EXHIBIT 10.40
CONFIDENTIAL TREATMENT REQUESTED BY QLT INC.
Amended and Restated License 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:
QLT Inc., a British Columbia company, having a place of business at 887 Great
Northern Way, Vancouver, British Columbia, Canada, V5T 4T5
(the “Licensee”)
WHEREAS:
A. The University has been engaged in research during the course of which it has
invented, developed and/or acquired certain technology relating to [**]
compounds, therapies and/or uses as set out on Schedules “A” and “B”, which
schedules shall be updated annually;
B. The University and the Licensee have agreed that all research conducted by
the University or the Licensee prior to the Commencement Date of this Agreement
(as hereinafter defined) which has resulted in the invention, development and/or
acquisition of the technology set out in Schedules “A” and “B” was conducted
under the direction of the principal investigators, [**];
C. The technology described on Schedule “B” was invented, developed and/or
acquired under the direction of [**] as a faculty member of the University
together with employees of the Licensee or other third parties;
D. The University has granted to the Licensee a number of separate licenses set
out on Schedule “C” (collectively, the “Existing License Agreements”) with
respect to the technology identified on Schedules “A” and “B”;
E. It is the intention of the University and the Licensee to enter into this
license agreement to amend and restate any and all of the Existing License
Agreements on terms and conditions set out herein; and
F. The University is desirous of entering into this Agreement with the objective
of furthering society’s use of its advanced technology, and to generate further
research in a manner consistent with its status as a non-profit, tax exempt
educational institution.
     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. DEFINITIONS:
1.1 In this Agreement, unless a contrary intention appears, the following words
and phrases shall mean:

  (a)   “Accounting”: means an accounting statement setting out in detail how
the amount of Revenue was determined,     (b)   “Affiliated Company” or
“Affiliated Companies”: means 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”: means any part of the
Information which is furnished by either party to the other and designated at
that time as confidential, whether orally or in writing but excluding any part
of the Information:

  (i)   possessed by the Recipient prior to receipt from 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 said third party is not known by the Recipient to be
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 Confidential Information as evidenced by the
Recipient’s business records,

  (d)   “Date of Commencement” or “Commencement Date”: means this Agreement will
be deemed to have come into force on the Date of Commencement which shall be the
1st day of January, [**], and shall be read and construed accordingly,     (e)  
“Discloser”: means a party to this Agreement providing its Confidential
Information to the other party as Recipient,     (f)   “Effective Date of
Termination”: means the date on which this Agreement is terminated pursuant to
Article 18,     (g)   “Improvements”: means, collectively, the QLT Improvements
and the UBC Improvements,     (h)   “Information”: means any and all Technology
and any and all Improvements and any and all oral, written, electronic or other
communications and other information disclosed or provided by one party to the
other 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,

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  (i)   “Patents”: means, collectively, the patents and patent applications
listed in Schedules “A” and “B”, including any patents or patent applications
that may be added to Schedules “A” and “B” from time to time, and any
counterparts, Continuations-In-Part, renewals, divisionals, reissues,
corresponding international patent applications, continuations and any patents
resulting therefrom, and which have not yet expired or been abandoned;     (j)  
“Product(s)”: means goods manufactured using the Technology or Improvements,
including Visudyne;     (k)   “QLT Improvements”: means any and all patentable
improvements, variations, updates, modifications, enhancements and alterations
related to the Technology which are conceived, invented, developed and/or
acquired by the Licensee (but not jointly by the Licensee and the University) at
any time which claim priority from any of the patents or patent applications
which comprise the Technology and cannot be used or practised without a licence
of Technology;     (l)   “QLT New Technology”: means any new discovery or
invention, whether patentable or not, which:

  (i)   is conceived, invented, developed and/or acquired by the Licensee (but
not jointly by the Licensee and the University), at any time, and     (ii)   is
not a QLT Improvement, a UBC Improvement or UBC New Technology;

  (m)   “Recipient”: means a party to this Agreement receiving Confidential
Information of the other party as Discloser;     (n)   “Retirement Date” means
March 31, [**];     (o)   “Revenue”: means, without duplication, all revenues,
receipts, monies, and the fair market value of all other consideration received,
whether by way of cash or credit or any [**] or any other licensee or party
claiming a right by or through such party, from the marketing, manufacturing,
sale, licensing, or distribution of the Technology, Improvements, Visudyne
and/or other Products in any or all parts of the world where the Licensee is
permitted by law and this Agreement to market, sell or distribute Technology,
Improvements, Visudyne and/or other Products, less the following deductions to
the extent included in the amounts invoiced and thereafter actually allowed and
taken:

[**].
Without limiting the generality of the foregoing, Revenue shall also include,
without duplication, all initial license fee payments (or any share thereof)
made to the Licensee, [**] pursuant to each sublicense agreement entered into by
the Licensee relating to the Technology and any Improvements, Visudyne and/or
other Products. For greater clarity, it is confirmed that Revenue shall only
include [**] received by the Licensee in excess of the direct reimbursement for
the actual costs (including overhead for which the Licensee has been reimbursed)
of such [**] incurred by the Licensee pursuant to a written [**] agreement.
Where any Revenue is derived from a country other than Canada it shall be
converted to the equivalent in Canadian dollars at the rate of exchange set by
the Licensee’s
 

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principal bank for buying such currency on the Royalty Due Dates. The amount of
Canadian dollars pursuant to such conversion shall be included in the Revenue.
[**]

  (p)   “Royalty Due Dates”: 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.     (q)   “Technology”: the Patents together with any and all
compounds, knowledge, know-how and/or technique or techniques invented,
developed and/or acquired, prior to the Commencement Date by: (i) the
University; or (ii) jointly by the University and the Licensee; 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,    
(r)   “UBC Improvements”: Any and all improvements, variations, updates,
modifications, enhancements and alterations related to the Technology, including
all improvements, variations, updates, modifications, enhancements and
alterations relating to photodynamic compounds or therapies, which are
conceived, invented, developed and/or acquired solely by UBC Personnel, or by
UBC Personnel jointly with the Licensee at any time after the Commencement Date,
whether patentable or not,

  (i)   if patentable, claim priority from any of the patents or patent
applications which comprise the Technology and can not be used or practiced
without a licence of Technology,     (ii)   if not patentable, which relate
directly to the Technology, or     (iii)   inventions or developments by [**]
relating to [**].

