LICENSE AGREEMENT executed this 13 day of December, 2001. BETWEEN: THE GOVERNORS OF THE UNIVERSITY OF ALBERTA, (the "University") AND:
LICENSE
AGREEMENT executed this 13
day of
December, 2001.
BETWEEN:
THE
GOVERNORS OF THE UNIVERSITY OF ALBERTA,
(the
"University")
AND:
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VIREXX
RESEARCH INC.
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(the
"Licensee")
WHEREAS:
A. ▇▇.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Scientist”) has been engaged in research during the course
of which he has developed certain recombinant viral antigens, murine antibody
clones and an animal model as are described in Schedule A to this
Agreement;
B. The
University has acquired all right, title and interest in the Technology as
herein defined and has the right to license the Technology to the
Licensee;
C. The
Licensee is desirous of the University granting an exclusive world-wide license
to the Licensee of the Type I Technology and a non-exclusive world-wide license
to the Licensee of the Type II Technology and to make use of or cause to
be used
the Technology to manufacture, commercialize, distribute, market, import,
export, offer to sell, sell, lease and/or license or sublicense Products
derived
or developed from such Technology and to sell the same to the general
public;
D. ViRexx
Research Inc. is a wholly owned subsidiary of ViRexx, Inc.;
E. The
Licensee and ViRexx, Inc. will be entering into a Research and Development
Services Agreement wherein the Licensee will provide research and development
services to ViRexx, Inc.;
F. ViRexx,
Inc. will be commercializing novel therapeutic approaches to treat diseases,
excluding cancer, in humans created by identifiable microbial
pathogens;
G. ViRexx,
Inc. has entered into a License Agreement dated December 13,
2001
with AltaRex Corp. (the "AltaRex License Agreement") wherein ViRexx, Inc.
has
been granted an exclusive license to utilize AltaRex's technology within
the
infectious disease field.
NOW
THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and of
the mutual covenants herein set forth, the parties hereto have covenanted
and
agreed as follows:
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1.
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DEFINITIONS
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1.1
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In
this Agreement, unless a contrary intention appears, the following
words
and phrases shall mean:
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1.1.1
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"Date
of Commencement" or "Commencement Date" means the date this Agreement
will
be deemed to have come into force which shall be the 1st
day of November, 2001 and shall be read and construed
accordingly;
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1.1.2
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"Affiliate"
shall include:
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(a)
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any
corporation or other noncorporate entity owning directly, or indirectly
controlling, at least fifty percent (50%) of the stock normally
entitled
to vote for election of directors of the
Licensee;
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(b)
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any
corporation owned or directly controlled by the Licensee through
ownership
of at least fifty percent (50%) of the stock normally entitled
to vote for
election of directors or any other entity actually controlled by
the
Licensee; and
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(c)
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any
corporate or noncorporate entity the majority ownership of which
is
directly or indirectly common to the ownership of the
Licensee;
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PROVIDED
THAT in the circumstance where the country of incorporation of such owned
or
controlled corporation requires the maximum ownership by a foreign entity
be
less than fifty percent (50%), the percentage of ownership required to make
such
an entity an Affiliate shall be equal to the maximum percentage of ownership
permitted by such country;
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1.1.3
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“Available
Options” shall mean a number of options equal to 10% of the issued share
capital of ViRexx, Inc. immediately following the first round of
financing
and, on an ongoing basis, 10% of any additional share capital of
ViRexx,
Inc. that is issued in subsequent financings during the period
ending on
the third anniversary date of this
Agreement;
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1.1.4
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“Improvements”
shall mean any and all advances in, improvements, modifications
to,
variations, updates and enhancements relating to and including
the
Technology which are developed by or on behalf of or acquired or
controlled by the Licensee prior to, following, and during the
term of
this Agreement. Improvements shall also include all improvements,
variations, and enhancements made to the Technology which are developed
by
▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇; provided that, no University resources
are
utilized by ▇▇. ▇▇▇▇▇▇▇ in making such improvements, enhancements
and
variations;
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1.1.5
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“License”
shall have the meaning described in Section 3.1
hereof;
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1.1.6
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"Net
Sales" shall mean, with respect to a Product, the gross amount
invoiced by
the Licensee, its Affiliates and/or Sublicensees on sales or other
dispositions of the Products to third parties (i.e. third parties
who are
unrelated to the Licensee, its Affiliates and/or Sublicensees and
for
greater clarity, excluding thereout any inter-company sales to
an
Affiliate or a Sublicensee) less sales and/or use taxes actually
paid,
import and/or export duties actually paid, outbound transportation
prepaid
or allowed, discounts allowed in amounts customary in the trade,
deductions for uncollectible accounts, third party brokers' or
agents'
sales commissions, and amounts allowed or credited due to returns
(not to
exceed the original billing or invoice amount). Gross revenues
shall not
include payments by an Affiliate to the Licensee for the Licensee's
research, development and/or operating costs and expenses or any
milestone
payments made pursuant to Section 5.5
herein;
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1.1.7
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“Non-Therapeutic
Products” shall mean services, processes and goods which result from the
use of or incorporate all or a portion of the Technology or Improvements
for non-therapeutic purposes, for example, diagnostics and
reagents;
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1.1.8
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"Product(s)"
shall mean collectively Non-Therapeutic Products and Therapeutic
Products;
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1.1.9
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"Sublicensee"
means a bona fide third party, including a third party having an
existing
business relationship with the Licensee or its Affiliates, which
sublicenses rights from the Licensee or its Affiliates to make,
have made,
use, market and distribute
Products;
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1.1.10
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"Technology"
shall collectively mean the Type I Technology and the Type II
Technology;
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1.1.11
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"Term"
shall mean a period of twenty-five (25) years from the Date of
Commencement or until the expiration of any patent which may be
issued in
respect of the Technology, whichever event shall first
occur;
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1.1.12
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“Therapeutic
Products” shall mean services, processes and goods which result from the
use of or incorporate all or a portion of the Technology or Improvements
for therapeutic use;
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1.1.13
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"Type
I Technology" shall mean the recombinant viral antigens and murine
antibody clones described in paragraphs 1 and 2 of Schedule "A"
to this
Agreement;
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1.1.14
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"Type
II Technology" shall mean the animal model described in paragraph
3 of
Schedule "A" to this Agreement;
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1.1.15
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"University
of Alberta Trademarks" shall mean any ▇▇▇▇, trademark, service
▇▇▇▇, logo,
insignia, seal, design or other symbol/device used by the University
and
associated with or referring to the University or any of its
facilities.
