Unassociated Document


    

      CONFIDENTIAL
        TREATMENT REQUESTED: Certain portions of this document have been
        omitted pursuant to a request for confidential treatment and, where applicable,
        have been marked with an asterisk (“[****]”) to denote where omissions have been
        made. Note that one page of this exhibit contains omitted material pursuant
        to
        this request. The confidential material has been filed separately with the
        Securities and Exchange Commission.

      


      


      SETTLEMENT
        & WORLDWIDE LICENSE AGREEMENT

      


      AGREEMENT
        (“Agreement”) made as of January 31, 2001, (the “Effective Date”), by and among
        Bracco International B.V. (“Bracco”), a Netherlands corporation having a place
        of business at 3051 Strawinskylaan, 1077 ZX Amsterdam, Netherlands; Schering
        Aktiengesellschaft (“Schering”), a German corporation having a place of business
        at Mullerstrasse 178, 13342 Berlin-Wedding, Germany; and Alliance Pharmaceutical
        Corp. (“Alliance”), a New York corporation having a place of business at 3040
        Science Park Road, San Diego, California 92121. Bracco, Schering, and Alliance
        may be referred to separately as a “Party” or collectively as the
“Parties”.

       

      WHEREAS,
        Bracco possesses intellectual property relating to the formulation method
        of
        preparing or use of Microbubbles (as this term is defined below);

       

      WHEREAS,
        Alliance possesses intellectual property relating to the formulation method
        of
        preparing or use of Microbubbles;

       

      WHEREAS,
        Schering possesses intellectual property relating to the formulation method
        of
        preparing or use of Microbubbles;

       

      WHEREAS,
        Schering and Alliance have entered into a License Agreement under which Alliance
        granted to Schering an exclusive worldwide license with a right to sublicense
        under the Alliance Patents as defined therein;

       

      WHEREAS,
        there is pending before the United States Patent and Trademark Office
        Interference No. 104,427 between Bracco and Alliance; and

       

      WHEREAS,
        the Parties desire to settle the interference and all potential intellectual
        property disputes relating to their future and planned activities involving
        certain Products (as this term is defined below) or Microbubbles that have
        been
        or are currently being developed or may be developed in the future.

       

      NOW,
        THEREFORE, in consideration of the foregoing and the covenants and
        acknowledgements and representations contained in this Agreement, the Parties
        hereby agree as follows:

       

       

      ARTICLE
        I.  DEFINITIONS

       

      1.1.  Definitions.
        For
        purposes of this Agreement, the terms defined in this Article shall have
        the
        meanings specified below. These terms are intended to encompass both the
        singular and plural forms.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        	1.1.1  	
                “Affiliate”
                  shall mean a person or an entity that controls, is controlled by,
                  or is
                  under common control with a Party to this
                  Agreement.

              


      

       

      
        	1.1.2  	
                “Alliance”
                  shall mean Alliance as identified as a Party above and any Affiliate
                  of
                  Alliance.

              


      

       

      
        	1.1.3  	
                “Alliance
                  Licensed Patents”
                  shall mean Licensed Patents which are owned, obtained, acquired,
                  purchased
                  by or licensed to, with a right to sublicense, or in any way under
                  the
                  control or at disposal of Alliance, except for Third Party patents
                  and
                  patent applications acquired after December 20, 2000 by Alliance
                  which,
                  prior to their acquisition and not as a result of the negotiations
                  leading
                  up to such acquisition, had been previously exclusively licensed
                  or
                  otherwise exclusively restricted to any Third
                  Party.

              


      

       

      
        	1.1.4  	
                “BR-1”
                  shall mean a phospholipid-stabilized Microbubble formulation not
                  prepared
                  by freeze drying wherein the fluorine atoms contained in the Microbubbles
                  are in the form of SF6.

              


      

       

      
        	1.1.5  	
                “BR-14”
                  shall mean a phospholipid-stabilized Microbubble formulation not
                  prepared
                  by spray drying wherein the fluorine atoms contained in the Microbubbles
                  are in the form of CF4,
                  C2F6,
                  C3F6,
                  C4F10
                  or
                  mixtures thereof.

