Amendment To Patent And Technology License Agreement

AMENDMENT TO PATENT AND TECHNOLOGY LICENSE AGREEMENT


This AMENDMENT TO PATENT AND TECHNOLOGY LICENSE AGREEMENT ("Amendment") is made and entered into as of this 9TH day of June, 2000 by and between ACCUMED INTERNATIONAL, INC., a Delaware corporation ("AccuMed") and AMPERSAND MEDICAL CORPORATION ("Ampersand" or "Licensee"), a Delaware corporation, as Assignee of INPATH, LLC. ("Inpath"), a wholly owned subsidiary of Ampersand.


WHEREAS, as of September 4, 1998 AccuMed and Inpath entered into that certain Patent and Technology Licence Agreement (the "License Agreement").


WHEREAS, on November 19, 1999 Inpath purported to terminate the License Agreement.


WHEREAS, AccuMed challenged the validity of the November 19, 1999 termination of the License Agreement by Inpath.


WHEREAS, on March 29, 2000 the parties hereto entered into a Letter Agreement ("Letter Agreement") pursuant to which the parties agreed to resolve all differences among them as set forth in the Letter Agreement and in this Amendment, the Assignment and the related Additional License and Purchase Agreement described therein.


WHEREAS, in conjunction with this Amendment, Inpath has assigned all of its rights, title, interest and obligations under the License Agreement and this Amendment to Ampersand.


WHEREAS, pursuant to the Letter Agreement, AccuMed agreed to the Assignment of the License Agreement by Inpath to Ampersand.


NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, AccuMed and Ampersand hereby agree as follows:


1. Definitions. The capitalized terms used in this Amendment shall have the respective meanings ascribed to them in the License Agreement unless otherwise expressly defined in this Amendment.


2. Reinstatement of License Agreement. AccuMed and Ampersand agree to reinstate and modify the September 4, 1998 License Agreement as set forth herein.


3. The following definitions outlined in the License Agreement are hereby replaced with the following:


"Foreign Patents" means, collectively (i) the letters patent corresponding
to the U.S. Patents, issued or applied for in a country other than the
United States; (ii) the continuations, continuations-in-part, or divisions
thereof~ and (iii) any and all improvements, modifications, extensions,
renewals, or reissues of such Patent, subject to the provisions of Section
5.1 governing the prosecution thereof. 2
"Sales" means all recorded booked revenues for actual sales upon which
payment has been collected by Licensee or an Affiliated Person of Licensee
(whether in cash or by way of other benefit, advantage, or concession (in
which case the applicable revenue will be the monetary equivalent or value
of same).


"U.S. Patents" means (i) AccuMed's Patent entitled "A Method and Apparatus
For Imaging and Sampling Diseased Tissue Using Autofluorescence" U.S.
patent number 5,999,844 dated 12/07/99; (ii) the continuations,
continuations-in-part or divisions thereof, if any; and (iii) any and all
improvements, modifications, extensions, renewals or reissues of such
Patent, if any.


4. Section 2.1 of the License Agreement is replaced with the following:


2.1 Grant of License in Patents. AccuMed hereby grants to Licensee, and
Licensee accepts from AccuMed, an exclusive, non-transferable (except as
provided in Section 10.8 herein), non-divisible license to make, have
made, use, offer to sell and sell Licensed Products covered by the U.S.
Patents and Foreign Patents for use in cervical and ovarian gynecological
applications for Point of Care and concurrent with a patient's medical
office visit in a physician's office and the non-exclusive license to
make, have made, use, offer to sell and sell Licensed Products covered by
the U.S. Patents and Foreign Patents for use in cervical and ovarian
gynecological applications for Point of Care in labs outside of the
physician's office.


5. Section 2.2 of the License Agreement is replaced with the following:


2.2 Grant of License in Technology. AccuMed hereby grants to Licensee,
and Licensee accepts from AccuMed, and exclusive, non-transferable (except
as provided in Section 10.8 herein), non-divisible license to make, have
made, use, offer to sell and sell Licensed Products utilizing the
Technology for use in cervical and ovarian gynecological applications for
Point of Care and concurrent with a patient's medical office visit in a
physician's office and the non-exclusive license to make, have made, use,
offer to sell and sell Licensed Products utilizing the Technology for use
in cervical and ovarian gynecological applications for Point of Care in
labs outside of the physician's office.


6. The following sentence is added to the end of Section 2.5:


"The parties acknowledge and agree that AccuMed has no obligation, express
or implied, to (i) develop any improvements to the U.S. Patents, the
Foreign Patents, the Technology on the Copyrighted Works or (ii) to file
any patent applications for any further developments, inventions or
discoveries known to AccuMed.


7. Section 2.6 of the License is stricken in its entirety.


8. Section 3.1 of the License Agreement is modified to add the
following sentence:


2 3
As of the date of the Amendment hereto, all of the Guaranteed License Issue Fees due to be paid hereunder have been paid and no further amounts are outstanding.


9. Section 3.2 of the License Agreement is replaced with the following:


3.2 Required Royalty; Minimum Guaranteed Payments; Advanced Required
Royalty Payments.


(a) For the rights and privileges granted to Licensee under this
Agreement, Licensee (subject to paragraph (b) of Section 5.1,
Section 5.2, and Section 5.3) shall pay to AccuMed from and after
the date hereto until the licenses hereunder are terminated in
accordance with this Agreement, a royalty rate equal to 4% of all
Sales ("Required Royalty"). The parties acknowledge and agree that
"the date hereto" referred to herein is the date of the License
Agreement, namely September 4, 1998.


(b) Notwithstanding the amount of any sales or Required Royalty,
Licensee shall pay AccuMed, a minimum guaranteed payment of
$5,000,000 ("Minimum Guaranteed Payment") payable by Licensee only
out of the booked revenues for Sales at the Royalty Rate outlined in
(a) herein as Required Royalty Payments for the term of the
Agreement. In the event that the Minimum Guaranteed Payment of
$5,000,000 is not paid in full at the time of the termination of
this Agreement, then the difference between the amounts actually
paid by Licensee to AccuMed as Required Royalty Payments and
$5,000,000 shall be immediately due and payable by Licensee to
AccuMed.


(c) Upon the signing by all parties of the Amendment, and related
documents, Licensee shall pay or provide to AccuMed the following:


(i) $500,000 in cash, which cash payment shall represent an
advanced, non-refundable Required Royalty Payment hereunder;


(ii) a $100,000 convertible promissory note payable to
AccuMed (with conversion rights at $3.50/share into registered
shares of Ampersand) bearing interest of 11% and due or convertible
on March 29, 2001. The principal amount of the note shall represent
an additional advanced, non-refundable Required Royalty Payment
hereunder; and


(iii) 128,571 shares of Ampersand common stock which stock
Ampersand will price protect to a share price of not less than $3
.50/share to a measurement date sixty days following the date on
which the shares being issued become registered and are freely
tradable. If the market price at the measurement date is less than
$3.50 per share, Ampersand shall at its option (x) make a cash
payment to AccuMed in an amount representing the difference in
market price and $3.50 per share multiplied by 128,571 shares or (y)
issue an additional number of Ampersand shares to AccuMed which
number shall be arrived at by multiplying the d ...