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COMMERCIAL LEASE

(GENERAL FORM)

1. PARTIES.

This Lease is made and entered into this 30th day of August, 2008 by and between by and between Robert L. and Margaret K. Balmes (hereinafter referred to as "Landlord") and AMDL, Inc., a Delaware corporation (hereinafter referred to as "Tenant").

2. PREMISES.

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, on the terms and conditions hereinafter set forth that certain real property and the building and other improvements located thereon situated in the City of  Tustin, County of  Orange , State of  California   , commonly known as  2492 Walnut Ave., Suite 100    (said real property is hereinafter called the "Premises").

3. TERM.

The term of this Lease shall be for  two years, commencing on  December 1, 2008 and ending on December 1, 2010 , unless sooner terminated as hereinafter provided.

4. RENT.

Tenant shall pay Landlord as rent for the Premises the following sums per month, in advance on the first day of each month during the term of this Lease:

During the  first  year of the term of this Lease, the sum of  Six thousand nine hundred dollars and fifteen cents ($ 6,900.15 )dollars per month. During the  second year of the term of this Lease, the sum of   Six thousand nine hundred forty-four dollars and ten cents  ($ 6,944.10 ) dollars per month. During the year through the year of the term of this Lease, the sum of n/a  ($ n/a  ) dollars per month.

Tenant shall pay to Landlord upon the execution of this Lease the sum of  n/a                 ($ n/a  ) dollars as rent for n/a  . Rent for any period during the term of this Lease which is for less than one (1) month, shall be a pro rata portion of the monthly installment. Rent shall be payable without notice or demand and without any deduction, off-set, or abatement in lawful money of the United States to the Landlord at the address stated herein for notices or to such other persons or such other places as the Landlord may designate to Tenant in writing.

5. SECURITY DEPOSIT.                                          shall retain

Tenant shall deposit with Landlord upon the execution of this Lease the sum of  Five thousand seven hundred fifty-seven, currently held as a deposit,   ($ 5,757 ) dollars as a security deposit for the Tenant's faithful performance of the provisions of this Lease. If Tenant fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord may use the security deposit, or any portion of it, to cure the default or compensate Landlord for all damages sustained by Landlord resulting from Tenant's default. Tenant shall immediately on demand pay to Landlord the sum equal to that portion of the security deposit expended or applied by Landlord, which was provided for in this paragraph so as to maintain the security deposit in the sum initially deposited with Landlord. Landlord shall not be required to keep the security deposit separate from its general account nor shall Landlord be required to pay Tenant any interest on the security deposit. If Tenant performs all of Tenant's obligations under this Lease, the security deposit or that portion thereof which has not previously been applied by the Landlord, shall be returned to Tenant within fourteen (14) days after the expiration of the term of this Lease, or after Tenant has vacated the Premises, whichever is later.

6. USE.

Tenant shall use the Premises only for  corporate offices, manufacturing of diagnostic products, medical laboratory, research and related activities  and for no other purpose without the landlord's prior written consent. Tenant shall not do, bring or keep anything in or about the Premises that will cause a cancellation of any insurance covering the Premises or the building in which the Premises are located. If the rate of any insurance carried by the Landlord is increased as a result of Tenant's use, Tenant shall pay to Landlord within ten (10) days after written demand from landlord, the amount of any such increase. Tenant shall comply with all laws concerning the Premises or Tenant's use of the Premises, including without limitation, the obligation at Tenant's cost to alter, maintain, or restore the Premises in compliance and conformity with all laws relating to the condition, use, or occupancy of the Premises by Tenant during the term of this lease. Tenant shall not use or permit the use of the Premises in any manner that will tend to create waste or a nuisance or, if there shall be more than one tenant of the building containing the Premises, which shall unreasonably disturb any other tenant.

 

 

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Before you use this form, fill in all the blanks, and make whatever changes are

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appropriate and necessary to your particular transaction. Consult a lawyer if you

	 
	 
WOLCOTTS FORM 973 – (price class 2A)

	 
you doubt the form’s fitness for your purpose and use. Wolcotts makes no representation

	 
	 
COMMERCIAL LEASE (General) – rev. 7-99

	 
or warranty, express or implied, with respect to the merchantability or fitness of this

	 
	 
© 1999 WOLCOTTS FORMS, INC.

	 
form for an intended use or purpose.

	 

 

 

  

  

  

 

 

 

Tenant hereby accepts the Premises in their condition existing as of the date that Tenant possesses the Premises, subject to all applicable zoning, municipal, county and state laws, ordinances, regulations governing or regulating the use of the Premises and accepts this lease subject thereto and to all matters disclosed thereby. Tenant hereby acknowledges that neither the Landlord nor the landlord's agent has made any representation or warranty to Tenant as to the suitability of the Premises for the conduct of Tenant's business.

7. TAXES.

(a) Real Property Taxes.

Landlord  shall pay all real property taxes and general assessments levied and assessed against the Premises during the term of this lease.

If it shall be Tenant's obligation to pay such real property taxes and assessments hereunder, Landlord shall use its best efforts to cause the Premises to be separately assessed from other real property owned by the landlord. If Landlord is unable to obtain such a separate assessment, the assessor's evaluation based on the building and other improvements that are a part of the Premises shall be used to determine the real property taxes. If this evaluation is not available, the parties shall equitably allocate the property taxes between the building and other improvements that are a part of the Premises and all buildings and other improvements included in the tax bill. In making the allocation, the parties shall reasonably evaluate the factors to determine the amount of the real property taxes so that the allocation of the building and other improvements that are a part of the Premises will not be less than the ratio of the total number of square feet of the building and other improvements that are a part of the Premises bears to the total number of square feet in all buildings and other improvements included in the tax bill.

Real property taxes attributable to land in the Premises shall be determined by the ratio that the total number of square feet in the Premises bears to the total number of square feet of land included in the tax bill.

(b) Personal Property Taxes.

Tenant shall pay prior to the delinquency all taxes assessed against and levied upon the trade fixtures, furnishings, equipment and other personal property of Tenant contained in the Premises. Tenant shall endeavor to cause such trade fixtures, furnishings and equipment and all other personal property to be assessed and billed separately from the property of the landlord. If any of Tenant's said personal property shall be assessed with landlord's property, Tenant shall pay to Landlord the taxes attributable to Tenant within ten (10) days after the receipt of a written statement from Landlord setting forth the taxes applicable to Tenant's property.

8. UTILITIES. Tenant shall make all arrangements and pay for all water, gas, heat, light, power, telephone and other utility services supplied specifically or exclusively to the Premises together with any taxes thereon and for all connection charges. Landlord will provide utility water.

9. MAINTENANCE AND REPAIRS.

(a) Landlord's Obligations.

Except as provided in Article 12, and except for damage caused by any negligent or intentional act or omission of Tenant, Tenant's agents, employees, or invitees, Landlord at its sole cost and expense shall keep in good condition and repair the foundations, exterior walls, and exterior roof of the Premises. Landlord shall also maintain the unexposed electrical, plumbing and sewage systems including, without limitation, those portions of the systems lying outside the Premises; window frames, gutters and down spouts on the building, all sidewalks, landscaping and other improvements that are a part of the Premises or of which the Premises are a part. The Landlord shall also maintain the heating, ventilating and air- conditioning systems servicing the Premises. Landlord shall resurface and re-stripe the parking area on or adjacent to the Premises when necessary. Landlord shall have thirty (30) days after notice from Tenant to commence to perform its obligations under this Article 9, except that Landlord shall perform its obligations immediately if the nature of the problem presents a hazard or emergency situation. If the Landlord does not perform its obligations within the time limit set forth in this paragraph, Tenant can perform said obligations and shall have the right to be reimbursed for the amount that Tenant actually expends in the performance of landlord's obligations. If Landlord does not reimburse Tenant within thirty (30) days after demand from Tenant, Tenant shall have the right to withhold from future rent the sums Tenant has expended.

(b) Tenant's Obligations.

Subject to the provisions of Sub-paragraph (a) above and Article 1 2, Tenant shall be responsible for payment of the cost of maintenance and repair of the Premises, excluding the heating, ventilating and air- conditioning systems servicing the Premises to the extent such cost or expense is attributable to causes beyond normal wear and tear.

