Exhibit 10.3
AMENDED AND RESTATED
AQUAMER, INC.
PATENT LICENSE AGREEMENT
THIS PATENT LICENSE AGREEMENT (the "Agreement"), effective as of
March 31, 2006 (the "Effective Date"), is entered into by and
between Partners in Biomaterials, Inc., a California corporation,
with principal offices at 466 West Arrow Highway, Suite H, San
Dimas, California, 91773 ("Partners in Biomaterials") and Aquamer,
Inc., a Delaware corporation, with principal offices at 237 Cedar
Hill Street, Ste 4, Marlborough, MA 01752. Aquamer, Inc. and
Partners in Biomaterials either individually or in the collective
may be hereinafter referred to as a "Party" or the
"Parties."
WHEREAS, Partners in Biomaterials is the sole and exclusive
owner of certain intellectual property rights, including patent
rights in chemical compounds relating to a polymer hydrogel
formulation based on a copolymer of three chemicals; i)
polyvinylpyrrolidinone (PVP), ii) a derivative of PVP, and iii) an
acrylic for the use in dermatological applications; and
WHEREAS, Aquamer, Inc. desires to continue and expand its
licenses from Partners in Biomaterials relating to such device in
the fields of dermatology, urology, and gastroenterology,
including patent rights therefore, and Partners in Biomaterials
desires to continue and expand such licenses to Aquamer, Inc., on
the terms and conditions herein; and
WHEREAS, the Parties have entered into a Patent License
Agreement as of October 14, 1999, as amended on March 6,
2002, all of which the Parties desire to replace and supercede in
their entirety with this Agreement; and
NOW, THEREFORE, Partners in Biomaterials and Aquamer, Inc.
agree as follows:
1. DEFINITIONS
1.1 " Affiliate " means any
corporation or other entity, which directly controls or is
controlled by Aquamer, Inc. For the purpose of this
Agreement, "control" shall mean the direct ownership of at least
50% of the outstanding voting shares or other voting rights
of the subject entity to elect directors.
1.2 " Licensed Product " means
any product or material distributed solely for use in the field of
dermatology for application in the epidermis, dermis, or
subcutaneous fatty tissue, urology, and gastroenterology the
manufacture, use or sale of which by an unlicensed third party
would constitute an infringement of a Valid Claim if such claim is
or were to be included in an issued patent.
1.3 " Net Sales " means the
gross revenues actually received by Aquamer, Inc. and its
Affiliates and Sublicensees from sales of Licensed Products, less
(i) normal and customary rebates, and cash and trade discounts,
(ii) sales, use, value added, excise and other taxes, tariffs or
duties actually paid, (iii) insurance costs and outbound
transportation charges prepaid or allowed,. (iv) import and/or
export duties actually paid, and (v) amounts allowed or credited
due to returns.
1.4 " Patent Rights
" means all rights in U.S. patents 5,116,371 and 5,713,960 owned by
Partners in Biomaterials and all divisions, continuations,
continuations-in-part, and substitutions thereof, all foreign
patent applications corresponding to these patents; and all U.S.
and foreign patents issuing on any of the preceding, including
extensions, reissues, and re-examinations.
1.5 " Valid Claim" means (i) a claim in a patent
application within the Patent Rights, or (ii)a claim in an issued
and unexpired patent included within the Patent Rights which has
not been held unenforceable or invalid by a court or other
governmental agency of competent jurisdiction, and which has not
been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise.
2. GRANTS
2.1 License/Grant . Partners in
Biomaterials hereby grants to Aquamer, Inc. an exclusive, world
wide, royalty-bearing license of the Patent Rights, with the right
to grant and authorize sublicenses, to develop, make, have made,
use, sell and otherwise distribute and exploit the Licensed
Products.
2.2 No Implied Licenses .
Nothing herein shall be construed as granting Aquamer, Inc., by
implication, estoppel or otherwise, any license or other right
under any patent or other intellectual property right of Partners
in Biomaterials, except for the licenses expressly granted in
Section 2.1.
2.3 Ownership . Aquamer, Inc.
acknowledges and agrees that Partners in Biomaterials is and shall
remain the sole and exclusive owner of the Patent Rights and that
Aquamer, Inc. acquires no rights in or to any of the foregoing,
other than the license rights specifically granted in Section
2.1.
3. ROYALTIES AND OTHER CONSIDERATION
3.1 Royalties . In consideration
of the license granted to Aquamer, Inc., Aquamer, Inc. shall pay to
Partners in Biomaterials a royalty equal to Five percent (5%) of
Net Sales of any Licensed Products manufactured or sold by Aquamer,
Inc., its Affiliates, or its sublicensees.
3.2 Prior to selling any Licensed
Product in combination with another product whose use and sale are
not covered by a Valid Claim, Aquamer, Inc. shall notify Partners
in Biomaterials and the parties shall discuss the proposed sale of
such a combination product. In the event that a Licensed Product is
sold in combination as a single product with another product whose
sale and use are not covered by a Valid Claim in the country for
which the combination product is sold, Net Sales from such sales
for purposes of calculating the amounts due under Section 3.1 above
shall be calculated by multiplying the Net Sales of that
combination by the fraction A/(A + B), where A is the gross selling
price of the Licensed Product sold separately and B is the gross
selling price of the other product sold separately. In the event
that no such separate sales are made by Aquamer, Inc., Net Sales
for royalty determination shall be as reasonably allocated by
Aquamer, Inc. between such Licensed Product and such other product,
based upon their relative direct cost.
