LICENCE AGREEMENT

Exhibit 10.14

THE SYMBOL ‘***’ IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AS CONFIDENTIAL

 

LICENCE AGREEMENT

 

BETWEEN:

 

THE UNIVERSITY OF BRITISH COLUMBIA , a corporation continued under the University Act of British Columbia and having its administrative offices at 2075 Wesbrook Mall, in the City of Vancouver, in the Province of British Columbia, V6T 1W5

(the "University")

AND:

ANGIOTECH PHARMACEUTICALS, INC ., a corporation duly incorporated pursuant to the laws of British Columbia and having an office at 6660 N.W. Marine Drive, in the City of Vancouver, in the Province of British Columbia

(the "Licensee")

WHEREAS:

A.

The Licensee and the University have been engaged in research pursuant to a Research Agreement dated October 21, 1993, as amended from time to time, (the "Research Agreement") during the course of which they have jointly invented and/or developed certain technology relating to polymeric drug delivery methodologies incorporating paclitaxel and analogues and derivatives thereof;

B.

The University is desirous of entering into this Agreement with the objective of furthering society's use of its advanced technology, and in particular its rights in and to the technology referred to above, and to generate further research in a manner consistent with its status as a non-profit, tax exempt educational institution; and

C.

The Licensee is desirous of the University granting an exclusive worldwide license. to the Licensee to use or cause to be used its rights in and to such technology for any lawful purpose and to manufacture, distribute, market, sell, lease and/or license or sublicense products derived or developed from such technology and to sell the same to the general public during the term of this Agreement.

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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1.0

DEFINITIONS:

 

1.1

In this Agreement, unless a contrary intention appears, the following words and phrases shall mean:

 

(a)

"Accounting": an accounting statement setting out in reasonable detail how the amount of Revenue and sublicensing revenue was determined,

 

(b)

"Affiliated Company" or "Affiliated Companies": two or more corporations where the relationship between them is one in which one of them is a subsidiary of the other, or both are subsidiaries of the same corporation, or fifty percent (50%) or more of the voting shares of each of them is owned by the same person, corporation or other legal entity,

(c)

"Confidential Information": any part of the Information which is designated, by the University as confidential, whether orally or in writing, but excluding any part of the Information:

(i)

possessed by the Licensee prior to receipt from the University, other than through prior disclosure by the University, as evidenced by the Licensee's business records;

(ii)

published or available to the general public otherwise than through a breach of this Agreement;

(iii)

obtained by the Licensee from a third party with a valid right to disclose it, provided that said third party is not under a confidentiality obligation to the University, or

(iv)

independently developed by employees, agents or consultants of the Licensee who had no knowledge of or access to the University's Information as evidenced by the Licensee's business records,

(d)

"Date of Commencement" or "Commencement Date": this Agreement will be deemed to have come into force on the Date of Commencement which shall be the 1st day of August, 1997, and shall be read and construed accordingly,

(e)

"Effective Date of Termination": the date on which this Agreement is terminated pursuant to Article 17,

(f)

"Improvements": improvements, variations, updates, modifications, and enhancements made to the Technology at any time after the Commencement Date which are included in the Patents, which means such improvements shall claim priority to the Patents,

 

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(g)

"Information": any and all Technology and any and all Improvements, the terms and conditions of this Agreement, and any and all oral, written, electronic or other communications and other information disclosed or provided by the parties including any and all analyses or conclusions drawn or derived therefrom regarding this Agreement and information developed or disclosed hereunder, or either party's raw materials, processes, formulations, analytical procedures, methodologies, products, samples and specimens or functions,

(h)

"Licensee New Technology": inventions, discoveries, improvements, variations, updates, modifications and/or enhancements relating to the Technology Applications developed at any time after the Date of Commencement which are developed solely by the Licensee, to the extent used in combination with the Technology or Improvements for the Technology Applications,

(i)

"Patent(s)": the Patent(s) and Patent applications set out on Schedule "A",

(j)

"Product(s)": goods manufactured in connection with the use of all or some of the Technology, Improvements, and Licensee New Technology,

(k)

"Revenue(s)": all revenues, receipts, monies, and the fair market value of all other consideration directly or indirectly collected or received whether by way of cash or credit or any barter, benefit, advantage, or concession received by the Licensee (including monies collected by the Licensee from any sublicensee of the Licensee, or any partner, joint venture or other agreement, relationship or arrangement with any third party) for the marketing, manufacturing, sale, distribution, sublicensing or leasing of the Technology, or Improvements, or Licensee New Technology and/or any Products for the Technology Applications, in any or all parts of the world where the Licensee is permitted by law to market, manufacture, sell, distribute, or lease the Technology, Improvements, Licensee New Technology and/or any Products, less the following deductions to the extent included in the amounts invoiced and thereafter actually allowed and taken:

(i)

credit, allowances or refunds given on account of returned goods,

(ii)

transportation charges invoiced separately and actually charged to third parties,

(iii)

taxes, duties and customs on all sales of Products,

(iv)

agents' commissions paid by the Licensee for the sale of Products, and

(v)

bona fide special rebates provided by the Licensee for Products purchased by third parties,

 

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(vi)

reimbursement for the direct costs of research and development undertaken by the Licensee;

 

(vii)

equity investments of a third party in the Licensee except to the extent such equity investment may reasonably be considered consideration for the license, sublicense, transfer or other use of the Technology; and

 

(viii)

transfers for compassionate use and emergency use, provided such uses are not for profit.

Where any Revenue is derived from a country other than Canada it shall be converted to the equivalent in Canadian dollars on the date the Licensee is required to make payment with respect to such Revenue pursuant to the terms hereof at the rate of exchange set by the Bank of Montreal for buying such currency. The amount of Canadian dollars pursuant to such conversion shall be included in the Revenue,

(l)

"Royalty Due Dates": Unless otherwise agreed the last working day of March, June, September and December of each and every year during which this Agreement remains in full force and effect,

(m)

"Technology": the Patents, and any and all knowledge, know-how and/or technique or techniques invented, developed and/or acquired, being invented, developed and/or acquired prior to the Date of Commencement by the University relating to the Patents , as amended from time to time, including, without limitation, all research, data, specifications, instructions, manuals, papers or other materials of any nature whatsoever, whether written or otherwise, relating to same,

(n)

"Technology Applications": means coated stents and other coated devices, (including stent grafts, vascular grafts, sweaty balloons and others), perivascular applications (films, pastes and beads), surgical paste applications and rheumatoid arthritis, but specifically does not include vanadium, psoriasis, multiple sclerosis and surgical adhesions (except to the extent surgical paste formulations developed with the University are used) at present and other new product applications conceived of or identified by the Company or its other collaborators in the future independent of the University,

(o)

“UBC Trade-marks": any mark, trade-mark, service mark, logo, insignia, seal, design, symbol, or device used by the University in any manner whatsoever,

 

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2.0

PROPERTY RIGHTS IN AND TO THE TECHNOLOGY:

 

2.1

The parties hereto hereby acknowledge and agree that the University and the Licensee jointly own any and all right, title and interest in and to the Technology, as well as any and all Improvements.

 

2.2

The Licensee shall, at the request of the University, enter into such further agreements and execute any and all documents as may be required to ensure that ownership of the Technology and any Improvements remains with the University and the Licensee.

 

2.3

All Improvements invented or developed will be owned jointly by the University and the Licensee. The Licensee agrees that its rights to use the Improvements which it jointly owns with the University shall be governed by the grant of license contained in Article 3.1 hereof. Any Licensee New Technology invented or developed solely by the Licensee will be owned solely by the Licensee, provided always that the University shall be entitled to receive a royalty on Revenues from all such Licensee New Technology on the terms as set out in Article 5 hereof. Any new technology invented or developed solely by the University will be owned solely by the University, subject to the terms of the Research Agreement.

 

2.4

On the last working day of December of each and every year during which this Agreement remains in full force and effect, the Licensee shall deliver in writing the details of any and all Improvements which the Licensee (and any sublicensees of the Licensee) has developed and or acquired during the previous twelve month period. Such information shall be maintained as confidential by the University and, subject to the terms of this Agreement, shall not be used for any purpose which is not expressly permitted herein.

 

3.0

GRANT OF LICENCE:

 

3.1

In consideration of the license fee payable hereunder and the royalty payments reserved herein, and the covenants on the part of the Licensee contained herein, the University hereby grants to the Licensee an exclusive worldwide licence to use and sublicense the University's rights in and to the Technology and any Improvements and to develop, manufacture, distribute, and sell Products on the terms and conditions hereinafter set forth during the term of this Agreement.

 

3.2

The licence granted herein is personal to the Licensee and is not granted to any Affiliated Company or Affiliated Companies.

 

3.3

The Licensee shall not cross-license the Technology without the prior written consent of the University.

 

3.4

Notwithstanding Article 3.1 herein, the parties acknowledge and agree that the University may use the Technology and Improvements without charge in any manner whatsoever for research, scholarly publication, educational or other non-commercial use.

 

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3.5

As part of the consideration for the rights granted by the University to the Licensee hereunder, the Licensee agrees to pay to the University as an initial licence fee the sum of $[***] (Canadian funds). The said sum shall be paid concurrently with the execution of this Agreement. Neither all nor any portion of the said sum shall be refundable to the Licensee under any circumstances.

