LICENSE AGREEMENT

DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms will have the respective meanings set forth below:

(a)  

“ Agreement ” means this License Agreement, including any recitals hereto and any Schedules annexed hereto, as the same may be amended from time to time in accordance with the provisions hereof; “hereof”, “hereto” and “hereunder” and similar expressions mean and refer to this Agreement and not to any particular article or section.

(b)  

" Confidential Information " means all information in written or other recorded form, including paper and electronic forms, that is disclosed by a disclosing party (the " Discloser ") to a recipient (the " Recipient ") and that is marked or otherwise designated  as “Confidential”, except that Confidential Information does not include information:

(i)  

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

(ii)  

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

(iii)  

obtained by the Recipient from a third party with a valid right to disclose it, provided that the third party is not under a confidentiality obligation to the Discloser; or,

(iv)  

independently developed by employees, agents or consultants of the Recipient who had no knowledge of or access to the Discloser's information as evidenced by the Recipient's business records.

(c)  

 “ Gross Revenue ” means: (a) the invoiced amount actually paid to the Licensee for Products, less any standard trade allowances or discounts actually deducted; and (b) the fair market value of any shares or other securities, and all other consideration directly or indirectly collected or received, whether by way of cash, credit or other value received by the Licensee from any source arising as a result or consequence of the exploitation by the Licensee of the Technology or Improvements, or from the marketing, manufacturing, sale or distribution of the Products.

(d)  

 “ Improvements " means, collectively, all Licensee Improvements, Licsensor improvements, and Joint Improvements.

(e)  

“ IP Rights ” means all intellectual property rights relating to the Technology and Improvements, and subject to protection by intellectual property laws in any country of the world, arising under statutory or common law, contract or otherwise, and whether or not perfected, including without limitation, all:

(i)  

Patent Rights;

(ii)  

rights associated with works of authorship, including without limitation copyrights, moral rights, copyright applications, copyright registrations;

(iii)  

rights associated with trademarks, service marks, trade names, logos, trade dress, goodwill and the applications for registration and registrations thereof;

(iv)  

rights relating to the protection of trade secrets, know-how and confidential information, including, but not limited to, formulae, procedures, protocols, techniques and results of experimentation and testing, which are necessary or useful to make, have made, use, develop, sell, import or seek regulatory approval to market a composition, or to practice any method or process, at any time claimed or disclosed or disclosed in any issued patent or pending patent application;

(v)  

rights analogous to those set forth in this definition; and,

(vi)  

any and all other proprietary rights relating to intangible property now existing, hereafter filed, issued or acquired.

(f)  

“ Joint Improvements ” means all improvements, variations, updates, modifications, and enhancements relating to the Technology made and/or conceived jointly by the Licensee and by the Licensor at any time after the Effective Date, and which cannot be legally used or practiced without infringing the IP Rights to the Technology licensed under this Agreement.

(g)  

“ License ” means the license granted by the Licensor to the Licensee pursuant to this Agreement.

(h)  

“ Licensee Improvements " means all improvements, variations, updates, modifications, and enhancements relating to the Technology made and/or conceived solely by the Licensee (including employees, agents or consultants of the Licensee) at any time after the Effective Date, and which cannot be legally used or practiced without infringing the IP Rights to the Technology licensed under this Agreement.

(i)  

“ Licensor Improvements " means all improvements, variations, updates, modifications, and enhancements relating to the Technology made and/or conceived solely by the Licensor (including employees, agents or consultants of the Licensor) at any time after the Effective Date, and which cannot be legally used or practiced without infringing the IP Rights to the Technology licensed under this Agreement.

(j)  

“ MRFBFC ” is defined in Recital A.

(k)  

“ Patent Rights ” means collectively the rights in and to any and all inventions relating to the Technology as disclosed and claimed in the Patents, and all counterparts, continuations, divisionals, continuing prosecution applications, requests for continuing prosecution, extensions, term restorations, renewals, reissues, re-examinations, or substitutions thereof, and all corresponding foreign patent applications, supplementary protection certificates, or other administrative protections, and any foreign counterpart patents resulting therefrom.

(l)  

“ Patents ” means the patent application described in Recital A, including any national or regional patents or patent applications derived therefrom, and any patents issued and patent applications filed in accordance with the provisions of Part 5 of this Agreement.

