**Exhibit 10.12**

** **

**DATED 9 JUNE 2004**

**Execution Version**

 

** **

**ELAN PHARMAINTERNATIONAL LTD.**

 

**AND**

 

**IMCOR PHARMACEUTICALCO.**

 

 

**LICENCE AGREEMENT**

 

 

Matheson Ormsby Prentice

30 Herbert Street

Dublin 2

Ireland

 

TEL  +353 1 619 9000

FAX  +353 1 619 9010

\MOP_DUBLIN\1013796.3

 

----

 

**CONTENTS**

 
| 1          | Preliminary                             |   |
|------------|-----------------------------------------|--------|
| 2          | The Licences                            |   |
| 3          | Intellectual Property                   |   |
| 4          | Financial Provisions                    |   |
| 5          | Development/Manufacturing/ Exploitation |   |
| 6          | Regulatory Approvals                    |   |
| 7          | Insurance                               |   |
| 8          | Customer Complaints and Product Recall  |   |
| 9          | Warranty and Indemnity                  |   |
| 10         | Duration and Termination                |   |
| 11         | Consequences of Termination/Survival    |   |
| 12         | Confidentiality                         |   |
| 13         | Payments, Reports and Audits            |   |
| 14         | Miscellaneous Provisions                |   |
| Schedule 1 |                                    |
|       | Elan Patents                            |   |

 

----

 

**THIS AGREEMENT** is dated 9 June 2004.

 

**BETWEEN:**

 

(1)           **ELAN PHARMA INTERNATIONAL LTD.**, a company incorporated under the laws of Ireland, and having itsregistered office at WIL House, Shannon Business Park, Shannon, County Clare,Ireland; and

 

(2)           **IMCOR PHARMACEUTICAL CO.**,a company incorporated under the laws of Nevada, having its principal place ofbusiness at 6175 Lusk Boulevard, San Diego, CA 92121.

 

**RECITALS:**

 

A.            Elanis beneficially entitled to the use of various patents which have been grantedor are pending under the International Convention in relation to thedevelopment and production of drug specific dosage forms for pharmaceuticalproducts and processes.

 

B.            IMCORwishes to enter into this Agreement to obtain the right to utilize the ElanIntellectual Property to import, use, offer for sale and sell the Product inthe Field in the Territory.

 

**NOWIT IS HEREBY AGREED AS FOLLOWS:**

 

**1**              Preliminary

** **

1.1           **Definitions:**

 

**“Affiliate”** shall mean any corporation or entity controlling, controlled orunder the common control of any other corporation or entity, excluding, in thecase of Elan, an Elan JV.  For thepurpose of this definition, “control” shall mean direct or indirect ownershipof fifty percent (50%) or more of the stock or shares entitled to vote for theelection of directors. IMCOR is not an Affiliate of Elan.

 

**“Agreement”** shall mean this licence agreement (which expression shall be deemedto include the Recitals and Schedules hereto).

 

**“CommercializationAgreement”** shall mean:

 

(a)           anylicense agreement, research and development agreement, or alternative form ofcollaboration or commercialization agreement, such as, but not limited to, aco-promotion or co-marketing arrangement to research, develop, import, make,use, offer for sale, and/or sell the Product(s) in the Territory;

 

(b)           anyDisposal Agreement; or

 

(c)           anagreement comprising an option to do any of the foregoing.

 

**“ConfidentialInformation”** shall have the meaningset forth in Clause 12.

 

**“Compound”** shall mean the diagnostic imaging agent compound NC-67722 (formerlyknown as WIN 67722).

 

**“Disposal Agreement”** shallmean any agreement for the assignment or outright sale or disposition, in wholeor in part, of the intellectual property rights in the Product(s).

 

1

----

 

**“EffectiveDate”** shall mean the date of thisAgreement.

 

**“Elan”** shall mean EPIL and its Affiliates.

 

**“ElanImprovements”** shall mean any and allimprovements, made to the Elan Patents and/or the Elan Know-How that areconceived, created, developed and/or otherwise invented by IMCOR at any timeafter the Effective Date.

 

**“ElanIntellectual Property”** shall mean theElan Patents, Elan Know How and, subject to the provisions of Clause3.2.2,  Elan Improvements.

 

**“ElanJV”** shall mean an entity that Elanand a third party (i) establish or have established; (ii) take shareholdings inor have a right to take shareholdings in; and (iii) grant certain licenses inand to certain intellectual property rights for the purpose of implementing astrategic alliance.

 

**“ElanKnow-How”** shall mean the rights ownedby Elan on the Effective Date to the specific scientific, pharmaceutical ortechnical information, data, discovery, invention (whether patentable or not),know-how, substances, techniques, processes, systems, formulations, designs andexpertise relating to nanoparticulate medical diagnostic imaging agentsincluding, without limitation, (i) methods for making medical diagnosticimaging agents in nanoparticulate form and related compositions; and (ii)medical diagnostic imaging agents, methods of treatment using medicaldiagnostic imaging agents and related compositions, which is not generallyknown to the public.

 

The primaryexamples of the Elan Know-How existing as of the Effective Date are set forthin Schedule 1, which listing is not necessarily exhaustive.

 

**“ElanLicence”** shall have the meaning setforth in Clause 2.1.

 

**“ElanPatents”** shall mean any and allPatent Rights owned or controlled by Elan, now existing, currently pending orhereafter filed by Elan relating to nanoparticulate medical diagnostic imagingagents including, without limitation, (i) methods for making medical diagnosticimaging agents in nanoparticulate form and related compositions; and (ii)medical diagnostic imaging agents, methods of treatment using medicaldiagnostic imaging agents and related compositions.  Representative Elan Patents existing as of the Effective Date areset forth in Schedule 1.