 

 

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If Tenant fails to perform Tenant's obligation as stated herein, Landlord may at its option (but shall not be required to), enter the Premises, after ten (10) days prior written notice to Tenant, put the same in good order, condition and repair, and the costs thereof together with interest thereon at the rate of ten (10%) percent per annum shall become due and payable as additional rental to Landlord together with Tenant's next rental installment.

10. ALTERATIONS AND ADDITIONS.

Tenant shall not, without the landlord's prior written consent, make any alterations, improvements or additions in or about the Premises except for non-structural work, which does not exceed $1,000.00 in cost. As a condition to giving any such consent, the Landlord may require the Tenant to remove any such alterations, improvements, or additions at the expiration of the term, and to restore the Premises to their prior condition by giving Tenant thirty (30) days written notice prior to the expiration of the term that Landlord requires Tenant to remove any such alterations, improvements, or additions that Tenant has made to the Premises. If Landlord so elects, Tenant at its sole cost shall restore the Premises to the condition designated by Landlord in its election before the last day of the term of the lease.

Before commencing any work relating to the alterations, additions, or improvements affecting the Premises, Tenant shall notify Landlord in writing of the expected date of the commencement of such work so that Landlord can post and record the appropriate notices of non-responsibility to protect, Landlord from any mechanic's liens, materialman liens, or any other liens. In any event, Tenant shall pay, when due, all claims for labor and materials go furnished to or for Tenant at or for use in the Premises. Tenant shall not permit any mechanic's liens or materialman's liens to be levied against the Premises for any labor or material furnished to Tenant or claimed to have been furnished to Tenant or Tenant's agents or contractors in connection with work of any character performed or claimed to have been performed on the Premises by or at the direction of Tenant. Tenant shall have the right to assess the validity of any such lien if, immediately on demand by landlord, Tenant procures and records a lien release bond meeting the requirements of California Civil Code Section 3143 and shall provide for the payment of any sum that the claimant may recover on the claim (together with the costs of suit, if it is recovered in the action).

Unless the Landlord requires their removal as set forth above, all alterations, improvements or additions which are made on the Premises by the Tenant shall become the property of the Landlord and remain upon and be surrendered with the Premises at the expiration of the term. Notwithstanding the provisions of this paragraph, Tenant's trade fixtures, furniture, equipment and other machinery, other than that which is affixed to the Premises so that it cannot be removed without material or structural damage to the Premises, shall remain the property of the Tenant and removed by Tenant at the expiration of the term of this lease.

11. INSURANCE; INDEMNITY.

	
  

	
(a)

	
Fire Insurance.

Landlord at its cost shall maintain during the term of this lease on the Premises a policy or policies of standard fire and extended coverage insurance to the extent of at least ninety (90%) percent of full replacement value thereof. Said insurance policies shall be issued in the names of Landlord and Tenant, as their interests may appear.

Tenant at its cost shall maintain during the term of this lease on all its personal property, Tenant's improvements, and alterations in or about the Premises, a policy of standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, to the extent of their full replacement value. The proceeds from any such policy shall be used by Tenant for the replacement of personal property or the restoration of Tenant's improvements or alterations.

(b) Liability Insurance.

Tenant at its sole cost and expense shall maintain during the term of this lease public liability and property damage insurance with a single combined liability limit of five hundred thousand ($500,000.00) dollars, and property damage limits of not less that one hundred thousand ($100;000.00) dollars, insuring against all liability of Tenant and its authorized representatives arising out of and in connection with Tenant's use or occupancy of the Premises. Both public liability insurance and property damage insurance shall insure performance by Tenant of the indemnity provisions in Sub-paragraph (d) below, but the limits of such insurance shall not, however, limit the liability of Tenant hereunder. Both Landlord and Tenant shall be named as additional insureds, and the policies shall contain cross-liability endorsements. If Tenant shall fail to procure and maintain such insurance the Landlord may, but shall not be required to, procure and maintain same at the expense of Tenant and the cost thereof, together with interest thereon at the rate of ten (10%) percent per annum, shall become due and payable as additional rental to Landlord together with Tenant's next rental installment.

 

 

 

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(c) Waiver of Subrogation.

Tenant and Landlord each waives any and all rights of recovery against the other, or against the officers, employees, agents, and representatives of the other, for loss of or damage to such waiving party or its property or the property of others under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Each party shall cause each insurance policy obtained by it hereunder to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with any damage covered by any such policy.

(d) Hold Harmless.

Tenant shall indemnify and hold Landlord harmless from and against any and all claims arising from Tenant's use or occupancy of the Premises or from the conduct of its business or from any activity, work, or things which may be permitted or suffered by Tenant in or about the Premises including all damage, costs, attorney's fees, expenses and liabilities incurred in the defense of any claim or action or proceeding arising therefrom. Except for landlord's willful or grossly negligent conduct, Tenant hereby assumes all risk of damage to property or injury to person in or about the Premises from any cause, and Tenant hereby waives all claims in respect thereof against landlord.

(e) Exemption of Landlord from Liability.

Except for landlord's willful or grossly negligent conduct, Tenant hereby agrees that Landlord shall not be liable for any injury to Tenant's business or loss of income therefrom or for damage to the goods, wares, merchandise, or other property of Tenant, Tenant's employees, invitees, customers or any other person in or about the Premises; nor shall Landlord be liable for injury to the person of Tenant. Tenant's employees, agents, contractors, or invitees, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air-conditioning, or lighting fixtures, or from any other cause, whether such damage results from conditions arising upon the Premises or upon other portions of the building in which the Premises are a part, or from any other sources or places. Landlord shall not be liable to Tenant for any damages arising from any act or neglect of any other tenant, if any, of the building in which the Premises are located.

12. DAMAGE OR DESTRUCTION.

(a) Damage - Insured.

If, during the term of this Lease, the Premises and/or the building and other improvements in which the Premises are located are totally or partially destroyed rendering the Premises totally or partially inaccessible or unusable, and such damage or destruction was caused by a casualty covered under an insurance policy required to be maintained hereunder, Landlord shall restore the Premises and/or the building and other improvements in which the Premises are located into substantially the same condition as they were in immediately before such damage or destruction, provided that the restoration can be made under the existing laws and can be completed within one hundred twenty (120) working days after the date of such destruction or damage. Such destruction or damage shall not terminate this Lease.

If the restoration cannot be made in said 120 day period, then within fifteen (15) days after the parties hereto determine that the restoration cannot be made in the time stated in this paragraph, Tenant may terminate this Lease immediately by giving notice to Landlord and the Lease will be deemed cancelled as of the date of such damage or destruction. If Tenant fails to terminate this Lease and the restoration is permitted under the existing laws, Landlord, at its option, may terminate this Lease or restore the Premises and/or any other improvements in which the Premises are located within a reasonable time and this Lease shall continue in full force and effect. If the existing laws do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party.

Notwithstanding the above, if the Tenant is the insuring party and if the insurance proceeds received by Landlord are not sufficient to effect such repair, Landlord shall give notice to Tenant of the amount required in addition to the insurance proceeds to effect such repair. Tenant may, at Tenant's option, contribute the required amount, but upon failure to do so within thirty (30) days following such notice, Landlord's sole remedy shall be, at Landlord's option and with no liability to Tenant, to cancel and terminate this Lease. If Tenant shall contribute such amount to Landlord within said thirty (30) day period, Landlord shall make such repairs as soon as reasonably possible and this Lease shall continue in full force and effect. Tenant shall in no event have any right to reimbursement for any amount so contributed.

(b) Damage -Uninsured.

