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EXHIBIT 10.6
January 4, 2005
LICENSE AGREEMENT
This
Agreement is between ImaRx Therapeutics, a corporation of the
State
of Delaware, having a principal place of business at 1635 E. 18th
St., Tucson,
AZ 85718 (hereinafter referred to as "IMARX") and Dr. med. Reinhard
Schlief,
(hereinafter "DR. SCHLIEF"), having an address at Neue Strasse 21,
14163 Berlin,
Germany.
WITNESSETH:
WHEREAS,
DR. SCHLIEF owns certain intellectual property; and
WHEREAS,
IMARX is desirous of obtaining a license under the intellectual
property and wishes to acquire a license in order to utilize or
otherwise
commercialize the intellectual property; and
NOW,
THEREFORE, in consideration of the premises and the mutual
promises
and covenants hereinafter set forth, the parties hereby agree as
follows
ARTICLE 1 - DEFINITIONS
1.1
"PATENT RIGHTS" shall mean the U.S. patent 5,380,411, and assigned
to
DR. SCHLIEF, entitled "Ultrasound or Shock Wave Work Process and
Preparation for
Carrying Out Same" and the invention disclosed and claimed therein,
and all
continuations, divisions, and reissues based thereof, and any
corresponding
foreign patent applications (including Japan and EU countries), and
any patents,
patents of addition, or other equivalent foreign patent rights
issuing, granted
or registered thereon.
1.2
"LICENSED PRODUCT(S)" shall mean products or services using a
method
covered by a VALID CLAIM, on a country-by-country basis, that if
made, used,
sold, imported or offered for sale would constitute, but for the
license granted
to IMARX pursuant to this Agreement, an infringement of a VALID
CLAIM
(infringement shall include, but is not limited to, direct,
contributory, or
inducement to infringe).
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January 4, 2005
1.3 "NET
SALES" shall mean gross sales revenues received by IMARX,
AFFILIATED COMPANY and IMARX's sublicensees from the sale of
LICENSED PRODUCT(S)
less trade discounts allowed, refunds, returns and recalls, and
sales taxes. In
the event that IMARX, AFFILIATED COMPANY or IMARX's sublicensee
sells a LICENSED
PRODUCT(S) in combination with other ingredients or substances or
as part of a
kit, the NET SALES for purposes of royalty payments shall be based
on calculated
as follows:
(a) If all LICENSED PRODUCTS and
Other Items contained in the
combination are available separately, the NET SALES for purposes
of
royalty payments will be calculated by multiplying the NET SALES
of
the combination by the fraction A/A+B, where A is the
separately
available price of all LICENSED PRODUCTS in the combination, and
B
is the separately available price for all Other Items in the
combination.
(b)
If the
combination includes Other Items which are not sold
separately (but all LICENSED PRODUCTS contained in the
combination
are available separately), the NET SALES for purposes of
royalty
payments will be calculated by multiplying the NET SALES of the
combination by A/C, where A is as defined above and C is the
invoiced price of the combination.
(c)
If the LICENSED
PRODUCTS contained in the combination are not sold
separately, the NET SALES for such combination shall be NET SALES
of
such combination as defined in the first sentence of this
Paragraph
1.3. However, the parties agree to negotiate a reduction in the
royalty rate to reflect the fair value that the LICENSED
PRODUCT
attributed to the overall product sold, but in no event shall
the
royalty rates be reduced by greater than fifty percent (50%).
The term "Other Items" does not include solvents, diluents,
carriers,
excipients, buffers or the like used in formulating a product.
1.4 "VALID
CLAIM" shall mean a claim of an issued patent in PATENT RIGHTS
which has not lapsed or become abandoned or been declared invalid
or
unenforceable by a court of competent jurisdiction or an
administrative agency
from which no appeal can be or is taken.
1.5
"LICENSED FIELD" shall mean all fields.
