Amended & Restated Research Agreement

Exhibit 10.2


AMENDED AND RESTATED RESEARCH AGREEMENT


This AMENDED AND RESTATED RESEARCH AGREEMENT (this "Agreement"), dated as of March 15, 2001, is between SPECTRADISC CORPORATION, a Delaware corporation ("SpectraDisc"), and SPECTRA SCIENCE CORPORATION, a Delaware corporation ("Spectra Science").


Whereas, pursuant to a Technology Transfer Agreement, dated June 30, 1999, by and between SpectraDisc and Spectra Science (the "Original Technology Transfer Agreement"), Spectra Science granted to SpectraDisc, and SpectraDisc had acquired from Spectra Science, an exclusive license to certain patent rights and technology to develop and commercialize single play DVDs and CDs;


Whereas, SpectraDisc and Spectra Science have amended and restated the Technology Transfer Agreement as of the date hereof to provide development rights and a license with respect to limited-play digital media that is adapted to be read by optical means, including enhancements, applications, processes and technologies related thereto (for example, CDs, DVDs, LDs, and similar technologies and processes);


Whereas, SpectraDisc engaged Spectra Science to perform, and Spectra Science provided, research and development services upon the terms and conditions of a certain Research Agreement, dated June 30, 1999 (the "Original Research Agreement");


Whereas, Spectra Science has certain research and development experience and has the facilities, equipment and employees to permit it to carry out research and development activities on behalf of SpectraDisc;


Whereas, Spectra Science also has certain resources that would allow it to provide certain management services to SpectraDisc; and


Whereas, SpectraDisc wishes to retain Spectra Science to provide research and development services and to provide such general financial and managerial services under the terms and conditions set forth in this Agreement, and Spectra Science agrees to and accepts such arrangement.


Now therefore, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Spectra Science and SpectraDisc hereby agree as follows.


Section 1. Definitions. As used herein, capitalized terms shall have the respective meanings set forth below.


1.1 "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.


1.2 "Amended and Restated Technology Transfer Agreement" shall mean the Amended and Restated Technology Transfer Agreement, dated as of March 15, 2001, by and between Spectra Science and SpectraDisc, as amended, modified or supplemented from time to time.


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1.3 "Benchmark" shall mean the development of processes, technology and equipment meeting or allowing a user of such to meet the Specifications.


1.4 "Confidential Information" shall mean all Technology disclosed by Spectra Science to SpectraDisc pursuant to this Agreement, the Original Technology Transfer Agreement, or the Amended and Restated Technology Transfer Agreement.


1.5 "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 50% of its outstanding voting stock.


1.6 "Force Majeure" shall mean any Act of God, any accident, explosion, fire, storm, earthquake, flood, drought, peril of the sea, riot, embargo, war or foreign, federal, state or municipal order of general application, seizure, requisition or allocation, any failure or delay of transportation, shortage of or inability to obtain supplies, equipment, fuel or labor or any other circumstances or event beyond the reasonable control of the party relying upon such circumstance or event.


1.7 "Person" shall mean any individual, partnership, corporation, firm, association, unincorporated organization, joint venture, trust or other entity.


1.8 "Product" or "Products" shall have the meaning set forth in the Amended and Restated Technology Transfer Agreement.


1.9 "Specifications" shall mean the technology, manufacturing, packaging and quality control specifications or requirements of Panasonic Disc Services Corporation or an equivalent major disc replicator regarding the creation and mass production of commercially viable single- or limited-play CDs and DVDs.


1.10 "Spectra Science Technology" shall have the meaning set forth in the Amended and Restated Technology Transfer Agreement.


1.11 "Spectra Science Special Technology" shall have the meaning set forth in the Amended and Restated Technology Transfer Agreement.


1.12 "SpectraDisc Field" shall have the meaning set forth in the Amended and Restated Technology Transfer Agreement.


1.13 "SpectraDisc Improvements" shall have the meaning set forth in the Amended and Restated Technology Transfer Agreement.


1.14 "Technology" shall have the meaning set forth in the Amended and Restated Technology Transfer Agreement.


Section 2. Research and Development; Management Services.


2.1 Research and Development Services. SpectraDisc hereby engages Spectra Science, and Spectra Science hereby agrees to undertake research and development in connection with the production of technology, processes, materials and equipment necessary for the manufacturing by SpectraDisc of Products that meet the


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Specifications (the "Research and Development"). Such services shall be provided as follows:


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2.1.1 Research and Development; Hardware.


(i) During the term of this Agreement, Spectra Science shall use commercially reasonable efforts to conduct the Research and Development on behalf of SpectraDisc in a prudent, skillful and diligent manner. Spectra Science shall furnish all labor, supervision, services, supplies and materials necessary to perform the Research and Development as contemplated in the SpectraDisc budget (including the schedules thereto) annexed hereto as Exhibit A.


