerning the IRIS Technology or the PSI Technology, including without
limitation (i) whether such technology, to the extent not already developed,
will be developed, (ii) the performance, utility, reliability, suitability for
any particular purpose or accuracy of such technology, (iii) whether the use of
the technology licensed hereunder will infringe any patent or other proprietary
rights of any third party, and (iv) whether any of the technology is or will be
entitled to protection under patent, copyright or other proprietary laws.
5.2 LIMITATIONS ON LIABILITY. Neither party to this Agreement shall
be entitled to recover from the other any incidental, consequential, special or
punitive damages for any breach of this Agreement.
6. INDEMNIFICATION.
6.1 INDEMNIFICATION OF PSI. Subject to Section 5.2, IRIS shall
indemnify and hold PSI harmless from and against any Loss including, without
limitation, any Loss based upon negligence, warranty, strict liability,
violation of government regulation or
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infringement of patent or other proprietary rights, arising out of (a) any use
of the IRIS Technology or the PSI Technology by IRIS or any Affiliate, agent or
sublicensee of IRIS (other than PSI) for purposes other than Research and
Development or (b) any breach of this Agreement by IRIS.
6.2 INDEMNIFICATION OF IRIS. Subject to Section 5.2, PSI shall
indemnify and hold IRIS harmless from and against any Loss including, without
limitation, any Loss based upon negligence, warranty, strict liability,
violation of government regulation or infringement of patent or other
proprietary rights, arising out of (a) any use of the IRIS Technology or the PSI
Technology by PSI or any Affiliate, agent or sublicensee of PSI (other than IRIS
for purposes other than Research and Development) or (b) any breach of this
Agreement by PSI.
6.3 INDEMNIFICATION PROCEDURES. Upon the Indemnified Party becoming
aware of a fact, condition or event for which a claim for Losses in respect
thereof is to be made against the Indemnifying Party under Sections 6.1 or 6.2,
the Indemnified Party will with reasonable promptness notify the Indemnifying
Party in writing of such fact, condition or event. The Indemnifying Party may
undertake full responsibility for the defense or prosecution in connection with
any claim brought by any third party and may contest or settle it on such terms
as the Indemnifying Party may choose; PROVIDED THAT the Indemnifying Party will
not have the right, without the Indemnified Party's written consent, to settle
any such claim if such settlement (i) arises from or is part of any criminal
actions, suit or proceeding, (ii) contains a stipulation to, confession of
judgment with respect to, or admission or acknowledgment of, any liability or
wrongdoing on the part of the Indemnified Party, or (iii) provides for
injunctive relief, or other relief or finding other than money damages, which is
binding on the Indemnified Party. Such defense or prosecution will be conducted
by reputable attorneys retained by the Indemnifying Party at the Indemnifying
Party's cost and expense, but the Indemnified Party will have the right to
participate in such proceedings and to be separately represented by attorneys of
its own choosing. The Indemnified Party will be responsible for the costs of
such separate representation.
6.4 COOPERATION. IRIS and PSI shall cooperate in determining the
validity of any third-party claim for any Loss for which a claim of
indemnification may be made hereunder. Each party shall also use all reasonable
efforts to minimize all Losses under this Agreement.
7. TERM AND TERMINATION.
7.1 TERM. Subject to the obligation of IRIS to fund $500,000 of the
Research and Development Costs pursuant to Section 2.1 and the right of IRIS to
continue the Research and Development pursuant to Section 2.4, this Agreement
shall be effective as of the date hereof and shall continue in full force and
effect until the earlier of July 31, 1998, or submission of the monthly invoice
under Section 2 constituting the last of the Available Funds (which the parties
currently anticipate will be for the month ended July 31, 1998), unless earlier
terminated as provided in Sections 7.2 or 7.3 hereof.
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7.2 TERMINATION BY IRIS. IRIS shall have the right to terminate this
Agreement, effective upon written notice of termination to PSI, in the event
that:
7.2.1 PSI fails to perform or observe or otherwise breaches
any of its material obligations under this Agreement or the Technology License
Agreement and such failure or breach continues for a period of sixty (60) days
after written notice thereof to PSI from IRIS;
7.2.2 PSI shall (i) seek the liquidation, reorganization,
dissolution, winding-up of itself or the composition or readjustment of its
debts, (ii) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its assets, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy
Code, (v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or
readjustment of debts, or (vi) adopt any resolution of its stockholders or Board
of Directors for the purpose of effecting any of the foregoing; or
7.2.3 a proceeding or case shall be commenced without the
application or consent of PSI and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
following shall be entered and continue unstayed and in effect, for a period of
forty-five (45) days from and after the date service of process is effected upon
PSI, seeking (i) the liquidation, reorganization, dissolution or winding-up of
PSI or the composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of PSI or of all or any
substantial part of its assets, or (iii) similar relief in respect of PSI under
any law relating to bankruptcy, insolvency, reorganization, winding-up or the
composition or readjustment of debts.