              


      

       

      
        	1.1.6  	
                “Bracco”
                  shall mean Bracco as identified as a Party above and any Affiliate
                  of
                  Bracco.

              


      

       

      
        	1.1.7  	
                “Bracco
                  Licensed Patents”
                  shall mean Licensed Patents which are owned, obtained, acquired,
                  purchased
                  or licensed to, with a right to sublicense, or in any way under
                  the
                  control or at disposal of Bracco, except for Third Party patents
                  and
                  patent applications acquired after December 20, 2000 by Bracco
                  which,
                  prior to their acquisition and not as a result of the negotiations
                  leading
                  up to such acquisition, had been previously exclusively licensed
                  or
                  otherwise exclusively restricted to any Third
                  Party.

              


      

       

      
        	1.1.8  	
                “Distributor”
                  shall mean any Third Party engaged solely in the shipping, transportation,
                  or distribution of any product, whether or not owned by a
                  Party.

              


      

       

      
        	1.1.9  	
                “Imavist”
                  shall mean a phospholipid-stabilized Microbubble formulation not
                  prepared
                  by freeze drying wherein the fluorine atoms contained in the Microbubble
                  are in the form of C6F14.

              


      

       

      
        	1.1.10  	
                “Imavist
                  II”
                  shall mean a phospholipid-stabilized Microbubble formulation not
                  prepared
                  by freeze drying wherein the fluoride atoms contained in the Microbubble
                  are in the form of C6F14 or any three fluoroether species or any
                  combination thereof to be named by Alliance within five years of
                  the
                  Effective Date of this Agreement.

              


      

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	1.1.11  	
                “Joint
                  Development Parties”
                  shall mean any Third Party engaged in the development, manufacture,
                  sale,
                  use, exportation or importation of a Party’s
                  Product(s).

              


      

       

      
        	1.1.12  	
                “Licensed
                  Patents”
                  shall mean all present and future patent and patent application
                  claims,
                  worldwide, that are directed to Microbubbles, formulations of
                  Microbubbles, intermediates used in making Microbubbles, methods
                  of
                  preparing Microbubbles or the use of Microbubbles in Ultrasound
                  Imaging
                  (including harmonic imaging) that cover a Product, method of preparing
                  a
                  Product or method of using a Product, provided that such patent
                  and patent
                  application claims shall not include those directed to (i) non-Ultrasound
                  Imaging uses of Microbubbles such as uses in drug delivery; gene
                  therapy;
                  sonothrombolysis; magnetic resonance imaging; and oxygen delivery,
                  and
                  (ii) Microbubbles with targeting ligands, peptides or chelates
                  and
                  formulations, intermediates for, methods of preparing and the use
                  of
                  same.

              


      

       

      
        	1.1.13  	
                “Medical
                  Diagnostic Imaging Field”
                  shall mean any in
                  vivo
                  imaging of at least a portion of a patient, including but not limited
                  to
                  radiopharmaceutical, ultrasound, MRI, X-ray and light
                  imaging.

              


      

       

      
        	1.1.14  	
                “Microbubbles”
                  shall mean microbubbles, microspheres, microballoons, microparticles
                  and/or microvesicles containing gas or gas
                  mixtures.

              


      

       

      
        	1.1.15  	
                “Physiologically
                  Acceptable Gas”
                  shall mean a gas selected from air, nitrogen, oxygen, carbon dioxide,
                  helium, xenon or mixtures thereof.

              


      

       

      
        	1.1.16  	
                “Products”
                  shall mean Imavist or Imavist II in the case of Alliance or Schering,
                  and
                  BR-1 or BR-14 in the case of
                  Bracco.

              


      

       

      
        	1.1.17  	
                “Schering”
                  shall mean Schering as identified as a Party above and any Affiliates
                  of
                  Schering.

              


      

       

      
        	1.1.18  	
                “Schering
                  Licensed Patents”
                  shall mean Licensed Patents which are owned, obtained, acquired,
                  purchased
                  by or licensed to, with a right to sublicense, or in any way under
                  the
                  control or at disposal of Schering, except for Third Party patents
                  and
                  patent applications acquired after December 20, 2000 by Schering
                  which,
                  prior to their acquisition and not as a result of the negotiations
                  leading
                  up to such acquisition, had been previously exclusively licensed
                  or
                  otherwise exclusively restricted to any Third
                  Party.