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2.
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PROPERTY
RIGHTS IN AND TO THE
TECHNOLOGY
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2.1
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The
parties hereto acknowledge and agree that the University owns any
and all
right, title and interest in and to the Technology, including any
and all
improvements, variations and enhancements made with respect to
the
Technology before the Commencement Date. The parties further acknowledge
and agree that any and all intellectual property rights, know-how
and
inventions that are conceived, reduced to practice, developed or
created
by ▇▇. ▇▇▇▇▇▇▇ in his capacity as Chief Scientific Officer of the
Licensee
and/or ViRexx, Inc. shall not be owned by the University and shall
be
owned by the Licensee or such other party as the Licensee may provide;
provided that no University resources (i.e. laboratories, equipment,
University research staff, students or post-doctoral fellows) are
utilized
by ▇▇. ▇▇▇▇▇▇▇ in this regard.
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2.2
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Upon
expiration of the Term, the license shall become a perpetual, fully-paid
up, royalty-free license, unless this Agreement is sooner
terminated.
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2.3
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The
parties hereto acknowledge and agree that the Licensee owns any
and all
right, title and interest in the Improvements. If
University resources are used by ▇▇. ▇▇▇▇▇▇▇ in making improvements,
variations and enhancements to the Technology, they shall not constitute
Improvements and, in such event, the parties will govern themselves
by the
terms of any applicable research contracts for determining which
party has
any right, title and interest in and to all improvements, variations
and
enhancements.
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3.
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GRANT
OF LICENSE
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3.1
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In
consideration of the covenants contained herein, the University
hereby
grants to the Licensee an exclusive world-wide license, in respect
of the
Type I Technology and a non-exclusive world-wide license in respect
of the
Type II Technology, to make use of, or caused to be used, sell
and/or
sublicense the Technology and any know how associated therewith
or which
forms a basis thereof whether it is ▇▇. ▇▇▇▇▇▇▇’▇ know how, and to
manufacture, commercialize, distribute, market, import, export,
offer to
sell, sell, lease and/or license or sublicense Products on the
terms and
conditions hereinafter set forth (the
"License").
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3.2
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The
Licensee shall have the right to grant a sublicense to any Affiliate
and
such Affiliate shall be entitled to all the rights of the Licensee
under
this Agreement, jointly, with the Licensee; PROVIDED
THAT
such Affiliate consents to be bound by the obligations of the Licensee
under this Agreement, jointly, with the
Licensee.
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3.3
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The
University reserves the right to use the Technology and the Improvements
(provided that the Improvements shall never include the AltaRex
Technology, the AltaRex Patent Rights or the Developed Technology
as those
terms are respectively defined in the AltaRex License Agreement)
for its
own non-commercial research purposes and in co-operation with other
non-commercial research centres; PROVIDED
THAT:
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(a)
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any
improvements, variations and enhancements made with respect to
the
Technology that are rightfully owned by the University will become
the
subject of the License granted in Section 3.1
herein; and
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(b)
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the
University will notify the Licensee in writing of any improvements,
variations and enhancements made with respect to the
Technology.
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3.4
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The
University shall not assign, transfer, sell or dispose of the Type
II
Technology without the prior written consent of the Licensee. The
University shall also keep control over the Type II Technology
during the
term of this Agreement.
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4.
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TERM
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4.1
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This
Agreement and the License hereby granted shall terminate on the
expiration
of the Term, unless terminated earlier under Section 15.
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5.
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ROYALTIES
AND MILESTONE
PAYMENTS
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5.1
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During
the Term, or until this Agreement is earlier terminated, the
Licensee
agrees to pay the University a royalty of 1% of the world-wide
Net Sales
of Products.
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5.2
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All
royalty payments due under Section 5.1
shall be paid by the Licensee, the
Affiliate
and/or the Sublicensee, to the University semi-annually within
60 days of
the end of each pay period, commencing with the first payment due
within
60 days from the end of the Licensee's first fiscal year in which
the
first Net Sales of Products are made.
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5.3
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The
Licensee will use its best efforts to ensure that any Affiliate
meets its
obligations under this Agreement.
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5.4
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In
addition to the forgoing royalties, the Licensee hereby covenants
that the
University will receive options on the following
terms:
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5.4.1
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These
options shall provide to the University the right to acquire a
number of
common shares of ViRexx, Inc. which is equal to 5% of Available
Options at
any give time during the first three years of the
Term;
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5.4.2
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The
first option will be granted on the date of closing of ViRexx,
Inc.'s
first round of financing. The second option will be granted on
the date of
closing of ViRexx, Inc.'s second round of financing. The third
option will
be granted on the closing of the third round of financing and so
on until
the third anniversary date of this Agreement;
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5.4.3
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The
term of the options is for five years from the date ("Option Grant
Date")
of the closing of each round of financing (i.e. the first option's
term is
five years from the date of the closing of the first round of financing,
the second option's term is five years from the closing of the
second
round of financing and so on) and if the options are not exercised
prior
to the fifth anniversary date of each Option Grant Date, the University
shall no longer be entitled to exercise the options in whole or
in part
and the University's right to be granted options shall be of no
further
force or effect;
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5.4.4
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The
options will provide for an exercise price equal to the same price
per
share that is being offered to the investors at each round of financing
which occurs from time to time during the existence of the
options.