  (s)   “UBC New Technology”: any new discovery or invention, whether patentable
or not, which:

  (i)   is conceived, invented, developed and/or acquired by UBC Personnel (but
not jointly by the Licensee and the University) which relate to the Technology,
at any time, and     (ii)   is not a UBC Improvement, a QLT Improvement, or QLT
New Technology;

  (t)   “UBC Personnel” shall mean all persons employed by or attending the
University including without limitation, University faculty members, research
associates, post-doctoral fellows, graduate students and undergraduate students
and staff, [**] and, for the period prior to the Retirement Date, [**];     (u)
  “UBC Trade-marks”: any mark, trade-mark, service mark, logo, insignia, seal,
design, symbol, or device used by the University in any manner whatsoever; and

 

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  (v)   “Valid Patent Claim” means a claim in any unexpired Patent which forms a
part of the Technology, which:

  (i)   is part of a pending application for a Patent which claim has not been
held invalid; or     (ii)   has matured into an issued patent which has not been
held invalid by a non-appealed or unappealable decision by a court or other
appropriate body of competent jurisdiction.

The scope of a Valid Patent Claim shall be limited to its terms as set forth in
the Patent itself or as defined by any court or appropriate body of competent
jurisdiction.

  (w)   “Visudyne”: [**].

2. PROPERTY RIGHTS IN AND TO THE TECHNOLOGY:
2.1 The parties hereto hereby acknowledge and agree that:

  (a)   the University owns any and all right, title and interest in and to:

  (i)   the Technology that was conceived, invented, developed and/or acquired
solely by UBC Personnel;     (ii)   any UBC Improvements that are conceived,
invented, developed and/or acquired solely by UBC Personnel; and     (iii)   any
UBC New Technology;

  (b)   the Licensee shall own any and all right, title and interest in and to:

  (i)   the QLT Improvements; and     (ii)   the QLT New Technology.

  (c)   the University and the Licensee shall jointly own any and all right,
title and interest in and to:

  (i)   the Technology that was conceived, invented, developed and/or acquired
jointly by UBC Personnel and the Licensee; and     (ii)   any UBC Improvements
that are conceived, invented, developed and/or acquired jointly by UBC Personnel
and the Licensee.

2.2 The parties shall enter into such further agreements and execute any and all
documents as may be required to ensure that ownership of the Technology, any
Improvements, UBC New Technology, and QLT New Technology vest with, or remains
with, the parties as set out in Article 2.1.
2.3 Not less than once per year during each and every year of the term of this
Agreement, the parties shall exchange in writing the details of any and all
Improvements which the University or the Licensee have developed and/or acquired
during the previous twelve month period.
 

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3. GRANT OF LICENSE:
3.1 In consideration of 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 license to use and sublicense the
Technology, all UBC Improvements and to manufacture, distribute, and sell
Products on the terms and conditions hereinafter set forth during the term of
this Agreement (the “License Grant”).
3.2 For greater clarity it is confirmed that nothing in this Agreement, and in
particular Article 3.1, shall be interpreted as granting to the Licensee any
license or right to the UBC New Technology.
3.3 Subject to Article 4.1, the license granted herein is personal to the
Licensee and is not granted to any Affiliated Company or Affiliated Companies.
3.4 [**]
3.5 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 non-commercial research, scholarly publication,
educational or other non-commercial use. The Licensee hereby grants to the
University a worldwide, non-exclusive license to use the QLT Improvements
without charge in any manner whatsoever for non-commercial research, scholarly
publication, educational or other non-commercial use.
3.6 The Licensee shall give written notice to the University if its chief place
of business in a jurisdiction outside British Columbia, prior to beginning
business in that other jurisdiction. The inadvertent failure of the Licensee to
comply with this Section 3.6 shall not give rise to a right of termination by
the University under Section 18.3.
3.7 This Agreement amends and restates the Existing License Agreements. As
between the University and the Licensee, the Existing License Agreements
described on Schedule “C” hereto shall hereby be terminated and of no further
force or effect. To the extent such Existing License Agreements have third party
signatories, the University and the Licensee agree that they shall make
reasonable efforts to execute, together with such third parties, a termination
agreement with respect to all of the Existing License Agreements. The rights
granted by the Licensee to the Technology and UBC Improvements prior to the date
of execution of this Agreement are not subject to Article 4 or the other
obligations to be imposed on sublicensees set out in this Agreement. Royalties
and other payments paid by the Licensee to the University in respect of the
Existing License Agreements prior to the Commencement Date shall be retained by
the University without credit therefor hereunder, and, in respect of periods
prior to the Commencement Date for which the Licensee has not yet made a royalty
payment to the University pursuant to the Existing License Agreements, the
Licensee shall make royalty payments in accordance with the terms of this
Agreement.
4. SUBLICENSING:
4.1 The Licensee shall have the right to grant sublicenses to Affiliated
Companies and other third parties with respect to the Technology and any UBC
Improvements without the prior written consent of the University. The Licensee
will furnish the University with a copy of each sublicense granted within
30 days after execution.
4.2 Any sublicense granted by the Licensee shall contain covenants by the
sublicensee to observe and perform similar terms and conditions to those in
Schedule “D” to
 

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this Agreement. The University acknowledges and agrees that this Section 4.2
shall not apply to the [**] dated [**] between Licensee and [**], as amended.
5. ROYALTIES:
5.1 In consideration of the license granted hereunder, the Licensee shall pay to
the University a royalty as follows:

  (a)   [**] of all Revenue derived from Visudyne     (b)   [**] of all Revenue
derived from the Technology listed in Schedule “A” (as amended from time to
time). whether or not such Revenue is also derived from Technology listed in
Schedule “B”;     (c)   [**] of all Revenue derived from the Technology listed
in Schedule “B” (as amended from time to time);     (d)   [**] of all Revenue
derived from any UBC Improvement; and     (e)   [**] of all Revenue derived from
any QLT Improvement.