              


      

       

      
        	1.1.19  	
                “Third
                  Party”
                  shall mean any entity other than Bracco, Alliance, or Schering,
                  including
                  any person or other entity that controls, is controlled by, or
                  is under
                  common control with that entity.

              


      

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	1.1.20  	
                “Ultrasound
                  Imaging”
                  shall mean the in
                  vivo
                  imaging of at least a portion of a patient with ultrasound, including
                  but
                  not limited to harmonic imaging.

              


      

       

       

      ARTICLE
        II.  WORLDWIDE
        GRANT OF INTELLECTUAL PROPERTY RIGHTS

       

      2.1.  Bracco
        hereby grants an irrevocable worldwide nonexclusive license to Schering and
        Alliance under the Bracco Licensed Patents to make, have made, use, sell,
        offer
        to sell, import Imavist and/Imavist II, whether or not Imavist and/or Imavist
        are combined with other elements and used outside the coverage of the Licensed
        Patents. This license of the instant provision 2.1 includes the right to
        sublicense such rights to current and future Distributors and Joint Development
        Partners.

       

      2.2.  Schering
        hereby grants an irrevocable worldwide nonexclusive license to Bracco under
        the
        Schering Licensed Patents to make, have made, use, sell, offer to sell, import
        or export BR-1 and/or BR-14, whether or not BR-1 and/or BR-14 are combined
        with
        other elements and used outside the coverage of the Licensed Patents. This
        license of the instant provision 2.2 includes the right to sublicense such
        rights to current and future Distributors and Joint Development
        Partners.

       

       

      ARTICLE
        III.  WORLDWIDE
        SETTLEMENT OF INTELLECTUAL PROPERTY DISPUTES

       

      3.1.  It
        is the
        intention of the Parties to settle any and all current and potential
        intellectual property disputes pertaining to the Licensed Products so as
        to
        obtain freedom to market their respective Products and therefor the Parties
        have
        voluntarily entered into this Agreement. In that connection, the Parties
        shall:

       

      
        	3.1.1  	
                withdraw
                  all current oppositions brought against the Licensed Patents of
                  another
                  Party in countries foreign to the United
                  States;

              


      

       

      
        	3.1.2  	
                refrain
                  from filing any future oppositions or other challenge against the
                  Licensed
                  Patents of another Party in countries foreign to the United
                  States;

              


      

       

      
        	3.1.3  	
                refrain
                  from filing any requests for interference, reexamination or other
                  challenge against the Licensed Patents of another Party in the
                  United
                  States; and

              


      

       

      
        	3.1.4  	
                in
                  the event an interference is declared by the United States Patent
                  and
                  Trademark Office (“PTO”), meet and cooperate in good faith to find a joint
                  settlement in a timely and efficient manner consistent with the
                  requirements of 35 U.S.C. § 135 and other applicable laws and
                  regulations.

              


      

       

      3.2.  In
        order
        to advance the resolution of PTO interference No. 104,427 (the “Interference”),
        Bracco and Alliance counsel have met, exchanged information and determined
        in
        good faith and in order to resolve the Interference in just, timely and
        efficient manner, to proceed as follows:

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	3.2.1  	
                Alliance
                  will file three motions in the Interference, namely, (1) a motion
                  to
                  [****], (2) a motion to [****], and (3)
                  a motion to be
[****].

              


      

       

      
        	3.2.2  	
                Bracco
                  will file papers in the Interference stating that it will not oppose
                  the
                  two motions set forth in Section 3.2.1 above and requesting entry
                  of an
                  adverse judgment against Bracco on Count
                  2.

              


      

       

      
        	3.2.3  	
                Bracco
                  will file motions in the Interference [****] Schneider
                  AAA application, which claims are set forth in Exhibits B and C
                  annexed
                  hereto) and accompanying motions for
                  benefit.

              


      

       

      
        	3.2.4  	
                Alliance
                  will file papers in the Interference stating that it will not oppose
                  the
                  motions set forth in Section 3.2.3 above and requesting entry of
                  an
                  adverse judgment against Alliance on the Proposed
                  Counts.

