Document:

kl09005_ex4-4.htm

    
      

    

     

    Exhibit
4.4

    

    

    

    Material
Transfer

    

    and

    

    License
Option Agreement

    

    

    

    

    

    between

    

    Helix
BioPharma Corporation

    

    and

    

    Schering
Corporation

    

    

    

    

    

    December
2000

    

    CONFIDENTIAL TREATMENT
REQUESTED

     

    INFORMATION
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS IDENTIFIED
BY THREE ASTERISKS, AS FOLLOWS “* * *”, AN UNREDACTED VERSION OF THIS DOCUMENT
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    MATERIAL TRANSFER &
LICENSE OPTION AGREEMENT

    

    This
Agreement, effective the latest of the signature dates, is by and between the
following parties:

    

    Helix
BioPharma Corp., having a principal place of business at 3-305 Industrial
Parkway South, Aurora, Ontario  L4G 6X7, Canada (hereinafter referred
to as “Helix”); and

    

    Schering
Corporation, having a principal place of business at 2000 Galloping Hill Road,
Kenilworth, New Jersey 07033 (hereinafter referred to as
“Schering”).

    

    WHEREAS,
Schering has developed certain Material and Proprietary Information (each as
defined below) and desires to protect its proprietary rights in and to the
Material and Proprietary Information;

    

    WHEREAS,
Helix has developed certain Proprietary Information, which includes the Biphasix
Technology (as defined below), and desires to protect its proprietary rights in
and to the Proprietary Information;

    

    WHEREAS
Helix desires to obtain quantities of the Material from Schering for use in the
development of a topical formulation using Helix’ proprietary Biphasix
technology; and

    

    WHEREAS
Schering, being the owner of the entire right, title and interest in the
Material, is willing to provide Helix with the Material for the sole purpose of
conducting such Development Program;

    

    NOW,
THEREFORE, in consideration of the transfer of Material to Helix and to protect
the interests and rights of Schering and Helix, the parties have agreed to the
following:

    

    1.         Definitions:

    

    “Affiliate” shall mean any individual
or entity directly or indirectly controlling, controlled by or under common
control with, a party to this Agreement.  For purposes of this
Agreement, the direct or indirect ownership of fifty percent (50%) or more of
the outstanding voting securities of an entity, or right to receive fifty
percent (50%) or more of the profits or earning of an entity shall be deemed to
constitute control.  Such other relationship as in fact results in
actual control over the management, business and affairs of an entity shall also
be deemed to constitute control.

    

    “Agreement Product” shall mean a
topical formulation of interferon alpha-2b, recombinant, formulated using
Biphasix Technology.

    

    “Biphasix Technology” shall mean the
Helix Patents, the subject matter claimed in the Helix Patents and all of Helix’
know-how related to the practice of such subject matter.

    

    “Development Program” shall mean all
the work necessary to prepare a dossier that would be acceptable to the Canadian
Health Protection Branch (“Health Canada”), the European Union’s Committee for
Proprietary Medicinal Products (“CPMP”) and the US Food and Drug Administration
(“FDA”) for regulatory approval of the Agreement Product for the treatment of

     

     

    
      
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    genital
warts due to HPV infection (the “Primary Indication”) and cervical dysplasia
(the “Secondary Indication”).   The Development Program shall
include, without limitation all preclinical, clinical, pharmacokinetic and
toxicology studies necessary to support such regulatory approvals for the
Agreement Product.

    

    “Helix Patents” shall mean the U.S.
patent applications and patents listed on Exhibit A and all divisions,
continuations, continuations-in-part, reexaminations, reissues, extensions,
registrations and supplementary protection certificates thereof, and all
corresponding foreign patent applications and patents.

    

    “Material” shall mean interferon
alpha-2b, recombinant, meeting the specifications identified in Exhibit
B.

    

    “Proprietary Information” shall mean
know-how and data, as well as trade secrets, technical information, tangible
materials, records and other proprietary technology belonging to one party which
is provided to the other party pursuant to this Agreement.  Schering’s
Proprietary Information shall include, without limitation, any of Schering’s
assays, test procedures, specifications, reference standards, data, processes or
methods relating to the Material or its use, which may be provided to Helix
under this Agreement.  Helix’s Proprietary Information shall include,
without limitation, all assays, test procedures, specifications, reference
standards, data, processes or methods relating to the Biphasix Technology or its
use, which may be provided to Schering under this Agreement.