(ii) Spectra Science shall arrange for SpectraDisc to purchase, and SpectraDisc agrees to purchase from third parties, the necessary hardware components for the manufacturing unit to be developed by Spectra Science hereunder (the "Hardware") at the lowest commercially available price.


2.1.2 Other Activities; Subcontracts. During the term of this Agreement, Spectra Science shall devote such time and effort to the performance of services pursuant to this Agreement as may be necessary or appropriate to fulfill its duties as described in this Section 2.1; provided, however, it is specifically understood and agreed by SpectraDisc that Spectra Science shall not be required to devote itself, on a full time basis, to the provision of such services and that Spectra Science shall have the right to engage in its own research and development activities and in other business activities with other Persons, and SpectraDisc 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, without limiting Spectra Science's obligation to use commercially reasonable efforts to provide certain services hereunder, nothing set forth in this Agreement shall limit or reduce the ability of Spectra Science to carry on such other activities. SpectraDisc acknowledges and agrees that, in performing the Research and Development, Spectra Science may (at no additional cost to SpectraDisc beyond the fees set forth in Section 3 hereof), and is hereby authorized to, without the prior consent of SpectraDisc, engage or agree or otherwise collaborate with other Persons, including, without limitation, Affiliates of Spectra Science, to provide assistance in carrying out the Research and Development.


2.1.3 Reports and Records. Spectra Science will provide to SpectraDisc monthly a reasonably detailed report setting forth (a) a summary of the Research and Development, (b) a description of any material developments (whether positive or negative) with respect to the Research and Development, and (c) the estimated time and expenses necessary to complete the Research and Development. Spectra Science will keep regular laboratory notebook records documenting its research and development efforts on behalf of SpectraDisc. Such notebook will be regularly signed and dated in the ordinary course by the individual or individuals engaged in such research and development efforts and witnessed by other individuals who understand the research and development.


2.1.4 License to Technology for Development. SpectraDisc hereby grants to Spectra Science an exclusive (against SpectraDisc and all other Persons), worldwide, royalty-free license, including the right to license or sublicense to other Persons, to employ and engage in any and all uses of the Technology owned or licensed by Disc, and the SpectraDisc Improvements solely for purposes of permitting Spectra Science to perform its duties hereunder, including, without limitation, the activities described in Section 2.1.2 hereof. The foregoing license shall terminate upon termination or expiration of this Agreement. The foregoing license is granted in addition


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to, and not in substitution for, any other rights of Spectra Science in the Technology owned or licensed by Disc and the SpectraDisc Improvements whether pursuant to the Amended and Restated Technology Transfer Agreement or otherwise.


2.1.5 (Intentionally Omitted)


2.1.6 Disclaimer of Warranties. Spectra Science cannot and does not guarantee that the Research and Development will be successful in whole or in part, that any materials useful in manufacturing the Product will be developed or that any developed materials will meet SpectraDisc's or any third party's needs in manufacturing the Products. To the extent that Spectra Science has complied with Section 2.1.1 hereof and has not otherwise breached its specific representations, warranties and covenants contained herein, the failure of Spectra Science to successfully develop any materials will not in and of itself constitute a breach by Spectra Science of any representation, warranty, covenant or other obligation under this Agreement or the Amended and Restated Technology Transfer Agreement. Spectra Science disclaims all warranties, whether express or implied, with respect to the Hardware, including warranties of THE HARDWARE'S merchantability, fitness for a particular purpose, and non-infringement.


2.1.7 Title to Improvements. All right, title and interest to any intellectual property or improvements developed pursuant to this Amended and Restated Research Agreement shall be governed by the provisions of the Amended and Restated Technology Transfer Agreement.


2.2 Management Services.


2.2.1 Services Provided.


(i) Spectra Science will provide persons acting in the capacity of SpectraDisc's Chief Executive Officer, Chief Technical Officer, and Chief Financial Officer functions (specifically, those functions set forth on Schedule 2.2 to this Agreement) including, without limitation except as set forth below, all business and general administrative and general accounting services, materials, supplies and office facilities to SpectraDisc as contemplated on Exhibit A annexed hereto, in consideration for the payments set forth in Section 3.1.2 of this Agreement (the "Management Services"), it being understood that this is a turn-key contract, that SpectraDisc will not in and of itself have offices or employees available to perform such services and that SpectraDisc shall not be responsible for any expenses or other charges other than the payments set forth in Section 3 and its own expenses for purchases of capital equipment, marketing or business development consultants, legal fees, independent auditor fees and patent maintenance costs.


(ii) Spectra Science shall at all times maintain comprehensive liability and workers' compensation insurance and shall obtain a vendor's broad form endorsement policy which shall name SpectraDisc as an additional insured.


2.2.2 Indemnification.


(i) SpectraDisc shall defend, indemnify and hold Spectra Science and its affected di ...