In the event that the Premises are damaged or destroyed by a casualty which is not covered by the fire and extended coverage insurance which is required to be carried by the party designated in Article 11 (a) above, then Landlord shall restore the same; provided that if the damage or destruction is to an extent greater than ten (10%) percent of the then replacement cost of the improvements on the Premises (exclusive of Tenant's trade fixtures and equipment and exclusive of foundations and footings), then Landlord may elect not to restore and to terminate this Lease. Landlord must give to Tenant written notice of its intention not to restore within thirty (30) days from the date of such damage or destruction and, if not given, Landlord shall be deemed to have elected to restore and in such event shall repair any damage as soon as reasonably possible. In the event that Landlord elects to give such notice of Landlord's intention to cancel and terminate this Lease, Tenant shall have the right, within ten (10) days after receipt of such notice, to give written notice to Landlord of Tenant's intention to repair such damage at Tenant's expense, without reimbursement from Landlord, in which event the Lease shall continue in full force and effect and Tenant shall proceed to make such repairs as soon as reasonably possible. If the Tenant does not give such notice within such 10-day period, this Lease shall be cancelled and be deemed terminated as of the date of the occurrence of such damage or destruction.

 

 

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(c) Damage Near the End of the Term.

If the Premises are totally or partially destroyed or damaged during the last twelve (12) months of the term of this Lease, Landlord may, at Landlord's option, cancel and terminate this Lease as of the date of the cause of such damage by giving written notice to Tenant of Landlord's election to do so within 30 days after the date of the occurrence of such damage; provided, however, that, if the damage or destruction occurs within the last 12 months of the term and if within fifteen (15) days after the date of such damage or destruction Tenant exercises any option to extend the term provided herein, Landlord shall restore the Premises if obligated to do so as provided in subparagraph (a) or (b) above.

(d) Abatement of Rent.

If the Premises are partially or totally destroyed or damaged and Landlord or Tenant repairs or restores them pursuant to the provisions of this Article 12, the rent payable hereunder for the period during which such damage, repair or restoration continues shall be abated in proportion to the degree to which Tenant's reasonable use of the Premises is impaired. Except for the abatement of rent, if any, Tenant shall have no claim against Landlord for any damages suffered by reason of any such damage, destruction, repair or restoration.

(e) Trade Fixtures and Equipment.

If Landlord is required or elects to restore the Premises as provided in this Article, Landlord shall not be required to restore Tenant's improvements, trade fixtures, equipment or alterations made by Tenant, such excluded items being the sole responsibility of the Tenant to restore hereunder.

(f) Total Destruction-Multi-Tenant Building.

If the Premises are a part of a multi-tenant building and there is destruction to the Premises and/or the building of which the Premises are a part that exceeds Fifty (50%) percent of the then replacement value of the Premises and/or the building in which the Premises are a part from any cause whether or not covered by the insurance described in Article 11 above, Landlord may, at its option, elect to terminate this Lease (whether or not the Premises are destroyed) so long as Landlord terminates the leases of all other tenants in the building of which the Premises are a part, effective as of the date of such damage or destruction.

13. CONDEMNATION.

If the Premises or any portion thereof are taken by the power of eminent domain, or sold by Landlord under the threat of exercise of said power (all of which is herein referred to as "condemnation"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever occurs first. If more than twenty (20%) percent of the floor area of any buildings on the Premises, or more than twenty (20%) percent of the land area of the Premises not covered with buildings, is taken by condemnation, either Landlord or Tenant may terminate this Lease as of the date the condemning authority takes possession by notice in writing of such election within twenty (20) days after Landlord shall have notified Tenant of such taking or, in the absence of such notice, then within twenty (20) days after the condemning authority shall have taken possession.

If this Lease is not terminated by either Landlord or Tenant as provided hereinabove, then it shall remain in full force and effect as to the portion of the Premises remaining, provided that the rental shall be reduced in proportion to the floor area of the buildings taken within the Premises as it bears to the total floor area of all buildings located on the Premises. In the event this Lease is not so terminated; then Landlord agrees at Landlord's sole cost and expense, to as soon as reasonably possible restore the Premises to a complete unit of like quality and character as existed prior to the condemnation.

All awards for the taking of any part of the Premises or any payment made under the threat of the exercise of the power of eminent domain shall be the property of the Landlord, whether made as compensation for the diminution of the value of the leasehold or for the taking of the fee or as severance damages; provided, however, that Tenant shall be entitled to any award for loss or damage to Tenant's trade fixtures and removable personal property.

Each party hereby waives the provisions of Code of Civil Procedure 1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

 

 

 

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Rent shall be abated or reduced during the period from the date of taking until the completion of restoration by Landlord, but all other obligations of Tenant under this Lease shall remain in full force and effect. The abatement or reduction of the rent shall be based on the extent to which the restoration interferes with Tenant's use of the Premises.

 

14. ASSIGNMENT AND SUBLETTING.

Tenant shall not voluntarily or by operation of law assign, transfer, sublet, mortgage, or otherwise transfer or encumber all or any part of Tenant's interest in this Lease or in the Premises without Landlord's prior written consent which consent shall not be unreasonably withheld. Any attempted assignment, transfer, mortgage, encumbrance, or subletting without such consent shall be void and shall constitute a breach of this Lease. If Tenant is a corporation, any dissolution, merger, consolidation or other reorganization of Tenant, or the sale or other transfer of a controlling percentage of the capital stock of Tenant, or the sale of at least fifty-one (51 %) percent of the value of the assets of Tenant, shall be deemed a voluntary assignment. The phrase "controlling percentage" means the ownership of, and the right to vote, stock possessing at least fifty-one (51 %) percent of the total combined voting power of all classes of Tenant's capital stock issued, outstanding, and entitled to vote for the election of directors. This paragraph shall not apply to corporations the stock of which is traded through an exchange or over the counter.

Regardless of Landlord's consent, no subletting or assignment shall release Tenant or Tenant's obligation to pay the rent and to perform all other obligations to be performed by Tenant hereunder for the term of this Lease. The acceptance of rent by Landlord from any other person shall not be deemed a waiver by Landlord of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting.

15. DEFAULT.

(a) Events of Default.

The occurrence of anyone or more of the following events shall constitute a default and breach of this Lease by Tenant:

(1) Failure to pay rent when due, if the failure continues for five (5) days after written notice has been given to Tenant.

(2) Abandonment and vacation of the Premises (failure to occupy the Premises for fourteen (14) consecutive days shall be deemed an abandonment, and vacation).

(3) Failure to perform any other provision of this Lease if the failure to perform is not cured within thirty (30) days after written notice thereof has beer given to Tenant by Landlord. If the default cannot reasonably be cured within said thirty (30) day period, Tenant shall not be in default under this Lease if Tenant commences to cure the default within the thirty (30) day period and diligently prosecutes the same to completion.

(4) The making by Tenant of any general assignment, or general arrangement for the benefit of creditors; the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy unless the same is dismissed within sixty (60) days; the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in the Lease, where possession is not restored to Tenant within thirty (30} days; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in the Lease, where such seizure is not discharged within thirty (30) days.

Notices given under this paragraph shall specify the alleged default and the applicable lease provisions, and shall demand that Tenant perform the provisions of this Lease or pay the rent that is in arrears as the case may be, within the applicable period of time. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord so elects in the notice.

(b) Landlord's Remedies.

The Landlord shall have the following remedies if Tenant commits a default under this Lease. These remedies are not exclusive but are cumulative and in addition to any remedies now or hereafter allowed by law.

Landlord can continue this Lease in full force and effect, and the Lease will continue in effect so long as Landlord does not terminate Tenant's right to possession, and the Landlord shall have the right to collect rent when due. During the period that Tenant is in default, Landlord can enter the Premises and re-let them, or any part of them, to third parties for Tenant's account. Tenant shall be liable immediately to the Landlord for all costs the Landlord incurs in re-letting the Premises, including, without limitation, brokers' commissions, expenses of remodeling the Premises required by the re-letting, and like costs. Re-letting can be for a period shorter or longer than the remaining term of this Lease. Tenant shall pay to Landlord the rent due under this Lease on the dates the rent is due, less the rent Landlord receives from any re-letting. No act by Landlord allowed by this paragraph shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease. After Tenant's default and for so long as Landlord has not terminated Tenant's right to possession of the Premises, if Tenant obtains Landlord's consent, Tenant shall have the right to assume or sublet its interest in the Lease, but Tenant shall not be released from liability. Landlord's consent to the proposed assignment or subletting shall not be unreasonably withheld.