    

    2. Schering shall provide to Helix,
without charge, sufficient quantities of the Material to enable Helix to conduct
the Development Program; provided that Schering’s obligation to provide Material
shall not exceed an aggregate total of *** without Schering’s prior written
approval.  The Material shall be manufactured in compliance with
current Good Manufacturing Practices (as established pursuant to the U.S. Food,
Drug and Cosmetics Act or otherwise by the U.S. Food and Drug
Administration).  The Material is owned by Schering and shall remain
the property of Schering.  Helix shall be responsible for the control
of the Material, which shall be stored in a locked, secured area, and shall not
distribute or release the Material to any third party, except as necessary for
the performance of the Development Program, without the prior written permission
of Schering.

    

    3.      The Material
shall be used by Helix solely in performance of the Development Program and
Helix shall not use any of the Material for any other purpose without the prior
written approval of Schering.  The Development Program shall be
conducted by Helix in accordance with the plan described in Exhibit C, which
shall be reviewed and approved in advance by Schering.  Any material
changes to the Development Program shall require Schering’s prior written
approval.  Helix shall use diligent efforts to conduct the Development
Program and maintain records and data during and after the term or early
termination of this Agreement in compliance with all applicable legal and
regulatory requirements, including without limitation, any applicable
requirements of the FDA.  Helix shall be solely responsible for the
costs and expenses of performing the Development Program.

    

    4. This Agreement, including the resulting
transfer of Material, constitutes the grant of the limited right to Helix to use
the Material solely to conduct the Development Program.  Helix shall
have no right to sublicense, assign or transfer any of its rights in the
Material to any third

     

     

    
      
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    party.  Schering
shall be free, in its sole discretion, to use the Material for its own purposes
and to distribute the Material to other parties.

    

    5.      In
consideration for the supplies of Material being provided by Schering hereunder,
Helix hereby grants to Schering an exclusive option and right of first refusal
to obtain a worldwide, exclusive license to make, have made, import, export,
use, offer for sale and sell pharmaceutical products containing alpha interferon
in combination with the Biphasix Technology, including without limitation, the
Agreement Product (the “Option”).  Schering may exercise the Option,
in its sole discretion, at any time during the Option Period (as defined below),
by providing Helix with written notice to that effect.  The “Option
Period” shall mean the period extending from the Effective Date until the date
which is sixty (60) days after Schering receives notice, as required under
Section 8(a), of the successful completion of Phase III clinical trials for the
Agreement Product under the Development Program.

    

    (a)   
Upon
exercising the Option, the parties shall have a period of ninety (90) days (the
“Negotiation Period”) to negotiate in good faith and enter into a mutually
acceptable license agreement for the Agreement Product (the License
Agreement”).  The License Agreement shall incorporate the basic
business terms set forth in Exhibit D, and such other terms and conditions,
consistent with the basic business terms, as are reasonable and customary in the
industry for such agreements.

     

    (b)   
Schering
shall have no obligation to enter into the License Agreement (nor any obligation
to make a determination of whether to enter into the License Agreement) prior to
its exercising the Option in accordance with this Section 5.

     

    (c)   
In the
event that Schering does not exercise the Option during the Option Period, then
the Option shall expire upon expiration of the Option Period.

     

    (d)   
During
the Option Period and the Negotiation Period, Helix shall not grant or offer to
grant a license, or assign, transfer or otherwise convey any rights, title or
interest in or to the Agreement Product, or under any patent applications or
patents owned or controlled by Helix which have claims covering the Agreement
Product, its manufacture or use, to any third party.  In addition,
during the Option Period and the Negotiation Period, Helix will not discuss or
evaluate a possible business relationship with any third party, or grant any
licenses or other rights to any third party, relating to the use of Biphasix
Technology in combination with  alpha interferon, nor enter into or
make any understandings or agreements with a third party which would otherwise
diminish the rights granted to Schering under this Agreement, without the prior
written consent of Schering.  Nothing herein shall be construed as
limiting Helix’ right to use the Biphasix Technology in connection with
compounds other than alpha interferon, or to make the Biphasix Technology
available to third parties for use in combination with compounds other than
alpha interferon.

