Full Press Release Details
License and Services Agreement ("Agreement") is made and entered into as of June 10, 2013 (the "Effective
Date") by and between A5 Genetics KFT, Corporation with its principal place of business at Gerecse u. 16, H-2094, Hungary
("A5"), and Atossa Genetics Inc., a Delaware corporation, with its principal place of business at 1616 Eastlake
Ave. East, Suite 360, Seattle, Washington ("Atossa").
A5 has developed proprietary software called RecurrenceOnline for the purpose of analyzing genes in biopsy samples from breast
cancer tumors (the "RecurrenceOnline Software");
Atossa is developing a laboratory test called the NextCYTE Breast Health Test which will be used to perform a laboratory diagnostic
test on samples of breast cancer tumors to help inform treatment options and risk of recurrence (the "NextCYTE Test");
Atossa wishes to acquire rights, and A5 wishes to transfer certain rights, to the RecurrenceOnline Software and other rights
for use with its NextCYTE Test.
THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.1. Grant of License. Subject to the terms and conditions of this Agreement A5 grants to Atossa an exclusive, irrevocable,
license in the Field of Use to use, sell, distribute, patent, sublicense and transfer the Licensed Property in the Territory.
For purposes of this Agreement:
means world-wide except the European Union.
Property" means all rights to the RecurrenceOnline Software and related, hardware, data bases and related content and
functionality to www.recurrenceonline.com, Documentation, improvements, new versions, Error corrections under Section
means all modifications, updates
and Error corrections under Section 3 to the algorithm used in the RecurrenceOnline Software, including additions and deletions
of genes, altering the weight of genes or otherwise altering the algorithm.
means the user manuals or other documentation accompanying the Licensed Property, as it may be revised and updated from time to
means the license to use the Licensed Property granted to Atossa in this Agreement.
of Use" means the fields of breast cancer and pre-cancerous lesions including ductal carcinoma in situ.
Restrictions. Atossa may not itself, or through any parent, subsidiary, affiliate, agent or other third party: (a) decompile,
disassemble, reverse engineer or circumvent any technological measure controlling access to the RecurrenceOnline Software in whole
or in part; or (b) modify the RecurrenceOnline Software or write or develop any derivative software or any other software program
based upon the RecurrenceOnline Software.
Specifications. The RecurrenceOnline Software contains the features and specifications set forth on Exhibit A (the
Source Code. The License is to the executable object code of the RecurrenceOnline Software only, and does not include any
license to the related source code.
Copies. A5 will retain one copy of the RecurrenceOnline Software on a secondary server or other host computer for backup
purposes. Atossa may make additional copies of the RecurrenceOnline Software in the normal course of its back-up and archival
operations but all of such copies will remain subject to the terms of this Agreement.
Documentation. Atossa may make copies of the Documentation to the extent necessary to enable use of the RecurrenceOnline
Software in accordance with this Agreement.
Shipments. All A5's shipments to Atossa under this Agreement, if any, will be F.O.B. Atossa's facility at the
address first set forth above. A5 will pay for any shipping, handling, insurance and other similar costs.
Right of First Refusal to New Algorithms. Prior to licensing, selling or distributing any new algorithms in the Field of
Use that are intended for commercialization, A5 shall first offer in writing to Atossa a license in the Territory to such new
algorithms substantially on the terms upon which the Licensed Property is licensed under this Agreement and other commercially
reasonable terms to be agreed upon by the parties. Atossa shall have 60 days to evaluate the potential license of such new algorithms.
Improvements. Improvements shall be promptly communicated and transferred to Atossa, but subject to A5's need to
validate improvements with third party clinical partners
Fees and Patent Costs.
Within 60 days of the date of this Agreement, Atossa shall pay A5 a one-time fee of $100,000. Atossa shall pay for all costs and expenses of pursuing all patents under Section 3 of this Agreement.
Within 60 days of the date that the Licensed Property is installed and tested at Atossa's site to Atossa's reasonable
satisfaction, Atossa shall pay A5 a one-time fee of $100,000.
Within three months of the Atossa achieving either of the following milestones
Atossa shall pay A5 US$200,000: (i) submission by Atossa of an application to the U.S. FDA seeking clearance of the NextCYTE Test
as a medical device, or (ii) commercial launch by Atossa of the NextCYTE Test. Atossa agrees to use good faith commercial efforts
to submit the application for the foregoing FDA clearance on or before January 1, 2015.