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5.4.5
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Schedule
"B" contains an illustration and word description of how the options
referred to herein are designed to be granted, exercised and priced.
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5.5
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The
Licensee shall pay to the University one milestone payment of
$250,000(CAD) upon commencement of Phase III clinical trials for
each
Product.
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6.
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SUBLICENSING
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6.1
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The
Licensee shall have the right to grant sublicenses with respect
to the
Technology without the prior written consent of the University;
PROVIDED
THAT prior to the Licensee granting a sublicense, the Licensee
shall
provide the University written notice of the terms of the sublicense
that
are relevant to the University to determine if the terms of the
sublicense
violate the terms of this Agreement. If such sublicense violates
any terms
of this Agreement, then the University shall provide a written
notice to
the Licensee that outlines the manner in which such sublicense
allegedly
violates the terms of this Agreement (the "Sublicense Notice").
Upon
receipt of the Sublicense Notice, the Licensee shall have 90 days
to cure
such default. If at the expiry of the 90 days the default has not
been
cured, then the University shall be able to refer such matter to
arbitration for resolution pursuant to Section 19.2.
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6.2
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Any
sublicense granted by the Licensee shall be personal to the Sublicensee
and shall not be assignable or further sublicensable without the
prior
written consent of the University, such consent not to be unreasonably
withheld. Such sublicenses shall contain covenants by the Sublicensee
to
observe and perform similar terms and conditions to those in this
Agreement.
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6.3
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The
Licensee shall furnish the University with a copy of each sublicense
granted within 30 days after execution of
same.
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6.4
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Research
collaborations, partnerships, joint ventures, joint development
agreements, joint marketing agreements, or other arrangements with
a third
party for the development, testing, and/or test marketing of Products
shall not be considered sublicense arrangements subject to any
royalty
payments that are required to be made pursuant to Section 5.1
herein;
provided that if any such arrangements result in Net Sales of Products,
then the Licensee shall be required to make the royalty payments
required
by Section 5.1
herein.
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6.5
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All
sublicenses under this Agreement shall provide that, upon termination
of
this Agreement under Section 15,
the sublicense shall also terminate. Upon termination of the license
for
any reason, any Sublicensee not then in default shall have the
right to
seek a license from the University. The University shall respond
to such
requests in good faith.
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7.
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ASSIGNMENT
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7.1
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The
Licensee may assign or transfer this Agreement to a third party
provided
that such third party is first approved of in writing by the University,
such approval not to be unreasonably withheld and provided further
that
such third party assumes all of the rights, obligations and covenants
set
forth in this Agreement. Upon the University approving such assignment
and
upon the third party assuming the terms and conditions herein,
the
University will release, remise and forever discharge the Licensee
from
any and all obligations or covenants
hereunder.
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7.2
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The
University shall have the right to assign its rights, duties and
obligations under this Agreement provided that the Licensee approves
in
writing such assignment, such approval not to be unreasonably withheld,
to
a company or society of which it is the sole shareholder in the
case of a
company or of which it controls the membership, in the case of
a society.
In the event of such an assignment, the Licensee will release,
remise and
forever discharge the University from any and all obligations or
covenants, provided however that such company or society, as the
case may
be, executes a written agreement which provides that such company
or
society shall assume all such obligations or covenants from the
University
and that the Licensee shall retain all rights granted to the Licensee
pursuant to this Agreement.
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8.
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RESEARCH
CONTRACT
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8.1
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The
parties agree that if the Licensee wishes to continue its research
and
development activities at the University (other than those activities
presently being carried on by the Licensee within those premises
that the
Licensee is presently sub-letting from AltaRex Corp. at the
Dentistry/Pharmacy Building), the University and the Licensee will
enter
into a Research Contract substantially in the University’s standard
form.
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9.
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PATENTS
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9.1
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The
Licensee shall have the right to identify any technology, process,
use or
products arising out of the Technology that may be patentable.
In the
event the Licensee determines to patent any such further technology
or any
process or product arising out of the Technology which it deems
patentable, the Licensee shall take all reasonable steps to apply
for a
patent in the name of the Licensee and the Licensee shall pay all
costs of
applying for, registering, and maintaining the patent in those
jurisdictions in which the Licensee might designate that a patent
is
required.
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10.
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PUBLICATION
AND CONFIDENTIALITY
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10.1
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Subject
to Section 10.3,
the parties hereto acknowledge and agree that they will treat the
Type I
Technology (other than the patents) as confidential and that they
will not
disclose or communicate or cause to be disclosed or communicated
the Type
I Technology (other than the patents) to any person or body corporate
except as permitted under a sublicense or to Affiliates who have
agreed to
be bound by the obligations under this Agreement pursuant to Section
3.2.
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10.2
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The
Licensee covenants and agrees that it will initiate and maintain
an
appropriate internal program limiting the internal distribution
of the
Technology to its officers, servants or agents and to take the
appropriate
non-disclosure agreements from any and all persons who may have
access to
the Technology.
