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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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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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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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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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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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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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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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 without the consent of DR. SCHLIEF in the case of the
sale or transfer by IMARX of all, or substantially all, of its assets relating
to the LICENSED PRODUCT to that party.
7.4 In the event that any one or more of the provisions of this Agreement
should for any reason be held by any court or authority having jurisdiction over
this Agreement, or over any of the parties hereto to be invalid, illegal or
unenforceable, such provision or provisions shall be reformed to approximate as
nearly as possible the intent of the parties, and if unreformable, shall be
divisible and deleted in such jurisdictions; elsewhere, this Agreement shall not
be affected.
7.5 The construction, performance, and execution of this Agreement shall
be governed by the laws of the State of Arizona. Any disputes between the
parties to the Agreement shall be brought in the state or federal courts of
Arizona.
7.6 DR. SCHLIEF warrants that he has good and marketable title to the
inventions claimed under PATENT RIGHTS. DR. SCHLIEF does not warrant the
validity of any patents or that practice under such patents shall be free of
infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 7.6, IMARX,
AFFILIATED COMPANIES AND SUBLICENSEES AGREE THAT THE PATENT RIGHTS ARE PROVIDED
"AS IS", AND THAT DR. SCHLIEF MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT
TO THE PERFORMANCE OF LICENSED PRODUCT(S) INCLUDING THEIR SAFETY, EFFECTIVENESS,
OR COMMERCIAL VIABILITY. DR. SCHLIEF DISCLAIMS ALL WARRANTIES WITH REGARD TO
PRODUCT(S) UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES,
EXPRESS OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, DR. SCHLIEF ADDITIONALLY
DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF DR. SCHLIEF, FOR
DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, AND
CONSEQUENTIAL DAMAGES, ATTORNEYS' AND EXPERTS' FEES, AND COURT COSTS (EVEN IF
DR. SCHLIEF HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS),
ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR
10 January 4, 2005
SALE OF THE PRODUCT(S) UNDER THIS AGREEMENT. IMARX, AFFILIATED COMPANIES AND
SUBLICENSEES ASSUME ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED
BY A LICENSED PRODUCT AS DEFINED IN THIS AGREEMENT MANUFACTURED, USED, OR SOLD
BY IMARX, ITS SUBLICENSEES AND AFFILIATED COMPANIES.
7.7 DR. SCHLIEF will not, under the provisions of this Agreement or
otherwise, have control over the manner in which IMARX or its AFFILIATED
COMPANIES or its sublicensees or those operating for its account or third
parties who purchase LICENSED PRODUCT(S) from any of the foregoing entities,
practice the inventions of LICENSED PRODUCT(S). Practice of the inventions
covered by LICENSED PRODUCT(S), by an AFFILIATED COMPANY or an agent or a
sublicensee or a third party on behalf of or for the account of IMARX or by a
third party who purchases LICENSED PRODUCT(S) from the IMARX, shall be
considered the Company's practice of said inventions for purposes of this
Paragraph 7.7.
7.8 Prior to initial human testing or first commercial sale of any
LICENSED PRODUCT in any particular country, IMARX shall establish and maintain,
in each country in which IMARX, an AFFILIATED COMPANY or sublicensee shall test
or sell LICENSED PRODUCT(S), product liability or other appropriate insurance
coverage appropriate to the risks involved in marketing LICENSED PRODUCT(S) and
will upon request present evidence to DR. SCHLIEF that such coverage is being
maintained.
7.9 This Agreement constitutes the entire understanding between the
parties with respect to the obligations of the parties with respect to the
subject matter hereof, and supersedes and replaces all prior agreements,
understandings, writings, and discussions between the parties relating to said
subject matter.
7.10 This Agreement may be amended and any of its terms or conditions may
be waived only by a written instrument executed by the authorized officials of
the parties or, in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect its right at a later time to enforce
the same. No waiver by either party of any condition or term in any one or more
instances shall be construed as a further or continuing waiver of such condition
or term or of any other condition or term.
7.13 This Agreement shall be binding upon and inure to the benefit of and
be enforceable
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by the parties hereto and their respective successors and permitted assigns.
7.14 Upon termination of this Agreement for any reason, Paragraphs 5.3,
6.4, 7.6, and 7.7 shall survive termination of this Agreement.
IN WITNESS WHEREOF the respective parties hereto have executed this
Agreement by their duly authorized officers on the date appearing below their
signatures.
IMARX THERAPEUTICS, INC. DR. SCHLIEF
By /s/ Evan Unger By /s/ Reinhard Schlief
--------------------------------- -------------------------
Evan Unger, M.D., President & CEO Dr. med. Reinhard Schlief
Date: 1-4-05 Date 1-6-05
EXHIBIT A
WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THIS WARRANT AND ANY OF SUCH
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER SAID ACTS AND ALL OTHER
APPLICABLE SECURITIES LAWS UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
WARRANT TO PURCHASE SHARES OF
COMMON STOCK OF IMARX THERAPEUTICS, INC.