     

    

    6.     
Each
party shall preserve any and all Proprietary Information received from the other
party as confidential and shall not use any such Proprietary Information except
as necessary to conduct the Development Program or as otherwise expressly
permitted hereunder.  The obligations of confidentiality and non-use
under this Agreement shall continue for a period of ten (10) years after the
expiration or termination of this Agreement, at which time it will
cease.  In the event the Proprietary Information is disclosed to the
receiving party in a manner other than in 

     

     

     

    
      
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    writing,
it shall be reduced to written form, marked “Confidential” and transmitted to
the receiving party within fifteen (15) business days of the initial
disclosure.  These confidentiality and non-use restrictions shall not
apply to any Proprietary Information:

    

    (a)  
which is
known by the receiving party prior to its communication by the disclosing party,
as evidenced by the receiving party’s written business records;

     

    (b)  
which is
a matter of public knowledge at the time of such disclosure by the disclosing
party;

     

    (c)  
which is
a matter of public knowledge, without fault on the part of the receiving party,
subsequent to disclosure by the disclosing party.

     

    (d)  
which is
disclosed to the receiving party by a third party lawfully having possession of
such Proprietary Information without an obligation of confidentiality to the
disclosing party;

     

    (e)  
which is
independently developed by the receiving party, or its parent corporation or
their respective Affiliates, without the aid, application or use of the
disclosing party’s Proprietary Information (and/or in the case of Helix the
Material) provided to the receiving party hereunder (and such independent
development can be properly demonstrated by the receiving party);
or

     

    (f)  
which is
required by law, regulation, rule, act, or order of any governmental authority
or agency to be disclosed; provided, however, that the
party required to disclose immediately notify the other party upon receiving
notice of requirement to disclose.

     

    

    7.     
Helix
shall use the Material in compliance with Good Laboratory Practices and Good
Clinical Practices (as set forth in the ICH guidelines) and all applicable laws,
rules and governmental regulations.  Helix represents and warrants
that it will not use in any capacity, in connection with the activities to be
performed under this Agreement, any individual or entity who has been debarred
pursuant to the Federal Food, Drug and Cosmetic Act, as amended.  THE
MATERIAL IS PROVIDED WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR
IMPLIED.  SCHERING MAKES NO REPRESENTATION OR WARRANTY THAT USE OF THE
MATERIAL WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT OF ANY THIRD
PARTY.

    

    8. Helix shall keep Schering informed of
the progress of the Development Program by providing semi-annual written reports
containing sufficient information to enable Schering to monitor the progress and
outcome of the Development Program. Helix shall provide Schering with a written
final report within sixty (60) days after completion of the Development Program
or termination of this Agreement.

    

    (a)   
Helix
shall provide written notice to Schering upon the successful completion of Phase
III clinical trials for the Agreement Product.  Such notice shall
include a detailed report of the data and results of all pre-clinical, clinical
and toxicology studies involving the Agreement Product sufficient to enable
Schering to independently 

     

     

    
      
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    evaluate
the outcome of such studies.  The Option Period described in Section 5
shall begin upon receipt by Schering of such notice.

    

    (b)   
During
the Option Period Schering will be permitted to conduct a due diligence review
of the Agreement Product and the Development Program to enable it to determine
whether or not to exercise the Option.  Upon request, Helix shall
provide Schering with reasonable cooperation in the performance of such due
diligence, which shall include providing Schering access to any additional data,
information and results relating to the results of the Development Program which
may be reasonably necessary to complete the diligence evaluation.

    

    9. Any new invention, development,
biological material or discovery, whether patentable or not, resulting from the
performance of the Development Program, or from the use of Schering’s
Proprietary Information or the Material by Helix in connection therewith, or
otherwise relating to the Agreement Product shall be promptly disclosed in
writing to Schering (individually and collectively referred to herein as
“Invention”).  The parties acknowledge and agree that all rights,
title and interest in and to any Inventions shall be governed by the following
terms:

    
      	
                      (i)  

            	
              Inventions
      that relate solely to alpha interferon and/or the Material shall be solely
      owned by Schering (“Schering
Inventions”);

            

    

     

    
      	
              (ii)  

            	
              Inventions
      that relate solely to the Biphasix Technology shall be solely owned by
      Helix (“Helix Inventions”); and

            

    

     

    
      	
              (iii)  

            	
              Inventions
      which relate to the combination of the Biphasix Technology with alpha
      interferon and/or the Material shall be jointly owned by the parties
      (“Joint Inventions”), subject to the terms and conditions set forth
      herein.