For greater clarity it is confirmed that the royalty rates in paragraphs 5.1(a),
(b), (c), (d) and (e) are not intended to be cumulative and that only a single
royalty not less than [**], and not greater than [**], shall be payable with
respect to the Revenue received or derived from any Product. For further
clarity, the royalties due pursuant to paragraphs 5.1 (a), (b), (c), (d) and
(e) shall be payable for so long as [**].
5.2 The royalty rates set in Article 5.1(b), (c), (d) and (e) will be reduced by
up to [**] for any Product (other than Visudyne) which satisfies (and continues
to satisfy) each of the following [**] conditions:

  (a)   [**]

For greater certainty, notwithstanding anything in this Article 5.2, the final
royalty payable by the Licensee to the University shall not be less than [**] of
the Royalties determined in accordance with Article 5.1.
The royalty shall become due and payable within 60 days of each respective
Royalty Due Date and shall be calculated with respect to the Revenue received by
the Licensee in the three month period, immediately preceding the applicable
Royalty Due Date.
5.3 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 law.
5.4 Visudyne and all other Products shall be deemed to have been sold and
included in the Revenue by:

  (a)   the Licensee when Revenue is actually received, provided that the
Licensee diligently pursues same; and     (b)   any sublicensee when Revenue is
reported to the Licensee by such sublicensee.

 

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5.5 Subject only to Articles 5.6 and 5.7, any transaction, disposition, or other
dealing involving the Technology or Improvements or any part thereof between the
Licensee or any sublicensee and another person that is not made at fair market
value shall be deemed to have been made at fair market value, and the fair
market value of that transaction, disposition, or other dealing shall be added
to and deemed part of the Revenue and shall be included in the calculation of
royalties under this Agreement.
5.6 No royalties will be payable on:

  (a)   Products used in research, pre-clinical trials, clinical trials or for
compassionate use for which the Licensee does not receive consideration;     (b)
  payments made to the Licensee other than those on account of Revenue, or any
amounts received by the Licensee as reimbursement for direct out of pocket
expenses (including overhead for which the Licensee has been reimbursed)
incurred and charged by the Licensee for further research, development or
regulatory approval of the Technology, Improvements or Products;     (c)   sales
among the Licensee, its Affiliates, sublicensees and sub-sublicensees or other
licensees, but royalties shall be payable on all sales by the Licensee, its
Affiliates, sublicensees, or sub-sublicensees to a third party (other than an
Affiliate, sublicensee, sub-sublicensee or other licensee).

5.7 If at any time, and from time to time, a third party in any country shall,
under the right of a [**], by a competent governmental authority, manufacture,
use or sell any Product with respect to which royalties would otherwise be
payable pursuant to this Agreement, then the Licensee may [**] in such country
of Product to an amount [**] by said party as consideration for the [**].
6. ANNUAL LICENSE FEE:
6.1 In further consideration for the license granted hereunder, the Licensee
shall pay to the University, in addition to all other amounts due under this
Agreement, an annual maintenance fee of [**] (Canadian funds) payable on or
before the anniversary of the Commencement Date, and annually thereafter during
the term of this Agreement (the “Annual Maintenance Fee”). Neither all nor any
part of the Annual Maintenance Fee paid shall be refundable to the Licensee
under any circumstances.
7. PATENTS:
7.1 The parties acknowledges that the ownership of the Patents and patent
applications are as set forth in Schedules “A” and “B”, notwithstanding the
manner in which ownership is registered in any patent office in any jurisdiction
and which Schedules shall be updated by mutual agreement not less than once a
year during the term of this Agreement (the “Patent Portfolio”), which updating
shall include the addition of all Improvements.
7.2 Subject to Article 7.5, the Licensee shall prudently manage the Patent
Portfolio and shall take all reasonable steps as may be required to protect and
preserve the Patent Portfolio. The Licensee agrees to pay all costs in relation
to the management of the Patent Portfolio and any further applications made by
the Licensee pursuant to Article 7.4 incurred after the date of execution of
this Agreement. Without limiting the generality of the forgoing the Licensee
agrees to pay for all costs with respect to the Patents, patent applications,
divisionals, substitutions, continuations, continuations in part, all claims of
foreign patent applications and
 

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any and all patents relating to the Technology and any UBC Improvements licensed
hereunder, and with respect to any and all maintenance fees for any and all
patents relating to the Technology and any UBC Improvements licensed hereunder.
7.3 Within 30 days of presentation of receipts and/or invoices by the University
to the Licensee, the Licensee will reimburse the University for all costs
incurred to date with respect to any and all patents relating to the Technology
and any UBC Improvements licensed hereunder.
7.4 The Licensee shall have the right to apply for further patents in other
jurisdictions, or continuations, continuations-in-part, divisions, reissues,
re-examinations or extensions of the Patents, or any further applications made
hereunder, in the name of the University with respect to the Technology or any
UBC Improvement that may be patentable, and the Licensee shall pay all costs of
applying for, registering and maintaining the same. [**]. In the event that this
Agreement is terminated for any reason whatsoever, the Licensee shall pay all
outstanding costs relating to such patent applications and shall direct the
patent agents responsible for such patent applications to take all further
instructions, if any, relating to such applications from the University.
7.5 Should the Licensee decide to:

  (a)   discontinue pursuing patent protection in relation to the Patent
Portfolio, or any continuation, continuation-in-part, division, re-issue,
re-examination or extension of the patents in the Patent Portfolio, or     (b)  
not pursue patent protection in relation to the Patents in the Patent Portfolio
in any jurisdiction, or     (c)   discontinue or not pursue patent protection in
relation to any further process, use or products arising out of the Technology
or UBC Improvements in any jurisdiction,

then the Licensee shall provide the University with a minimum of 60 days written
notice of its decision to discontinue or not to pursue such patent protection
(the “Discontinued Patent”) in sufficient time for the University to file a
patent application, or continue pursuing an existing patent application. During
the 60 day transition period, the Licensee shall be responsible for all costs of
filing, prosecuting and maintaining the Patent Portfolio. After the 60 day
transition period, provided that the University diligently pursues such
Discontinued Patent application, or maintains any existing registration for the
Discontinued Patent, the Discontinued Patent shall be excluded from the License
Grant under this Agreement.
7.6 For the purposes of greater clarity, the parties agree that should the
Licensee decide not to pursue patent protection in relation to the Patents in a
specific jurisdiction other than the [**], for reasonable commercial reasons,
this shall not invoke the provisions of Article 7.5.
7.7 The Licensee shall provide to the University once each year during the term
of this Agreement a report of all patents filed and/or maintained in the
preceding twelve month period relating to the Technology, UBC Improvements and
QLT Improvements.
7.8 In the event of the issuance of any new patent for use of the Technology or
any UBC Improvements, the Licensee shall have the right to become, and shall
become the Licensee, of the same without charge, all pursuant to the terms
contained herein.
 