Date of Issuance: January 4, 2005
THIS CERTIFIES that, for value received, Dr. med. Reinhard Schlief (the
"Holder") is entitled to purchase, subject to the provisions of this warrant,
from IMARX THERAPEUTICS, INC., a Delaware corporation (the "Company"), at the
Exercise Price described in Section 2.2, shares of the $0.0001 par value Common
Stock of the Company as adjusted in accordance with the provisions hereof. This
warrant is hereinafter referred to as the "Warrant," and the shares of Common
Stock issuable pursuant to the terms hereof are hereinafter sometimes referred
to as "Warrant Shares."
This Warrant entitles the Holder to purchase, effective from the date
hereof until January 4, 2010 (the "Expiration Date"), Twenty Thousand (20,000)
shares of Common Stock. This Warrant shall be exercisable in whole or in part,
and at any time, or from time to time, on or before the Expiration Date.
ARTICLE I
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise
requires, the following terms shall have the following respective meanings:
"Act": the federal Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect at the time.
"CASHLESS EXERCISE": an exercise of Warrants in which, in lieu of
payment of the Exercise Price, the Holder elects to receive a lesser number of
shares of Common Stock such that the value of the Common Stock that the Holder
would otherwise have been entitled to receive but has agreed not to receive, as
determined by the average of the closing prices of such shares over the thirty
(30) day period ending three (3) days prior to the date of exercise, is equal to
the Exercise Price with respect to such exercise. A Holder may only elect a
Cashless Exercise if the Common Stock issuable by the Company on such exercise
is publicly traded.
"COMMON STOCK": the Company's authorized Common Stock of $0.0001 par
value per share, as such class existed on the date of this Warrant.
"COMMISSION": the United States Securities and Exchange Commission, or
any other federal agency then administering the Act.
"COMPANY": IMARX THERAPEUTICS, INC., a Delaware corporation,
headquartered at 1635 East 18th St., Tucson, Arizona 85719, and any other
corporation assuming or required to assume the Warrants pursuant to Article VII.
"EXERCISE PRICE": defined in Section 2.2.
"PERSON": any individual, corporation, partnership, limited liability
company, trust, unincorporated organization and any government, and any
political subdivision, instrumentality or agency thereof.
"WARRANT OFFICE": defined in Section 3.1.
"WARRANT SHARES": the shares of Common Stock purchasable by the Holder
of this Warrant upon the exercise of this Warrant.
ARTICLE II
EXERCISE OF WARRANT
2.1 Exercise of Warrant. All or any part of the Warrant represented by
this Warrant Certificate may be exercised commencing on January 4, 2005 and
ending at 5 p.m. Eastern Time on January 4, 2010 by surrendering this Warrant
Certificate, together with appropriate instructions, duly executed by the Holder
or by its duly authorized attorney, at the office of the Company, or at such
other office or agency as the Company may designate. The date on which the
Company receives such instructions shall be the date of exercise. If the Holder
has elected a Cashless Exercise, such instructions shall so state. Upon receipt
of notice of exercise, the Company shall immediately instruct its transfer agent
to prepare certificates for the Common Stock to be received by the Holder upon
completion of the Warrant exercise. When such certificates are prepared, the
Company shall notify the Holder and deliver such certificates to the Holder or
as per the Holder's instructions immediately upon payment in full by the Holder,
in lawful money of the United States, of the Exercise Price payable with respect
to the Common Stock being purchased, if any.
If fewer than all the Common Stock purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Holder a new Warrant Certificate (dated the date hereof), in form and tenor
similar to this Warrant Certificate, evidencing that portion of the Warrant not
exercised. The Common Stock to be obtained on exercise of the Warrant will be
deemed to have been issued, and any person exercising the Warrants will be
deemed to have become a holder of record of those shares, as of the date of the
payment of the Exercise Price.
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2.2 Exercise Price. The exercise price for any Warrant Share shall be
equal to $3.00 per share of Common Stock; such price may be adjusted from time
to time pursuant to the terms of Article V.
2.3 Shares to be Fully Paid and Nonassessable. All shares of Common
Stock issued upon the exercise of this Warrant shall be validly issued, fully
paid and nonassessable.
2.4 No Fractional Shares to be Issued. The Company shall not be
required upon any exercise of this Warrant to issue a certificate representing
any fraction of a share of Common Stock.