1.6
"AFFILIATED COMPANY" or "AFFILIATED COMPANIES" shall mean any
corporation, company, partnership, joint venture or other entity
which controls,
is controlled by or is under common control with IMARX. For
purposes of this
Paragraph 1.6, control shall mean the
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January 4, 2005
direct or indirect ownership of at least fifty percent (50%).
1.7
"EXCLUSIVE LICENSE" shall mean a grant by DR. SCHLIEF to IMARX of
its
entire right and interest in the PATENT RIGHTS.
1.8
"EFFECTIVE DATE" of this License Agreement shall mean the date
the
last party hereto has executed this Agreement.
ARTICLE 2 - GRANTS
2.1
Subject to the terms and conditions of this Agreement, DR.
SCHLIEF
hereby grants to IMARX an EXCLUSIVE LICENSE to make, have made,
use, sell and
have sold the LICENSED PRODUCT(S) in the United States and
worldwide under the
PATENT RIGHTS in the LICENSED FIELD.
2.2
IMARX may
sublicense others under this Agreement and any sublicense
shall be consistent with the terms of this Agreement.
2.3
If for any
reason other than being sold to another company IMARX
ceases to exist, then patent rights shall return to DR. SCHLIEF.
In
the event that IMARX is sold to another company, the rights and
responsibilities assigned to IMARX in this Agreement will be
transferred to the company.
ARTICLE 3 - PATENT INFRINGEMENT
3.1 Each
party will notify the other promptly in writing when any
infringement by another is uncovered or suspected.
3.2 IMARX shall have
the right to enforce any patent within PATENT RIGHTS
in the LICENSED FIELD against any infringement or alleged
infringement thereof,
and shall keep DR. SCHLIEF informed as to the status thereof. IMARX
may, in its
sole judgment and at its own expense, institute suit against any
such infringer
or alleged infringer and control, settle, and defend
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January 4, 2005
such suit in a manner consistent with the terms and provisions
hereof and
recover, for its account, any damages, awards or settlements
resulting
therefrom.
3.3 If
IMARX elects not to enforce any patent within the PATENT
RIGHTS,
then it shall so notify DR. SCHLIEF in writing within six (6)
months of
receiving notice that an infringement exists, and DR. SCHLIEF may,
in his sole
judgment and at its own expense, take steps to enforce any patent
and control,
settle, and defend such suit in a manner consistent with the terms
and
provisions hereof, and recover, for his own account, any damages,
awards or
settlements resulting therefrom.
ARTICLE 4 - PAYMENTS, ROYALTY AND EQUITY
4.1 IMARX
will reimburse DR. SCHLIEF for certain past out-of-pocket costs
associated with PATENT RIGHTS including but not limited to
maintenance fees and
patent transfer fees up to the amount of $15,000.00 US Dollars.
IMARX shall
reimburse DR. SCHLIEF within thirty (30) days of receipt of invoice
from DR.
SCHLIEF. Such invoice shall provide copies of documentation from
patent
attorney's and patent offices or other acceptable documentation
detailing the
out-of-pocket patent costs incurred by DR. SCHLIEF. IMARX shall
also reimburse
future incurred expenses as detailed in Paragraph 5.1.
4.2 In
partial consideration for the license granted herein, IMARX
grants
DR.SCHLEIF warrants to purchase 20,000 shares of IMARX common stock
pursuant to
the COMMON STOCK WARRANT attached as Exhibit A.
4.3 IMARX
shall pay to DR. SCHLIEF, as a running royalty, for each
LICENSED PRODUCT sold by IMARX or AFFILIATED COMPANIES, two percent
(2%) of NET
SALES for the term of this Agreement. Should IMARX be required to
pay running
royalties on any patent rights not licensed hereunder ("Other
Royalties") in
order to make, use or sell a particular LICENSED PRODUCT, IMARX
shall be
entitled to credit half (50%) of such Other Royalties against the
running
royalty due, provided that the running royalties shall not be
reduced below
fifty percent (50%) of those that would otherwise be due DR.
SCHLIEF for that
LICENSED PRODUCT.
Such
payments shall be made twice per year as provided in Paragraph
4.5.