 

**“EPIL”** or **“Elan Pharma InternationalLimited”** shall mean Elan Pharma International Limited, a privatelimited company incorporated under the laws of Ireland.

 

**“FDA”** shall mean the United States Food and Drug Administration or anyother successor agency whose approval is necessary to market the Product(s) inthe USA.

 

**“Field”** shall mean x-ray, CT, and/or MRI diagnostic imaging agents usingradio-opaque molecules containing Iodine that passively target to lymphnodesinvolved in a disease state following parenteral administration to a mammal tolocate, diagnose and/or treat cancer and/or other diseases.

 

For theavoidance of doubt, the Field does not include:

 

(i)            activetargeting agents, including but not limited to monoclonal antibodies,short-chain antibodies or any other active targeting agents including protein,peptide or peptidomimetic targeting agents; or

 

2

----

 

(ii)           ultrasounddiagnostic imaging agents.

 

**“ForceMajeure”** shall mean causes beyond aParty’s reasonable control, including, without limitation, acts of God, fires,strikes, acts of war, or intervention of a Governmental Authority or RHA.

 

**“GovernmentalAuthority”** shall mean allgovernmental and regulatory bodies, agencies, departments or entities whichregulate, direct or control commercial and other related activities in or withthe Territory.

 

**“IMCOR”** shall mean IMCOR Pharmaceutical Co. and its Affiliates.

 

**“In Market”** shall mean thesale of the Product(s) by IMCOR, and/or an Affiliate of IMCOR, to anunaffiliated third party, such as a wholesaler, managed care organization,hospital or pharmacy, and shall exclude the transfer pricing of the Product(s)by one IMCOR Affiliate to another IMCOR Affiliate.

 

**“InfringementClaim”** shall have the meaning set outin Clause 3.4.

 

**“NetRevenues”**shall mean:

 

(a)           alllicense fees, license option payments (whether in relation to the grant orexercise of any license option), sublicense fees, milestone payments, androyalties on sales of the Product(s), and any other kinds of revenue orconsideration whatsoever received by IMCOR, and/or an Affiliate of IMCOR, inrespect of the commercialization of the Product(s);

 

(b)           anynet manufacturing profits realized by IMCOR, and/or an Affiliate of IMCOR, onany supply of Product(s);

 

(c)           anyconsideration received by IMCOR, and/or an Affiliate of IMCOR, under anyDisposal Agreement;

 

(d)           researchand development payments received by IMCOR, and/or an Affiliate of IMCOR, inrelation to research and development of the Product(s), where such payments aremade other than for reimbursement of direct expenses incurred by IMCOR, and/oran Affiliate of IMCOR, and other than on an FTE rate based on then currentstandard industry rates; where such payments are made other than on an FTE ratebased on then current standard industry rates, the surplus over the currentindustry standard FTE rates shall be included in the calculation of NetRevenues; and

 

(e)           in thecontext of any Commercialization Agreement, any premium paid by a subscriberfor stock of IMCOR, and/or an Affiliate of IMCOR;

 

(i)            whereIMCOR, and/or an Affiliate of IMCOR, is not publicly listed on a recognizedstock exchange, the premium paid over the fair market value of such stock asreasonably determined by the board of directors of IMCOR, and/or an Affiliateof IMCOR, in good faith and certified in a board resolution, taking intoaccount (i) the most recently or concurrently completed arm’s length transactionin which the primary consideration for the stock is cash between IMCOR, and/oran Affiliate of IMCOR, and an unaffiliated third party that is not part of astrategic investment and the closing of which occurs 

 

3

----

 

within the six months preceding or on thedate of such calculation, if any) and shall be reasonably agreed to by the Elan(provided that in the event Elan reasonably does not agree with IMCOR’s, and/oran Affiliate of IMCOR’s, fair market value determination, Elan and IMCOR,and/or an Affiliate of IMCOR, shall jointly appoint an independentnationally-recognized third party to determine the fair market value), (ii) thegeneral market conditions for private biotech securities, and (iii) the generalstate of progress in clinical and commercial activities in IMCOR, and/or anAffiliate of IMCOR,; or

 

(ii)           whereIMCOR, and/or an Affiliate of IMCOR, is publicly listed on a recognized stockexchange, the premium paid over the average closing price of such stock ofIMCOR, and/or an Affiliate of IMCOR, for the 30 trading day period immediatelyprior to any such subscription;

 

having takenaccount of deductions in respect of any customs and excise duties or othersales taxes that are actually paid by IMCOR, and/or an Affiliate of IMCOR,(but, for the avoidance of doubt, not income or corporation tax), directlyrelated to the receipt of revenue by IMCOR, and/or an Affiliate of IMCOR, asset forth above.

 

“**Net Sales**” shall mean that sum determined,in accordance with generally accepted accounting principles, by deducting thefollowing deductions from the aggregate gross In Market sales proceeds billedfor the Product(s) by IMCOR, and/or an Affiliate of IMCOR:

 

(i)            customsand excise duties or other sales taxes (but, for the avoidance of doubt) notincome or corporation tax), directly related to the sale of the Product(s)which are actually paid by IMCOR, and/or an Affiliate of IMCOR;

 

(ii)           a discount from the gross sales proceeds to cover such normal costs asare incurred by IMCOR, and/or an Affiliate of IMCOR, in respect of industrystandard transport, shipping and insurance costs; and industry standard ormandatory discounts or rebates directly related to the sale of the Product(s);and

 

(iii)          amountsrepaid or credited by IMCOR, and/or an Affiliate of IMCOR, consistent with itsnormal business practices for similar products, by reason of the rejection orreturn of goods.