2.5 Legend on Warrant Shares. Each certificate for shares initially
issued upon exercise of this Warrant, unless at the time of exercise such shares
are registered under the Act, shall bear the following legends (and any
additional legend required by the Agreement, any national securities exchanges
upon which such shares may, at the time of such exercise, be listed or under
applicable securities laws):
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
the securities laws of any state. They may not be sold, transferred,
assigned, pledged, hypothecated, encumbered, or otherwise disposed of
in the absence of registration under said Act and all other applicable
securities laws, unless an exemption from registration is available.
The securities represented by this certificate are subject to
the Company's right of first refusal set forth in the issuer's bylaws,
and none of such securities, or any interest therein, shall be
transferred, pledged, encumbered or otherwise disposed of except as
provided in such bylaws, a copy of which is on file in the Company's
office and will be made available for inspection to any properly
interested person without charge upon written request.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Act of the securities represented thereby) shall also bear the above legends
unless, in the opinion of counsel to the Company, the securities represented
thereby need no longer be subject to the restrictions on transferability. The
provisions of Article IV shall be binding upon all subsequent Holders of this
Warrant.
2.6 Acknowledgment of Continuing Obligation. The Company will, at the
time of any exercise of this Warrant in whole or in part, upon request of the
Holder hereof, acknowledge in writing its continuing obligation to such Holder
in respect of any rights to which the Holder shall continue to be entitled after
exercise in accordance with this Warrant; provided, however, that the failure of
the Holder to make any such request shall not affect the continuing obligation
of the Company to the Holder in respect of such rights.
3
ARTICLE III
WARRANT OFFICE; TRANSFER, DIVISION
OR COMBINATION OF WARRANTS
3.1 Warrant Office. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's location set forth in Article I hereof, and may subsequently be
such other office of the Company or of any transfer agent of the Common Stock in
the continental United States as to which written notice has previously been
given to all of the Holders of the Warrants.
3.2 Ownership of Warrant. The Company may deem and treat the Person in
whose name this Warrant is registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article III.
3.3 Transfer of Warrant. The Company agrees to maintain at the Warrant
Office books for the registration of this Warrant. Subject to the provisions of
Article IV, this Warrant and the rights hereunder are not transferable, in whole
or in part, by the Holder.
3.4 Division or Combination of Warrants. Subject to Article IV hereof,
this Warrant maybe divided or combined with any other Warrant or warrants held
by Holder.
3.5 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes and any federal or state income
taxes), and other charges payable in connection with the preparation, issuance
and delivery of new Warrants hereunder.
ARTICLE IV
RESTRICTION ON TRANSFER
4.1 Restrictions on Transfer. This Warrant and the rights hereunder are
not transferable, in whole or in part, by the Holder. Notwithstanding any
provisions contained in this Warrant to the contrary, this Warrant shall not be
exercisable except upon the conditions specified in this Article IV, which
conditions are intended, among other things, to insure compliance with the
provisions of the Act in respect of the exercise of the Warrant. The Holder of
this Warrant, by acceptance hereof, agrees that it will not exercise this
Warrant prior to delivery to the Company of any required opinion of the Holder's
counsel (as the opinion and counsel are described in Section 4.2 hereof). The
Warrant Shares are subject to the Company's right of first refusal set forth in
the Company's bylaws.
4.2 Opinion of Counsel. If in the opinion of counsel reasonably
acceptable to the Company, a proposed exercise of this Warrant may be effected
without registration of this Warrant under the Act, the Holder of this Warrant
shall be entitled to exercise this Warrant in accordance with the proposed
method of disposition; provided, however, that if the method of disposition
would, in the opinion of such counsel, require that the Company take any action
or execute and file with the Commission or deliver to the Holder or any other
person any notice, form or document in order to establish the entitlement of the
Holder to take advantage of such
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method of disposition, the Company agrees, at the cost of the Holder, to
promptly take any necessary action or execute and file or deliver any necessary
form or document.
ARTICLE V
ADJUSTMENT OF WARRANT SHARES AND EXERCISE PRICE
5.1 Anti-Dilution Adjustments. If at any time after this Warrant
becomes exercisable, the Company (i) pays a stock dividend of Common Stock to
holders of Common Stock, (ii) institutes a stock split or a reverse stock split
of its Common Stock, or (iii) reclassifies its capital structure in any other
way, then in each such case, the number of shares of Common Stock into which
this Warrant is exercisable shall be adjusted as if the Warrant Shares were
outstanding immediately prior to the time of such event, and the Exercise Price
shall be adjusted accordingly.
5.2 Notice to Holder. Whenever the Company proposes to take any action
that would cause an anti-dilution adjustment, the Company will provide the
Holder hereof with written notice of such change and the number of Warrant
Shares into which this Warrant would then be exercisable and the applicable
Exercise Price. Such notice will be provided no less than ten (10) days prior to
the effective date of any such action.