            

    

     

    

    (a)   
Each of
Schering and Helix shall have sole responsibility, at such party’s sole
discretion and expense, for the preparation, filing, prosecution, maintenance,
enforcement and defense of patent applications and patents claiming Schering
Inventions or Helix Inventions, respectively.  The other party shall,
upon request, reasonably assist such party in connection with such
activities.  Reasonable assistance shall include causing the execution
of any patent assignments or other documents necessary to perfect the requesting
party’s title to the Schering Invention or Helix Invention as
applicable.

     

    (b)   
In the
event of any patentable Joint Invention, the parties shall consult and agree
upon mutually acceptable procedures and allocate responsibility for the
preparation, filing, prosecution, maintenance, enforcement and defense of patent
applications and patents.

     

    (c)   
Except as
expressly set forth herein, nothing contained in this Agreement shall be deemed
to grant or create either directly or by implication, estoppel or otherwise any
license, title or other rights under any patents, patent applications or other
proprietary interests to any materials, inventions or discoveries of either
party.

     

    

     

    
      
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    10.          
Helix shall notify Schering within twenty-four (24) hours after learning of any
serious and/or unexpected adverse drug reaction affecting any patient in the
Development Program.  Helix further agrees to follow up such
notification of adverse drug reaction with appropriate reports in compliance
with all applicable legal and regulatory requirements.  Helix shall
provide such notification to: Schering Corporation, 50 Lawrence Road,
Springfield, NJ  07081-3121, Attention:  Senior Director –
Medical and Safety Services, Telephone No.: (973) 921-7400, Facsimile No.: (973)
921-7424

    

    11.           Schering
shall indemnify, defend and hold harmless Helix and its Affiliates, and their
respective directors, officers, agents, and employees from and against any
demands, claims, actions, proceedings or costs of judgments which may be made or
instituted against any of them by reason of personal injury (including death) to
any person, or damage to property, to the extent caused by the use of the
Material to conduct the Development Program.  Notwithstanding the
foregoing, Schering shall have no indemnification obligation or liability and
Helix shall indemnify, defend and hold harmless Schering, its parent corporation
and Affiliates, and their respective officers, directors, agents, and employees
with respect to any demands, claims, actions, proceedings or costs of judgments
which may be made or instituted against any of them by reason of personal injury
(including death) to any person, or damage to property, to the extent caused by:
(i) failure of Helix to comply with any applicable FDA or other governmental or
state requirements, law, rules or regulations applicable to the performance of
its obligations under this Agreement; (ii) the breach by Helix of nay of its
covenants, representations or warranties under this Agreement; or (iii) a
negligent act or omission or willful misconduct by Helix, its directors,
officers, agents or employees related to the performance of the Development
Program.

    

    12.           This
Agreement shall terminate upon expiration of the Option Period.  In
addition, either party shall have the right to terminate this Agreement upon
thirty (30) days’ written notice in the event of a material breach of this
Agreement by the other party; unless the breach is cured during such thirty (30)
day period.  Notwithstanding the foregoing, Sections 6, 7, 8, 9, 10,
11, 13, 14, 15, 16 and 17, and any other applicable provisions extending into
the future shall survive the termination or expiration of this
Agreement.  Upon completion of the Development Program, or the earlier
termination of this Agreement, Helix shall cease use of and shall, at Schering’s
election, return to Schering or destroy any unused Material.  Upon
request, each of Schering and Helix shall return to the other party all copies
of the requesting party’s Proprietary Information in its possession, except for
one archival copy which may be retained by it for purposes of identifying its
obligations under this Agreement.

    

    13.           
Neither
party shall use the name of the other party (or the name of Schering, its parent
corporation or their respective Affiliates) for promotional purposes without the
prior written consent of the party whose name is proposed to be
used.  The parties agree that on or after the Effective Date that
Helix may issue an initial press release as set forth in Exhibit
E.  No other news release, publicity or other public announcement,
either written or oral, regarding the terms and/or existence of this Agreement,
or performance hereunder, shall be made by Schering or Helix without the prior
written approval of the other party; provided, however, that nothing
herein will be deemed to prevent either party from making such disclosures to
the extent required under applicable federal, state or provincial securities
laws or any rule or regulation of any nationally recognized securities exchange
(including, without limitation, the Toronto Stock Exchange), provided same is
accurate and complete.  In such event, however, the disclosing party

     

     

     

    
      
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    shall use
good faith efforts to consult with the other party prior to such disclosure and
where applicable, shall request confidential treatment to the extent
available.