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7.9 During the term of this Agreement, without the consent of the University,
the Licensee shall not contest the validity or scope of any University patent
including any Patent(s) in the Patent Portfolio.
7.10 The Licensee will ensure proper patent marking for all Technology and any
UBC Improvements licensed hereunder and, where reasonable to do so, shall
clearly mark the appropriate patent numbers on any Products made using the
Technology and any UBC Improvements or any patented processes used to make such
Products.
8. DISCLAIMER OF WARRANTY:
8.1 Except as expressly set out in this Agreement, the University makes no
representations, conditions, or warranties, either express or implied, with
respect to the Technology, or any Improvements, or any Products. Without
limiting the generality of the foregoing, the University specifically disclaims
any implied warranty, condition, or representation that the Technology, or any
Improvements, or any 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.

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 any
Improvements, or any Products, even if the University has been advised of the
possibility of such defect, error, fault, or failure. The Licensee acknowledges
that it has been advised by the University to undertake its own due diligence
with respect to the Technology, and any Improvements.
8.2 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.
8.3 Except as expressly set out in this Agreement, nothing in this Agreement
shall be construed as:

  (a)   a warranty or representation by the University as to title to the
Technology and/or any Improvement, or 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, trade-marks, industrial design or
other intellectual property rights,     (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, or     (c)   the conferring by the
University of the right to use in advertising or publicity the name of the
University or UBC Trade-marks.

8.4 Except as previously disclosed in writing by one Party to the other, the
Parties warrant that, to the best of their knowledge, without making any
enquiry, as of the date of execution of this Agreement, in respect of the
Technology which is identified in the unmodified

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Schedules “A” and “B” as of the date of execution of this Agreement, all
inventors listed therein have assigned their rights in the Patents to the
respective Party, and no claims have been filed and served on such party or
threatened in writing in respect of the Technology.
8.5 Notwithstanding Article 8.3, in the event of an alleged infringement of the
Technology or any UBC Improvements or any right with respect to the Technology
or any UBC Improvements, the Licensee shall have, the right to prosecute
litigation designed to enjoin infringers of the Technology or any UBC
Improvements. The University agrees to provide reasonable cooperation to the
Licensee, 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.
8.6 In the event that any complaint alleging infringement or violation of any
patent or other proprietary rights is made against the Licensee or a sublicensee
of the Licensee with respect to the use of the Technology or any UBC
Improvements, or the manufacture, use or sale of any 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 8.5(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)   solely to the extent that any final
disposition of the litigation that will restrict the claims in or admit any
invalidity of any Patent(s) or significantly adversely affect the University’s
rights, no such disposition of the litigation shall be taken without full
consultation with and approval by the University, not to be unreasonably
withheld or delayed,     (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).

9. INDEMNITY AND LIMITATION OF LIABILITY:
9.1 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 Technology or any Improvements or any Products
licensed under this Agreement by the Licensee or its sublicensees, or their
customers or end-users howsoever the same may arise.
9.2 Subject to Article 9.3, the University’s total liability, whether under the
express or implied terms of this Agreement, in tort (including negligence), or
at common law, for any loss or damage suffered by the Licensee, whether direct,
indirect, special, or any other similar or like

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damage that may arise or does arise from any breaches of this Agreement by the
University, its Board of Governors, officers, employees, faculty, students, or
agents shall be limited to the [**].
9.3 In no event shall the University be liable for [**] arising from any breach
or breaches of this Agreement.
9.4 [**]
10. PUBLICATION AND CONFIDENTIALITY:
10.1 The Discloser’s Confidential Information shall be developed, received, and
used by the Recipient solely in furtherance of the purposes set forth in this
Agreement subject to the terms and conditions set forth in this Article 10.
10.2 The Recipient shall keep and use all of the Confidential Information in
confidence and will not, without the Discloser’s prior written consent, disclose
any Confidential Information to any person or entity, except those of the
Recipient’s officers, faculty, students, staff, employees, consultants, agents
and assigns who require said Confidential Information in performing their
obligations under this Agreement. The Recipient covenants and agrees that it
will initiate and maintain an appropriate internal program limiting the internal
distribution of the Confidential Information.
10.3 The Recipient shall not use, either directly or indirectly, any
Confidential Information for any purpose other than as contemplated herein
without the Discloser’s prior written consent.
10.4 In the event that the Recipient is required by judicial or administrative
process to disclose any or all of the Confidential Information, the Recipient
shall promptly notify the Discloser, and when available, shall allow the
Discloser reasonable time to oppose such process before disclosing any
Confidential Information.
10.5 Notwithstanding any termination or expiration of this Agreement, the
obligations created in this Article 10 shall survive and be binding upon the
Recipient, its successors and assigns.
10.6 Notwithstanding, Articles 10.1, 10.2, 10.3 and 10.8, the University shall
not be restricted from presenting at symposia, national or regional professional
meetings, or from publishing in journals or other publications accounts of its
research relating to the Information, provided that with respect to Confidential
Information only, the Licensee shall have been furnished copies of the
disclosure proposed therefor at least 30 days in advance of the date for
submission of same for presentation or publication and does not within 30 days
after receipt of the proposed disclosure object to such presentation or
publication. Any objection to a proposed presentation or publication shall
specify the portions of the presentation or publication considered objectionable
(the “Objectionable Material”). Upon receipt of notification from the Licensee
that any proposed publication or disclosure contains Objectionable Material, the
University and the Licensee shall work together to revise the proposed
publication or presentation to remove or alter the Objectionable Material in a
manner acceptable to the Licensee, in which case the Licensee shall withdraw its
objection. In the event that an objection is made, disclosure of the
Objectionable Material shall not be made for a period of 6 months after the date
the Licensee has received the proposed publication or presentation relating to
the Objectionable Material. The University shall co-operate in all reasonable
respects in making revisions to any proposed disclosures if considered by the
Licensee to contain Objectionable Material. The University shall not be
restricted from publishing or presenting the proposed
 