ARTICLE VI
ADDITIONAL NOTICES TO WARRANT HOLDER
[INTENTIONALLY LEFT BLANK]
ARTICLE VII
RECLASSIFICATION, REORGANIZATION OR MERGER
In case of any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the Company, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger with a subsidiary in which merger the Company is the continuing
corporation or that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock), the
Company shall cause effective provision to be made so that the Holder hereof
shall have the right thereafter by exercising this Warrant to purchase the kind
and amount of shares of stock and other securities, cash and/or property
receivable upon such reclassification, capital reorganization or other change,
consolidation or merger, by a Holder of the number of shares of Common Stock
that might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation or merger. Any such provision
shall include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments herein provided of the Exercise Price and
the number of Warrant Shares purchasable and receivable upon the exercise of
this Warrant. The foregoing provisions of this Article VII shall similarly apply
to successive reclassifications, capital reorganizations and changes of shares
of Common Stock and to successive consolidations and mergers.
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ARTICLE VIII
CERTAIN COVENANTS OF THE COMPANY
8.1 Reservation of Common Stock. The Company covenants and agrees that
it will reserve and set apart and have at all times, free from preemptive
rights, a number of shares of authorized but unissued Common Stock or other
securities or property deliverable upon the exercise of this Warrant sufficient
to enable it at any time to fulfill all its obligations hereunder.
8.2 Piggyback Registration. Holder shall have unlimited piggyback
registration rights for any shares purchased hereunder on a pari passu basis
with the Investors party to that certain Amended and Restated Investor Rights
Agreement dated October 10, 2002 among the Company and the parties thereto, as
amended from time to time (the "Investor Rights Agreement"). Holder hereby
agrees that such Holder shall not sell, transfer, make any short sale of, grant
any option for the purchase of, or enter into any hedging or similar transaction
with the same economic effect as a sale, any Common Stock (or other securities)
of the Company held by such Holder (other than those included in the
registration) for a period specified by the representative of the underwriters
of Common Stock (or other securities) of the Company not to exceed one hundred
eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act; provided that all officers and
directors of the Company and holders of at least five percent (5%) of the
Company's voting securities (other than Arizona Angels Fund I, LLC) enter into
similar agreements. Each Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter
which are consistent with the foregoing or which are necessary to give further
effect thereto. The Company may impose stop-transfer instructions with respect
to the shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period.
ARTICLE IX
MISCELLANEOUS
9.1 Waiver and Amendment. Any term or provision of this Warrant may be
waived at any time by the party who or that is entitled to the benefits thereof,
and any term or provision of this Warrant may be amended or supplemented at any
time by agreement of the Holder hereof and the Company, except that any waiver
of any term or condition, or any amendment or supplementation, of this Warrant
must be in writing. A waiver of any breach or failure to enforce any of the
terms or conditions of this Warrant shall not in any way affect, limit or waive
a party's rights hereunder at any time to enforce strict compliance thereafter
with any term or condition of this Warrant.
9.2 Filing of Warrant. A copy of this Warrant shall be filed in the
records of the Company.
9.3 Notice. Any notice or other document required or permitted to be
given or delivered to the Holder shall be delivered personally, or sent by
certified or registered mail, to Holder at the last address shown on the books
of the Company maintained at the Warrant Office for the registration of the
Warrant or at any more recent address of which the Holder shall have notified
the Company in writing. Any notice or other document required or permitted to be
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given or delivered to the Company shall be delivered at, or sent by certified or
registered mail to, the Warrant Office, or such other address within the United
States of America as shall have been furnished by the Company to the Holder.
9.4 Limitation of Liability; Not Shareholders. No provision of this
Warrant shall be construed as conferring upon the Holder the right to vote or
consent at meetings of shareholders, receive dividends or receive notice other
than as herein expressly provided. No provision hereof, in the absence of
affirmative action by the Holder hereof to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of Holder for the exercise price of any Warrant Shares or as a
shareholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
9.5 Loss, Destruction, Etc. of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of the
Warrant, and in the case of any such loss, theft or destruction, upon delivery
of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation, upon surrender
and cancellation of the Warrant, the Company will make and deliver a new
Warrant, of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant. Any Warrant issued under the provisions of this Section 9.5 in lieu of
any Warrant alleged to be lost, destroyed or stolen, or in lieu of any mutilated
Warrant, shall constitute an original contractual obligation on the part of the
Company.
9.6 Governing Law. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to any law or rule that would cause the laws of any jurisdiction other
than the State of Delaware to be applied.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its President and its corporate seal to be impressed hereon and
attested by its Secretary.
THE COMPANY:
IMARX THERAPEUTICS, INC.
By:
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Name:
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Title: President
Attest:
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, Secretary
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