Within 60 days of receiving FDA clearance for the NextCYTE Test, Atossa
shall pay A5 an additional fee of US$1,000,000.
On or before January 31 of each year, Atossa shall pay A5 a royalty fee equal to US$50 for each NextCYTE Test for which
Atossa receives payment. Atossa shall provide a report to A5 of all NextCYTE tests processed and for which Atossa
receives payment during each six month periods ending June 30 and December
reports shall be provided within 30 days after each such six month period. Atossa shall be responsible for any third-party royalties
that Atossa incurs as a result of commercialization of the NextCYTE Test.
Support Services Fees. For the services provided by A5 under Section 3 (the "A5 Services"), Atossa
will pay A5 a service fee equal to US$65 for each NextCYTE Test for which A5 Services are provided; provided, however, that no
such fee shall be due for NextCYTE Tests performed during the validation and pre-commercial launch periods. The service fees shall
be paid quarterly in arrears within 30 days after the end of each calendar quarter.
Payments. All payments due under this Agreement will be made in U.S. dollars.
Support. A5 will provide Atossa with Support Services consisting of the following (the "Support Services"):
Installation and Testing. A5 will provide reasonable support and assistance to Atossa in installing and otherwise integrating
the Licensed Property with the NextCYTE Test and Atossa's other operations.
Email Support. A5 will provide assistance via email to Atossa related to Atossa's operation of RecurrenceOnline Software
and its use with the NextCYTE Test. A5 will respond to emails within 24 hours. A5 will also be available for occasional phone
consultations at mutually agreeable times.
Maintenance. A5 will provide diagnostic services and other assistance to Atossa for Errors in the RecurrenceOnline Software.
A5 may provide Atossa with a report form for reporting suspected Errors. An "Error" means any defect in the
RecurrenceOnline Software that prevents the RecurrenceOnline Software from operating substantially in accordance with the Specification
and Documentation. A5 will work diligently to provide an immediate correction or modification for all Errors.
and Upgrades. A5 will make available to Atossa without charge one copy of any update or upgrade generally made available by
A5 without charge to its other licensees.
Operations. A5 will provide operational support to assist Atossa in processing samples with the NextCYTE Test by performing
the quality control of the processed samples and statistical evaluation for a gene expression based diagnostic report.
Atossa Responsibilities. Atossa agrees to provide A5 with all information and materials reasonably requested by A5, to
the extent reasonably available to Atossa, for use in replicating, diagnosing and correcting an Error or other problem with the
A5 Software reported by Atossa to the extent such information and materials are reasonably available to Atossa. Atossa will maintain
permanent internet connection with a fixed IP address through which the RecurrenceOnline Software can be accessed and to otherwise
facilitate maintenance and Support Services.
Ownership of Atossa Data. All of Atossa's data, including the data generated by use of the Licensed Property and
the NextCYTE Test (the "Atossa Data") will remain the sole and exclusive property of Atossa.
Use of Atossa Data by A5. Atossa hereby grants to A5 during the Term of this Agreement, the limited, nontransferable and
nonexclusive right and license to Atossa Data to develop Improvements, and for research purposes, publish research papers and
for teaching purposes; provided, however, that at all times A5 shall keep all Atossa Data confidential in accordance with Section
9 (Confidentiality). Any reference or use by A5 to the names Atossa, Atossa Genetics, National Reference Laboratory for Breast
Health, NextCYTE and other trademarks or service marks of Atossa shall be subject to the prior written approval of Atossa.
Ownership by A5. Subject to Section 4.5:
all inventions, discoveries, improvements, enhancements, methods, processes,
models, algorithms, software technology, technical documentation and other methodologies owned or developed by A5 in the course
of providing Services to Atossa or preparing the RecurrenceOnline Software will remain the property of A5;
no title or ownership of the RecurrenceOnline Software or any part thereof
will be transferred to Atossa; and
Atossa acknowledges that Atossa is acquiring only a license to use the Licensed
Property and not any title to or ownership of the Licensed Property or any part thereof
Patent Prosecution. A5 represents that it has not sought patent protection on the Licensed Property in the Territory and
A5 shall not seek or permit others to seek, any such patent protection in the Territory. Atossa shall have the right, but not