THIS TECHNOLOGY COMMERCIALIZATION AGREEMENT made as of the 1st of January, 2004.
THIS
TECHNOLOGY COMMERCIALIZATION AGREEMENT made as of the 1st of January,
2004.
BETWEEN:
ALBERTA
HERITAGE FOUNDATION FOR MEDICAL
RESEARCH,
a
corporation established pursuant to the Alberta
Heritage
Foundation for Medical Research Act, R.S.A.
2000,
Chap.
A-21
(hereinafter
called the “Foundation”)
OF
THE
FIRST PART
-and-
(hereinafter
called the “Recipient”)
OF
THE
SECOND PART
WHEREAS
the Foundation has approved for Funding the project entitled “A Phase I study of
patients with primary or secondary cancers of the liver to determine the safety
of Transcatheter Arterial Embolization and Hepclusin Injection” as more
particularly described in the Application;
AND
WHEREAS as a condition to providing the Funding, the Foundation has requested
that the Recipient enter into this Agreement;
AND
WHEREAS the Recipient is the owner of or entitled to certain proprietary
or
other
rights in the Product;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the
mutual covenants and agreement hereinafter set forth and of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
ARTICLE
1- Definition AND INTERPRETATION
1.01 Definitions
In
this
Agreement including the recitals, un1ess the context otherwise
requires:
(a) “Agreement”
means this Technology Commercialization Agreement;
| (b) |
“Application”
means the application attached as Appendix “B” made by the Recipient to
the Foundation for the Funding, pursuant to the Foundation’s “Technology
Commercialization Program”, together with all supplementary material and
information
|
| (c) |
“Certificate
of Gross Sales” means a certification of the Gross Sales of the Recipient,
prepared by a chartered accountant, certified management accountant
or
certified general accountant exclusively engaged in a public accounting
practice;
|
| (d) |
“Fiscal
Year” means the twelve (12) month period January 1 to December
31;
|
| (e) |
“Funding”
means that certain amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000,00)
granted by the Foundation to the Recipient pursuant to the Foundation’s
“Technology Commercialization Program”;
|
| (f) |
“Gross
Sales” means all the gross revenues generated by the Recipient from all
sources whatsoever;
|
| (g) |
“Milestones”
means those certain business, scientific and technical milestones,
all as
may be set out in Appendix “A” attached hereto and forming part
hereof;
|
| (h) |
“Product”
means any product, device, process, concept; theory, formula or other
Intangible, or any tangible, improved, developed or invented in whole
or
in part with the assistance of the Funding in which the Recipient has
a
property or other interest or royalty right and without limiting the
generality of the foregoing. includes the “Hepclusin’
Injection”, set forth in the Application made by the Recipient to the
Foundation in respect of the Funding;
|
| (i) |
“Project”
means the project entitled “A Phase
study of patients with primary or secondary cancers of the liver to
determine the safety of Transcatheter Arterial Embolization with Hepclusin
Injection” as more particularly described in the Application;
and
|
| (j) |
“Significant
Alberta Presence” means all of the
following:
|
| (i) |
At
least fifty per cent (50%) of the Recipients employees reside in
Alberta;
|
| (ii) |
The
Recipient conducts Its business affairs such that ft Is required to
tile
its income tax return in Alberta; and
|
| (iii) |
At
least one (1) member of the board of directors of the Recipient is
a
resident of Alberta.
|
2
|
1.02
|
Interpretation
|
The
words
“hereto”, “hereof”, “hereunder”, “herein” and similar expressions refer to this
Agreement and not to any particular article, clause, paragraph or other portion
hereof and include any and every instrument, supplemental or ancillary hereto.
Any word herein contained importing the singular number shall include the plural
and. any word importing the masculine gender shall include the feminine or
neuter gender and any word importing a person shall include a corporation,
a
partnership and any other entity. This Agreement shall be interpreted in
accordance with the laws of the Province of Alberta.
|
1.03
|
Headinqs
|
The
headings used throughout this Agreement form part of this Agreement and shall
be
deemed to have been inserted for convenience of reference only.