 

**“Party”** shall mean Elan or IMCOR; and “Parties” shall mean Elan and IMCOR.

 

**“PatentRights”** shall mean any and allpatents and patent applications, including all divisionals, continuations,continuations-in-part, extensions, patents-of-additions, re-examinations,re-issues, supplementary protection certificates and foreign counterparts of suchpatents and patent applications and any patents issuing thereon and extensionsthereon.

 

**“Product(s)”** shall mean a formulationcontaining x-ray, CT, and/or MRI Compound in nanoparticulate form in the Field.

 

**“RegulatoryApplication”** shall mean any regulatoryapplication or any other application for Regulatory Approval for theProduct(s), which IMCOR will file in the Territory, including any supplementsor amendments thereto which IMCOR may file.

 

4

----

 

**“RegulatoryApproval”** shall mean the finalapproval to market the Product(s) in any country of the Territory, includingpricing and reimbursement approval and any other approval which is required tolaunch the Product(s) in the normal course of business.

 

**“RHA”** shall mean all relevant government health authorities (or successoragency thereof) in each country of the Territory whose approval is necessary tomarket the Product(s) in the relevant country of the Territory.

 

**“TerminationAgreement”** shall mean the TerminationAgreement dated as of the Effective Date between Elan Corporation plc, Elan,Elan International Services Ltd., IMCOR and Sentigen Ltd.

 

**“Term”** shall mean the term of this Agreement, as set out inClause 10.

 

**“Territory”** shall mean all of the countries of the world.

 

**“WINLicense Agreement”** shall mean theLicense Agreement between Elan and IMCOR referred to in Clause 4.2.1(a) ofthe Termination Agreement.

 

**“$”** shall mean United States Dollars.

 

**“US”** or **“USA”** shall meanthe United States of America.

 

1.2           **Interpretation**

 

In thisAgreement:

 

1.2.1        thesingular includes the plural and vice versa, the masculine includes thefeminine and vice versa and references to natural persons include corporatebodies, partnerships and vice versa.

 

1.2.2        anyreference to a Clause or Schedule, unless otherwise specifically provided,shall be respectively to a Clause or Schedule of this Agreement.

 

1.2.3        theheadings of this Agreement are for ease of reference only and shall not affectits construction or interpretation.

 

**2**              The Licences

** **

2.1           **Elan Licence to IMCOR**

 

Subject to theterms of this Agreement, Elan hereby grants to IMCOR for the Term anon-exclusive licence to the Elan Intellectual Property to make and have made,import, use, offer for sale and sell the Product(s) in the Field in theTerritory (the “**Elan Licence**”).

 

2.2           **Sub-licensing by IMCOR**

 

IMCORshall not be entitled, without the prior written consent of Elan which shallnot be unreasonably withheld, to grant sub-licences in respect of the ElanIntellectual Property.

 

**3**              IntellectualProperty

** **

3.1           **Ownership of Intellectual Property**

 

Elan shallremain the owner of the Elan Intellectual Property.

 

5

----

 

3.2           **Patent prosecution and maintenance**

 

3.2.1        Elan, atits sole discretion and expense, may:

 

(i)            securethe grant of any patent applications within the Elan Improvements, the ElanPatents and/or the Elan Know-How;

 

(ii)           fileand prosecute patent applications on patentable inventions and discoveriesrelating to the same;

 

(iii)          defendall such applications against third party oppositions; and

 

(iv)          maintainin force any issued letters patent relating to the same.

 

3.2.2        IMCORshall promptly notify Elan of any Elan Improvements.  IMCOR shall fully cooperate with Elan in perfecting Elan’sownership and other proprietary rights in respect of any of the ElanImprovements and shall execute and deliver to Elan any documents that Elan mayreasonably require with respect thereto. Thereafter, provided that IMCOR hasfully complied with the obligations of this Clause 3.2.2, such ElanImprovements shall be deemed included in the Elan Licence granted to IMCORhereunder.

 

3.2.3        IMCORshall provide Elan with reasonable support in the filing, prosecution,maintenance and defence of any patents and/or patent applications in theTerritory in respect of any Elan Improvements and shall provide all informationand/or data in IMCOR’s possession or control that is necessary to support thefiling, prosecution, maintenance and defence of any such patents and/or patentapplication in the Territory.

 

3.3           **Enforcement**

 

3.3.1        IMCORshall promptly inform Elan in writing of any actual or alleged unauthorized useof the Elan Intellectual Property by a third party in the Territory in theField of which it becomes aware and shall provide Elan with any availableevidence of such unauthorized use; provided that no loss of privilege wouldoccur.

 

3.3.2        Elanshall have the right, but not the obligation, to enforce the Elan IntellectualProperty for Elan’s own benefit.  IMCORshall reasonably cooperate with Elan to enforce such rights, provided thatIMCOR shall be reimbursed for reasonable out-of-pocket expenses incurred inproviding such cooperation. Elan shall advise IMCOR of any such suit orproceedings that Elan commences.