              


      

       

      
        	3.2.5  	
                Bracco
                  and Alliance will generally cooperate in a reasonable manner in
                  filing the
                  motions and papers identified above. In this regard, Bracco and
                  Alliance
                  will file no other motions or other papers in the Interference
                  other than
                  those that are identified in Sections 3.2.1, 3.2.2, 3.2.3 and 3.2.4
                  above
                  and 3.3 below unless they are reasonably necessary to effectuate
                  the
                  above. If, however, after the Parties file these motions and papers,
                  the
                  PTO comes to some other judgment that does not include awarding
                  Alliance
                  judgment for Count 2 and either awarding Bracco judgment for the
                  Proposed
                  Counts or denying or dismissing the motions for the Proposed Counts
                  (e.g.,
                  the PTO sua sponte
                  corresponds some or all of the claims that make up Count 2 and
                  some or all
                  of the claims that make up the Proposed Counts to a single count
                  in the
                  original interference or in a new interference), then Bracco and
                  Alliance
                  will confer on an appropriate way to advance the resolution of
                  the
                  Interference. If agreement on such an appropriate way to advance
                  the
                  resolution cannot be reached, Bracco and Alliance will be free
                  to file any
                  motions or other papers to pursue any
                  outcome.

              


      

       

      3.3.  Bracco
        and Alliance will file all agreements and understandings regarding the
        Interference, including this Agreement, with the PTO as required by 35 U.S.C.
        § 135(c).

       

      3.4.  In
        the event the [****] application, the [****]
        application and/or an application claiming priority from the
[****] application or the [****] application
        issues as a United States patent, Bracco will grant [****]
        under any such patent for any products or methods used outside of the Medical
        Diagnostic Imaging Field. Notwithstanding the foregoing, the license set
        forth
        in this Section 3.4 shall not include any other Bracco patent or patent
        application, even if the patent or patent application has claims that are
        the
        same or similar to the New Claims, provided that the patent does not issue
        from
        the [****] application, the [****] application
        or an application that claims priority from the [****]
        application or the [****] application.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      3.5.  Neither
        Bracco nor Alliance will, in the future, assert an issue preclusion defense
        in
        any proceeding, other than an interference proceeding in the PTO, based upon
        the
        other Party requesting entry of an adverse judgment pursuant to Sections
        3.2.2
        and 3.2.4 above.

       

      3.6.  The
        licenses set forth in this Agreement shall not be affected in any way by
        any
        outcome of the Interference.

       

       

      ARTICLE
        IV.  FIRST
        RIGHT OF NEGOTIATION

       

      4.1.  If
        Alliance’s license of Imavist to Schering is terminated, Alliance will give
        Bracco a first right of negotiation for any rights to Imavist returned to
        Alliance as a result of such termination, which right of negotiation will
        be for
        ninety (90) days starting at the time Alliance informs Bracco that it desires
        a
        development/marketing partner for Imavist II.

       

      4.2.  Alliance
        hereby grants to Bracco, subject to any rights of Schering, a first right
        of
        negotiation for worldwide rights (e.g., development and marketing) to Imavist
        II
        which right of negotiation will be for a one hundred and twenty (120) day
        period
        starting at the time Alliance informs Bracco that it desires a development
        marketing partner for Imavist II.

       

       

      ARTICLE
        V.  EFFECT
        OF AGREEMENT ON THIRD PARTIES

       

      5.1.  Nothing
        in this Agreement shall be construed to (1) obligate any Party to bring any
        action against any Third Party based on such Party’s Licensed Patents, or (2)
        limit or affect a Party’s right to bring any action against any Third Party
        based on such Party’s Licensed Patents.

       

      5.2.  Nothing
        in this Agreement shall be construed to (1) obligate any Party to negotiate
        with
        or obtain licenses from any Third Party, or (2) limit or affect a Party’s rights
        to negotiate or obtain licenses from any Third Party.