 

 

 

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If Landlord elects to re-let the Premises as provided in this paragraph, any rent that Landlord receives from such re-letting shall apply first to the payment of any indebtedness from Tenant to Landlord other than the rent due from Tenant to Landlord; secondly, to all costs, including maintenance, incurred by Landlord in such re-letting; and third, to any rent due and unpaid under this Lease. After deducting the payments referred to in this paragraph, any sum remaining from the rent Landlord receives from such re-letting shall be held by Landlord and applied in payment of future rent as rent becomes due under this Lease. In no event shall tenant be entitled to any excess rent received by Landlord. If, on the date rent is due under this Lease, the rent received from the re-letting is less than the rent due on that date, Tenant shall pay to Landlord, in addition to the remaining rent due, all costs, including maintenance, that Landlord shall have incurred in re-letting that remain after applying the rent received from re-letting as provided in this paragraph.

Landlord can, at its option, terminate Tenant's right to possession of the Premises at any time. No act by Landlord other than giving written notice to Tenant shall terminate this Lease. Acts of maintenance, efforts to re-let the Premises, or the appointment of a receiver on Landlord's initiative to protect Landlord's interest in this Lease shall not constitute a termination of Tenant's right to possession. In the event of such termination, Landlord has the right to recover from Tenant:

(1) The worth, at the time of the award, of the unpaid rent that had been earned at the time of the termination of this Lease; (2) The worth, at the time of the award, of the amount by which the unpaid rent that would have been earned after the date of the termination of this Lease until the time of the award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided;

(3) The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term after the time of the award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and

(4) Any other amount, including court costs, necessary to compensate Landlord for all detriment proximately caused by Tenant's default. "The worth at the time of the award," as used in (1) and (2) of this paragraph is to be computed by allowing interest at the maximum rate an individual is permitted by law to charge. "The worth at the time of the award," as referred to in (31 of this paragraph is to be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one (1 %) percent.

If Tenant is in default under the terms of this Lease, Landlord shall have the additional right to have a receiver appointed to collect rent and conduct Tenant's business. Neither the filing of a petition for the appointment of a receiver nor the appointment itself shall constitute an election by Landlord to terminate this Lease.

Landlord at any time after Tenant commits a default, can cure the default at Tenant's cost and expense. If Landlord at any time, by reason of Tenant's default, pays any sum or does any act that requires the payment of any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the maximum rate an individual is permitted by law to charge from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with interest thereon, shall be considered additional rent.

16. SIGNS.

Tenant shall not have the right to place, construct or maintain any sign, advertisement, awning, banner, or other exterior decorations on the building or other improvements that are a part of the Premises without Landlord's prior, written consent, which consent shall not be unreasonably withheld.

17. EARLY POSSESSION.

In the event that the Landlord shall permit Tenant to occupy the Premises prior to the commencement date of the term of this Lease, such occupancy shall be subject to all the provisions of this Lease. Said early possession shall not advance the termination date of this Lease.

18. SUBORDINATION.

This Lease, at Landlord's option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation for security now or hereafter placed upon the real property of which the Premises are a part and to any and all advances made on the security thereof and to all renewal, modifications, and extensions thereof. Notwithstanding any such subordination, Tenant's right to quiet possession of the Premises shall not be disturbed if Tenant is not in default and so long as Tenant shall pay the rent and observe and perform all the other provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee, or ground lessor shall elect to have this Lease prior to the lien of its mortgage or deed of trust or ground lease, and shall give written notice thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease is dated prior to or subsequent to the date of such mortgage, deed of trust or ground lease, or the date of recording thereof. Tenant agrees to execute any documents requiring to effect such subordination or to make this Lease prior to the lien of any mortgage, deed of trust, or ground lease, as the case may be, and failing to do so within ten (10) days after written demand from Landlord does hereby make, constitute and irrevocably appoint Landlord as Tenant's attorney in fact and in Tenant's name, place and stead to do so.

 

 

 

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19. SURRENDER.

On the last day of the term hereof, or on any sooner termination, Tenant shall surrender the Premises to Landlord in good condition, broom clean, ordinary wear and tear accepted. Tenant shall repair any damage to the Premises occasioned by its use thereof, or by the removal of Tenant's trade fixtures, furnishings and equipment which repair shall include the patching and filling of holes and repair of structural damage. Tenant shall remove all of its personal property and fixtures on the Premises prior to the expiration of the term of this Lease and if required by Landlord pursuant to Article 10(a) above, any alterations, improvements or additions made by Tenant to the Premises. If Tenant fails to surrender the Premises to Landlord on the expiration of the Lease as required by this paragraph, Tenant shall hold Landlord harmless from all damages resulting from Tenant's failure to evacuate the Premises, including, without limitation, claims made by any succeeding tenant resulting from Tenant's failure to surrender the Premises.

20. HOLDING OVER.

If the Tenant, with the Landlord's consent, remains in possession of the Premises after the expiration or termination of the term of this Lease, such possession by Tenant shall be deemed to be a tenancy from month-to-month at a rental in the amount of the last monthly rental plus all other charges payable hereunder, upon all the provisions of this Lease applicable to month-to-month tenancy.

21. BINDING ON SUCCESSORS AND ASSIGNS.

The terms, conditions and covenants of this Lease shall be binding upon and shall inure to the benefit of each of the parties hereto, their heirs, personal representatives, successors and assigns.

22. NOTICES.

Whenever under this Lease a provision is made for any demand, notice or declaration of any kind, it shall be in writing and served either personally or sent by registered or certified United States mail, postage prepaid, addressed at the addresses set forth below:

 

	 TO LANDLORD AT:	 P.O. Box 3909	 	 TENANT AT:	2492 Walnut Avenue,  #100	 
	 	 Orange, CA 92857-3909	 	                             Tustin, CA  92780	 
	 	 	 	 	 

 

Such notices shall be deemed to be received within forty-eight (48) hours from the time of mailing, if mailed as provided for in this paragraph.

23. LANDLORD'S RIGHT TO INSPECTION.

Landlord and Landlord's agent shall have the right to enter the Premises at reasonable times for the purpose of inspecting same, showing the same to prospective purchasers or lenders, and making such alterations, repairs, improvements or additions to the Premises or to the building of which the Premises are a part as Landlord may deem necessary or desirable. Landlord may at any time place on or about the Premises any j ordinary "For Sale" signs and Landlord may at any time during the last one hundred twenty (120) days of the term of this Lease place on or about the Premises any ordinary "For Sale or Lease" signs, all without rebate of rent or liability to Tenant.

24. CHOICE OF LAW.

This Lease shall be governed by the laws of the state where the Premises are located.

25. ATTORNEY'S FEES.

If either Landlord or Tenant becomes a party to any litigation or arbitration concerning this Lease, the Premises, or the building or other improvements in which the Premises are located, by reason of any act or omission of the other party or its authorized representatives, and not by reason of any act or omission of the party that becomes a party to that litigation or any act or omission of its authorized representatives, the party that causes the other party to become involved in the litigation shall be liable to that party for reasonable attorney's fees and court costs incurred by it in the litigation.

 

 

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If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover from the losing party reasonable attorney's fees and costs of suit.

26. LANDLORD'S LIABILITY.

The term "Landlord" as used in this Lease shall mean only the owner or owners at the time in question of the fee title or a Lessee's interest in a ground lease of the Premises, and in the event of any transfer of such title or interest, Landlord herein named (and in case of any subsequent transfers to the then successor) shall be relieved from and after the date of such transfer of all liability in respect to Landlord's obligations thereafter to be performed. The obligations contained in this Lease to be performed by Landlord shall be binding upon the Landlord's successors and assigns, only during their respective periods of ownership.

27. WAIVERS.

No waiver by Landlord of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Tenant of the same or any other provision. Landlord's consent to or approval of any act shall not be deemed to render unnecessary the obtaining of Landlord's consent to or approval of any subsequent act by Tenant. The acceptance of rent hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of any provision hereof, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of its acceptance of such rent.

28. INCORPORATION OF PRIOR AGREEMENTS.

This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified only in writing, and signed by the parties in interest at the time of such modification.

29. TIME.

Time is of the essence of this Lease.