4.0

SUBLICENSING:

4.1

The Licensee shall have the right to grant sublicences to Affiliated Companies and other third parties with respect to the Technology and Improvements with the prior written consent of the University, not to be unreasonably withheld or delayed. The University agrees to consider a request from any such proposed sublicensee for the right to be granted a license in the event this Agreement is terminated. The Licensee will furnish the University with a copy of each sublicence granted 30 days prior to execution. The University shall respond to the Licensee within 30 days of delivery of such sublicense, failing which the University shall be deemed to have consented to such sublicense. If required by the Licensee, the University will use its reasonable efforts to expedite a request for consent.

4.2

Any sublicence granted by the Licensee shall be personal to the sublicensee and shall not be assignable without the prior written consent of the University, such consent not to be unreasonably withheld or delayed. Such sublicences shall contain covenants by the sublicensee to observe and perform similar terms and conditions to those in this Agreement.

5.0

ROYALTIES AND CONSIDERATION:

5.1

In consideration of the license granted hereunder, the Licensee shall pay to the University [***] percent ([***]%) of the Revenues.

5.2

All payments of royalties made by the Licensee to the University hereunder shall be made in Canadian dollars without any reduction or deduction of any nature or kind whatsoever, except as may be prescribed by Canadian law.

5.3

Products shall be deemed to have been sold and included in the Revenue when the Licensee receives payment therefore.

.5 .4

The royalties shall be due and payable within thirty (30) days from each Royalty Due Date and shall be calculated with respect to the Revenue in the three month period immediately preceding applicable Royalty Due Date.

5.5

Excluding transactions that have been explicitly exempted from the definition of "Revenue" in this Agreement, the fair market value of any transaction, disposition, or other dealing involving the Technology, any Improvements and Licensee New Technology that occurs between the Licensee, its sublicensees or any other third party including joint venture partners and distributors shall be added to and deemed part of the Revenue even if such transactions were not made at fair market value. For greater certainty, this provision shall also apply to any shares, warrants, options or other consideration which the Licensee receives from a third party in

 

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connection with the marketing, distribution, sublicensing, or other transaction involving the Technology including any milestones or other performance or achievement based payments or obligations.

5.6

The University and the Licensee agree that the University may [***] of the royalty referred to in paragraph 5. hereof in exchange for [***]. For greater certainty, if the University elects to [***] of the royalty referred to in paragraph 5.1 for [***], thereafter the royalty shall be adjusted to [***] of Revenues. This right contained herein may be exercised at any time up to the date upon which the Licensee has been listed and called for trading on the Toronto Stock Exchange for a period of [***].

Neither all nor any portion of the Shares issued hereunder shall be refundable to the Licensee under any circumstances once such Shares have been issued to the University. Such Shares shall be free from any pooling, escrow or other trading restrictions placed upon such Shares by the Licensee, save and except as may be required by applicable legislation or in the event that any regulatory authority having jurisdiction over the Licensee requires there to be a pooling or escrow agreement with respect to such Shares. The Licensee acknowledges and agrees that the University shall have the right to transfer such Shares at any time to any Affiliated Company or to the University of British Columbia Foundation, and the Licensee shall take all such steps or do such acts as may be reasonably required to allow such transfer, subject to applicable securities legislation.

5.7

The Licensee agrees to pay an annual license maintenance fee to the University in the amount of $[***] on the anniversary date of the execution of this license agreement.

 

6.0

PATENTS:

 

6.1

That the Licensee has been and shall continue to pay all costs of filing, prosecuting and maintaining the Patents incurred after the Commencement Date, which Patents shall be in the name of the Licensee or the University, or both, as appropriate.

 

6.2

The Licensee shall have the right to identify any process, use or products arising out of such Technology or an Improvement that may be patentable and may take all steps to apply for a patent in the name of the Licensee and/or the University, as appropriate, provided that the Licensee pays all costs of applying for, registering, and maintaining the patent in those jurisdictions in which the Licensee might designate that a Patent is required.

 

6.3

Should the Licensee decide to:

 

(a)

 discontinue pursuing any patent application, patent prosecution or patent maintenance in relation of any patent or any continuation, continuation-in-part, division, reissue, re examination of extension of a patent application, or

 

(b)

not pursue Patent protection in relation to the Patents in any jurisdiction, or

 

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(c)

discontinue or not pursue patent protection in relation to any further process, use or products arising out of the Technology in any jurisdiction,

 

then the Licensee shall provide the University with notice of its decision to discontinue or not to pursue such patent protection in sufficient time, such time not to be less than 30 clear calendar days prior to the date the patent or patent application would become invalid or be deemed abandoned, for the University to file a Patent application or continue pursuing an existing Patent application at the University's own expense, and if the University takes such action the Licensee shall not have the right to use the Technology and Improvements claimed in any such Patent and/or Patent application in such jurisdiction. Upon receipt of such notice from the Licensee, Schedule "A" hereto will be deemed to be amended to exclude such Patent and/or Patent application from the grant of license contained herein and thereafter, the University shall be free to grant a license of such Patent and/or Patent application to a third party in such jurisdiction.