(m)  

“ Product ” and “ Products ” means any product manufactured or service provided that if made, used, sold, offered for sale or imported absent the License granted hereunder would infringe either a Valid Claim or other IP Rights to the Technology or Improvements granted hereunder.

(n)  

“ Royalty ” is defined in Part 4 of this Agreement.

(o)  

“ Sublicense ” means the sublicense to be granted by the Licensee to any sublicense subsequent to this Agreement, as further described in Part 3 hereof.

(p)  

“ Technology ” is defined in Recital A.

(q)  

“ Valid Claim ” means either (a) a claim of an issued and unexpired patent included within the Patents, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, un-appealable or un-appealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application included within the Patents, which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of such application.

PROPERTY RIGHTS IN AND TO THE TECHNOLOGY

As between the Licensor and the Licensee, the Licensee acknowledges and agrees that the Licensor owns all right, title and interest in and to the Technology and in and to any Licensor Improvements

The Licensee will not contest the validity or scope of any patents or patent applications that may be filed or issued in relation to the Technology or to the Licensor Improvements, and will, at the request of the Licensor, sign all documents as may be required to ensure that ownership of the Technology and all Licensor Improvements remains solely with the Licensor.

The Licensor acknowledges and agrees that the Licensee owns all right, title and interest to any Licensee Improvements.  Except as explicitly set forth in this Agreement, the Licensee is under no restriction or obligation to the Licensor with respect to the Licensee Improvements.

All right, title and interest in any Joint Improvements shall be jointly owned by the Licensor and the Licensee.  On the last business day of June and December of each year during the term of this Agreement, the Licensee will give notice to the Licensor of the details of any Licensee Improvements or Joint Improvements which the Licensee has developed and/or acquired during the previous six month period.

GRANT OF LICENSE

Subject to and in accordance with the terms and conditions set out in this Agreement, the Licensor grants to the Licensee a worldwide, exclusive, royalty-bearing License in all fields of use (including, without limitation, the exclusive right to grant sublicenses in accordance Part 3 hereof) under its IP Rights to the Technology and any Improvements, to use, research, discover, develop, make, manufacture, have made, distribute, offer to sell, provide, import and sell Products for a term as defined in Sections 10 and 11 of this Agreement.

The license granted under this Agreement is granted only to the Licensee and not to any affiliated companies thereof, except for wholly owned subsidiaries of the Licensee, wherein the Licensee will be fully liable for and shall guarantee the performance of such wholly owned subsidiary under the terms and conditions of this Agreement;

The Licensee acknowledges and agrees that U.B.C. may use the Technology without charge in perpetuity in any manner at all for research, scholarly publication, educational and all other non-commercial uses;

The Licensee will not grant Sublicenses of the Technology to third parties without the prior written consent of the Licensor.  Each Sublicense granted by the Licensee hereunder will be subject to and subordinate to the terms and conditions of this Agreement, and will contain terms and conditions consistent with those in this Agreement.  Notwithstanding the terms of the Sublicense, the obligations and liabilities of the Licensee and any sublicense will be joint and several, and the Licensor will not be obliged to seek recourse against any sublicense before enforcing its rights against the Licensee if any action of any sublicense constitutes a breach of this Agreement.

In the event that this Agreement terminates pursuant to Section 9 hereof, any Sublicense granted under the terms and conditions hereof shall, upon the written request of the sublicensee, become a direct license between the Licensor and that sublicensee so long as: (a) the Sublicense does not impose obligations on the Licensor beyond those set forth in this Agreement, and (b) the sublicensee is not in breach of its Sublicense agreement or, mutatis mutandis , the terms of this Agreement.

LICENSE FEES AND ROYALTIES

As a condition of the Licensor granting this License, the Licensee agrees to pay to the Licensor the following license fees:

(a)  

an initial license fee of CAD $10,000 (the "Initial License Fee"), payable in two installments: $5,000 upon execution of this Agreement, and $5,000 within 30 days of the Effective Date of this Agreement;

(b)  

a further license fee of CAD $15,000, to be paid within 90 days of the Effective Date of this Agreement, in partial reimbursement of fees incurred by the Licensor in relation to the preparation, filing and maintenance of patents for the Technology; and,

(c)  

an annual license fee, payable annually on the anniversary of the Effective Date of this Agreement, according to the following schedule:

The Licensee will also pay to the Licensor a royalty calculated as 2% of the Gross Revenue, and 15% of any and all consideration directly or indirectly received by the Licensee from