7.3 TERMINATION BY PSI. PSI shall have the right to terminate this
Agreement, effective upon written notice of termination to IRIS, in the event
that:
7.3.1 IRIS fails to perform or observe or otherwise breaches
any of its material obligations under this Agreement or the Technology License
Agreement and such failure or breach continues for a period of sixty (60) days
after written notice thereof to IRIS from PSI;
7.3.2 IRIS shall (i) seek the liquidation, reorganization,
dissolution or winding-up of itself or the composition or readjustment of its
debts, (ii) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator of itself or of all or
a substantial part of its assets, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy
Code, (v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or
readjustment of debts, or (vi) adopt any resolution of its stockholders or Board
of Directors for the purpose of effecting any of the foregoing; or
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7.3.3 a proceeding or case shall be commenced without the
application or consent of IRIS and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
following shall be entered and continue unstayed and in effect, for a period of
forty-five (45) days from and after the date service of process is effected upon
IRIS, seeking (i) the liquidation, reorganization, dissolution or winding-up of
IRIS or the composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of IRIS or of all or any
substantial part of its assets or (iii) similar relief in respect of IRIS under
any law relating to bankruptcy, insolvency, reorganization, winding-up or the
composition or readjustment of debts.
7.4 EFFECT OF TERMINATION. Upon the termination of this Agreement,
all rights and obligations of the parties hereunder will terminate without
liability of any party to any other party except for (i) liability for any
breach occurring prior to such termination and (ii) the obligations of the
parties set forth in Sections 1.1.4, 1.3, 2 (but solely to the extent services
have been rendered by IRIS prior to such termination), 4, 5, 6, 7.4, 8.8, 8.10,
8.11 and 8.16 which shall survive such termination.
8. MISCELLANEOUS.
8.1 COMPLETE AGREEMENT; MODIFICATIONS. This Agreement and any
documents referred to herein or executed contemporaneously herewith constitute
the parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Agreement may not be amended, altered or modified except by a
writing signed by the parties.
8.2 WAIVERS STRICTLY CONSTRUED. With regard to any power, remedy or
right provided herein or otherwise available to any party hereunder (a) no
waiver or extension of time shall be effective unless expressly contained in a
writing signed by the waiving party; and (b) no alteration, modification or
impairment shall be implied by reason of any previous waiver, extension of time,
delay or omission in exercise, or other indulgence.
8.3 FORCE MAJEURE. Neither party shall be responsible for delays or
failure to perform under this Agreement (other than the obligations of PSI to
make certain payments to IRIS pursuant to Section 2 hereof) due to causes beyond
the reasonable control and without fault or negligence of such party.
8.4 NOTICES. Unless otherwise specifically permitted by this
Agreement, all notices under this Agreement shall be in writing and shall be
delivered by personal service, telegram, telex, facsimile or certified mail (or,
if certified mail is not available, then by first class mail), postage prepaid,
to such address as may be designated from time to time by the relevant party,
and which shall initially be as follows:
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(i) If to IRIS:
International Remote Imaging Systems, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000 (facsimile)
Attention: Xxxx X. Xxxxxxxxxxx, President
(ii) If to PSI:
PSI Systems, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000 (facsimile)
Attention: Xxxx X. Xxxxxxxxxxx, President
Any notice sent by certified mail (or by first class mail if certified mail
is not available) shall be deemed to have been given three (3) days after the
date on which it is mailed. All other notices shall be deemed given when
received. No objection may be made to the manner of delivery of any notice
actually received in writing by an authorized agent of a party.
8.5 ADDITIONAL DOCUMENTS. Each party hereto agrees to execute any
and all further documents and writings and to perform such other actions which
may be or become necessary or expedient to effectuate and carry out this
Agreement.
8.6 SUCCESSORS AND ASSIGNS. Except as provided herein to the
contrary, this Agreement shall be binding upon and inure to the benefit of the
parties, their respective successors and permitted assigns.