ARTICLE
II - FUNDING
|
2.01
|
Timing
of Funding
|
Upon
execution of this Agreement, the Foundation agrees to advance the Funding to
the
Recipient in instalments according to the payment schedule set out in, and
conditional upon the Recipient meeting, the Milestones. The Foundation shall
determine whether the Recipient has reached each of the Milestones in the
Foundation’s sole discretion, which shall be final and binding on the parties
hereto. The Foundation shall determine
whether instalments are to he made to the Recipient or directly to Recipient’s
payables that have been approved for payment by the Recipient. The Recipient
hereby authorizes and directs the Foundation to pay the instalments of the
Funding, or any portion thereof, to:
(a)
the Recipients;
| (b) |
directly
to any one of the Recipient’s payables that have been approved for payment
by the Recipient or
|
| (c) |
directly
to any third party that has been approved for payment by the
Recipient;
|
and
the
Recipient acknowledges and agrees that the Recipient will receive consideration
for the Recipient’s promise to repay the Funding by such above
payment.
|
2.02
|
Use
of Funding and Reporting
|
The
Recipient shall use the Funding to advance the Project. Until the complete
Funding has been advanced, the Recipient shall report to the Foundation in
accordance with the Milestones, or earlier if requested by the Foundation,
with
financial information on expenses incurred, progress made by the Recipient
on
the Milestones since last reporting to the Foundation (or such applicable period
as the Foundation may request) and any material changes anticipated for the
remainder of the Project. Thereafter the Recipient shall report to the
satisfaction at the Foundation, as reasonably requested by the
Foundation.
3
ARTICLE
III — ROYALTY
|
3.01
|
Royalty
|
The
Recipient shall within sixty (60) days after the end of each Fiscal Year pay
to
the Foundation an amount equal to five per cent (5%) of Gross Sates (to an
annual maximum of ONE HUNDRED THOUSAND DOLLARS $100,000.00) for such preceding
Fiscal Year, starting with the Recipient’s 2005 Fiscal Year.
| 3.02 |
Maximum
Royalty
|
Notwithstanding
Article 3.01 (Royalty) hereof, the royalties paid by the Recipient to the
Foundation shall not exceed two times the amount of Funding actually advanced
by
the Foundation pursuant to this Agreement.
| 3.03 |
Certificate
of Gross Sales
|
The
Recipient shall within sixty (60) days after the end of each Fiscal Year provide
the Foundation a Certificate of Gross Sales for such proceeding Fiscal Year,
starting the Fiscal Year that the Foundation last paid to the Recipient an
instalment of the Funding, in the event that such Certificate of Gross Sales
is
not available within such sixty (60) days, the Recipient shall provide the
Foundation with an estimate of Gross Sales verified by a senior officer. The
Recipient shall then provide the Foundation with a Certificate of Gross Sales
within ninety (90) days of the end of the previous Fiscal Year at which time
any
adjustment for the royalty already submitted (if any) will be made.
|
3.04
|
Prepayment
|
The
Recipient may prepay all or any part of the maximum royalty set out in Article
3.02 (Maximum Royalty) at any time without notice or bonus.
|
3.05
|
Place
of Payment
|
The
Recipient shall make all payments to be made to the Foundation hereunder to
the
address for notice for the Foundation pursuant to Article 7.01 (Notices)
hereof
4
ARTICLE
IV—ADDITIONAL COVENANTS OF RECIPIENT
|
4.01
|
Restrictions
on Transferring Rights
|
|
(1)
|
The
Recipient shall not transfer, assign or otherwise dispose of any
right,
title or other interest which the Recipient may have or hereinafter
acquire in the Product unless each such transfer, assignment or
disposition is made conditional on such transferee, assignee or party
to
the disposition entering into an agreement with the Foundation; such
agreement to be similar in form and content IC’ this Agreement. PROVIDED
HOWEVER. that the restrictions set forth In this Article 4.01
(Restrictions on Transferring Rights) shall not apply to sales of
the
Product in final form in the ordinary course of business of the Recipient
to wholesales, distributors, or
consumers,
|
|
(2)
|
Notwithstanding
Subsection (1) above and provided that the Recipient is not in default
of
this Agreement the Recipient may with the prior written consent of
the
Foundation sublicense its rights in the Product to third parties
on
commercially reasonable terms. Without limiting the generality of
the foregoing,
the Foundation shall be permitted to withhold its consent to any
such
sublicense in any of the following
circumstances:
|
|
(a)
|
the
Recipient does not provide the Foundation with the form of the sublicense
that it proposes to enter into; or
|
|
(b)
|
the
Recipient does not provide the Foundation with sufficient information
regarding the sublicensee or
|
|
(c)
|
the
proposed sublicense may significantly reduce the amount of royalties
or
potential royalties payable by the Recipient to the Foundation pursuant
to
this Agreement or
|
|
(d)
|
the
proposed sublicense is for substantially all of the Recipient’s rights in
commercially viable parts of the
Product.