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10.3
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The
University shall be permitted to present at symposia, professional
meetings, and to publish in journals or other publications accounts
of its
research relating to the Technology provided that the Licensee
shall have
been furnished copies of the disclosure proposed therefor at least
60 days
in advance of submission for presentation or publication. The Licensee
shall evaluate the proposed disclosures for patentable content
and pursue
patent protection pursuant to Section 9,
if necessary. If the Licensee notifies the University in writing
prior to
the expiration of the sixty (60) day period following receipt of
such
notification that it wishes to exercise its right contained in
Section
9
to
seek statutory protection for any improvements, variations and
enhancements described in the proposed publication, such submission
will
be delayed for a further period of sixty (60) days following the
originally proposed submission date or until such statutory protection
is
in place, whichever is earlier. After the 120-day period has elapsed,
the
University shall be free to present and/or publish the proposed
disclosures.
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11.
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ACCOUNTING
RECORDS AND REPORTS
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11.1
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The
Licensee shall maintain at its principal place of business, or
such other
place as may be most convenient, separate accounts and records
of business
done pursuant to this Agreement, such accounts and records to be
in
sufficient detail to enable proper accounting to be made under
this
Agreement, and the Licensee shall require Sublicensees to keep
similar
accounts.
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11.2
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The
Licensee shall deliver to the University the following reports,
subject to
the confidentiality provisions of Section 11.7:
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11.2.1
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An
annual progress report summarizing the Licensee’s activity towards
commercializing the Technology due 60 days after the end of the
Licensee’s
fiscal year, the first report due on such date immediately following
the
first full year after the Effective Date until submission
of a new drug application or equivalent to any regulatory
agency.
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11.3
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Commencing
within 60 days after the end of the Licensee’s fiscal year in which the
first commercial sale of Product(s) occurs, and every year thereafter,
the
Licensee shall deliver annually to the University true and accurate
reports, giving such particulars of the business conducted by the
Licensee
and its Sublicensees during the preceding royalty payment period
as shall
be pertinent to royalty accounting. These shall include at least
the
following:
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(a)
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Number
of Product(s) manufactured and sold by the Licensee and all
Sublicensees;
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(b)
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Total
▇▇▇▇▇▇▇▇ for Product(s) sold by the Licensee and all
Sublicensees;
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(c)
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Deductions
applicable as provided in Section 1.1.3;
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(d)
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Royalties,
fees and considerations payable to the Licensee from
Sublicensees;
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(e)
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Royalties,
fees and considerations payable to the University from the Licensee;
and
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(f)
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Names
and addresses of all Sublicensees.
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11.4
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Product(s)
shall be deemed to have been sold or provided when invoiced, or
if not
invoiced, when paid for. If no royalties shall be due, the Licensee
shall
so report.
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11.5
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The
Licensee shall retain the accounts and records referred to in Section
11.1
above for at least five years after the date upon which they were
made and
shall permit a duly authorized representative of the University
to inspect
such accounts and records during normal business hours of the Licensee
at
the University's expense. The Licensee shall furnish such reasonable
evidence as such representative will deem necessary to verify the
accounting and will permit such representative to make copies of
or
extracts from such accounts, records and agreements at the University's
expense. Should such inspection of Licensee’s records lead to the
discovery of a greater than 5% discrepancy in reporting to the
University’s detriment, Licensee agrees to pay immediately the full cost
of such inspection and to make payment of any outstanding sums
with
interest as defined in Section 11.6,
without prejudice to the rights of the University subject to Section
15.
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11.6
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Any
payments due under this Agreement shall, if overdue, bear interest
until
payment at a per annum rate of 2% above the prime rate in effect
at the
Bank of Montreal on the due date. The payment of such interest
shall not
prejudice the University in exercising any other rights it may
have as a
consequence of the lateness of any payment, including termination
of this
Agreement subject to Section 15.
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11.7
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During
the term of this Agreement and thereafter, all information provided
to the
University or its representatives pursuant to this Section and
Section
11.2
shall remain confidential and be treated as such by the University,
and
the University will not make the same available to any other person
except
as may be required by law.
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11.8
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Notwithstanding
the termination of this Agreement, this Section 11
shall remain in full force and
effect.
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12.
|
PRODUCTION
AND MARKETING
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12.1
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The
Licensee shall use commercially reasonable efforts to promote,
market and
sell the Products and utilize the Technology and to meet or cause
to be
met the world market demand for the Products and the utilization
of the
Technology.
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12.2
|
The
University acknowledges that the Licensee may perform all or a
part of its
obligations under Section 12.1
itself or through a Sublicensee, provided that the Licensee shall
at all
times remain committed to the University for the performance of
such
obligations.
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12.3
|
The
Licensee shall not use any of the University of Alberta Trademarks
or make
reference to the University or its name in any advertising publicity
whatsoever, without the prior written consent of the
University.
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13.
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INSURANCE
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13.1
|
One
month prior to the first sale of a Product, the Licensee will give
notice
to the University of the terms and amount of the public liability
and
product liability insurance which it has placed in respect of the
same,
which in no case shall be less than the insurance which a reasonable
and
prudent businessmen carrying on a similar line of business would
acquire.
This insurance shall be placed with a reputable and financially
secure
insurance carrier, and at Licensee’s sole cost and expense, shall include
the University, the Board of Governors, its faculty, officers,
employees,
students and agents as additional insureds, and shall provide primary
coverage with respect to the activities contemplated by this Agreement.
Such policy shall include severability of interest and cross-liability
clauses and shall provide that the policy shall not be cancelled
or
materially altered except upon at least 30 days' written notice
to the
University. The University shall have the right to require reasonable
amendments to the terms or the amount of coverage contained in
the policy.
Failing the parties agreeing on the appropriate terms or the amount
of
coverage, then the matter shall be determined by arbitration as
provided
for herein. The Licensee shall provide the University with certificates
of
insurance evidencing such coverage seven days before commencement
of sales
of any Product and the Licensee covenants not to sell any Product
before
such certificate is provided and approved by the
University.