30. SEVERABILITY.

The unenforceability, invalidity, or illegality of any provision of this Lease shall not render the other provisions hereof unenforceable, invalid or illegal.

31. ESTOPPEL CERTIFICATES.

Each party, within ten (10) days after notice from the other party, shall execute and deliver to the other party a certificate stating that this Lease is unmodified and in full force and effect, or in full force and effect as modified, and stating the modification. The certificate shall also state the amount of minimum monthly rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent, if any, as well as acknowledging that there are not, to that party's knowledge, any uncured defaults on the part of the other party, or specifying such defaults, if any, which are claimed. Failure to deliver such a certificate within the ten (10) day period shall be conclusive upon the party failing to deliver the certificate to the benefit of the party requesting the certificate that this Lease is in full force and effect, that there are no uncured defaults hereunder, and has not been modified except as may be represented by the party requesting the certificate.

32. COVENANTS AND CONDITIONS.

Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition.

33. SINGULAR AND PLURAL.

When required by the context of this Lease, the singular shall indicate the plural.

34. JOINT AND SEVERAL OBLIGATIONS.

"Party" shall mean Landlord and Tenant; and if more than one person or entity is the Landlord or Tenant, the obligations imposed on that party shall be joint and several.

35. OPTION TO EXTEND.

Provided that Tenant shall not then be in default hereunder, Tenant shall have the option to extend the term of this lease fortwo  additional one  year periods upon the same terms and conditions herein contained, upon delivery by Tenant to Landlord of written notice of its election to exercise such option(s) at least ninety (90) days prior to the expiration of the original (or extended) term hereof.

 

 

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36. ADDENDUM.

Any addendum attached hereto and either signed or initialed by the parties shall be deemed a part hereof and shall supersede any conflicting terms or provisions contained in this Lease.

37. PARKING.

So long as Tenant is not in default, and subject to the rules and regulations established by Landlord from time to time, Tenant shall be entitled to use 18 parking spaces in the common area in front of the Premises, including two reserved spaces immediately in front of the Premises.

38. CARPETING.

Landlord, at Landlord’s sole expense, shall semi-annually have all carpeting in the Premises shampoo of like quality, as approved by Tenant.

40. FLOORS.

   Landlord, at Landlord’s sole expense, shall semi-annually have all floors stripped, waxed, and polished in the Premises of like quality, as approved by Tenant.

The parties hereto have executed this Lease on the date first above written.

 

	 LANDLORD:  	 	 TENANT:	 
	 	 Robert L. and Margaret K. Balmes 	 	 	
 AMDL, Inc.,

 A Delaware Corporation

	 

 

 

	By:	 	 	 By:	 	 
	 	 Robert L. Balmes, Co-Owner 	 	 	
 Gary L. Dreher

 President & CEO

	 
	 	 	 	 
	 By:	 	 	 By:	 	 
	 	 Margaret K. Balmes, Co-Owner	 	 	 	 

 

 

NOTICE: The California Department of Justice, sheriff's departments, police departments serving jurisdictions of 200,000 or more and many other local law enforcement authorities maintain for public access a data base of the locations of persons required to register pursuant to paragraph (1) of subdivision (a) of Section 290.4 of the Penal Code. The database is updated on a quarterly basis and is a source of information about the presence of these individuals in any neighborhood. The Department of Justice also maintains a Sex Offender Identification Line through which inquiries about individuals may be made. This is a "900" telephone service. Callers must have specific information about individuals they are checking Information regarding neighborhoods is not available through the "900" telephone service

 

 

 

 

 

 

 

 

 

 

 

 

 

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	 Confidential

 

 

COLLABORATION AGREEMENT

THIS COLLABORATION AGREEMENT (the “Agreement”) is made and entered into effective this 12th day of December in 2008 (the “Effective Date”) by and between MAYO COLLABORATIVE SERVICES, INC., doing business as MAYO VALIDATION SUPPORT SERVICES, a Minnesota corporation and its affiliates (“MVSS”), and AMDL, Inc., a Delaware corporation (“COMPANY”).

RECITALS

WHEREAS, MVSS and COMPANY desire to collaborate on the projects (the “Projects”) identified in those certain protocol(s) to be attached hereto as separate Exhibits, as amended and agreed in writing to from time to time, and incorporated by reference (the “Project Description(s)”);

WHEREAS, MVSS possesses certain human tissue and blood/serum specimens and/or histological slides identified as MVSS Materials in each Project Description and as more specifically defined below;

WHEREAS, COMPANY will share the results of certain experiments and analysis with MVSS as set forth in each Project Description, and the parties may collaborate in the publication of certain data or results;

WHEREAS, MVSS possesses certain clinical record information, technical information, know-how, data and other information, whether written, oral or visual (“Annotation/Technical Information”), related to the MVSS Materials and identified as MVSS Annotation/Technical Information on each Project Description;

WHEREAS, MVSS, through a subcontract with Mayo Clinic (“Mayo”) possesses certain laboratory testing services, specimen preparation and analysis, and other validation services identified as Other MVSS Services on each Project Description;

 

 

WHEREAS, COMPANY possesses technology and development capabilities that are capable of being used to analyze samples of the MVSS Materials for the purpose of identifying and/or validating certain gene/protein targets, biomarkers and molecular features related to disease and disease treatment; and

WHEREAS, MVSS and the designated Mayo physician(s) and or scientist(s) (“Mayo Physician”) on each attached Project Description(s) desire to transfer to COMPANY certain samples of tissues, blood/serum and/or histological slides and information for the purpose of allowing COMPANY to identify certain clinical features, molecular biomarker features, and tissue image features to develop products for the advancement of medicine and COMPANY desires to disclose to MVSS certain materials and technology developed by COMPANY in performance of the Project in order to facilitate research and collaboration by MVSS to advance medical research;

 

 

  

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NOW THEREFORE, in consideration of the above premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the parties agree as follows:

AGREEMENT

1.           Ownership and Use of Materials.

	
  

	
1.1

	
Obligations of MVSS.

	
  

	
(a)

	
Subject to the terms and conditions of this Agreement, MVSS shall provide COMPANY with materials described in detail in each Project Description prepared by MVSS or Mayo Physician(s) for the purpose of performing a Project, (for the purposes of this Agreement the “MVSS Materials”).  MVSS shall retain all right, title and interest in the MVSS Materials and any progeny, derivatives, DNA, RNA, or genetically engineered modification obtained therefrom.

	
  

	
(b)

	
MVSS shall provide COMPANY with certain MVSS Annotation/Technical Information, as identified in each Project Description, for the purpose of performing the Project.

	
  

	
(c)

	
MVSS shall not transfer any tangible COMPANY Materials (as defined below) to any individual or entity that is not a party to this Agreement without the prior written consent of COMPANY, which COMPANY shall provide or withhold in its sole discretion.  However, MVSS shall have the right to transfer the COMPANY Materials to its affiliates for non-profit, non-commercial research purposes only.

	
  

	
(d)

	
MVSS shall use the COMPANY Materials solely for the purposes expressly set forth in this Agreement and the applicable Project Description and shall not use the COMPANY Materials in human subjects, clinical trials or for diagnostic purposes involving human subjects without the written consent of COMPANY, which COMPANY shall provide or withhold in its sole discretion.  Notwithstanding anything in this Agreement or any Project Description to the contrary, under no circumstances shall MVSS use the COMPANY Materials for commercial purposes.

	
  

	
(e)

	
On completion or expiration of each Project, MVSS and its affiliates shall have the right to use the COMPANY Materials for its non-commercial research purposes and for the purposes set forth in Section 5.

	
  

	
1.2

	
Obligations of COMPANY.

	
  

	
(a)

	
Subject to the terms and conditions of this Agreement, COMPANY shall provide MVSS, solely for MVSS’s use in performing its obligations under the Projects, with the following materials and information, as set forth in more detail in the specific Project Descriptions, (all of which materials and information will be considered “COMPANY Materials”):

	
  

	
(i)

	
Annotation/Technical Information of COMPANY regarding profiling data derived from work within the scope of the Projects and analyses of such data; and

	
  

	
(ii)

	
Information the COMPANY generated as a result of and during the Project.