 

3.4           **Notification of Infringement Claims**

 

3.4.1        IMCOR andElan shall promptly notify each other in writing of any claim made againstIMCOR or Elan alleging infringement or other unauthorised use of theproprietary rights of a third party arising from the exploitation of the ElanIntellectual Property, including the manufacture, importation, use, offer forsale, sale or other commercialisation of the Product(s) (“**Infringement Claim**”).

 

3.4.2        Elanshall have the right, but not the obligation, to take over the conduct andcontrol of any Infringement Claim; provided, however, that IMCOR’s indemnityobligations under Clause 9.3.3 shall continue in such circumstances.

 

6

----

 

[****] Represents material which has beenredacted pursuant to a request for confidential treatment pursuant to Rule24B-2 under the Securities Exchange Act of 1934, as amended.

 

3.4.3        Elanshall have no liability to IMCOR whatsoever or howsoever arising for anylosses, costs and/or expenses incurred by IMCOR as a result of having to ceaseselling the Product or having to defer the launch of selling the Product,whether as a result of a court order or otherwise.

 

**4**              FinancialProvisions

** **

4.1           Inconsideration of the Elan Licence, IMCOR shall pay to Elan the followingnon-refundable amounts:-

 

4.1.1        if IMCOR,and/or an Affiliate of IMCOR, sells the Product(s) then [****] of Net Sales inthe Territory during the Term; and

 

4.1.2        if IMCOR,and/or an Affiliate of IMCOR, enters into a Commercialization Agreement withany third party then [****] of Net Revenues in the Territory during the Term.

 

**5**              Development/Manufacturing/ Exploitation

** **

5.1           IMCORwill be solely responsible for the development, manufacture, storage, handling,packaging, promotion, distribution, marketing and sale of the Product(s) ineach country of the Territory and for ensuring that all such activities are instrict compliance with all the legal and regulatory requirements of eachcountry in the Territory (including, for the avoidance of doubt, all legal andregulatory requirements relating to patent marking).

 

5.2           Alladvertising, promotional materials and marketing costs in respect of theProduct(s) shall be borne solely by IMCOR.

 

5.3           IMCORshall research, develop, make, have made, import, export, use, offer for saleand sell the Product(s) in accordance with all statutes, regulations andrequirements of the FDA and other RHAs, including without limitations, cGMP,cGLP, cGMP regulations.

 

5.4           Forthe avoidance of doubt, Elan shall have no responsibility of any naturewhatsoever to carry out any work or activity of the kind described in thisClause 5 or any other work or activity whatsoever, otherwise than asexpressly agreed in this Agreement.

 

**6**              RegulatoryApprovals

** **

6.1           For theavoidance of doubt, IMCOR shall have full responsibility for its dealings withthe FDA and other RHAs relating to the Product(s) and Elan shall have noresponsibility of any nature relating thereto; provided, however, that IMCORshall promptly advise Elan of any notices or other communications relating tothe safety of any Product.

 

6.2           Anyand all Regulatory Applications filed by IMCOR for the Product(s) shall be theproperty of IMCOR; provided, however, that IMCOR shall permit Elan to utilizeall information contained in any Regulatory Application or Regulatory Approvalsrelating to the Elan Intellectual Property in relation to Elan’s regulatoryfilings of any kind.

 

6.3           Forthe avoidance of doubt, the costs and expenses of any filings and proceedingsmade by IMCOR to a Governmental Authority and the FDA and other RHAs, includingpost approval studies required by such authorities in respect of theProduct(s), and the maintenance of any approval relating thereto includingRegulatory Approvals, shall be paid by IMCOR.

 

7

----

 

**7**              Insurance

** **

7.1           Duringthe term of this Agreement and for a period of five years thereafter, IMCORshall maintain adequate comprehensive general liability insurance, includingproduct liability insurance and insurance in respect of any clinical trials, onthe Product(s).

 

**8**              Customer Complaints and Product Recall

** **

8.1           IMCORshall establish a procedure for formal adverse event handling and reporting.

 

8.2           IMCORshall be responsible for furnishing post-marketing reports to the applicableRHA’s and other relevant governmental agencies and, at Elan’s request, shallcopy Elan on all such communications with the RHA’s and other relevantregulatory agencies.

 

8.3           In theevent of any recall of the Product for any reason whatsoever, including assuggested or requested by any Governmental Authority and/or RHA, IMCOR shallperform the recall of the Product(s) in the Territory and in all events therecall costs shall be borne by IMCOR. IMCOR shall immediately notify Elan inwriting of any such event.

 

**9**              Warrantyand Indemnity

** **

9.1           Elanrepresents and warrants to IMCOR as of the Effective Date, as follows:

 

9.1.1        Elan hasthe right to enter into this Agreement and to grant the Elan Licence;

 

9.1.2        there areno agreements between Elan and any third party that conflict with the ElanLicence.

 

9.2           IMCORrepresents and warrants to Elan as of the Effective Date, as follows:

 

9.2.1        IMCOR hasthe right to enter into this Agreement;

 

9.2.2        there areno agreements between IMCOR and any third party that conflict with thisAgreement.

 

9.3           IMCORshall indemnify, defend and hold harmless Elan against any and all claims andproceedings (whether successful or otherwise), liabilities, expenses, includingreasonable attorney’s fees, responsibilities and damages by reason of anyclaim, including without limitation, proceedings, action, liability or injuryarising out of:

 

9.3.1        theresearch, development, testing, manufacture, transport, packaging, use,storage, handling, distribution, marketing, advertising, promotion and/or saleof the Product(s) by IMCOR, or any of its Affiliates or any third party onbehalf of IMCOR;

 

9.3.2        anyclaims or proceedings made or brought against Elan or IMCOR on behalf of anypersons seeking damages for personal injury (including death) and/or for costsof medical treatment, which claims relate in any way to the Product(s); and

 

9.3.3        anyInfringement Claim.