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13.2
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The
Licensee shall require that each Sublicensee under this Agreement
shall
procure and maintain, during the term of the sublicense, public
liability
and product liability insurance in reasonable amounts, with a reputable
and financially secure insurance carrier. The Licensee shall use
its best
efforts to ensure that any and all such policies of insurance required
pursuant to this clause shall contain a waiver of subrogation against
the
University, its Board of Governors, faculty, officers, employees,
students
and agents.
|
|
13.3
|
The
University has in effect and will maintain during the term of this
License, comprehensive general liability insurance in reasonable
amounts
consistent with industry standards with a reputable and financially
secure
insurance carrier (i.e. Canadian University Reciprocal Insurance
Exchange
"▇▇▇▇▇") relating to the University's activities contemplated by
this
Agreement. The Licensee shall obtain and maintain during the term
of this
License, comprehensive general liability insurance in reasonable
amounts
consistent with industry standards with a reputable and financially
secure
insurance carrier relating to the Licensee's activities contemplated
by
this Agreement. Each of the University and the Licensee shall each
respectively use their commercially reasonable efforts to ensure
that any
such policies of insurance shall contain a waiver of subrogation
against
the University and the Licensee and their respective Board of Governors
(Directors), officers, employees and
agents.
|
|
13.4
|
The
University has in effect and will maintain during the term of this
License, all risks property insurance in reasonable amounts consistent
with industry standards with a reputable and financially secure
insurance
carrier (i.e. ▇▇▇▇▇) in respect of the University's owned property
that
will be used in relation to the University's activities contemplated
by
this Agreement. The Licensee shall obtain and maintain during the
term of
this License, all risks property insurance in reasonable amounts
consistent with industry standards with a reputable and financially
secure
insurance carrier in respect of the Licensee's owned property that
will be
used in relation to the Licensee's activities contemplated by this
Agreement. Each of the University and the Licensee shall each respectively
use their commercially reasonable efforts to ensure that any such
policies
of insurance shall each respectively contain a waiver of subrogation
against the University and the Licensee and their respective Board
of
Governors (Directors), officers, employees and
agents.
|
|
14.
|
DISCLAIMER,
WARRANTY AND
INDEMNIFICATION
|
|
14.1
|
Subject
to Section 14.2,
the University makes no representations or warranties, either
express or
implied, with respect to the Technology or Products and specifically
disclaims any implied warranty of merchantability or fitness
for a
particular purpose. The University shall in no event be liable
for any
loss of profits, be they direct, consequential, incidental, or
special or
other similar or like damages arising from any defect, error
or failure to
perform with respect to the Technology or Products, even if the
University
has been advised, shall be advised, shall have other reason to
know, or in
fact shall know of the possibility of such
damages.
|
|
14.2
|
The
University represents and warrants that it has the right to enter
into
this Agreement and to grant the license given herein and that
it has not
granted licenses to the Type I Technology to any other entity,
and the
University hereby indemnifies, holds harmless and defends the
Licensee,
its officers, employees and agents against any and all claims,
damages,
costs or expenses incurred by the Licensee, its officers, employees
and
agents as a result of or arising from a breach of the representation
and
warranty contained in this Section 14.2.
|
|
14.3
|
The
provisions contained in Section 14.2
shall survive this Agreement.
|
|
14.4
|
Nothing
in this Agreement shall be construed
as:
|
|
14.4.1
|
a
warranty or representation by the University as to the validity
or scope
of the License granted pursuant to this
Agreement,
|
|
14.4.2
|
a
warranty or representation by the University that anything made,
used,
sold or otherwise disposed of under the License granted in this
Agreement
is or will be free from infringement of patents, copyrights,
trademarks,
registered design or other intellectual property
rights,
|
|
14.4.3
|
an
obligation by the University to bring or prosecute actions or
suits
against third parties for infringement of patents, copyrights,
trademarks,
registered design or other intellectual property or contractual
rights,
or
|
|
14.4.4
|
the
conferring by the University of the right to use in advertising
or
publicity the University of Alberta
Trademarks.
|
In
the
event of an alleged infringement by a third party of the Technology or
any right
with respect to the Technology, the Licensee shall give notice to the University
in writing of such alleged infringement and shall have the right to prosecute
litigation designed to enjoin infringers of the Technology with the consent
of
the University. The University agrees to co-operate to the extent of executing
all necessary documents and to vest in the Licensee the right to institute
any
such suits so long as all the direct or indirect costs and expenses of
bringing
and conducting any such litigation or settlement shall be borne by the
Licensee
and in such event recoveries shall enure to the Licensee, provided that
if
Licensee’s recoveries exceed Licensee’s expenses with respect to such
infringement action, such excess recoveries shall be considered Net Sales
and
subject to the applicable royalty obligations under Section 5.1.
|
14.5
|
In
the event the Licensee chooses not to prosecute infringers, the
University
shall have the right, but shall not be obligated, to prosecute
all
infringers of the Technology so long as all the direct or indirect
costs
and expenses of bringing and conducting any such litigation or
settlement
shall be borne by the University and in such event recoveries
shall enure
to the University.