 

 

 

  

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COMPANY shall retain all right, title and interest in the COMPANY Materials.

	
  

	
(b)

	
COMPANY shall not transfer any MVSS Materials or any MVSS Annotation/Technical Information to any individual or entity that is not a party to this Agreement without the prior written consent of MVSS, which MVSS shall provide or withhold in its sole discretion. 

	
  

	
(c)

	
COMPANY shall use the “MVSS Materials” solely for the purposes set forth in this Agreement and shall not use “MVSS Materials” in human subjects, clinical trials or for diagnostic purposes involving human subjects without the written consent of MVSS, which MVSS shall provide or withhold in its sole discretion.

	
  

	
(d)

	
On completion or expiration of each Project, at MVSS's direction, COMPANY shall either destroy or return to MVSS all of the “MVSS Materials”.

1.3           Performance of Project

	
  

	
(a)

	
MVSS shall provide those services required for performance of the Project as specified in the Project Description in accordance with applicable timelines and standards as may be set forth in said Project Description and shall comply with all applicable laws and regulations in providing such services.

	
  

	
(b)

	
If MVSS or a Mayo Physician involved in the Project determines in his or her best medical judgment that medical concerns require reasonable alternatives and deviations from methods and procedures set forth in the Project Description, MVSS shall promptly report the alternatives and deviations to COMPANY.

	
  

	
(c)

	
MVSS agrees that it will obtain any necessary consent from prospective patients and specimen donors in connection with performance of the Project.  The parties further agree that each will comply with all applicable state and federal rules and regulations regarding confidentiality of health information, including but not limited to the Health Insurance Portability and Accountability Act of 1996, 45 C.F.R. Section 160 et seq. (“HIPAA”).

 

 

 

  

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(d)

	
The parties agree that in the event it becomes necessary to modify a Project Description, the parties shall negotiate in good faith a revised budget and amend Exhibit A accordingly in writing signed by each party.  Exhibit A may be amended from time to time, by mutual written agreement, by the addition of particular Project Descriptions.

2.           Representations and Warranties.

	
  

	
2.1

	
Mutual Representations.  Each party represents and warrants that it has the right and authority to enter into this Agreement.

	
  

	
2.2

	
Representations by MVSS.  MVSS represents and warrants that all patient samples to be transferred pursuant to this Agreement will be either: a) sourced from patients who consented to such use, or b) sourced from patient samples that Mayo’s Institutional Review Board (“Mayo IRB”) has approved for use with a waiver of consent based on anonymization or de-identification of such samples.

	
  

	
2.3

	
Limitation on Liability.  SUBJECT TO SECTION 2.2, MVSS PROVIDES THE MVSS MATERIALS AND MVSS ANNOTATION/TECHNICAL INFORMATION AS IS.  MVSS MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING THE QUALITY, SAFETY, UTILITY OR COMMERCIAL APPLICABILITY OR OTHER CHARACTERISTICS OF THE MATERIALS, OR THE ACCURACY OF THE ANNOTATION/ TECHNICAL INFORMATION PROVIDED TO COMPANY.  MVSS MAKES NO AND HEREBY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED.

	
  

	
2.4

	
IRB Review and Approval.  The activities to be undertaken involving MVSS Materials and MVSS Annotation/Information and Other MVSS Services as described in the Project Descriptions, as such relate to patient safety and/or fall under the auspices of the Mayo IRB, must be reviewed and approved by the Mayo IRB before they can become effective exhibits or amendments to this Agreement.

3.           Intellectual Property. 

	
  

	
3.1

	
Ownership.  The inventorship, authorship and ownership of inventions, discoveries or improvements that may be conceived or reduced to practice under this Agreement, as part of the Projects, shall be governed by United States patent and copyright laws, as applicable.

	
  

	
3.2

	
No Transfer of Intellectual Property Rights.  It is expressly understood that neither MVSS nor COMPANY transfers to the other party, by operation of this Agreement, any of its respective patent rights, copyrights or other proprietary rights.

 

 

 

  

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3.3

	
Future Consulting.  Nothing in this Agreement should be interpreted as a grant for future consulting by Mayo relating to the subject matter of this Agreement.  In the event COMPANY wishes to engage a Mayo employee to perform additional consulting, or to provide additional services, relating to the information or materials provided or generated under this Agreement, COMPANY must seek additional approval from Mayo.

	
4.

	
Confidential Information.

	
  

	
4.1

	
Confidentiality Obligations.  Each party may, from time to time in connection with the Project, disclose Confidential Information to the other party.  “Confidential Information” shall mean (i) the Project; (ii) MVSS Annotation/Technical Information; (iii) COMPANY Annotation/Technical Information; and (iv) any other confidential or proprietary information and materials of a party that are designated in writing as confidential by such party.  Each party agrees, to the extent permitted by law, that such Confidential Information shall remain the property of the disclosing party.  The receiving party shall not disclose, divulge or otherwise communicate Confidential Information to any other individual or entity for any purposes other than to fulfill its respective obligations pursuant to this Agreement.  Notwithstanding the foregoing, the restrictions on Confidential Information set forth in this Section 4 shall not apply to information that (a) is lawfully in possession of the receiving party at the time of disclosure, as demonstrated by written records; (b) is or later becomes part of the public domain through no fault of the receiving party; (c) is disclosed to the receiving party from a third party having no obligation of confidentiality to the disclosing party; or (d) is developed independently by the receiving party without use of Confidential Information.  If a party is obligated to disclose Confidential Information by law or regulation, it shall promptly notify the disclosing party, to enable such party to seek a protective order or otherwise prevent or limit disclosure of such Confidential Information.

	
  

	
4.2

	
Health Information.  Except as otherwise agreed in writing between the parties, the parties agree that any and all health information shared between the parties shall be “de-identified” in accordance with 45 C.F.R. Section 164.514.  The parties shall take any and all steps (including execution of any ancillary agreements) deemed necessary for each party to meet its individual obligations under HIPAA.

5.           Publication.

	
  

	
5.1

	
Right to Publish.  MVSS, Mayo, and Mayo Physician shall have the right to publish articles reporting on the results obtained under the Projects; provided, however, that COMPANY shall be provided with a copy of any proposed publication at least ninety (90) days prior to such publication date, so that COMPANY may review the proposed publication to determine if any patentable Invention and / or any of COMPANY’s Confidential Information are disclosed therein.

 

 

 

  

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5.2

	
Right to Review.  If COMPANY identifies any of COMPANY’s Confidential Information contained in the proposed publication, COMPANY shall notify MVSS in writing of its objections within said ninety (90) day period and MVSS shall remove such references to COMPANY Confidential Information from the article prior to publication; provided, however, that the obligation to remove shall not apply to results and data generated through use of the “MVSS Materials” and provided to MVSS as COMPANY Materials.  If COMPANY determines that any patentable Invention is disclosed in the proposed publication that is owned by COMPANY, COMPANY shall notify MVSS in writing of its objections within said ninety (90) day period.  On receipt of such notice from COMPANY, MVSS shall delay publication of the article for up to an additional ninety (90) days to enable COMPANY to file a patent application on such Invention(s).  In no event shall publication be delayed beyond such additional ninety (90) days without the prior written consent of MVSS.

	
6.

	
Compensation and Expenses.  In consideration for the MVSS Materials and MVSS Annotation/Technical Information and Other MVSS Services to be supplied by MVSS pursuant to Exhibit A, as amended and agreed to from time to time, and taking into account the value of the information COMPANY will provide to MVSS through the COMPANY Materials, COMPANY shall pay MVSS the fee (“Fee”), upon the payment schedule, specified in the applicable Project Description attached to this Agreement as Exhibit A.

7.           Term and Termination.

	
  

	
7.1

	
Term.  The term of this Agreement shall be from the Effective Date until terminated under the provisions of this Article 7.  The term of individual Project Descriptions shall be as specified therein.

	
  

	
7.2

	
Termination.

	
  

	
(a)

	
For Breach.  This Agreement may be terminated by either party for cause on written notice to the other party in the event that there has been a material breach by the other party of any of the terms of this Agreement and the other party has failed to cure such breach within thirty (30) days after receipt of written notice thereof.