    

    14.          
This
Agreement is not assignable by either party, whether by operation of law or
otherwise, without the prior written consent of the other party.

    

    15.          
This
Agreement shall be governed by and construed in accordance with the laws of New
York, excluding the choice of law provisions.

    

    16.           This
Agreement is intended to be severable.  Should any part or provision
of this Agreement be found to be unenforceable or invalid for any reason, the
remaining parts and provisions will remain in effect.

    

    17.          
This
Agreement constitutes the entire understanding of the parties with respect to
the subject matter hereof and hereby supersedes and replaces all prior
agreements and understandings with respect to the Material, and may be modified
only with written permission of both parties.

    

    

    IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed by duly authorized representatives as of
the last date written below.

    

    HELIX
BIOPHARMA
CORP.                                                                        SCHERING
CORPORATION

    

    By:                 /s/ Donald
Segal                                   By:                 
/s/ David
Poorvin                                      

    

    Name:            Donald
Segal                                        
Name:            
David
Poorvin                                   

    

    Title:              Executive
Vice-President                                                         Title:              
Vice
President                                   

    

    Date:              December 18,
2000                                                                   
Date:             
December 13,
2000

    

     

     

     

     

    
      
        7 

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
A

    

    

    Patents
and Patent Applications (U.S.)

    

    
      	
              Title

            	
              Application No.

            	
              Patent No. / Status

            
	
              Biphasic
      Multilamellar Lipid Vesicles

            	
              08/872,068

            	
              5,853,755

            
	
              Method
      for Preparing Biphasic Multilamellar Lipid Vesicles

            	
              09/042,097

            	
              5,993,851

            
	
              Topical
      Patch for Liposomal Drug Delivery System

            	
              08/342,962

            	
              5,718,914

            
	
              Composition
      and Method for Dermal and Transdermal Administration of a
      Cytokine

            	
              09/216,500

            	
              Pending

            
	
              Biphasic
      Lipid Vesicle Composition for Transdermal Administration of an
      Immunogen

            	
              09/141,875

            	
              5,993,852

            
	
              Composition
      for Transdermal and Dermal Administration of
    Interferon-alpha

            	
              60/195,549

            	
              Pending

            
	
              Composition
      for Transdermal Administration of Insulin

            	
              60/195,401

            	
              Pending

            
	
              Delivery
      of Polynucleotides Using Biphasic Lipid Vesicles

            	
              60/195,945

            	
              Pending

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
B

    

    Specification Limits/Ranges
for Material (interferon alpha-2b)

    

    ***

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
C

    

    Development
Program

    

    ***

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
D

    

    Basic Business Terms for a
License Agreement

    

     

    

    
      	
              Grant:

            	
              Exclusive
      right to make, have made, import, export, use, offer for sale and sell
      pharmaceutical formulations of alpha interferon, including without
      limitation interferon alpha-2b, utilizing the Biphasix Technology within
      the Field, with right to
sublicense.

            

    

    

    
      	
              Field:

            	
              Topical
      alpha interferon formulations

            

    

    

    Territory:               
Worldwide

    

    Duration:               
Life of patents

    

    License
fees:                         $250K             
Exercise of option (within 60 days of phase III completion)

    $500K                      NDA
filing in the US for Primary Indication

    $500K                      HRD
filing in the EU for Primary Indication

    $2.0M                      NDA
approval in the US for Primary Indication

    $1.0M                      HRD
approval in the EU for Primary Indication

    $2.0M                      NDA
approval in the US for Secondary Indication

    $1.0M                      HRD
approval in the EU for Secondary Indication

    

    $3.0M                      When
Net Sales first reach $50M/yr.

    $5.0M                      When
Net Sales first reach $100M/yr.

    $8.0M                      When
Net Sales first reach $150M/yr.

    --------

    $23.25M                  Total
fees

    

    (Each of
the above license fees shall only be payable once on the first occurrence of the
relevant triggering event.)