 

7.0

DISCLAIMER OF WARRANTY:

7.1

That the University makes no representations, conditions, or warranties, either express or implied, with respect to the Technology and Improvements or the Products. Without limiting the generality of the foregoing, the University specifically disclaims any implied warranty, condition, or representation that the Technology or the Products:

 

(a)

shall correspond with a particular description;

(b)

are of merchantable quality;

(c)

are fit for a particular purpose; or

(d)

are durable for a reasonable period of time.

 

That the University shall not be liable for any loss, whether direct, consequential, incidental, or special which the Licensee suffers arising from any defect, error, fault, or failure to perform with respect to the Technology or Products, even if the University has been advised of the possibility of such defect, error, fault, or failure. That the Licensee acknowledges that it has been advised by the University to undertake its own due diligence with respect to the Technology.

 

7.2

That the parties acknowledge and agree that the International Sale of Goods Act and the United Nations Convention on Contracts for the International Sale of goods have no application to this Agreement.

 

7.3

Nothing in this Agreement shall be construed as:

 

(a)

a warranty or representation by .the University as to title to the Technology or that anything made, used, sold or otherwise disposed of under the licence granted in this Agreement is or will be free from infringement of patents, copyrights, trade­marks, industrial design or other intellectual property rights,

 

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(b)

an obligation by the University to bring or prosecute or defend actions or suits against third parties for infringement of patents, copyrights, trade-marks, industrial designs or other intellectual property or contractual rights,

 

(c)

the conferring by the University of the right to use in advertising or publicity the name of the University or UBC Trade-marks.  

 

7.4

Notwithstanding Article 7.3, in the event of an alleged infringement of the Technology or any right with respect to the Technology, the Licensee shall have, upon receiving the prior written consent of the University, not to be unreasonably withheld or delayed, the right to prosecute litigation designed to enjoin infringers of the Technology. Provided that it has first granted its prior written consent, not to be unreasonably withheld or delayed, 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 all recoveries shall enure to the Licensee.

 

7.5

In the event that 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 the Products, the following procedure shall be adopted.

 

(a)

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 (on behalf of itself or a sublicensee),

 

(b)

except as provided in Article 7 5(d), all costs and expenses incurred by the Licensee (or any sublicensee of the Licensee) in investigating, resisting, litigating and settling such a complaint, including the payment of any award of damages and/or costs to any third party, shall be paid by the Licensee (or any sublicensee of the Licensee, as the case may be),

 

(c)

no decision or action concerning or governing any final disposition of the complaint shall be taken without full consultation with and approval by the University, acting reasonably and in a timely manner,

 

(d)

the University may elect to participate formally in any litigation involving the complaint to the extent that the court may permit, but any additional expenses generated by such formal participation shall be paid by the University (subject to the possibility of recovery of some or all of such additional expenses from the complainant),

 

(e)

notwithstanding Article 7.3, if the complainant is willing to accept an offer of settlement and one of the parties to this Agreement is willing to make or accept such offer and the other is not, then the unwilling party shall conduct all further proceedings at its own expense, and shall be responsible for the full amount of any

 

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damages, costs, accounting of profits and settlement costs in excess of those provided in such offer, but shall be entitled to retain unto itself the benefit of any litigated or settled result entailing a lower payment of costs, damages, accounting of profits and settlement costs than that provided in such offer.

 

(f)

the royalties and other amounts payable pursuant to this Agreement shall be paid by the Licensee to the University in trust from the date the complaint is made until such time as a resolution of the complaint has been finalized. If the complainant prevails in the complaint, then the royalties paid to the University in trust pursuant to this Article shall be returned to the Licensee, provided that the amount returned to the Licensee hereunder shall not exceed the amount paid by the Licensee to the complainant in the settlement or other disposition of the complaint. If the complainant does not prevail in the complaint, then the University shall be entitled to retain all royalties and other amounts paid to it pursuant to this Article.

 

 

8.0

INDEMNITY AND LIMITATION OF LIABILITY:

 

8.1

That the Licensee hereby indemnifies, holds harmless and defends the University its Board of Governors, officers, employees, faculty, students, invitees, and agents against any and all claims (including all legal fees and disbursements incurred in association therewith) arising out of the exercise of any 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 T