Amendment To License And Joint Development

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


-------------------------------- * 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.


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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.


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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.


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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.


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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.


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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.


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(ii) Beginning on January 1, 2005:


...