	
  

	
(b)

	
For Compliance.  This Agreement may be terminated immediately by either party on written notice to the other party in the event that it receives notice from any local, state or federal governmental entity or regulatory agency indicating that this Agreement or continuation of the Project is in violation of any local, state or federal law or regulation.

	
  

	
(c)

	
For Bankruptcy.  This Agreement will automatically terminate without the need to give notice if the other is adjudged bankrupt, becomes insolvent for more than sixty (60) days, makes an assignment for the benefit of creditors or is placed in the hands of receiver or a trustee in bankruptcy.

 

 

 

  

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(d)

	
For Convenience by Company.  This Agreement may be terminated by COMPANY at any time on thirty (30) days written notice; provided, however, COMPANY shall provide a pro-rata share of the Fee for the work completed by MVSS through the effective date of termination and any other termination related fees that may be owed as specified in the individual Project Descriptions attached as Exhibit A and amended from time to time, and all related expenses at the effective date of termination by COMPANY.

	
  

	
(e)

	
Upon Reasonable Cause by MVSS.  This Agreement may be terminated by MVSS at any time based on reasonable cause, including but not limited to changes in MVSS policies or changes in its practice and service activities, on thirty (30) days written notice.  In this case, COMPANY shall provide a pro-rata share of the Fee for the work completed by MVSS through the effective date of termination and any other termination related fees that may be owed as specified in the individual Project Descriptions attached as Exhibit A and amended from time to time, and all related expenses at the effective date of such termination by MVSS.

	
  

	
7.3

	
Provisions to Survive Termination.  The provisions of Sections 2.3, 3.1, 3.2, 4.1, 4.2,5.1,5.2,8,9,10 shall survive termination or expiration of this Agreement.

	
8.

	
Indemnification.  COMPANY shall defend, indemnify and hold harmless MVSS and each of MVSS’s respective agents and employees from any and all liabilities, claims, actions or suits, including reasonable attorneys fees, (“Claims”) arising out of the use by COMPANY of the MVSS Materials, MVSS Annotation/Technical Information, or performance of the COMPANY’S study protocol, or arising out of the negligence or willful misconduct of COMPANY or the failure of COMPANY to perform this Agreement in accordance with the terms hereof and all applicable laws, rules and regulations.

	
9.

	
Insurance.  COMPANY shall maintain insurance or a program of self-insurance that is sufficient and available to provide coverage for its obligations of indemnification hereunder.

10.           Miscellaneous Provisions.

	
  

	
10.1

	
Relationship of the Parties.  The relationships of COMPANY and MVSS and COMPANY and the Mayo Physician(s) hereunder shall be that of independent contractors.  Nothing in this Agreement shall be construed as creating a partnership, joint venture or employment relationship among or between COMPANY and MVSS or COMPANY and the Mayo Physician(s).  Each of COMPANY and MVSS shall comply with applicable laws, rules and regulations with respect to its performance under this Agreement.

 

 

 

  

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10.2

	
Notice.  All notices between the parties related to this Agreement shall be in writing, sent by certified mail, return receipt requested, addressed as follows:

	
If to COMPANY:

	
AMDL, Inc.

	 	 
2492 Walnut Ave., Suite 100

	 	 
Tustin, CA  92780

 

 

	 Billing Inquiries to:	Akio Ariura
	 	COO and CFO
	 	 
AMDL, Inc.

	 	2492 Walnut Ave., Suite 100
	 	 
Tustin, CA  92780

 

	
If to MVSS:

	
Mayo Collaborative Services, Inc.

	 	 
Attn:  Mr. David Herbert

	 	 
3050 Superior Drive N.W.

	 	 
Rochester, MN  55901

 

	
  

	
With copy to:

	
  

	
Mayo Legal Department

	
  

	
Attn:  General Counsel

	
  

	
200 First Street SW

	
  

	
Rochester, MN  55905

Notices sent by certified mail shall be deemed delivered on the third day following the date of mailing.  Either party may change its address by giving notice in compliance with this section.

	
  

	
10.3

	
Amendment.  This Agreement and its related Exhibits and Project Descriptions shall not be modified or amended except by written instrument signed by both of the parties.  The parties agree to take such action as is necessary to amend this Agreement from time to time as necessary for MVSS to comply with the requirements of HIPAA.  Any ambiguity in this Agreement shall be resolved to permit the parties to comply with HIPAA.

	
  

	
10.4

	
Use of Name.  Neither party shall use the name of the other party, or any trademark or tradename of the other party, in any news release, publicity, promotion, endorsement or advertising without the prior written consent of the other.

	
  

	
10.5

	
Assignment. Neither party may assign its rights hereunder to any third party without the prior written consent of the other party; provided, however, that a party may assign its rights without the prior written consent of the other party to any affiliate or other entity that now or hereafter controls, is controlled by or is under common control with such party.  Any purported assignment in violation of this section is void.  Such consent, if given, shall not in any manner relieve the assignor from liability for the performance of this Agreement by its assignee.

 

 

 

  

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10.6

	
Severability.  In the event any provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect as if the invalid or unenforceable provision has never been a part of the Agreement.

	
  

	
10.7

	
Defined Terms.  The terms defined herein include the plural as well as the singular and the singular as well as the plural.  The neuter gender shall include the masculine and feminine.  The definitions of all agreements defined herein shall refer to such agreements as from time to time amended or supplemented.

	
  

	
10.8

	
Counterparts.  This Agreement may be executed in any number of counterparts which, when taken together, will constitute an original and photocopy, facsimile, electronic or other copies shall have the same effect for all purposes as an ink-signed original.

	
  

	
10.9

	
Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.

	
  

	
10.10

	
Waiver.  The failure of either party to complain of any default by the other party or to enforce any of such party’s rights, no matter how long such failure may continue, will not constitute a waiver of the party’s rights under this Agreement.  The waiver by either party of any breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach of the same or any other provision.  No part of this Agreement may be waived except by further written agreement of the parties.

	
  

	
10.11

	
Entire Agreement.  This Agreement, together with all Exhibits constitutes the final, complete, and exclusive agreement between the parties with respect to its subject matter and supersedes all past and contemporaneous agreements, promises and understandings, whether oral or written, between the parties.

IN WITNESS WHEREOF, this Agreement has been executed by duly authorized representatives of the parties on the date written below.

 

 

	 MAYO COLLABORATIVE SERVICES,   	 	 COMPANY:	 
	 
 INC., doing business as MAYO

	 	 	 
	 
 VALIDATION SUPPORT SERVICES:

	 	 	 
	 	 	 	 
	 By:	 	 	 By:	 	 
	 Name:	 	 	 Name:	 Akio ariura	 
	 Title:	 	 	 Title:	 COO & CFO	 
	 Date:	 	 	 Date:	 December 12, 2008	 

 

  

 

 

  

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Exhibit A-1

Project Description MVSS Study # AMD001-08 CC

“Evaluation of AMDL-ELISA DR-70® in Colon Cancer”

The Collaboration Agreement between Mayo Collaborative Services, Inc. doing business as Mayo Validation Support Services (“MVSS”) and AMDL, Inc. (“COMPANY”), dated December 4, 2008 is hereby amended to add this Project Description to Exhibit A.  Future projects will be added to Exhibit A in sequential order and labeled accordingly, i.e., Exhibit A-2, Exhibit A-3, etc., and shall not affect previous projects unless specifically modified by future exhibits.

1.      Project Description:

 

	
  

	
–

	
The AMDL-ELISA DR-70 (FDP) is the first new cancer test to be approved by the US FDA for monitoring CRC since January 14, 1982 when Carcinoembryonic Antigen (CEA) was approved.

	
  

	
–

	
The AMDL-ELISA DR-70 (FDP) test is a welcome new option for cancer patients who are CEA “low responders”.

	
  

	
–

	
AMDL will perform AMDL-ELISA DR-70® testing on retrospective colon cancer specimens and data generated in this study will be provided back to MVSS for potential publication according to the terms of the Agreement.