|
The
Recipient shall only enter into a sublicense that is materially in the same
form
that the Foundation consented to. The Recipient shall provide the Foundation
with a copy of such a sublicense within a reasonable period of time after its
execution.
|
4.02
|
Restrictions
on Corporate Structure
|
If
the
Recipient is a corporation, and as long as the Recipient has not paid its
maximum royalty as set out in Article 3.02 (Maximum Royalty), the Recipient
shall not make, nor permit, nor suffer any changes to the Recipients directors
or senior management of the Recipient as of the date of this Agreement without
the. Foundation’s written approval.
5
|
4.03
|
Maintain
Significant Alberta Presence
|
The
Recipient shall maintain a Significant Alberta Presence at all times throughout
the term of this Agreement, the failure of which shall be an
event
of default under this Agreement.
ARTICLE
V-RECORDS
| 5.01 |
Disclosure
|
The
Recipient shall, with respect to the financial information required pursuant
to
Article 3.03 (Certificate of Gross Sales), maintain true and accurate records,
accounts, books and data which shall accurately reflect all particulars which
may be relevant to such information. The books, papers, documents or records
evidencing or relating to that information required for purposes of Article
3.03
(Certificate of Gross Sales) shall be open for audit and inspection and for
taking copies thereof by authorized representatives of the Foundation and the
Recipient shall provide the Foundation’s representatives with reasonable access
to all premises occupied by the Recipient.
| 5.02 |
Confidentiality
|
The
Foundation shall use reasonable efforts to not disclose any confidential
Information made available in connection with this Agreement, which confidential
information shall include, without limitation, any information contained in
the
Application and any information referred to in Article 5.01 (Disclosure). The
Foundation shall use reasonable efforts to maintain any information received
in
connection herewith in confidence, and shall use the information only for the
purposes contemplated hereunder; however, it will not assume responsibility
for
the appropriation or misuse of information by those not directly employed by
the
Foundation: for example, external reviewers, site visitors or consultants which
may be
used
in connection with the Application or any matter relating to this Agreement.
The
Recipient expressly agrees that the Foundation may report on this Agreement
and
publish information about this Agreement including information about the
principal investigators, the Recipient and the title and description of the
Project and the Product.
|
5.03
|
Disclosure
re: Certain Shareholders
|
The
Recipient shall provide the Foundation with written notice of any proposed
or
actual change in the number of shares of the Recipient owned by the shareholders
set out in Appendix “C” that the Recipient becomes aware of including the
details of the transaction known by the Recipient.
6
ARTICLE
VI - DEFAULT
| 6.01 |
Default
|
Upon:
| (a) |
the
failure of the Recipient to pay to the Foundation any royalty owing
to the
Foundation pursuant to Article 3.01 (Royalty) hereof when due;
or
|
| (b) |
the
failure of the Recipient to provide the Foundation with the Certificate
of
Gross Sales as and when due pursuant to Article 3.03 (Certificate of
Gross
Sales); or
|
| (c) |
the
breach of Article 4.01 (Restrictions on Transferring Rights);
or
|
| (d) |
the
breach of Article 4.02 (Restrictions on Corporate Structure);
or
|
| (e) |
the
failure of the Recipient to maintain a Significant Alberta Presence
as
required pursuant to Article 4.03 (Maintain Significant Alberta Presence):
or
|
| (f) |
the
Recipient making an assignment for the benefit of creditors, or making
an
assignment or having a petition or a receiving order made against the
Recipient under the Bankruptcy
& Insolvency Act (Canada),
or becoming bankrupt or insolvent making an application for relief
under
the provisions of any statute now or hereafter in force concerning
bankrupt or insolvent debtors, or any action whatsoever, legislative
or
otherwise shall be taken with a view to the winding up, dissolution
or
liquidation of the Recipient; or
|
| (g) |
any
other default under this Agreement remaining outstanding for Thirty
(30)
days.