 

9.4           Infulfilling its indemnification obligations hereunder, IMCOR shall:

 

9.4.1        reasonablyand regularly consult with Elan in relation to the progress and status of anyaction, claim or proceedings; and

 

8

----

 

9.4.2        not makeany statements, enter into any settlement, agreement or consent to any judgmentin respect of any actions, claims and/or proceedings, without Elan’s priorwritten consent.

 

9.5           **SUBJECT TO CLAUSE 9.1, ELAN ISGRANTING THE ELAN LICENCE HEREUNDER ON AN “AS IS” BASIS WITHOUT REPRESENTATIONOR WARRANTY WHETHER EXPRESS OR IMPLIED (FROM ELAN OR ANY OF ITS AFFILIATES),INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ORINFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH WARRANTIES ARE EXPRESSLYDISCLAIMED.**

 

9.6           **NOTWITHSTANDING ANYTHING TO THE CONTRARY INTHIS AGREEMENT, ELAN (AND ITS AFFILIATES) AND IMCOR SHALL NOT BE LIABLE TO THEOTHER BY REASON OF ANY REPRESENTATION OR WARRANTY, CONDITION OR OTHER TERM ORANY DUTY OF COMMON LAW, OR UNDER THE EXPRESS TERMS OF THIS AGREEMENT, FOR ANYCONSEQUENTIAL, SPECIAL OR INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FORLOSS OF CURRENT OR FUTURE PROFITS, LOSS OF ENTERPRISE VALUE OR OTHERWISE) ANDWHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR EMPLOYEESOR AGENTS OR OTHERWISE.**

 

**10**            Durationand Termination

** **

10.1         ThisAgreement shall expire on the execution of the WIN License Agreement.

 

10.2         In theevent that the WIN License Agreement is not executed then, this Agreement shallbe deemed to have come into force on the Effective Date and, subject to therights of termination outlined in this Clause 10 and the provisions ofapplicable laws, will expire on a country by country basis:-

 

10.2.1      on the 15thanniversary of the date of the launch of the Product(s) in the countryconcerned; or

 

10.2.2      in anycountry upon the expiration of the life of the last to expire patent includedin the Elan Patents in that country;

 

whichever dateis later to occur (the “**Term**”).

 

10.3         Inaddition to the rights of termination provided for elsewhere in this Agreement,either Party will be entitled forthwith to terminate this Agreement by writtennotice to the other Party if:

 

10.3.1      the otherParty commits a material breach of any of the provisions of this Agreement, andfails to cure the same within 60 days after receipt of a written notice fromthe other Party hereto giving full particulars of the breach and requiring itto be remedied; provided, that if the breaching Party has proposed a course ofaction to cure the breach and is acting in good faith to cure same but has notcured the breach by the 60th day, such period shall be extended by such periodas is reasonably necessary to permit the breach to be cured, provided that suchperiod shall not be extended by more than 90 days, unless otherwise agreed inwriting by the Parties;

 

10.3.2      the otherParty goes into liquidation under the laws of any applicable jurisdiction(except for the purposes of amalgamation or reconstruction and in such mannerthat 

 

9

----

 

the company resulting therefrom effectivelyagrees to be bound by or assume the obligations imposed on that other Partyunder this Agreement);

 

10.3.3      a receiver,administrator, examiner, trustee or similar officer is appointed over all orsubstantially all of assets of the other Party under the laws of any applicablejurisdiction; and/or

 

10.3.4      anyproceedings are filed or commenced by that other Party under bankruptcy,insolvency or debtor relief laws, or anything analogous to any of the foregoingunder the laws of any applicable jurisdiction occurs in relation to the otherParty.

 

10.4         Inaddition to rights of termination provided elsewhere in this Agreement, Elanwill be entitled forthwith to terminate this Agreement by written notice toIMCOR if IMCOR directly or indirectly, contests or otherwise disputes theownership, scope, or validity of any of the Elan Intellectual Property, orsupports any such claim by a third party.

 

**11**            Consequences of Termination/Survival

** **

11.1         Uponexercise of those rights of termination specified in Clause 11 orelsewhere in this Agreement, this Agreement shall, subject to the provisions ofthe Agreement which survive the termination of the Agreement andClause 11.2 automatically terminate forthwith and be of no further legalforce or effect.

 

11.2         Uponexpiration or termination of this Agreement by either Party, the followingshall be the consequences relating to the Territory or the particular country,as applicable:-

 

11.2.1      any sumsthat were due from IMCOR to Elan under the provisions of Clause 4 orotherwise howsoever prior to the termination or expiry hereof shall be paid infull within 30 days of such termination or expiration and Elan shall not beliable to repay to IMCOR any amount of money paid or payable by IMCOR to Elanup to the date of the termination or expiry;

 

11.2.2      allconfidentiality provisions set out herein shall remain in full force andeffect;

 

11.2.3      allrepresentations and warranties shall insofar as are appropriate remain in fullforce and effect;

 

11.2.4      the rightsof inspection and audit shall continue in force for the period referred to inthe relevant provisions of this Agreement;

 

11.2.5      all rightsand licences granted in and pursuant to this Agreement shall cease for theTerritory or for such particular country or countries in the Territory, as thecase may be, and shall immediately revert to Elan.  Following such expiration or termination, IMCOR may notthereafter use the Elan Intellectual Property in the Territory or in suchparticular country or countries in the Territory, as the case may be.