       

       

      ARTICLE
        VI.  FEES,
        PAYMENTS, ROYALTIES, WARRANTIES, INDEMNIFICATION

       

      6.1.  No
        party
        shall have any obligation to make any payments to the other Parties pursuant
        to
        this Agreement. Each Party shall bear its own costs and expenses, including,
        without limitation, its attorneys fees, relating to any action to be taken
        or
        having been taken in respect to this Agreement.

       

      6.2.  Each
        Party makes the following warranties and representations to the other
        Parties:

       

      
        	6.2.1  	
                each
                  Party is a corporation duly organized and validly existing and
                  in good
                  standing under the laws of the state or country in which it is
                  organized
                  and has all requisite power and authority to enter into and perform
                  this
                  Agreement and the transactions contemplated hereby and to require
                  its
                  Affiliates to abide by its terms and
                  conditions;

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	6.2.2  	
                all
                  requisite corporate actions on the part of each Party has been
                  completed
                  for the authorization of the execution and delivery of this Agreement
                  and
                  the performance of the transactions contemplated
                  hereunder.

              


      

       

      
        	6.2.3  	
                this
                  Agreement is, and such other transactions will be, valid and binding
                  obligations of each Party enforceable in accordance with their
                  respective
                  terms; and

              


      

       

      
        	6.2.4  	
                the
                  execution, delivery and performance of this Agreement and the consummation
                  of transactions contemplated hereby do not and will not violate
                  the
                  provisions of any Party’s certificate of incorporation or bylaws or
                  similar type documents or the provisions of any note, indenture,
                  lease,
                  license permit or other instrument or obligation or violate any
                  law,
                  order, rule or regulation applicable to
                  it.

              


      

       

      6.3.  No
        Party
        makes any warranties or representations, either express or implied, concerning
        the scope, validity or enforceability of its respective Licensed
        Patents.

       

      6.4.  No
        party
        shall have any obligation to indemnify any other Party for any lawsuit arising
        in connection with Imavist, Imavist II, BR-1 or BR-14, or the Schering, Alliance
        or Bracco Licensed Patents.

       

      6.5.  No
        Party
        makes any warranties or representations, either express or implied, or assumes
        any responsibility whatsoever with respect to the manufacture, use or sale
        or
        other disposition by any other Party of that Party’s Product, even if that
        Party’s Product makes use of any inventions claimed in the Licensed Patents of
        another Party.

       

       

      ARTICLE
        VII.  DURATION

       

      7.1.  The
        term
        of the license granted from Bracco to Schering and Alliance set forth in
        Section
        2.1 above and the Schering and/or Alliance obligations set forth in Section
        3
        above shall start at the Effective Date and shall last until Imavist and
        Imavist
        II are no longer under development or planned for development, undergoing
        regulatory approval, or being manufactured, sold or prepared for sale by
        either
        Schering or Alliance.

       

      7.2.  The
        term
        of the license granted from Schering and/or Alliance to Bracco set forth
        in
        Sections 2.2 and 2.3 above and the Bracco obligations set forth in Section
        3
        above shall start at the Effective Date and shall last until BR-1 and
        BR-14 are
        no
        longer under development or planned for development, undergoing regulatory
        approval, or being manufactured, sold or prepared for sale by
        Bracco.

       

       

      ARTICLE
        VIII.  CONFIDENTIALITY

       

      8.1.  Each
        Party will maintain the other Party’s information in confidence. No party will
        disclose the contents of this Agreement to any other person or entity and
        each
        Party will retain in confidence the terms and conditions of this Agreement,
        except as necessary to comply with law or the valid order of a court or agency
        of competent jurisdiction of a state or federal authority; or to the extent
        necessary in any action, suit or proceeding to enforce this Agreement or
        to
        their respective Affiliates, banks, auditors, accountants, lawyers, and any
        other representative of a Party who has a good faith need to know, provided
        that
        any such person or entity to whom disclosure is made must be advised of the
        confidentiality of the information disclosed and agree to keep such information
        confidential.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      8.2.  No
        public
        statements of any kind pertaining to this Agreement may be made except as
        required by law, such as that enforced by the Securities Exchange Commission
        of
        the United States of America.