|
|
14.6
|
In
the event of any complaint alleging infringement or violation
of any
patent or other proprietary rights is made against the Licensee
with
respect to the use of the Technology or the manufacture, use
or sale of
Products that actually incorporates or uses any of the Technology,
the
following procedure shall be
adopted:
|
|
14.6.1
|
the
Licensee shall promptly notify the University upon receipt of
any such
complaint and shall keep the University fully informed of the
actions and
positions taken by the complainant and taken or proposed to be
taken by
the Licensee;
|
|
14.6.2
|
the
Licensee shall investigate any complaint fully and take appropriate
action, including resisting, litigating, and meeting with the
complainant
with a view to settling the
complaint;
|
|
14.6.3
|
subject
to Sections 14.6.4
and 14.6.5,
all costs and expenses incurred by the Licensee in investigating,
resisting, litigating and settling such a complaint shall be
borne by the
Licensee, with the exception that if the Licensee is required
to make
payments (the “Damage Payment”) to such complainant for infringement of
the complainant's intellectual property rights, such Damage Payment
will
be deducted from the royalty payments, payable by the Licensee
to the
University commencing on the date the first payment is made to
the
complainant. The reduction of payments to the University resulting
from
such deduction from the royalty payment, however, shall not exceed,
fifty
percent (50%) of each royalty payment due to the University which
are
calculated, according to Sections 5.1,
before such deductions from the royalty payment were
made;
|
|
14.6.4
|
any
settlement reached between the complainant and the Licensee must
be
agreeable to the University;
|
|
14.6.5
|
notwithstanding
anything in this Section 14.6,
the Licensee shall not be responsible for any costs and/or expenses
arising from anything occurring prior to the Commencement
Date.
|
|
14.7
|
In
any infringement suit that either party may institute or defend
pursuant
to Sections 14.5
and 14.6
herein, the other party hereto shall, at the request and expense
of the
party initiating or defending such suit, co-operate in all respects
and,
to the extent possible, have its employees testify when requested
and make
available relevant records, papers, information, samples, specimens,
and
the like.
|
|
TERMINATION
|
|
15.1
|
The
Licensee may, at its option and in its sole discretion, terminate
this
Agreement without liability in the event that the use of the
Technology or
the manufacture, use or sale of the Products violates a complainant's
proprietary rights, as described in Section 14.6,
and no reasonable settlement can be reached with the
complainant.
|
|
15.2
|
The
University may, at its option and in its sole discretion, terminate
this
Agreement on the happening of any one or more of the following
events by
forthwith delivering notice in writing to this effect to the
Licensee:
|
|
15.2.1
|
if
any proceeding under the Bankruptcy
and Insolvency Act
of
Canada, or any other statute of similar purport is commenced
by or against
the Licensee which results in the Licensee being adjudged bankrupt,
(such
proceedings shall not include a general proposal to creditors
provided
such proposal is not made under the provisions of the Bankruptcy
and Insolvency Act
of
Canada or any other statute of similar purport),
or
|
|
15.2.2
|
if
any execution, sequestration, or any another process of any court
becomes
enforceable against the Licensee or if any such process is levied
on the
rights under this Agreement or upon any of the monies due to
the
University and is not released or satisfied by the Licensee within
30 days
thereafter,
|
|
15.2.3
|
if
any resolution is passed or order made or other steps taken for
the
winding-up, liquidation or other termination of the existence
of the
Licensee, or
|
|
15.2.4
|
if
the Licensee ceases to carry on its
business.
|
|
15.3
|
Other
than as set out in Sections 15.1
and 15.2
herein, if either party shall be in material default under or
shall fail
to comply with the terms of this Agreement
and:
|
|
15.3.1
|
if
such default is reasonably curable within 90 days after receipt
of notice
of such default and such default or failure to comply is not
cured within
90 days after receipt of written notice thereof,
or
|
|
15.3.2
|
if
such default is not reasonably curable within 90 days after receipt
of
written notice thereof, and such default or failure to comply
is not cured
within such further reasonable period of time as may be necessary
for the
curing of such default or failure to comply,
|
then
the
non-defaulting party shall have the right to terminate this Agreement by
written
notice to that effect.
|
15.4
|
If
this Agreement is terminated by the University pursuant to Sections
15.2
or
15.3
herein, the University may proceed to enforce payment of all
debts owed to
the University and to exercise any or all of the rights and remedies
contained herein or otherwise available to the University by
law or in
equity. The University shall have the right to enforce one or
more
remedies successively or concurrently in accordance with applicable
law
and the University expressly retains all rights and remedies
including all
of the rights it may have under the Personal Property Security
Act.
Without restricting the generality of the foregoing, the University
may
immediately and without notice enter the Licensee's premises
and repossess
any or all of the Technology, demand payment of any deficiency
after the
sale of the Technology and ▇▇▇ the Licensee for any deficiency,
and
appoint by instrument in writing a receiver of the Licensee,
and remove or
replace such receiver from time to time or institute proceedings
in any
court of competent jurisdiction for the appointment of a receiver,
any
such receiver appointed by the University so far as responsibility
for his
acts will be deemed to be the agent of the Licensee. All charges
or
expenses incurred by the University in the enforcement of its
rights or
remedies against the Licensee including without limitation the
University's solicitors fees and disbursements on an indemnity
basis and
the costs of any receiver appointed pursuant to this Section
may, at the
option of the University be deducted from any proceeds of disposition
of
the Technology before payment to the Licensee or any other entitled
party
to be added to and become part of the obligations owed by the
Licensee to
the University.
|
|
15.5
|
Upon
termination of this Agreement for any cause, nothing in this
Agreement
shall be construed to release either party of any obligation
matured prior
to the effective date of such
termination.
|
|
16.
|
INDEMNITY
BY LICENSEE
|
|
16.1
|
The
Licensee hereby indemnifies, holds harmless and defends the University,
its officers, employees and agents against any and all claims
arising out
of the Licensee's exercise of any of its rights under this Agreement
including, without limiting the generality of the foregoing,
against any
damages or losses, consequential or otherwise, arising from or
out of the
use of the Technology or the Products licensed under this Agreement
by the
Licensee, its Affiliates, officers, employees, and agents, and
any
Sublicensee or end-users howsoever the same may
arise.
|
|
16.2
|
The
provisions of Section 16.1.
shall survive this Agreement.
|
|
16.3
|
The
Licensee covenants and agrees that it has the expertise necessary
to
handle the Technology with care and without danger to the Licensee,
its
Affiliates, officers, employees, agents, any Sublicensee, or
the public.