 

11.3         If thisAgreement is terminated pursuant to Clause 10.1 then no provisions shallsurvive and all terms and provisions of this Agreement shall cease to haveeffect and be null and void upon the termination of this Agreement.

 

11.4         If thisAgreement is terminated for any reason other than pursuant to clause 10.1,then the provisions of Clauses 1, 3, 4, 6, 7, 8, 9, 10, 11, 12 and 13shall survive the termination of this Agreement under this Clause 11; allother terms and provisions of this Agreement shall cease to have effect and benull and void upon the termination of this Agreement.

 

10

----

 

**12**            Confidentiality

** **

12.1         **Confidentiality**

 

12.1.1      The Partiesagree that it will be necessary, from time to time, to disclose to each otherconfidential and proprietary information, including without limitation,inventions, trade secrets, specifications, designs, data, know-how and otherproprietary information relating to the Field, the Product(s), processes,services and business of the disclosing party.

 

The foregoingshall be referred to collectively as **“ConfidentialInformation”**.

 

12.1.2      AnyConfidential Information disclosed by the disclosing Party shall be used by thereceiving Party exclusively for the purposes of fulfilling the receivingParty’s obligations under this Agreement and for no other purpose.

 

12.1.3      Save asotherwise specifically provided herein, and subject to Clause 12.2 and 12.3,each Party shall disclose Confidential Information of the other Party only tothose employees, representatives and agents requiring knowledge thereof inconnection with fulfilling the Party’s obligations under this Agreement, andnot to any other third party.

 

Each Partyfurther agrees to inform all such employees, representatives and agents of theterms and provisions of this Agreement relating to Confidential Information andtheir duties hereunder and to obtain their agreement hereto as a condition ofreceiving Confidential Information.

 

Each Partyshall exercise the same standard of care as it would itself exercise inrelation to its own confidential information (but in no event less than areasonable standard of care) to protect and preserve the proprietary andconfidential nature of the Confidential Information disclosed to it by theother Party.

 

Upontermination or expiration of this Agreement, each Party shall promptly, uponrequest of the other Party, return all documents and any copies thereofcontaining Confidential Information belonging to, or disclosed by, such otherParty, save that it may retain one copy of the same solely for the purposes ofensuring compliance with this Clause 12.

 

12.1.4      Any breachof this Clause 12 by any person informed by one of the Parties is considered abreach by the Party itself.

 

12.1.5      ConfidentialInformation shall be deemed not to include:

 

(i)            informationwhich is in the public domain;

 

(ii)           informationwhich is made public through no breach of this Agreement;

 

(iii)          informationwhich is independently developed by a Party, as evidenced by such Party’srecords;

 

(iv)          informationthat becomes available to a receiving Party on a non-confidential basis,whether directly or indirectly, from a source other than the other Partyhereto, which source did not acquire this information on a confidential basis.

 

11

----

 

12.1.6      Theprovisions relating to confidentiality in this Clause 12 shall remain in effectduring the term of this Agreement, and for a period of 10 years following theexpiration or earlier termination of this Agreement.

 

12.1.7      The Partiesagree that the obligations of this Clause 12 are necessary and reasonable inorder to protect the Parties’ respective businesses, and each Party agrees thatmonetary damages may be inadequate to compensate a Party for any breach by theother Party of its covenants and agreements set forth herein.

 

The Partiesagree that any such violation or threatened violation may cause irreparableinjury to a Party and that, in addition to any other remedies that may beavailable, in law and equity or otherwise, each Party shall be entitled to seekinjunctive relief against the threatened breach of the provisions of thisClause 12, or a continuation of any such breach by the other Party, specific performanceand other equitable relief to redress such breach together with damages andreasonable counsel fees and expenses to enforce its rights hereunder.

 

12.2         **Announcements**

 

Subject toClause 12.3, no announcement or public statement concerning the existence,subject matter or any term of this Agreement shall be made by or on behalf ofany Party hereto without the prior written approval of the other Party.

 

The terms ofany such announcement shall be agreed in good faith by the Parties.

 

12.3         **Required Disclosures**

 

12.3.1      A Party(the “Disclosing Party”) will be entitled to make an announcement or publicstatement concerning the existence, subject matter or any term of thisAgreement, or to disclose Confidential Information that the Disclosing Party isrequired to make or disclose pursuant to:

 

(i)            avalid order of a court , Governmental Authority, or RHA; or

 

(ii)           anyother requirement of law or any securities or stock exchange;

 

provided thatif the Disclosing Party becomes legally required to make such announcement,public statement or disclosure hereunder, the Disclosing Party shall give theother Party or Parties hereto prompt notice of such fact to enable the otherParty or Parties hereto to seek a protective order or other appropriate remedyconcerning any such announcement, public statement or disclosure.

 

The DisclosingParty shall fully co-operate with the other Party or Parties hereto inconnection with that other Party’s or Parties’ efforts to obtain any such orderor other remedy.

 

If any such orderor other remedy does not fully preclude announcement, public statement ordisclosure, the Disclosing Party shall make such announcement, public statementor disclosure only to the extent that the same is legally required.

 

12.3.2      Each of theParties shall be entitled to provide a copy of this Agreement (and anysubsequent amendments hereto) to a potential third party purchaser inconnection with Clause 14.1; and Elan (and/or any Affiliate) shall also be soentitled in connection with Clause 14.1.2 provided that the relevant thirdparty purchaser or 

 

12

----

 

assignee has entered into a confidentialityagreement on terms no less protective than the terms of this Clause 12.