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January 4, 2005
4.4 In the
event IMARX grants a sublicense of rights to a third party
under this Agreement, IMARX shall pay DR. SCHLIEF three percent
(3%) of any
milestone payments or running royalties received by IMARX, for
sublicensing
PATENT RIGHTS. Research support to fund development of a LICENSED
PRODUCT,
patent cost or other out-of-pocket reimbursements or equity
investments made at
fair market value are excluded, however DR. SCHLIEF shall receive
three percent
(3%) of the excess above fair market value of any equity
investments. If any
Other Rights (Other Rights are rights other than PATENT RIGHTS that
are owned or
controlled by IMARX) are conveyed under a sublicense, the
percentage owed to DR.
SCHLIEF shall be based upon the value of the contribution of PATENT
RIGHTS to
the overall value of all rights being sublicensed to the third
party. The
determination of value of right shall be made by an independent
agent of
national stature who is mutually agreeable to both parties and the
costs of such
valuation shall be borne equally between IMARX and DR. SCHLIEF.
4.5 IMARX
shall provide to DR. SCHLIEF within sixty (60) days of the end
of each June after the a first commercial sale of a LICENSED
PRODUCT, a written
report of the amount of LICENSED PRODUCTS sold, the total NET SALES
of each
LICENSED PRODUCTS, and the running royalties due to DR. SCHLIEF as
a result of
NET SALES by IMARX, AFFILIATED COMPANIES and sublicensees thereof.
Payment of
any such royalties due shall accompany such report.
4.6 IMARX
shall make and retain, for a period of three (3) years
following
the period of each report required by Paragraph 4.5, true and
accurate records,
files and books of account containing all the data reasonably
required for the
full computation and verification of sales and other information
required in
Paragraph 4.5. Such books and records shall be in accordance with
generally
accepted accounting principles consistently applied. IMARX shall
permit the
inspection and copying of such records, files and books of account
by an
independent accountant of nationally recognized stature selected by
DR. SCHLIEF
and acceptable to IMARX. Such inspection shall be during regular
business hours
and upon ten (10) business days' written notice to IMARX. Such
inspection shall
not be made more than once each calendar year. All costs of such
inspection and
copying shall be paid by DR. SCHLIEF, provided that if any such
inspection shall
reveal that an error has been made in the amount equal to ten
percent (10%) or
more of such payment, such costs shall be borne by IMARX. IMARX
shall include in
any agreement with its AFFILIATED COMPANIES or its sublicensees
which permits
such party to make, use or sell the LICENSED PRODUCT(S) a
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January 4, 2005
provision requiring such party to retain records of sales of
LICENSED PRODUCT(S)
and other information as required in Paragraph 4.5 and permit DR.
SCHLIEF's
agents to inspect such records as required by this Paragraph
4.6.
4.7 All
payments under this Agreement shall be made in U.S. Dollars.
ARTICLE 5 - PATENT RIGHTS AND CONFIDENTIAL INFORMATION
5.1 DR.
SCHLIEF shall notify IMARX of any patent related costs due at
least thirty (30) days prior to any payment being due. IMARX shall
promptly
notify DR. SCHIEF in writing of its desire to maintain such patent
(Authorized
Expense) and shall reimburse DR. SCHLIEF upon receipt of an invoice
for such
approved expense. Title to all such patents shall reside in DR.
SCHLIEF. In any
country where IMARX elects not to pay expenses associated with
maintaining a
patent, DR.SCHLIEF may maintain such patent at his own expense and
for his own
exclusive benefit and IMARX thereafter shall not be licensed under,
or owe
monies for, such patent right.
5.2 IMARX
agrees that all packaging containing individual LICENSED
PRODUCT(S) sold by IMARX, AFFILIATED COMPANIES and sublicensees of
IMARX will be
marked with the number of the applicable patent(s) licensed
hereunder in
accordance with each country's patent laws.