    

    Royalty:                
5%  on Net Sales up to $50M

    6%  on Net Sales between
$50-$100M

    7%  on Net Sales over
$100M

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
E

     

    Form of Initial Press
Release

    

     

    

    HELIX
BIOPHARMA GRANTS BIPHASTXTM LICENSE OPTION TO SCHERING-PLOUGH

    

    

    Helix
BioPharma today announced that it has signed an agreement with Schering-Plough
Corporation
of Kenilworth, N.1, which grants Schering-Plough the option to obtain an
exclusive

    worldwide
license to use Helix BioPharma's BIPHASIXTM technology in pharmaceutical
products
containing alpha interferon. As part of the license option, Schering-Plough will
supply

    Helix
BioPharma, at no charge, with a quantity of interferon alfa-2b for use in Helix
BioPharma's
planned development program for an interferon alfa-2b BIPHASIXTM cream
for

    the
treatment of genital warts and cervical dysplasia.

    

    Schering-Plough'
s option may be exercised at any time up to a specified period following the
successful
completion of Phase Ill clinical trials. Included in the option agreement are
terms for the grant
of a license to Schering-Plough that provides for milestone payments and
royalties on product
sales:

    

    "We are
very pleased to have signed this agreement with Schering-Plough, the world
leader in the
production and marketing of alpha interferon products, and we look forwardto
working with them on
this important project," said Jerome McElroy, President and Chairman of Helix
BioPharma:kl09005_ex4-5.htm

    
      

    

    Exhibit 4.5

    
       

       

       

      THIS
EMPLOYMENT AGREEMENT
dated for reference the 6th day of August, 2008

       

       

      BETWEEN:

       

      HELIX
BIOPHARMA CORP., a corporation amalgamated

      under the
Canada Business Corporations Act and having its head

      office at
#3 - 305 Industrial Parkway South, Aurora, Ontario L4G

      6X7

      (the
“Company”)

       

      AND:

       

      HEMAN
CHAO, Businessman, of 5 Hogaboom, Aurora,

      Ontario L4G DE5

      (the
“Executive”)

       

      WHEREAS:

       

      A.    the
Executive was the Vice President of Technology of the Company from June 20, 2002
till December 1, 2006 and has been the Vice President of Research of the Company
since December 1, 2006;

       

      B.    the Board
of Directors wishes to continue the Executive’s appointment as the Vice
President of Research of the Company and the Executive has agreed to accept such
appointment;

       

      C.    The
parties wish to enter into an Employment Agreement which reflects the current
terms and conditions of the Executive’s office and employment with the
Company;

       

      THEREFORE in consideration of
the recitals, the following covenants and the payment of one dollar made by each
party to the other, the receipt and sufficiency of which is acknowledged by each
party, the parties agree on the following terms:

       

      ARTICLE
1 ENGAGEMENT AND DURATION

       

      1.1    Engagement

       

      The
Company hereby continues the employment of the Executive as the Vice President
of Research of the Company and the Executive accepts such employment and agrees
to continue to provide services to the Company in such capacity and on the terms
and conditions contained in this Agreement. The Executive acknowledges and
agrees that the Company shall have the right from time to time during the term
of this Agreement to change the title and / or office of the Executive on notice
to the Executive, provided that the changed title and / or office is comparable
to the Executive’s office at the date hereof.

       

      1.2    Term

       

      This
Agreement and the employment of the Executive pursuant hereto shall continue
until terminated by either party pursuant to ARTICLE 7 hereof.

       

      ARTICLE
2 DUTIES

       

      2.1    Performance of
Duties

       

      The
Executive shall perform such services and duties as are normally provided by a
Vice President of Research, 

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      or
comparable officer position, of a company in a business and of a size similar to
the Company’s, and such other services and duties as may reasonably be assigned
from time to time by the directors of the Company.

       

      2.2    Standard of
Care

       

      The
Executive shall, in exercising his powers and performing his functions, act
honestly and in good faith and in the best interests of the Company, shall
exercise the care, diligence and skill of a reasonably prudent person to the
extent necessary to discharge the responsibilities assigned to the Executive and
shall perform faithfully and efficiently such responsibilities.

       

      2.3    Hours

       

      The
Executive shall devote, his full time and attention during normal business hours
to the business and affairs of the Company.