       

       

      ARTICLE
        IX.  MISCELLANEOUS

       

      9.1.  Notice.
        All
        notices or communications required pursuant to this Agreement shall be in
        writing and shall be deemed to have been duly given upon the date of receipt
        if
        delivered by hand, international overnight courier, confirmed facsimile
        transmission, or registered or certified mail (return receipt requested,
        postage
        prepaid) to the following addressees or facsimile numbers:

       

      
        	9.1.1  	
                For
                  Alliance:

              


      

                      Alliance
        Pharmaceutical

      3040
        Science Park Road

      San
        Diego, CA 92121

      USA

      Attn:
        President

      Facsimile:
        +1-858-410-5343

       

      
        	9.1.2  	
                For
                  Bracco:

              


      

                      Bracco
        Imaging
        S.p.A.

      Via
        Egidio Follé 50

      20
        134
        Milano, ITALY

      Attn:
        Director, Intellectual Property

      Facsimile:
        +39-02-2177-2785

       

      
        	9.1.3  	
                For
                  Schering:

              


      

                      Schering
        Aktiengesellschaft

      13342
        Berlin

      Germany

      Attn:
        Legal Department

      Facsimile:
        +49-30-4681-4086

       

      9.2.  Choice
        of Law:
        The
        Parties agree that this Agreement shall be governed by the laws of the State
        of
        New York without reference to conflict of laws principles.

       

      9.3.  Entire
        Agreement:
        This
        Agreement, including all Exhibits attached hereto and all documents delivered
        concurrently herewith,. set forth all the licenses, covenants, premises,
        agreements, warranties, representations, conditions, and understandings between
        the Parties hereto and supersede all prior agreements and understandings
        between
        the Parties relating to the subject matter hereof. This Agreement, including,
        without limitation, the Exhibits attached hereto, is intended to describe
        the
        full extent of the legally enforceable undertakings of the Parties
        hereto.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      9.4.  Severability:
        In the
        event that any provision of this Agreement shall, for any reason, be held
        to be
        invalid or unenforceable in any respect, such invalidity or unenforceability
        shall not affect any other provision hereof, and the Parties shall negotiate
        in
        good faith to modify the Agreement to preserve their original
        intent.

       

      9.5.  Amendment
        and Waiver:
        This
        Agreement may be amended, supplemented, or otherwise modified only be means
        of a
        written instrument signed by all Parties. Any waiver of any rights or failure
        to
        act in a specific instance shall relate only to such instances and shall
        not be
        construed as an agreement to waive any rights or fail to act in any other
        instance, whether or not similar.

       

      9.6.  Headings:
        The
        sections and paragraph headings contained herein are for the purposes of
        convenience only and are not intended to define or limit the contents of
        said
        sections or paragraphs.

       

      9.7.  Counterparts:
        This
        Agreement may be signed in counterpart, each of which shall be deemed to
        be an
        original. Signatures shall be provided by facsimile transmission, with original
        signatures following by mail.

       

      9.8.  Assignment:
        Neither
        this Agreement nor the licenses granted herein may be assigned to any Third
        Party. No Party shall assign, by operation of law or otherwise, any Licensed
        Patents to a Third Party without such Third Party agreeing to be bound in
        writing by the licenses granted hereunder.

       

      IN
        WITNESS WHEREOF, the undersigned Parties have duly executed and delivered
        this
        Agreement as of the date first written above.

       

      
        	
                Alliance
                  Pharmaceutical Corp.

                 

                By:
                  /s/
                  Lloyd A.
                  Rowland                             

                 

                Name:
                  Lloyd A. Rowland

                 

                Title:
                  Vice President & General Counsel

                 

                Date:
                  31 Jan 2001

                 

                 

                 

                Schering
                  Aktiengellschaft

                 

                By:/s/
                  H. G.
                  Rook                                      

                 

                Name:
                  H. G. Rook

                 

                Title:
                  Head of SBK, DG & RP

                 

                Date:
                  31.1.2001

                 

              	
                for
                  and on behalf of

                 

                Bracco
                  International B.V.

                 

                By:
                  Bracco Holding BV

                 

                Name:
                  Diana Bracco

                 

                Title:
                  Managing Director

                 

                Date:
                  31.01.01

                 

              


      

      


       

      
        
          
          

        

        
          9