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disclosure as long as the Objectionable Material has been removed. After the
6 month period has elapsed, the University shall be free to present and/or
publish the proposed publication or presentation, whether or not it contains
Objectionable Material. In respect of any disclosures made pursuant to this
Section, at the Licensee’s request, the Licensee’s Confidential Information
shall be deleted therefrom prior to such disclosure.
10.7 The Licensee requires of the University, and the University agrees insofar
as it may be permitted to do so at law, that this Agreement, and each part of
it, is confidential and shall not be disclosed to third parties, as the Licensee
claims that such disclosure would or could reveal commercial, scientific or
technical information and would significantly harm the Licensee’s competitive
position and/or interfere with the Licensee’s negotiations with prospective
sublicensees. Notwithstanding anything contained in this Article, the parties
hereto acknowledge and agree that the University may identify the title of this
Agreement, the parties to this Agreement, and the names of the inventors of the
Technology and any UBC Improvements.
10.8 The parties acknowledge that: (a) this Agreement is in part, a license of
know-how, and (b) the definition of Confidential Information contained herein
applies only to Information disclosed by one party to the other; and
(c) Information regarding the Technology may have arisen at the University, and
(d) the University would have no obligation of confidence in respect of such
Information without this Section 10.8. Notwithstanding the definition of
Confidential Information contained in this Agreement, the University shall use
reasonable efforts to maintain the confidentiality of the Information arising at
the University respecting the Technology and the Improvements, unless same is
Information falling within the terms of Section 1.1(c)(ii) or
(iii).Notwithstanding the rest of this Article 10, the Licensee’s obligations of
confidence and use respecting the University’s Confidential Information are
subject to the Licensee’s rights to disclose and use the Technology and UBC
Improvements in the exercise of the Licensee’s rights under the License Grant in
Article 3.
11. PRODUCTION AND MARKETING:
11.1 The Licensee shall not use any of the UBC Trade-marks or make reference to
the University or its name in any advertising or publicity whatsoever, without
the prior written consent of the University, except as required by law. Without
limiting the generality of the foregoing, neither party shall issue a press
release with respect to this Agreement or any activity contemplated herein
without the prior review and approval of same by the other party, except as
required by law. If either party is required by law to act in contravention of
this Article, such party shall provide the other party with sufficient advance
notice in writing to permit the other party to bring an application or other
proceeding to contest the requirement.
11.2 The Licensee represents and warrants to the University that:

  (a)   it has the infrastructure, expertise and resources to develop and
commercialize the Technology and any UBC Improvements;     (b)   it has the
infrastructure, expertise and resources to track and monitor on an ongoing basis
performance under the terms of each sublicense agreement entered into by the
Licensee; and     (c)   it has the infrastructure, expertise and resources to
initiate and maintain an appropriate program limiting the distribution of the
University’s Confidential Information, Technology and any UBC Improvements, and
any related biological materials as set out in this Agreement.

11.3 Subject to the following, the Licensee shall use reasonable efforts to
develop and, subject to obtaining regulatory approval, promote, market and sell
Products and utilize the

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Technology and any UBC Improvements and to meet or cause to be met the market
demand for Products and the utilization of the Technology and any UBC
Improvements on a product-by-product basis. The University acknowledges that,
with respect to Visudyne and the Technology and any UBC Improvements respecting
Visudyne, the Licensee shall be deemed to be making such reasonable efforts so
long as Visudyne is being marketed. Without limiting the generality of the
foregoing, the Licensee covenants and agrees that it shall notify the University
in writing if it no longer intends to proceed with the development and
commercialization of any of Product embodying any material part of the
Technology or UBC Improvements (the “Non-Commercialized Technology”). Upon the
University’s receipt of such written notice, the Non-Commercialized Technology
shall be excluded from the License Grant under this Agreement and if jointly
owned by the Licensee and the University shall be [**].
11.4 In the event that the University is of the view that the Licensee is in
breach of Article 11.3, the University shall notify the Licensee in writing,
specifying the portion of the Technology or UBC Improvements for which it
alleges that the Licensee has not used reasonable efforts as specified in
Article 11.3 (the “Disputed Technology”). The parties shall use good faith
efforts to resolve the matter for a period of sixty (60) days following receipt
of written notice by the Licensee. If the parties fail to resolve the matter
within that time period, they shall appoint a mutually acceptable person as an
independent evaluator (the “Evaluator”) to conduct the evaluation set forth in
Article 11.5. In the event that the parties cannot agree on such an Evaluator,
the appointing authority shall be the British Columbia International Commercial
Arbitration Centre.
11.5 Unless the parties mutually agree otherwise, the following rules and
procedures shall govern the conduct of the parties and the Evaluator before and
during the investigation by the Evaluator:

  (a)   within 30 days of the appointment of the Evaluator each party shall
provide to the Evaluator and the other party copies of all documents, statements
and records on which the party intends to rely in presenting its position to the
Evaluator;     (b)   within 45 days of the appointment of the Evaluator the
Licensee shall provide to the Evaluator and the University a written summary of
its position respecting the Disputed Technology. On receipt of the Licensee’s
summary the University shall have 15 days to prepare and submit to the Licensee
and the Evaluator its own summary in reply to the summary submitted by the
Licensee;     (c)   on receipt of the documents, statements, records and
summaries submitted by the parties the Evaluator shall have 30 days within which
to conduct such further inquiries as he or she may deem necessary for the
purpose of reviewing the efforts made by the Licensee with respect to the
Disputed Technology in compliance with the requirements of Article 11.3. For the
purpose of conducting such an inquiry, the Evaluator shall have the right to:

  (i)   require either party to disclose any further documents or records which
the Evaluator considers to be relevant;     (ii)   interview or question either
orally (or by way of written questions) one or more representatives of either
party on issues deemed to be relevant by the Evaluator;     (iii)   make an “on
site” inspection of the Licensee’s facilities;

 

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  (iv)   obtain if necessary, the assistance of an independent expert to provide
technical information with respect to any area in which the Evaluator does not
have a specific expertise;

  (d)   on completion of the Inquiry described in Article 11.5(c), the Evaluator
shall within 15 days prepare a report setting out his or her findings and
conclusions as to whether or not the Licensee has used reasonable efforts as
specified in Article 11.3 respecting the Disputed Technology. If the Evaluator
has determined that the Licensee has failed to use reasonable efforts as
specified in Article 11.3 respecting the Disputed Technology, then the Evaluator
shall also specify in the report his or her conclusions as to what would
constitute such reasonable efforts, and the Licensee shall thereafter make the
efforts so specified. If the Licensee fails to make such efforts, after notice
of default provided in accordance with the terms of Article 18, then the
University’s sole remedy for failure to make the efforts specified in Articles
11.3 and 11.5(d) respecting the Disputed Technology shall be, at the Licensee’s
option, either:

  (i)   that the Disputed Technology shall be excluded from the License Grant
under this Agreement and, if owned by the Licensee, shall be assigned by the
Licensee to the University without payment of any consideration by the
University; or     (ii)   the remedies set out in Article 18.9 respecting the
Disputed Technology.

11.6 The University may not call for more than one evaluation pursuant to
Article 11.4 in any three year period. The cost of an evaluation hereunder shall
be borne by the unsuccessful party.
12. ACCOUNTING RECORDS:
12.1 The Licensee shall maintain at its principal place of business, or such
other place as may be most convenient, separate accounts and records of all
Revenues, and all business done pursuant to this Agreement, such accounts and
records to be in sufficient detail to enable proper returns to be made under
this Agreement, and the Licensee shall cause its sublicensees to keep similar
accounts and records.
12.2 The Licensee shall deliver to the University on the date 60 days after each
and every Royalty Due Date, together with the royalty payable thereunder, the
Accounting and a report on all sublicensing activity, including an accounting
statement setting out in detail how the amount of Revenue was determined and
identifying each sublicensee and the location of the business of each
sublicensee.
12.3 The calculation of royalties shall be carried out in accordance with
generally accepted Canadian accounting principles (“GAAP”), or the standards and
principles adopted by the U.S. Financial Accounting Standards Board (“FASB”)
applied on a consistent basis.
12.4 The Licensee shall retain the accounts and records referred to in
Article 12.1 above for at least [**] years after the date upon which they were
made and shall permit on reasonable notice, and no more than once every year,
any 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
 

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expense. If an inspection of the Licensee’s records by the University shows an
under-reporting or underpayment by the Licensee of any amount to the University,
in excess of [**], then the Licensee shall reimburse the University for the cost
of the inspection as well as pay to the University any amount found due [**]
within 30 days of notice by the University to the Licensee.
12.5 During the term of this Agreement and thereafter, the University shall use
reasonable efforts to ensure that all information provided to the University or
its representatives pursuant to this Article remains confidential and is treated
as such by the University.
13. INSURANCE:
13.1 Unless satisfactory arrangements are made between the Licensee and the
University with respect to a self-insurance program or the requirement for
insurance hereunder is waived by the University sixty (60) days prior to the
commencement of any human clinical trials or other Product testing involving
human subjects by the Licensee or any sublicensee, the Licensee shall procure
and maintain, during the term of this Agreement, the insurance outlined in
Articles 13.2 and 13.3 and otherwise comply with the insurance provisions
contained in Articles 13.2 and 13.3.
13.2 The Licensee shall give written notice to the University:

  (a)   30 days prior to the commencement of the first of any human clinical
trials involving any Product testing involving human subjects by the Licensee or
any sublicensee, (“Human Clinical Trials”), and     (b)   30 days prior to the
first sale of any Product by the Licensee or any sublicensee

of the terms of the appropriate product liability and clinical trials insurance
which it has placed. Such insurance shall in no case be less than the insurance
which a reasonable and prudent businessperson carrying on a similar line of
business would acquire. To the extent available to a reasonable and prudent
businessperson carrying on a similar line of business: (a) this insurance shall
be placed with a reputable and financially secure insurance carrier; (b) shall
include the University, its Board of Governors, faculty, officers, employees,
students, and agents as additional insureds; and (c) shall provide primary
coverage with respect to the activities contemplated by this Agreement. 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.
13.3 The Licensee shall provide the University with certificates of insurance
evidencing such coverage 30 days before commencement of Human Clinical Trials
and 30 days prior to the sales of any Product and the Licensee covenants not to
start Human Clinical Trials, unless the insurance outlined in Article 13.1 or
13.2 is in effect.
13.4 The Licensee shall require that each sublicensee under this Agreement shall
either:

  (a)   [**]

14. ASSIGNMENT:
14.1 Except as expressly permitted hereby, the Licensee will not assign,
transfer, mortgage, charge or otherwise dispose of any or all of the rights,
duties or obligations granted to it under this Agreement without the prior
written consent of the University, which consent will not be unreasonably
withheld. Notwithstanding the foregoing, the Licensee shall have the right to
 

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assign to an Affiliated Company, any entity with which it may merge or
amalgamate, or an entity that acquires all or most of the assets related to the
Technology, the rights granted hereunder with respect to the UBC Improvements,
and/or any Products.
14.2 The University shall have the right to assign its rights, duties and
obligations under this Agreement 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 either case, if such company or society acquires all
or most of the University’s assets related to the Technology and the UBC
Improvements. 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.
15. GOVERNING LAW AND ARBITRATION:
15.1 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the laws of Canada in force therein
without regard to its conflict of law rules. All parties agree that by executing
this Agreement they have attorned to the jurisdiction of the Supreme Court of
British Columbia. Subject to Article 15.2 and 15.3, the British Columbia Supreme
Court shall have exclusive jurisdiction over this Agreement.
15.2 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
Commercial Arbitration Act of British Columbia, or any successor legislation
then in force. The place of arbitration shall be Vancouver, British Columbia.
The language to be used in the arbitration proceedings shall be English.
15.3 Nothing in Article 15.2 shall prevent a party hereto from applying to a
court of competent jurisdiction for interim protection such as, by way of
example, an interim injunction.
15.4 Notwithstanding the rest of this Article 15, if a ruling by a court or
arbitral authority on any dispute between the Licensee and a sublicensee,
regarding the interpretation of the sublicensee’s sublicense agreement, could
reasonably effect the interpretation of this Agreement, then on receipt of
notice of such a dispute from the Licensee, the University may elect to apply to
join in such proceeding. If:

  (a)   the University is permitted to join in such proceeding it shall be bound
by the decision of such court or arbitral authority, in so far as such decision
reasonably effects the interpretation of this Agreement;     (b)   if the
University elects not to join in such proceeding (for reasons other not being
permitted to join) then the University hereby agrees to be bound by the decision
of such court or arbitral authority, in so far as such decision reasonably
effects the interpretation of this Agreement.     (c)   if the University is not
permitted to join in such proceeding, then the University shall not be bound by
the decision of such court or arbitral authority.

If the Licensee and the University retain common counsel to represent them for
the purposes of any such proceeding, then the Licensee shall bear all costs of
such counsel. If the University retains independent counsel, then the Licensee
will bear one-half of the cost of such counsel.

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16. NOTICES:
16.1 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,
or fax, all postage and other charges prepaid, at the address for such party set
forth below or at such other address as any party may hereinafter designate in
writing to the others. Any notice personally delivered or sent by fax shall be
deemed to have been given or received at the time of delivery, or faxing. Any
notice mailed as aforesaid shall be deemed to have been received on the
expiration of five days 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.

     
If to the University:
  The Director
 
  University — Industry Liaison Office
 
  University of British Columbia
 
  #103 — 6190 Agronomy Road
 
  Vancouver, British Columbia
 
  V6T 1Z3
 
  Telephone: (604)-822-8580
 
  Fax: (604)-822-8589
 
   
If to the Licensee:
  Attention: President and Chief Executive Officer
 
  QLT Inc.
 
  887 Great Northern Way
 
  Vancouver, B.C.
 
  V5T 4T5
 
  Telephone: (604)-707-7000
 
  Fax: (604)-707-7001
 
    Attention: Legal Department
 
  QLT Inc.
 
  887 Great Northern Way
 
  Vancouver, B.C.
 
  V5T 4T5
 
  Telephone: (604)-707-7000
 
  Fax: (604)-707-7001

17. TERM:
17.1 This Agreement and the license granted hereunder shall terminate on the
expiration of a term of [**], whichever event shall last occur unless earlier
terminated pursuant to Article 18 herein. Upon the later of the expiry of the
term of [**], the Licensee shall thereafter have in perpetuity, a fully paid up
world-wide, exclusive license to use and sublicense the Technology and UBC
Improvements and to manufacture, distribute, and sell any Products, without
further accounting to the University.
18. DEFAULT AND TERMINATION:
18.1 This Agreement shall automatically and immediately terminate without notice
to the Licensee 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, provided that if such proceedings are initiated against the Licensee
by a third party and are not initiated by the
 

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Licensee, the Licensee shall have a 60 day period following the commencement of
any such proceedings to discharge such proceedings, and, if such proceedings are
discharged within such period, the termination shall be of no effect.
18.2 The University may, at its option, terminate this Agreement immediately on
the happening of any one or more of the following events by delivering notice in
writing to that effect to the Licensee:

  (a)   if any resolution is passed by the Licensee or voluntary order made or
other steps taken by the Licensee for the winding up, liquidation or other
termination of the existence of the Licensee other than as a result of a
disposition of its substantially all of its assets to another party,     (b)  
if the Licensee ceases to carry on its business other than as a result of a
disposition of its substantially all of its assets to another party,     (c)  
if the Licensee commits a material breach of the requirement to obtain and
maintain insurance pursuant to Article 13.4,     (d)   if, as a result of the
operation of Articles 11.3 or 11.5(d), no Technology or UBC Improvements remain
subject to the License Grant under this Agreement

18.3 Other than as set out in Articles 18.1 and 18.2, if either party shall be
in material default under or shall fail to comply with the material terms of
this Agreement then the non-defaulting party shall have the right to terminate
this Agreement by written notice to that effect if:

  (a)   such default is reasonably curable within 30 days after receipt of
notice of such default and such default or failure to comply is not cured within
30 days after receipt of written notice thereof, or     (b)   such default is
not reasonably curable within 30 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.

18.4 If this Agreement is terminated pursuant to Article 18.1 or 18.2, or 18.3
the Licensee shall make royalty payments to the University in the manner
specified in Article 5, and 6 and the University may proceed to enforce payment
of all outstanding royalties or other monies 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, successively or concurrently at
the option of the University.
18.5 Upon any termination of this Agreement, the Licensee shall:

  (a)   except as required by law, deliver up to the University within a
reasonable time, not to exceed six months from the Effective Date of
Termination, all Technology and any UBC Improvements in its possession or
control (except for a copies retained for record keeping purposes) and shall
thereafter have no further right of any nature whatsoever in the Technology or
any UBC Improvements.     (b)   have a reasonable time to liquidate its
inventory of Products, provided that such period shall not exceed six months
from the Effective Date of Termination. The Licensee shall then deliver or cause
to be delivered to the University an accounting within 210 days from the
Effective Date of Termination. The accounting will specify, in or on such terms
as the University may in its

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      reasonable discretion require, the inventory or stock of Products
manufactured and remaining unsold on the Effective Date of Termination. The
Licensee will continue to make royalty payments to the University in the same
manner specified in Article 5 and 6 on all unsold Products that are sold in
accordance with this Article 18.5(b), notwithstanding anything contained in or
any exercise of rights by the University under Article 18.5 herein.