       

      2.4    Other Boards or
Committees

       

      The
Executive’s performance of reasonable personal, civic or charitable activities
or the Executive’s service on any boards or committees of any private or public
companies shall not be deemed to interfere with the performance of the
Executive’s services and responsibilities to the Company pursuant to this
Agreement. The Executive agrees to inform the Board forthwith upon the Executive
being appointed to any such board or committee.

       

      2.5    Principal Place of
Work

       

      The
Executive shall perform his duties primarily at the Company’s principal
Executive offices which are currently located at #3 - 305 Industrial Parkway
South, Aurora, Ontario L4G 6X7, or, subject to section 7.1(d), at such other
location as shall be approved by the Board.

       

      2.6    Reporting

       

      The
Executive shall report directly to the CEO.

       

      2.7    Instructions

       

      The
Executive will, subject to the terms of this Agreement, comply promptly and
faithfully with the Board’s reasonable and lawful instructions, directions,
requests, rules and regulations.

       

      2.8    Change of
Control

       

      In the
event of a change of control of the Company, the Company shall continue to
engage and the Executive shall continue to serve the Company in the same
capacity and have the same authority, responsibilities and status as he had as
of the date immediately prior to the change of control. Following a change of
control, the Executive's services shall be performed at such location as may be
mutually agreed upon between the Company and the Executive provided that such
location shall be within the York Region or Greater Metropolitan Toronto area,
Province of Ontario.

       

      For the
purposes of this Agreement, the occurrence of any one of the following shall be
deemed to constitute a “change of control” (the “Change of
Control”):

       

      (a)   a change
in the composition of the Board of Directors of the Company occurring within any
two-year period, as a result of which fewer than a majority of such directors
are Incumbent Directors. "Incumbent Directors" shall mean directors of the
Company who either:

             
(i)    are
directors of the Company as of the date hereof, or

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

           
(ii)    are
elected, or nominated for election, as directors of the Company by the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination;

      (b)   upon
completion of any merger, arrangement or amalgamation involving the Company,
provided that upon such completion, less than a majority of the directors (or
other persons in a similar capacity, hereinafter referred to as “Merged
Directors”) of the merged, amalgamated, surviving or parent person (the “Merged
Entity”) are Incumbent Directors;

      (c)   when any
Control Person or any person acting jointly or in concert with a Control Person
votes against any proposal put before the shareholders of the Company by the
Board of Directors of the Company, and such proposal is in fact defeated by the
requisite majority of votes of shareholders of the Company;

      (d)   when any
Control Person or any person acting jointly or in concert with a Control Person
votes in favour of any proposal put before the shareholders of the Company other
than by the Board of Directors of the Company and such proposal is in fact
approved by the requisite majority of votes of shareholders of the
Company;

      (e)   when the
Company’s shares listed on any of The Toronto Stock Exchange, NASDAQ, The New
York Stock Exchange or the American Stock Exchange (each, a “Recognized
Exchange”) are de-listed from such Recognized Exchange, provided
that:

            
(i)           
the
Company’s shares are not concurrently listed on another Recognized Exchange;
and

                    
(ii)   at any
time prior to such de-listing, the Company has become either or both of the
following:

                            
A.  controlled,
directly or indirectly, by another person; or

                            
B.   a
subsidiary, directly or indirectly, of another person.

       

      2.9    Interpretation

       

      For
purposes of section 2.8 and this section 2.9:

       

      (a)    all
references to “Company” shall mean and include a Merged Entity as defined in
section 2.8(b);

      (b)    all
references to “Board of Directors” or “directors” shall mean and include Merged
Directors, as defined in section 2.8(b), of a Merged Entity;

      (c)    “Control
Person” means a person who, either alone or together with any person acting
jointly or in concert with such person, beneficially owns, or exercises control
or direction over, 20 per cent or more of the outstanding voting or equity
securities of any class of the Company;

      (d)    it is a
question of fact as to whether a person is acting jointly or in concert with a
Control Person and, without limiting the generality of the foregoing, the
following shall be presumed to be acting jointly or in concert with a Control
Person:

            
(i)    every
person who, as a result of any agreement, commitment or understanding, whether
formal or informal, with the Control Person or with any other person acting
jointly or in concert with the Control Person, acquires or offers to acquire
securities of the Company of the same class as those acquired by the Control
Person;