8.7 ASSIGNMENTS. IRIS and PSI may assign their rights and
obligations after prior written notice thereof to the other to an Affiliate if
such Affiliate assumes all of the obligations of the assignee hereunder and this
Agreement remains binding upon the assignee, and IRIS may assign its rights and
obligations after prior written notice to PSI to any Person which acquires all
or substantially all of the assets of IRIS or which is the surviving Person in a
merger or consolidation with IRIS, if (a) such Person assumes all of the
obligations of IRIS hereunder and (b) such Person shall, immediately after
giving effect to such assignment or transfer, be solvent and have a tangible net
worth (determined in accordance with generally accepted accounting principles
then in effect) not materially less than the tangible net worth (as so
determined) of IRIS immediately prior thereto. Except as provided above or
otherwise expressly permitted under this Agreement, neither party may assign any
of its rights or delegate any of its obligations under this Agreement, in whole
or in part, including without limitation pursuant to a merger or consolidation,
without the prior written consent of the other party, which may be withheld in
the sole discretion of the other party. Any attempt to assign or delegate any
portion of this Agreement in violation of this Section shall be null and void.
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8.8 GOVERNING LAW. This Agreement has been negotiated and entered
into in the State of California, concerns only California business and all
questions with respect to the Agreement and the rights and liabilities of the
parties shall be governed by the laws of that state, regardless of the choice of
laws provisions of California or any other jurisdiction. Any litigation or
arbitration between the parties shall be conducted in Los Angeles, California.
8.9 REMEDIES. The parties acknowledge that the remedy at law for any
breach, or threatened breach, of any of the provisions of this Agreement will be
inadequate. Therefore, each party to this Agreement shall be entitled to seek
specific performance as a remedy for any breach of this Agreement. Such remedy
shall not be deemed to be the exclusive remedy of a party hereto for the breach
of this Agreement by the other party hereto or its representatives, but shall be
in addition to all other remedies available at law or in equity to the party
suffering such breach.
8.10 ARBITRATION AS EXCLUSIVE REMEDY. Except for actions seeking
injunctive relief, which may be brought before any court having jurisdiction,
any claim arising out of or relating to (i) this Agreement, including, but not
limited to, its validity, interpretation, enforceability or breach, or (ii) the
relationship between the parties (including its commencement and termination)
whether based on breach of covenant, breach of an implied covenant or
intentional infliction of emotional distress or other theories, which are not
settled by agreement between the parties, shall be settled by arbitration in Los
Angeles, California before a board of three arbitrators, one selected by each
party, and the third by the two persons so selected, all in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
then in effect. The notice of intent to arbitrate shall name one arbitrator,
and the party(ies) receiving the notice shall name the second arbitrator within
15 days or the moving party may select the second arbitrator from a list
supplied by the AAA. In the event that these two arbitrators cannot agree upon
a third arbitrator within 15 days, then the third arbitrator shall be selected
from the list provided by the AAA with the parties striking names in order with
the party striking first to be determined by the flip of a coin. The parties
hereby (i) consent to the in personam jurisdiction of the Superior Court of the
State of California for purposes of confirming any such award and entering
judgment thereon; (ii) agree to use their best efforts to keep all matters
relating to any arbitration hereunder confidential; and (iii) agree that the
arbitrators may not assess any remedy other than the awarding of actual damages
suffered and/or an injunctive order (including temporary, preliminary and
permanent relief) when appropriate. In any arbitration proceedings hereunder,
(a) all testimony of witnesses shall be taken under oath; (b) discovery will be
allowed under the provisions of Section 1283.05 of the California Code of Civil
Procedure, as presently in force, which are incorporated herein; and (c) upon
conclusion of any arbitration, the arbitrators shall render findings of fact and
conclusions of law in a written opinion setting forth the basis and reasons for
any decision reached and deliver such documents to each party to this Agreement
along with a signed copy of the award in accordance with Section 1283.6 of the
California Code of Civil Procedure. Each party agrees that the arbitration
provisions of this Agreement are its exclusive remedy and expressly waives any
right to seek redress in another forum. Each party shall bear the fees of the
arbitrator appointed by it, and the fees of the neutral arbitrators shall be
borne equally
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by each party during the arbitration, but the fees of all arbitrators shall be
borne by the losing party.