5.3 If
necessary, the parties will exchange information which they
consider to be confidential. The recipient of such information
agrees to accept
the disclosure of said information which is marked as confidential
at the time
it is sent to the recipient, and to employ all reasonable efforts
to maintain
the information secret and confidential, such efforts to be no less
than the
degree of care employed by the recipient to preserve and safeguard
its own
confidential information. The information shall not be disclosed or
revealed to
anyone except employees of the recipient who have a need to know
the information
and who have entered into a secrecy agreement with the recipient
under which
such employees are required to maintain confidential the
proprietary information
of the recipient and such employees shall be advised by the
recipient of the
confidential nature of the information and that the information
shall be treated
accordingly. The recipient's obligations under this Paragraph 5.3
shall not
extend to any part of the information:
a. that
can be demonstrated to have been in the public domain or
publicly
known
and
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January 4, 2005
readily
available to the trade or the public prior to the date of the
disclosure; or
b. that
can be demonstrated, from written records to have been in the
recipient's possession or readily available to the recipient from
another
source not
under obligation of secrecy to the disclosing party prior to
the
disclosure; or
c. that
becomes part of the public domain or publicly known by
publication
or
otherwise, not due to any unauthorized act by the recipient; or
d. that is
demonstrated from written records to have been developed by or
for the
receiving party without reference to confidential information
disclosed
by the disclosing party.
e. that is
required to be disclosed by law, government regulation or court
order.
The obligations of this Paragraph 5.3 shall also apply to
AFFILIATED COMPANIES
and/or sublicensees provided such information by IMARX. DR.
SCHLIEF, the
IMARX's, AFFILIATED COMPANIES, and sublicensees' obligations under
this
Paragraph 5.3 shall extend until five (5) years after the
termination of this
Agreement.
ARTICLE 6 - TERM AND TERMINATION
6.1 This
Agreement shall expire in each country on the date of
expiration
of the last to expire patent included within PATENT RIGHTS in that
country.
6.2 Upon
breach or default of any of the terms and conditions of this
Agreement, the defaulting party shall be given written notice of
such default in
writing and a period of sixty (60) days after receipt of such
notice to correct
the default or breach. If the default or breach is not corrected
within said
sixty (60) day period, the party not in default shall have the
right to
terminate this Agreement.
6.3 IMARX
may terminate this Agreement and the license granted herein,
for
any reason, upon giving DR. SCHLIEF sixty (60) days written
notice.
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January 4, 2005
6.4
Termination shall not affect DR. SCHLIEF's right to recover
unpaid
royalties or fees or reimbursement for Authorized Expense incurred
pursuant to
Paragraph 5.1 prior to termination. Upon termination all rights in
and to the
licensed technology shall revert to DR. SCHLIEF at no cost to
ImaRx.
ARTICLE 7 - MISCELLANEOUS
7.1 All notices pertaining to this Agreement shall be (a) delivered
in person,
or (b) mailed certified mail return receipt requested, or (c) faxed
to other
party if the sender has evidence of successful transmission and if
the sender
promptly sends the original by ordinary mail, in any event to the
following
addresses:
FOR IMARX:
Jean Carlyle
CFO
ImaRx Therapeutics Inc.
1635 E. 18th Street
Tucson, Arizona 85719
FOR DR. SCHLIEF: Dr. med.
Reinhard Schlief
Neue Strasse 21
14163 Berlin
Germany
7.2 All
written royalty and other payments, and any other related
correspondence shall be in writing and sent to:
FOR DR. SCHLIEF: Dr. med.
Reinhard Schlief
Neue Strasse 21
14163 Berlin
Germany
or such other addressee which DR. SCHLIEF may designate in writing
from time to
time. Checks are to be made payable to "Dr. med. Reinhard Schlief".
Wire
transfers may be made through:
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7.3 This
Agreement is binding upon and shall inure to the benefit of DR.
SCHLIEF, his successors and assignees and shall not be assignable
to another
party without the written consent of DR. SCHLIEF, which consent
shall not be
unreasonably withheld, except that IMARX shall have the right to
assign this
Agreement to another party