18.6 Except as required by law, upon any termination of this Agreement, each
party shall cease to use the Confidential Information of the other party, and
upon written request and at the option of the other party, shall deliver or
destroy (and certify the destruction) of all copies of same.
18.7 Notwithstanding the termination of this Agreement, Article 12 shall remain
in full force and effect until [**] years after

  (a)   all payments of royalty required to be made by the Licensee to the
University under this Agreement have been made by the Licensee to the
University, and     (b)   any other claim or claims of any nature or kind
whatsoever of the University against the Licensee has been settled.

18.8 In the event that this Agreement is terminated, any sublicense granted by
the Licensee under this Agreement shall be assigned by QLT to the University and
shall remain in full force and effect between the sublicensee and the
University, except that the University’s obligations thereunder shall be no
greater than the University’s obligations under this Agreement. At the request
of the Licensee, the University shall acknowledge to a sublicensee the
University’s obligations to the sublicensee under this Section.
18.9 Except as otherwise expressly set out in this Agreement, including Articles
18.1, 18.2 and 18.3, the University and the Licensee agree that, in the event of
breach of this Agreement by the Licensee, the University’s sole remedies shall
be:

  (a)   a judgement for payment of any and all monetary amounts that are due and
owing by the Licensee to the University pursuant to this Agreement and
enforcement of any such judgement;     (b)   injunctive relief to enjoin further
breach of this Agreement;     (c)   specific performance by the Licensee of the
Licensee’ obligations hereunder;     (d)   damages; and     (e)   recovery of
costs associated with seeking and obtaining such judgement, injunctive relief,
specific performance or damages.

The University may exercise the foregoing remedies concurrently.
19. MISCELLANEOUS COVENANTS OF LICENSEE:
19.1 Licensee will provide to the University such reasonable assistance,
necessary background and additional information as may be required by the
University in determining an equitable sharing of revenues with the inventors of
the Technology.
 

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19.2 The Licensee hereby represents and warrants to the University that QLT Inc.
is a corporations duly organized, existing, and in good standing under the laws
British Columbia and has the power, authority, and capacity to enter into this
Agreement and to carry out the transactions contemplated by this Agreement, all
of which have been duly and validly authorized by all requisite corporate
proceedings.
19.3 The Licensee represents and warrants that it has the expertise necessary to
handle the Technology and any UBC Improvements with care and without danger to
the Licensee, its employees, agents, or the public. The Licensee shall not
accept delivery of the Technology or any UBC Improvements until it has requested
and received from the University all necessary information and advice to ensure
that it is capable of handling such Technology and any UBC Improvements in a
safe and prudent manner.
19.4 The Licensee shall comply in all material respects with all laws,
regulations and ordinances, whether Federal, State, Provincial, County,
Municipal or otherwise with respect to the Technology and any UBC Improvements
and/or this Agreement.
19.5 [**]
19.6 The Licensee shall pay all taxes and any related interest or penalty
howsoever designated and imposed as a result of the existence or operation of
this Agreement, including, but not limited to, tax which the Licensee is
required to withhold or deduct from payments to the University. The Licensee
will furnish to the University such evidence as may be required by Canadian
authorities to establish that any such tax has been paid. [**]
19.7 [**] to the appropriate governmental authority, and [**] with proof of
payment of such income tax together with official or other appropriate evidence
issued by the appropriate governmental authority sufficient to enable [**].
19.8 The obligations of the Licensee to make all payments hereunder will be
absolute and unconditional and will not except as expressly set out in this
Agreement, be affected by any circumstances, including without limitation any
set-off, compensation, counterclaim, recoupment, defence or other right which
the Licensee may have against the university, or anyone else for any reason
whatsoever.
19.9 All amounts due and owing to the University hereunder but not paid by the
Licensee on the due date thereof shall bear interest in Canadian dollars at the
rate of [**] per annum calculated annually not in advance. Such interest shall
accrue on the balance of unpaid amounts from time to time outstanding from the
date on which portions of such amounts become due and owing until payment
thereof in full.
20. GENERAL:
20.1 On 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 any 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.
20.2 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
 

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liable for any act, omission, representation, obligation or debt of any other
party, even if informed of such act, omission, representation, obligation or
debt.
20.3 Subject to the limitations hereinbefore expressed, this Agreement shall
enure to the benefit of and be binding upon the parties, and their respective
successors and permitted assigns.
20.4 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.
20.5 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.
20.6 Marginal 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.
20.7 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.
20.8 In the event that any Article, part, section, clause, paragraph or
subparagraph of this Agreement shall be held to be indefinite, invalid, illegal
or otherwise 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.
20.9 The parties hereto acknowledge that the law firm of Richards Buell Sutton
has acted solely for the University in connection with this Agreement and that
all other parties hereto have been advised to seek independent legal advice.
20.10 Subject to Article 3.7, this Agreement sets forth the entire understanding
between the parties and replaces any and all previous License Agreements
regarding the Technology and Improvements between the parties to this Agreement.
No modifications hereof shall be binding unless executed in writing by the
parties hereto.

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23

20.11 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 or the parties hereto may require.
IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement on
the 14th day of December, 2007 but effective as of the Date of Commencement.

     
SIGNED FOR AND ON BEHALF of
   
THE UNIVERSITY OF BRITISH COLUMBIA
   
by its duly authorized officers:
   
 
   
/s/ Angus Livingston
 
Authorized Signatory
   
 
   
 
Authorized Signatory
   
 
   
QLT Inc.
   
Per:
   
/s/ Bob Butchofsky
 
Authorized Signatory
   
 
   
/s/ Cameron Nelson
 
Authorized Signatory
   

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24

SCHEDULE “A”
DESCRIPTION OF TECHNOLOGY AND IMPROVEMENTS — [**] ROYALTIES
[**]
 

**   Confidential Treatment Requested.

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25

SCHEDULE “B”
DESCRIPTION OF TECHNOLOGY AND IMPROVEMENTS — [**] ROYALTY
[**]
 

**   Confidential Treatment Requested.

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26

SCHEDULE “C”
EXISTING LICENSE AGREEMENTS
[**]
 

**   Confidential Treatment Requested.

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27

SCHEDULE “D”
SUBLICENSE TERMS
[**]
 

**   Confidential Treatment Requested.