8.11 ATTORNEYS' FEES. Should any litigation or arbitration be
commenced (including any proceedings in a bankruptcy court) between the parties
hereto or their representatives concerning any provision of this Agreement or
the rights and duties of any person or entity hereunder, the party or parties
prevailing in such proceeding shall be entitled, in addition to such other
relief as may be granted, to the attorneys' fees and court costs incurred by
reason of such litigation.
8.12 SEVERABILITY. The validity, legality or enforceability of the
remainder of this Agreement shall not be affected even if one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect. To the extent permitted by applicable law, the
parties hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
8.13 NO THIRD-PARTY BENEFITS. None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any third-party
beneficiary.
8.14 HEADINGS. The headings in this Agreement are inserted only as a
matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular provision.
8.15 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.16 NO JOINT VENTURE. It is understood and agreed that no agency,
employment, partnership or joint venture relationship is hereby created between
the parties. Neither party is an affiliate of the other and no claims or
representations will be made by either party which would create an apparent
agency, employment, partnership or joint venture relationship with the other.
Neither party has the authority to act for, create debts or
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obligations for, or bind the other, nor is either party responsible for the
obligations and debts of the other. The only relationship between the parties
is that of independent contractors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC.
By
----------------------------------------------
Xxxx X. Xxxxxxxxxxx, Chairman of the Board,
President and Chief Executive Officer
POLY U/A SYSTEMS, INC.
By
----------------------------------------------
Xxxx X. Xxxxxxxxxxx, President
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SCHEDULE A
GLOSSARY
"ADMINISTRATION AND SERVICES AGREEMENT" shall mean the Administration and
Services Agreement dated as of September 29, 1995 between IRIS and PSI, as
amended, modified or supplemented from time to time.
"AFFILIATE" of a Person shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with such Person. "Control" (and, with correlative meanings, the
terms "controlled by" and "under common control with") shall mean the possession
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting stock, by contract or
otherwise. In the case of a corporation "control" shall mean, among other
things, the direct or indirect ownership of more than fifty percent (50%) of its
outstanding voting stock.
"ANNUAL WORKPLAN AND BUDGET" shall mean the reasonably detailed workplans
and budgets for Research and Development to be provided by IRIS to PSI for each
annual period in accordance with Sections 1.1.1 and 1.1.4 of the Development
Agreement.
"AVAILABLE FUNDS" shall have the meaning set forth in Section 2.1 of the
Development Agreement.
"BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978, as amended,
modified or supplemented from time to time.
"CONFIDENTIAL INFORMATION" shall mean all information disclosed by IRIS to
PSI or by PSI to IRIS pursuant to the Technology License Agreement or the
Development Agreement, except information that (i) was known to the receiving
party prior to its receipt from the disclosing party (except that information
first developed pursuant to the Development Agreement shall not be considered
known by IRIS), (ii) is or becomes part of the public domain through no fault of
the receiving party or (iii) is disclosed to the receiving party on an
unrestricted basis by a third party that is legally free to disclose such
information.
"DEVELOPMENT AGREEMENT" shall mean the Research and Development Agreement
dated as of September 29, 1995 between PSI and IRIS, as amended, modified or
supplemented from time to time.
"FDA" shall mean the United States Food and Drug Administration or any
successor agency or authority, the approval of which is required to market
medical laboratory instruments in the United States.
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"IMPROVEMENTS" shall mean all methods, procedures, processes, techniques,
systems, inventions, apparatus, information, formulas, trade secrets, concepts,
ideas, proprietary rights (including, without limitation, patents), know-how,
data and test results made, conceived, discovered or developed by IRIS
exclusively in the course of conducting Research and Development.
"INDEMNIFIED PARTY" shall mean, with respect to any alleged Loss, the party
seeking indemnity under the terms of this Agreement.
"INDEMNIFYING PARTY" shall mean, with respect to any alleged Loss, the
party from whom indemnity is being sought under the terms of this Agreement.
"IRIS" shall mean International Remote Imaging Systems, Inc., a Delaware
corporation.
"IRIS COMMON STOCK" shall mean the common stock, $0.01 par value per share,
of IRIS or such security that IRIS stockholders receive in connection with any
consolidation, merger, or sale of all or substantially all of the assets of IRIS
or, if such securities were not received, the common stock (or equivalent
thereto) of the Person surviving any consolidation of IRIS with or merger of
IRIS with or into any other Person or any sale, lease or other transfer of all
or substantially all of the assets of IRIS to any other Person (including any
individual, partnership, joint venture, corporation, trust or group thereof).