 

**13**            Payments,Reports and Audits

** **

13.1         With reference to Clause 4, IMCOR and/or anAffiliate of IMCOR shall keep true and accurate records of Net Sales and/or NetRevenues.  Where IMCOR and/or anAffiliate of IMCOR has Net Sales and/or Net Revenues, IMCOR and/or an Affiliateof IMCOR (as the case may be) shall deliver to Elan a written statement (the “**Statement**”)thereof within 45 days following the end of each calendar****quarter (or any partthereof).  The financial officers ofElan and IMCOR shall agree upon the precise format of the Statement.

 

13.2         Paymentsdue on Net Sales and/or Net Revenues on sales amounts in a currency other than USDollars shall first be calculated in the foreign currency and then converted toUS Dollars on the basis of the exchange rate in effect for the purchase of USDollars with such foreign currency quoted in the Wall Street Journal (orcomparable publication if not quoted in the Wall Street Journal).

 

13.3         Any income or other taxes which IMCOR and/or anAffiliate of IMCOR is required by law to pay or withhold on behalf of Elan withrespect to such Net Sales and/or Net Revenues payments under this Agreementshall be deducted from the amount of such Net Sales and/or Net Revenuespayments.  IMCOR and/or an Affiliate ofIMCOR, as the case may be, shall furnish Elan with proof of such payments.  IMCOR and/or an Affiliate of IMCOR, as thecase may be, shall promptly provide Elan with a certificate or otherdocumentary evidence to enable Elan to support a claim for a refund or a foreigntax credit with respect to any such tax so withheld or deducted by IMCOR and/oran Affiliate of IMCOR.  The Parties willreasonably cooperate in completing and filing documents required under theprovisions of any applicable tax treaty or under any other applicable law, inorder to enable IMCOR and/or an Affiliate of IMCOR, as the case may be, to makesuch payments to Elan without any deduction or withholding.

 

13.4         Paymentof monies hereunder shall be made by IMCOR and/or an Affiliate of IMCOR, as the case may be, to Elan within 45days of the Statement.

 

13.5         Allpayments due hereunder shall be made in U.S. Dollars.

 

13.6         All payments due hereunder shall be made to thedesignated bank account of Elan in accordance with such timely writteninstructions as Elan shall from time to time provide.

 

13.7         Without prejudice to Elan’s other remedieshereunder, IMCOR and/or an Affiliate of IMCOR, as the case may be, shall payinterest to Elan on sums not paid to Elan on the date on which payment shouldhave been made pursuant to the applicable provisions of this Agreement (“**Due Date**”)over the period from the Due Date until the date of actual payment (both beforeand after judgment) at the Prime Ratepublicly announced by Morgan Guaranty Trust Company of New York at itsprincipal office on the Due Date (or next to occur business day, if such dateis not a business day) plus 5%,such interest to be payable on demand from time to time and compounded monthly.

 

13.8         For the180 day period following the close of each calendar year of the Agreement,IMCOR and/or an Affiliate ofIMCOR, as the case may be, will, in the event that Elanreasonably requests such access, provide Elan’s independent certifiedaccountants (reasonably acceptable to IMCOR and/or an Affiliate of IMCOR) with access,during regular business hours and subject to the confidentiality provisions ascontained in this Agreement, to IMCOR and/or an Affiliate of IMCOR, as the case may be, books and records solely for the purpose of verifying 

 

13

----

 

the accuracy and reasonable composition ofthe calculations hereunder for the calendar year then ended.

 

13.9         In theevent that IMCOR and/or anAffiliate of IMCOR shall sell the Product(s) to anythird party, or enter into any agreement with respect thereto with any thirdparty, together with other products of IMCOR or an Affiliate of IMCOR, by themethod commonly known in the pharmaceutical industry as “bundling” and theprice attributable to the Product(s) is less than the average price which wouldhave been attributable thereto on an “arms length” basis, the Net Revenues and/or Net Sales attributablethereto hereunder shall be adjusted by the Parties to reflect an average priceon an “arms length” basis.

 

**14**            MiscellaneousProvisions

** **

14.1         **Assignments/Sub-contracting**

 

14.1.1      Subject toClause 14.1.2, this Agreement shall not be assigned by any Party hereto withoutthe prior written consent of the other Party or Parties hereto, save that anyParty:

 

(i)            mayassign this Agreement in whole or in part and delegate its duties hereunder toits Affiliate or Affiliates without such consent; and

 

(ii)           mayassign its rights and obligations to a successor (whether by merger,consolidation, reorganisation or other similar event) or purchaser of all orsubstantially all of its assets relating to such Party’s technology related tothis Agreement, provided that such successor or purchaser has agreed in writingto assume all of such Party’s rights and obligations hereunder and a copy ofsuch assumption is provided to the other Parties.

 

14.1.2      Elan(and/or any Affiliate) shall be entitled to assign the rights of Elan (or anyAffiliate) to the royalty payments under Clause 4 and Clause 13 without theconsent of any other Party hereto.  Elan(and/or any Affiliate) shall notify the other Parties hereto of any suchassignment within a reasonable time following any such assignment.

 

14.2         **Governing law and jurisdiction**

 

14.2.1      ThisAgreement shall be governed by and construed in accordance with the laws of theState of New York without regard to conflicts of law principles under the lawsof the State of New York.