3.3 When all Valid Claims have expired,
Aquamer, Inc., in consideration of the confidential information and
know-how of Partners in Biomaterials shall pay to Partners in
Biomaterials a royalty equal to two percent (2%) of Net Sales of
any Licensed Products manufactured or sold by Aquamer, Inc., its
affiliates or its sublicensees. This payment shall then
replace the Royalty is section 3.1 of this agreement.
3.4 Royalty Term . Royalties due
under this Article 3 shall be payable on a country-by-country and
Licensed Product-by-Licensed Product basis until the expiration of
the last-to-expire Valid Claim covering such Licensed Product in
such country.
3.5 Aquamer, Inc. further agrees to
issue to Partners in Biomaterials 100,000 of shares of common
stock in Bellacasa Productions, Inc. within sixty (60) days of
signing this agreement.
4. PAYMENTS
4.1 Payments . Aquamer,
Inc. agrees to pay all royalties due hereunder to Partners in
Biomaterials within sixty (60) days after the last day of the
calendar quarter in which they accrue.
4.2 Currency: Foreign
Payments . All royalty payments due hereunder shall be paid
in United States dollars. If any currency conversion shall be
required in connection with the payment of any royalties hereunder,
such conversion shall be made by using the exchange rate for the
purchase of U.S. dollars reported by the Bank of America (or its
successor) on the last business day of the calendar quarter to
which such royalty payments related.
4.3 Any income or other tax that must
be withheld by applicable law on behalf of Partners in Biomaterials
with respect to the royalties owed pursuant to this Agreement shall
be deducted by Aquamer, Inc. from the royalties prior to
remittance. Upon request by Partners in Biomaterials, Aquamer, Inc.
shall furnish to Partners in Biomaterials evidence of any such
taxes withheld.
4.4 Payments more than thirty (30) days
overdue will be subject to a service charge of one percent (1%) per
month or the maximum allowable by law, whichever is less.
5 . REPORTS AND RECORDS
5.1 Royalty Reports . Aquamer,
Inc. shall deliver to Partners in Biomaterials, within thirty (30)
days after the end of each calendar quarter in which Licensed
Products are sold, a report setting forth in reasonable detail the
calculation of the royalties payable to Partners in Biomaterials
for such calendar quarter, including the Licensed Products sold in
each country, the Net Sales thereof by Aquamer, Inc., its
Affiliates, and its licensees and taxes withheld pursuant to
paragraph 4.3. Such reports shall be Aquamer, Inc. Confidential
Information pursuant to Article 7 herein.
5.2 Inspection of Books and
Records . Aquamer, Inc. and its sublicensees shall maintain
accurate books and records which enable the calculation of
royalties payable hereunder to be verified. Aquamer, Inc. and its
sublicensees shall retain the books and records for each quarterly
period for three (3) years after the submission of the
corresponding report under Section 5.1 hereof. Upon thirty
(30) days prior notice to Aquamer, Inc., independent certified
public accountants selected by Partners in Biomaterials may have
access to Aquamer, Inc.’s, its Affiliates’, and its
sublicensees’ books and records to conduct a review or audit
once per calendar year during the term of the Agreement, at
Partners in Biomaterials’ expense, for the sole purpose of
verifying the accuracy of Aquamer, Inc.’s payments and
compliance with this Agreement. The accounting firm shall report to
Partners in Biomaterials only whether there has been a royalty
underpayment and, if so, the amount thereof. If Aquamer, Inc. has
underpaid Partners in Biomaterials by more than five percent
(5%) in any year, then the expense of such review or audit
shall be borne by Aquamer, Inc. Such access shall be permitted
during Aquamer, Inc.’s normal business hours during the term
of this Agreement and for two (2) years after the expiration or
termination of this Agreement.
6 . DILIGENCE
6.1 Aquamer, Inc. agrees to use
reasonable efforts to diligently develop and commercialize the
Patent Rights, consistent with its prudent business judgment;
provided, however, Partners in Biomaterials may terminate this
Agreement if Aquamer, Inc., its and Affiliates and
sublicensees have not invoiced aggregate gross sales of at least
Five Million Dollars ($5,000,000) of Licensed Products in the
period from the date of approval to market the Licensed Products in
the U.S. until the third anniversary of such date, or in any
subsequent period of three (3) consecutive years. Aquamer,
Inc. shall notify Partners in Biomaterials within thirty (30) days
after the first commercial sale of any Licensed Product.
6.2 Pursuant to to Section 3.10 of the
Amended and Restated Aquamer, Inc. Product Supply Agreement,
Aquamer, Inc. further agrees to purchase from Partners in
Biomaterials Fifty Thousand Dollars ($50,000) worth of Licensed
Products in each calendar year.
7. CONFIDENTIALITY
7.1 General . Partners in
Biomaterials and Aquamer, Inc. shall each hold in confidence and
not disclose to any third party during the term of this Agreement
and for a period of five (5) years thereafter, unless authorized in
advance in writing any product, technical, manufacturing, process,
marketing, financial, business or other intonation, ideas, or
know-how delivered by the other party and identified in writing as
confidential or oral information disclosed by one party to another
pursuant to this Agreement, provided that such information i