"IRIS TECHNOLOGY" shall mean all methods, procedures, processes,
techniques, systems, inventions, apparatus, information, formulas, trade
secrets, concepts, ideas, proprietary rights (including, without limitation,
existing and pending patents), know-how, data and test results (excluding the
PSI Technology) which IRIS owns, or to which IRIS has the right to grant
sublicenses, on or prior to the expiration of the Development Agreement.
"LOSS" shall mean any loss, damage, claim, liability or expense, including
without limitation, interest, penalties and reasonable attorneys' fees, net of
any tax adjustments, settlements or other effects which actually result from the
Loss and its payment by the Indemnifying Party.
"MAYO ADVANCED URINE CHEMISTRY SYSTEM" means a Stand Alone wet chemistry
system for urine chemistry.
"OFFERING" shall mean the offering of Units as described in the Offering
Memorandum.
"OFFERING MEMORANDUM" shall mean the Offering Memorandum relating to the
Units dated June 29, 1995, as supplemented by the Supplemental Information to
Offering Memorandum dated Septebmer 25, 1995.
"OFFERING START DATE" shall mean the original date of the Offering
Memorandum.
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"OPTION EXPIRATION DATE" shall mean 121 days after termination of the
Development Agreement.
"PERSON" shall mean any individual, partnership, corporation, firm,
association, unincorporated organization, joint venture, trust or other entity.
"PROPOSED PRODUCTS" shall mean the Sonic Macrometer, the Mayo Advanced
Urine Chemistry System, the Urine Sediment Analyzer, and the Specimen
Accessioning Station.
"PSI" shall mean Poly U/A Systems, Inc., a Delaware corporation.
"PSI COMMON STOCK" shall mean the common stock, $.01 par value per share,
of PSI.
"PSI TECHNOLOGY" shall mean all methods, procedures, processes, techniques,
systems, inventions, apparatus, information, formulas, trade secrets, concepts,
ideas, proprietary rights (including, without limitation, existing and pending
patents), know-how, data and test results (excluding the IRIS Technology) which
PSI owns, or to which PSI has the right to grant sublicenses, on or prior to the
expiration of the Development Agreement, including the Improvements.
"RESEARCH AND DEVELOPMENT" shall have the meaning set forth in Section 1.1
of the Development Agreement.
"RESEARCH AND DEVELOPMENT COSTS" shall mean all direct and indirect costs,
fees and out-of-pocket or other expenses incurred, paid or accrued by IRIS in
connection with performing the Research and Development for PSI under the
Development Agreement, determined in accordance with Section 2.3 thereof, but
excluding in all events any such costs, fees or expenses paid by PSI to IRIS
under the Administration and Services Agreement.
"SONIC MACROMETER" means a Stand Alone instrument designed to automatically
measure all of urine specific gravity, pH and urine color and clarity in a
single instrument.
"SPECIMEN ACCESSIONING STATION" means a Stand Alone system consisting of
collection cups and an automatic pipetting device designed to transfer urine
from collection cups into standard clinical laboratory tubes.
"STAND ALONE" shall mean an instrument which is designed and sold primarily
to conduct the test or combination of tests described in the definition of the
instrument and not bundled with or generally sold or marketed with significant
additional features or incorporated into another instrument.
"TECHNOLOGY LICENSE AGREEMENT" shall mean the Technology License Agreement
dated as of September 29, 1995 between IRIS and PSI, as amended, modified or
supplemented from time to time.
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"TOA" shall mean TOA Medical Electronics Co., Ltd., a Japanese corporation.
"TOA RESTRUCTURING AGREEMENTS" shall mean the following agreements between
TOA and IRIS dated as of July 15, 1988: (i) Restructuring Agreement, (ii)
Amended and Restated Distribution Agreement, (iii) License Agreement and (iv)
Security Agreement and Collateral Assignment.
"UNITS" shall mean the units described in the Offering Memorandum, each
consisting of two thousand shares of PSI Common Stock and a warrant to purchase
four thousand shares of IRIS Common Stock.
"URINE SEDIMENT ANALYZER" means a Stand Alone instrument for automatically
conducting the microscopic portion of a urinalysis only through a slide-based
microscope but will not include a complete urinalysis work station or any other
part of a complete urinalysis.
"WORKPLAN AND BUDGET" shall mean the workplan and budget for Research and
Development to be provided by IRIS to PSI for the duration of the Development
Agreement in accordance with Section 1.1.1 thereof.
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