 

14.2.2      For thepurposes of this Agreement, the Parties submit to the nonexclusive jurisdictionof the State and Federal Courts of New York.

 

14.3         **Notices**

 

14.3.1      Any noticeto be given under this Agreement shall be sent in writing in English byregistered airmail, internationally recognized courier or telefaxed to thefollowing addresses:

 

If to IMCOR at:

 

6175 Lusk Boulevard

San Diego, CA 92121

Attention:              President

 

14

----

 

Telephone:            (858)410 5200

Fax:                         (858) 410 5602

 

with a copy to:

 

Grippo & Elden

Suite 3600

227 West Monroe

Chicago, Illinois 60606

USA

Attention: Theodore W Grippo

Telephone 312 704 7720

Fax: 312 558 1195

 

If to Elan at:

 

Elan Pharma International Limited

C/o Lincoln House

Lincoln Place

Dublin 2

Ireland

Attention:             Secretary

Telephone:            709 4000

Fax:                         662 4949

 

or to suchother address(es) and telefax numbers as may from time to time be notified byany Party to the others hereunder.

 

14.3.2      Any noticesent by mail shall be deemed to have been delivered within seven (7) workingdays after dispatch or delivery to the relevant courier and notice sent by faxshall be deemed to have been delivered upon confirmation receipt.  Notice of change of address shall beeffective upon receipt.

 

14.4         **Waiver**

 

No waiver ofany right under this Agreement shall be deemed effective unless contained in awritten document signed by the Party charged with such waiver, and no waiver ofany breach or failure to perform shall be deemed to be a waiver of any futurebreach or failure to perform or of any other right arising under thisAgreement.

 

14.5         **Severability**

 

If anyprovision in this Agreement is agreed by the Parties to be, or is deemed to be,or becomes invalid, illegal, void or unenforceable under any law that isapplicable hereto:

 

14.5.1      suchprovision will be deemed amended to conform to applicable laws so as to bevalid and enforceable; or

 

14.5.2      if itcannot be so amended without materially altering the intention of the Parties,it will be deleted, with effect from the date of this Agreement or such earlierdate as the Parties may agree, and the validity, legality and enforceability ofthe remaining provisions of this Agreement shall not be impaired or affected inany way.

 

15

----

 

14.6         **Further Assurances**

 

At the requestof any of the Parties, the other Party or Parties shall (and shall usereasonable efforts to procure that any other necessary parties shall) executeand perform all such documents, acts and things as may reasonably be requiredsubsequent to the signing of this Agreement for assuring to or vesting in therequesting Party the full benefit of the terms hereof.

 

14.7         **Successors**

 

This Agreementshall be binding upon and inure to the benefit of the Parties hereto and theirrespective successors and permitted assigns.

 

14.8         **Amendments**

 

No amendment,modification or addition hereto shall be effective or binding on any Partyunless set forth in writing and executed by a duly authorized representative ofeach Party.

 

14.9         **Counterparts**

 

This Agreementmay be executed in any number of counterparts, each of which when so executedshall be deemed to be an original and all of which when taken together shallconstitute this Agreement.

 

14.10       **Costs**

 

Each Party shall bear its owncosts and expenses in connection with the transactions contemplated by thisAgreement.

 

14.11       **Force Majeure**

 

Neither Partyto this Agreement shall be liable for failure or delay in the performance ofany of its obligations hereunder if such failure or delay results from ForceMajeure, but any such failure or delay shall be remedied by such Party as soonas practicable.

 

14.12       **Relationship of the Parties**

 

The Partiesare independent contractors under this Agreement.  Nothing herein contained shall be deemed to create or establishan employment, agency, joint venture, or partnership relationship between theParties or any of their agents or employees, or any other legal arrangementthat would impose liability upon one Party for the act or failure to act of theother Party.

 

No Party shallhave any express or implied power to enter into any contracts, commitments ornegotiations or to incur any liabilities in the name of, or on behalf of, anyother Party, or to bind any other Party in any respect whatsoever.

 

14.13       **Entire agreement**

 

14.13.1    ThisAgreement sets forth all of the agreements and understandings between theParties with respect to the subject matter hereof.  There are no agreements or understandings with respect to thesubject matter hereof, either oral or written, between the Parties other thanas set forth in this Agreement.

 

16

----

 

14.13.2    No provisionof this Agreement shall be construed so as to negate, modify or affect in anyway the provisions of any other agreement between the Parties unlessspecifically provided herein and only to the extent so specified.

 

17

----

 

**IN WITNESS WHEREOF**, the parties hereto have executed this Agreement.

 

 
| **SIGNED**                         |   |
|------------------------------------|--------|
| for and on behalf of               |   |
| **Elan Pharma International Ltd.** |   |
|                               |   |   |
| By :                               |   |   |
|                               |   |   |
| Name:                              |   |   |
|                               |   |   |
| Title:                             |   |   |
|                               |   |   |
| **SIGNED**                         |   |   |
| For and on behalf of               |   |
| **IMCOR  Pharmaceutical Co.**      |   |
|                               |   |   |
| By :                               |   |   |
|                               |   |   |
| Name:                              |   |   |
|                               |   |   |
| Title:                             |   |   |

 

18

----

 

[****] Represents material which has beenredacted pursuant to a request for confidential treatment pursuant to Rule24B-2 under the Securities Exchange Act of 1934, as amended.

 

**SCHEDULE 1**

** **

**Elan Patents**

** **

 

 

[****]

 

19

----