The Licensee covenants that it will not accept delivery of the
Technology
until it has requested and received from the University all necessary
information and advice to ensure that it is capable of handling
the
Technology in a safe and prudent manner in accordance with this
Section
16.3.
|
|
16.4
|
The
Licensee covenants and agrees that it will comply with all laws,
regulations and ordinances, whether Federal, Provincial, Municipal
or
otherwise with respect to the Technology, the Products, and/or
this
Agreement.
|
|
17.
|
POWER
OF ENTRY
|
|
17.1
|
Upon
reasonable notice, the Licensee shall permit any duly authorized
representative of the University during normal business hours
and at the
University's sole risk and expense to enter upon and into any
premises of
the Licensee for the purpose of inspecting the Products and the
manner of
their manufacture and generally of ascertaining whether or not
the
provisions of this Agreement have been, are being, or will be
complied
with by the Licensee.
|
|
18.
|
INDEPENDENCE
|
|
18.1
|
Nothing
contained herein shall be deemed or construed to create between
the
parties hereto a partnership or joint venture. No party shall
have the
authority to act on behalf of any other party, or to commit any
other
party in any manner or cause whatsoever or to use any other party's
name
in any way not specifically authorized by this Agreement. No
party shall
be liable for any act, omission, representation, obligation or
debt of any
other party, even if informed of such act, omission, representation,
obligation or debt.
|
|
19.
|
GOVERNING
LAW AND ARBITRATION
|
|
19.1
|
This
Agreement shall be governed by and construed in accordance with
the laws
of the Province of Alberta and the laws of Canada in force
therein.
|
|
19.2
|
In
the event of any dispute arising between the parties concerning
this
Agreement, its enforceability or the interpretation thereof,
the same
shall be settled by a single arbitrator appointed pursuant to
the
provisions of the Arbitration Act of Alberta, or any successor
legislation
then in force.
|
|
19.3
|
Section
19.2
shall not prevent a party hereto from applying to a court of
competent
jurisdiction for interim protection such as, by way of example,
an interim
injunction.
|
|
20.
|
ENUREMENT
|
|
20.1
|
Subject
to the limitations herein before expressed, this Agreement shall
enure to
the benefit of and be binding upon the parties, and their respective
successors and permitted assigns.
|
|
21.
|
HEADINGS
|
|
21.1
|
Headings
as used in this Agreement are for the convenience of reference
only and do
not form a part of this Agreement and are not be used in the
interpretation hereof.
|
|
22.
|
SURVIVAL
OF COVENANTS
|
|
22.1
|
The
terms and provisions, covenants and conditions contained in this
Agreement
which by the terms hereof require their performance by the parties
hereto
after the expiration or termination of this Agreement shall be
and remain
in force notwithstanding such expiration or other termination
of this
Agreement for any reason
whatsoever.
|
|
NON-WAIVER
|
|
23.1
|
No
condoning, excusing or overlooking by any party of any default,
breach or
non-observance by any other party at any time or times in respect
of any
covenants, provisos, or conditions of this Agreement shall operate
as a
waiver of such party's rights under this Agreement in respect
of any
continuing or subsequent default, breach or non-observance, so
as to
defeat in any way the rights of such party in respect of any
such
continuing or subsequent default or breach and no waiver shall
be inferred
from or implied by anything done or omitted by such party, save
only an
express waiver in writing.
|
|
23.2
|
No
exercise of a specific right or remedy by any party precludes
it from or
prejudices it in exercising another right or pursuing another
remedy or
maintaining an action to which it may otherwise be entitled either
at law
or in equity.
|
|
24.
|
SEVERABILITY
|
|
24.1
|
In
the event that any Section of this Agreement shall be held to
be
indefinite, invalid, illegal or otherwise void, voidable or unenforceable,
the entire agreement shall not fail on account thereof, and the
balance of
the Agreement shall continue in full force and
effect.
|
|
25.
|
NOTICES
|
|
25.1
|
All
payments, reports and notices or other documents that any of
the parties
hereto are required or may desire to deliver to any other party
hereto may
be delivered only by personal delivery or by registered or certified
mail,
telex or telecopy, all postage and other charges prepaid, at
the address
for such party as follows:
|
To
the
University:
c/o
Industry Liaison Office
University
of Alberta
222
Campus Tower
▇▇▇▇
-
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
Director
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
To
the
Licensee:
Virexx
Research Inc.
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇▇▇▇
Fax:
(780) 436 - 0068
With
a
copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇
Barristers
and Solicitors
▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
-
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇
or
at
such other address as any party may hereinafter designate by notice in
writing
to the others pursuant to this Section 25.1.
Any
notice personally delivered or sent by telex or telecopy shall be deemed
to have
been given or received at the time of delivery, telexing or telecopying.
Any
notice mailed as aforesaid shall be deemed to have been received on the
expiration of five Business Days (a "Business Day" being a day that is
not a
Saturday, Sunday, or statutory holiday in the jurisdiction such notice
is
received) after it is posted, provided that if there shall be at the time
of
mailing or between the time of mailing and the actual receipt of the notice
a
mail strike, slow down or labour dispute which might affect the delivery
of the
notice by the mails, then the notice shall only be effected if actually
received.
|
26.
|
GENERAL
|
|
26.1
|
All
amounts payable hereunder shall be payable in Canadian
Funds.
|
|
26.2
|
This
Agreement, together with any Relationship Agreement relating
to the
matters herein, sets forth the entire understanding between the
parties
and no modifications or amendments hereof shall be binding unless
executed
in writing by the parties hereto and the Biological Material
Transfer
Agreement between the parties dated July 10, 2001, has been replaced
by
this Agreement and as such all of its provisions (including paragraphs
4,
5 and 7) are no longer of any force or
effect.