|
at
the
option of the Foundation, the maximum royalty set out in Article 3.02 (Maximum
Royalty) shall become immediately due and payable. The determination of whether
a default exists or has been cured shall be in the sole discretion of the
Foundation.
|
6.02
|
Enforcement
|
The
Recipient covenants to pay any and all costs incurred by the Foundation,
including without limitation, solicitor’s fees on a solicitor and own client
basis (full indemnity) and all fees for agents, employees or other costs
incurred in the successful enforcement of any provision of this Agreement or
for
the curing of any default of
the
Recipient its agents or assigns.
7
ARTICLE
VII -GENERAL
|
7.01
|
Notices
|
My
notices herein provided for or permitted to be given by the Foundation to the
Recipient or vice versa shall be sufficiently given if mailed, postage prepaid,
addressed to, as the case may be,
to
the
Foundation at
Xxxxx
0000
00000-
000 Xxxxxx
Xxxxxxxx,
Xxxxxxx
X0X
0X0
or
to the
Recipient at
1123
Dentistry - Pharmacy Building
University
of Alberta
Xxxxxxxx,
Xxxxxxx
X0X
0X0
Any
party
may at any time give notice in writing to the other of any change of address
of
the party giving such notice and from and after the giving of such notice the
address herein specified shall be deemed to be the address of such party for
the
giving of notices hereunder.
|
7.02
|
Acknowledgement
of No Property Interest
|
The
Foundation acknowledges that nothing contained in this Agreement entitles the
Foundation to a property interest in the Product of any kind whatsoever- and
that this Agreement does not act in any way whatsoever as an assignment,
disposition, or transfer of any right in or to the Product.
|
7.03
|
Further
Assurances
|
The
Recipient and the Foundation shall execute and deliver to each other such
further documents and assurances as may be necessary or desirable to carry
out
the intention of this Agreement.
|
7.04
|
Severability
|
If
any
portion of this Agreement shall for any reason be declared invalid or
unenforceable by a court of competent jurisdiction, the remaining portion shall
remain in full force and effect as if this Agreement had been executed with
such
invalid portion eliminated and it is hereby declared the intention of the
parties hereto that they would have executed the remaining portion of this
Agreement without including any such part which might be declared
invalid.
8
|
7.05
|
Execution
In Counterparts
|
This
Agreement may be executed in several counterparts, each of’ which once so
executed shall be deemed to be an original and such counterparts shall each
constitute one and the same instrument.
7.06 Successors
and Assigns
The
terms
of this Agreement shall extend to and enure to the benefit of and be
binding on
the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
|
7.07
|
Technology
Warranty
|
The
Recipient represents and warrants that the Recipient has the exclusive right
to
commercialize the technology that will be used in development of the
Product.
|
7-08
|
Environment
|
The
Recipient shall, at the Recipient’s own cost and expense, comply with all
environmental laws and regulations imposed by any federal, provincial or
municipal government relating to environmental matters including the
manufacturing, treatment, sale, handling, use, storage, disposal, transportation
or method of application of any substance or thing and the protection of the
environment generally for the duration of the Project and this
Agreement
9
IN
WITNESS WHEREOF the parties hereto have executed this Agreement with effect
from
and as of the date first above written.
|
Per:
signed
X.X.
Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
VP Drug Development
(I
have authority to bind the Recipient)
Per:
signed
Xxx
Xxxxxx
Name:
Xxx Xxxxxx
Title:
Chief Financial Officer
(I
have authority to bind the Recipient)
ALBERTA
HERITAGE FOUNDATION FOR
MEDICAL
RESEARCH
Per:
________________________________
Name:
Title:
(I
have authority to bind the Foundation)
Per:_________________________________
Name:
Title:
(I
have authority to bind the
Foundation)
|
10