	
  

	
–

	
MVSS will provide the appropriate biospecimens and annotation from subjects with specific characteristics.

	
  

	
–

	
Mayo will have the option at its discretion in the future to license DR-70.

2.      MVSS Materials:

	
  

	
a.

	
Biospecimens to be collected for Validation Study by MVSS

 

To be accessed from institutional archives per Subject Qualification details below and results to be de-identified when provided to COMPANY.

 

	
Number

	
Biospecimen

	
Biospecimen Format (volume)

	
Comments

	
1031

	
Serum

	
250μl

	
Departmental archive

b.      Subject Qualification Details:

 

	  	
1031 subjects will be selected from institutional archive and 250ul serum will be utilized.

 

Cohort 1: 141 subjects – Stage I colon cancer

Cohort 2:   96 subjects – Stage II colon cancer

Cohort 3: 197 subjects – Stage III colon cancer

Cohort 4:   70 subjects – Stage IV colon cancer

Cohort 5: 261 subjects – Control subjects/negative for colon cancer

Cohort 6: 266 subjects – Control subjects/benign polyps

 

Notes: The subjects in this study may be selected from Dr. Lisa Boardman’s Departmental archive under IRB# 622-00.

c.      MVSS Annotation / Technical Information identified in Section 3.

	
  

	
d.

	
COMPANY must notify MVSS of any problems with the materials and/or annotation within 30 business days of receipt by COMPANY.  If notice is not received within this time frame, the materials and/or annotation shall be deemed accepted by COMPANY.

	
3.

	
MVSS Annotation/Technical Information:

	
  

	
a.

	
Information and Annotation required for each subject (De-Identified):

MVSS will create case report forms (CRFs) and record requested annotation on these CRFs for each subject enrolled into the study.  The CRF content will be reviewed and approved by COMPANY prior to study initiation.  The CRF data will be transferred to COMPANY via SAS data transfer within 30 days of study completion.

 

 

 

 

  

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b.

Other: 

	
  

	
i.

	
Not applicable

	
  

	
c.

	
MVSS Annotation/Technical Information will be provided to COMPANY on a schedule agreed between the parties.

	
4.

	
Other MVSS Services (if applicable):

Specimen preparation and analysis activities:

 

	
Number

	
Biospecimen

	
Service Details

	
Comments

	
1031

	
Serum

	
250μl aliquot

	
Stored at -70degC until shipped to client

	
5.

	
Milestones and Timelines (if applicable):

	
  

	
a.

	
Project Commencement:  The later of: a) a date of mutual agreement following Mayo IRB approval; or b) such date following Mayo IRB approval as MVSS receives the COMPANY Materials to be used in study activities at MVSS.

	
  

	
d.

	
Project Completion:  The project is expected to take approximately 3-6 months, with target completion between June 2009 and September 2009.

	
  

	
e.

	
COMPANY results provided to MVSS:  Within approximately 3 months of the Project Completion, COMPANY shall complete its review of the MVSS Annotation/Technical Information and provide overall project results to MVSS per the terms of the Collaboration Agreement.

	
6.

	
COMPANY Materials:

Materials, Equip or Information to be provided to MVSS by COMPANY include study proposal.

 

	
7.

	
COMPANY Annotation/Technical Information

Per Section 5.c., COMPANY shall report the data and findings resulting from its study to MVSS, including but not limited to conclusions, findings, and future research areas.

	
8.

	
Scope of use of COMPANY Annotation/Technical Information Provided to MVSS

MVSS and the Mayo Physicians shall have the right to publish articles reporting the results obtained under the Project according to the terms outlined in the Collaboration Agreement.

	
9.

	
Project Protocol Fee, Fee Schedule, Adjustments, and Expenses

	
  

	
a.

	
Project Fee: $312,072 total; comprised of $31,207 study start-up fee (“start-up fee”) to be split into two payments (Part 1:  $10,000; to be paid following execution of this Exhibit in accordance with Section 9(b)(i) hereof.  Part 2:  $21,207; to be paid following IRB approval in accordance with Section 9(b)(ii) hereof, and $280,865 study fee (“study fee”).

	
  

	
b.

	
Compensation and Expenses:  COMPANY shall pay MVSS the Project Fee according to the following schedule:

	
  

	
i.

	
Start-up fee, part 1:  Following execution of this Exhibit, COMPANY shall pay to MVSS the study Start-up Fee of $10,000 as outlined above in 9.a. within thirty (30) days of receipt of invoice by COMPANY.

	
  

	
ii.

	
Start-up fee, part 2:  Upon IRB approval, COMPANY shall pay to MVSS the study Start-up Fee of $21,207 as outlined above in 9.a. within thirty (30) days of receipt of invoice by COMPANY.

	
  

	
iii.

	
Study fee:  COMPANY shall pay the study fee as follows:  Following the end of each calendar month during the term of the Project, MVSS shall send to COMPANY an invoice setting forth the number of Samples and associated Annotation/Technical Information that were delivered to COMPANY during each calendar month.  COMPANY shall pay to MVSS such amounts within thirty (30) days following receipt of such invoice.

	
  

	
c.

	
Adjustment Amount: If COMPANY indicates by timely notice to MVSS (as described in Section 2.d. of this Exhibit A-1), that COMPANY has received the wrong or insufficient quality MVSS Annotation/Technical Information - in which case COMPANY will be asked to return the wrong/incorrect Annotation/Technical Information - and MVSS is unable to provide a replacement Annotation/Technical Information of suitable quality in a timely way, COMPANY shall receive a unit adjustment in the amount as follows:

	
  

	
i.

	
$272.42 per Annotation/Technical Information unit where units are based on discrete subjects.

 

 

 

  

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d.

	
Subject Accrual Adjustment:  In the event MVSS is unable to accrue the total target number of subjects and related biospecimens/information, MVSS shall notify COMPANY in writing and the total fee shall be adjusted pro-rata to the number of subjects accrued, less any fees already paid by COMPANY.

	
  

	
e.

	
Expenses: COMPANY shall be responsible for shipping expenses associated with information sent from MVSS to COMPANY.  COMPANY shall provide a Fed Ex # or other primary overnight delivery carrier account # to MVSS and coordinate shipping schedules with MVSS.

	
  

	
f.

	
Early Termination:  Should COMPANY wish to terminate the Project according to the terms of the Collaboration Agreement, COMPANY shall pay a pro-rata share of the Project Fee, as follows:

	
  

	
i.

	
Should termination occur after execution of this Exhibit, but prior to IRB submission, COMPANY shall pay to MVSS a study start-up fee of $10,000 (start-up fee, part 1) as outlined above in 9. a/b (i).

	
  

	
ii.

	
Should termination occur due to the inability of MVSS to obtain IRB approval, then MVSS shall promptly refund to COMPANY $5,000 of the start-up fee, part 1.

	
  

	
iii.

	
Should such termination occur after IRB approval, but before MVSS has begun providing study-related services including collecting specimens/annotation pursuant to the protocol (Study Services), COMPANY shall pay to MVSS the remainder of the start-up fee of $21,207 (start-up fee, part 2) as outlined above in 9.a/b (ii).

	
  

	
iv.

	
Should COMPANY wish to terminate the Project after Study Services have begun, but prior to Project Completion, COMPANY shall provide payment for the biospecimens/annotation collected, delivered and/or invoiced hereunder at the time of the effective date of termination.

	
10.

	
Option to License

MVSS will have the option at its discretion in the future to license and perform the DR-70 assay at commercially reasonable terms for use in the Mayo practice and Mayo Medical Laboratories.

IN WITNESS WHEREOF, this amendment has been executed by duly authorized representatives of the parties, effective as of the most recent date affixed below.

 

	 MAYO COLLABORATIVE SERVICES,  INC. 	 	 COMPANY:	 
	 
 doing business as Mayo Validation

	 	 	 
	 
 Support Services:

	 	 	 
	 	 	 	 
	 By:	 	 	 By:	 	 
	 Name:	 	 	 Name:	 Akio ariura	 
	 Title:	 	 	 Title:	 COO & CFO	 
	 Date:	 	 	 Date:	 December 12, 2008	 

 

 

 

 

 

  

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