|
|
26.3
|
Time
shall be of the essence of this
Agreement.
|
|
26.4
|
Whenever
the singular or masculine or neuter is used throughout this Agreement
the
same shall be construed as meaning the plural or feminine or
body
corporate when the context of the parties hereto may
require.
|
IN
WITNESS WHEREOF the parties hereto have hereunto executed this Agreement
the day
and year first written above.
|
SIGNED
FOR AND ON BEHALF OF THE
GOVERNORS
OF THE UNIVERSITY OF
ALBERTA
by its duly authorized officer:
|
||
| |
|
|
| Signed “▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇” | ||
|
Authorized
Signatory
Associate
Vice-President (Research)
|
||
| VIREXX RESEARCH INC. | ||
| |
|
|
| Per: | signed “▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇” | |
|
Authorized Signatory |
||
| Per: | signed “▇▇▇ ▇▇▇▇▇▇” | |
|
Authorized Signatory |
||
SCHEDULE
“A”
|
1.
|
Antigens
cloned, expressed and purified in the ▇▇▇▇▇▇▇ University laboratory
as
follows:
|
|
·
|
Human
Hepatitis B(HBV) Core Antigen
(short)
|
|
·
|
Duck
Hepatitis B(DHBV) Surface Antigen
|
|
·
|
Duck
Hepatitis B(DHBV) Polymerase
Protein
|
|
·
|
Duck
Hepatitis B(DHBV) Core Protein
|
|
2.
|
Murine
antibody clones developed in the ▇▇▇▇▇▇▇ University laboratory
as
follows:
|
|
·
|
Monoclonal
Antibody 1D12 to HBV core antigen
|
|
·
|
Monoclonal
antibodies 2C12, 2D12, 2C11, 2A12, 4A10, 1F9, 2G11 to HBV surface
antigen
|
|
·
|
Monoclonal
Antibody 3A8, 2C4 to HBV Polymerase
|
|
·
|
Monoclonal
Antibody 1F4 to DHBV Surface
Antigen
|
|
·
|
Monoclonal
Antibodies 9A8, 8D6, 7G4, 7G5, 7G10, 9F2, 9G8, 1A9, 4A9, 1H5
to DHBV Core
Antigen.
|
|
3.
|
Animal
model as follows:
|
|
·
|
Hepatitis
B Duck Model
|
Including
any replications of progeny of the above made by the Licensee and, if
that which
is made by the Licensee, constitutes cells or DNA molecules. Type II
Technology
includes all modifications, improvements and variants thereof and any
data or
information in relating thereto including sequence information.
SCHEDULE
"B"
VIREXX,
INC.
ILLUSTRATION
OF THE STOCK OPTION AGREEMENT WITH THE UNIVERSITY OF
ALBERTA
|
Date
|
Shares
|
Allowable
Options
(2)
|
Options
Granted
to Employees
|
Options
Granted
to
U.
of A. (3)
|
||||||||||||
|
June
6, 2001
|
Incorporation
of Virexx, Inc.
|
10,000
|
||||||||||||||
|
August
1, 2001
|
License
Agreement with U. of A.
|
|||||||||||||||
|
September
1, 2001
|
Combination
with Virexx Technologies
|
20,000
|
||||||||||||||
|
December
1, 2001
|
1stround
financing of $10-20 million (1)
|
|
10,000,000
|
1,000,000
|
||||||||||||
|
December
1, 2001
|
Options
granted
|
200,000
|
50,000
|
|||||||||||||
|
June
1, 2001
|
Options
granted
|
200,000
|
||||||||||||||
|
September
1, 2001
|
Options
granted
|
400,000
|
||||||||||||||
|
March
1, 2002
|
2nd
round financing of $10 million
|
5,000,000
|
500,000
|
|||||||||||||
|
March
1, 2002
|
Options
granted
|
200,000
|
25,000
|
|||||||||||||
|
|
15,000,000
|
1,500,000
|
1,000,000
|
75,000
|
||||||||||||
|
January
1, 2003
|
Certain
employees exercise options
|
500,000
|
50,000
|
-500,000
|
0
|
|||||||||||
|
|
15,500,000
|
1,550,000
|
500,000
|
75,000
|
||||||||||||
|
March
1, 2003
|
Options
granted
|
975,000
|
||||||||||||||
|
15,500,000
|
1,550,000
|
1,475,000
|
75,000
|
|||||||||||||
|
1.
|
The
10,000,000 shares represents 100% of the shares outstanding following
the 1st
round of financing.
|
|
2.
|
Allowable
options equal 10% of outstanding shares. Shareholder approval
may be
required for any plan where the number of shares reserved under
a stock
option plan exceeds 10%.
|
|
3.
|
The
U. of A. will be granted options will equal 5% of the "available"
options.
For purposes of this Agreement, the available options will be
defined as
10% of the outstanding shares at the time of the initial funding
plus 10%
of the shares issued through subsequent financings during the
3 year
period August 1, 2001 through to July 31, 2004. Subsequent financings
do
not include the issue of shares upon the exercise of stock
options.
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i.e.
|
on
December 1, 2001, the U. of A. would be granted 50,000 options
(5% x
1,000,000 of "available" options) and on March 1, 2002, it
would be
granted a further 25,000 options (5% x 500,000 of "available"
options).
This number of options would be granted regardless of the number
of
options granted to employees at that
time.
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Note:
Dates and amounts are for illustrative purposes only.
DATED
the
_____ day of December, 2001.
THE
GOVERNORS OF THE UNIVERSITY OF ALBERTA
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and
-
VIREXX
RESEARCH INC.
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Barristers
& Solicitors
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File
No.
59815-02/KLL