            
(ii)   every
person who, as a result of any agreement, commitment or understanding, whether
formal or informal, with the Control Person or with any other person acting
jointly or in concert with the Control Person, intends to exercise jointly or in
concert with the Control Person or with any other person acting jointly or in
concert with the Control Person any voting rights attaching to any securities of
the Control Person; and

            
(iii)   every
associate or affiliate (as such terms are used in the Ontario Securities Act) of
the Control Person;

      (e)    “person”
includes an individual, company, partnership, party, trust, fund, association
and any other organized group of persons and the personal or other legal
representative of a person to whom the context can apply according to
law;

      (f)    a person
shall be deemed to be an affiliate of another person if one of them is the
subsidiary of the 

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       other
or if both are subsidiaries of the same person or if each of them is controlled
by the same person;

      (g)    a person
shall be deemed to be controlled by another person or by two or more persons
if,

             
(i)    voting
securities of the first-mentioned person carrying more than 50 per cent of the
votes for the election of directors are held, otherwise than by way of
security  only, by or for the benefit of the other person or by or for the
benefit of the other persons; and

              
(ii)   the votes
carried by such securities are entitled, if exercised, to elect a majority of
the board of directors of the first-mentioned person;

      (h)    a person
shall be deemed to be a subsidiary of another person if:

              
(i)    it is
controlled by,

                    
  A.    that
other, or

                     
 B.     that
other and one or more persons each of which is controlled by that other,
or

                    
  C.     two or
more persons each of which is controlled by that other; or

             
(ii)    it is a
subsidiary of a person that is that other's subsidiary;

      (i)    a person
shall be deemed to own beneficially securities beneficially owned by a person
controlled by the person or by an affiliate of such person; and

      (j)    a person
shall be deemed to own beneficially securities beneficially owned by its
affiliates.

       

      ARTICLE
3 REMUNERATION AND BENEFITS

       

       

      3.1    Annual Base
Salary

       

      The
Company shall pay or provide to the Executive, for his services under this
Agreement, an annual salary, effective as of June 1, 2007, of $160,000.00, and
an annual car allowance of $6000.00, payable semi-monthly on the fifteenth and
the second last banking day of the month as follows:

       

      (a)    base
salary of $6,666.67; and

      (b)    car
allowance of $250.00.

       

      Should
the fifteenth day of any month not be a business day, the base salary and car
allowance otherwise due on such date shall be paid to the Executive on the
immediately preceding business day.

       

      3.2    Annual
Review

       

      The
annual base salary and car allowance referred to in subsection 3.1 shall be
reviewed in the last quarter of each fiscal year of the Company by the Board or
Compensation Committee of the Board (the “Committee”), in consultation with the
Executive, and shall be increased for the following fiscal year by such amount
as is determined by the Board or the Committee, provided that in no event
shall:

       

      (a)    the base
salary and car allowance be less than the base salary and car allowance payable
in the previous fiscal year; and

      (b)    the
increase, in percentage terms, be less than the percentage increase in the
Consumer Price Index, as published by Statistics Canada for the Greater Toronto
Area, over the previous year.

       

      3.3    Bonus

       

      The
Company will, within the first quarter of each fiscal year, pay to the Executive
an annual bonus, based on the Company’s achievement of milestones agreed to by
the Committee and the Executive of the prior fiscal year. Within the first
quarter of each fiscal year, the Committee and the Executive shall agree to
milestones of the Company and the bonus which will be awarded to the Executive
if one or more milestones are achieved. The Company may, in addition to the
foregoing, pay a bonus to the Executive from time to time based on performance
or milestones achieved but not previously agreed.

       

       

      3.4    Reimbursement of
Expenses

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      The
Company shall reimburse the Executive for all reasonable expenses incurred by
him in the performance of this Agreement provided that the Executive provides
the Company with written expense accounts with respect to each calendar month.
Without limiting the generality of the foregoing but for greater certainty, the
Company shall reimburse the Executive for insurance and maintenance costs
related to maintaining a car.

       

      3.5    Insurance

       

      The
Company shall provide the Executive with group life, long-term disability,
extended medical and dental insurance coverage in accordance with the policies
and procedures of the Company in effect and, to the extent permissible by law,
the Company shall extend medical and dental insurance coverage to the
Executive's wife and child dependents.

       

      3.6    Directors and Officers
Liability Insurance

       

      Throughout
the term of this Agreement, the Company shall provide the Executive with
director's and officer's liability insurance appropriate to the nature of his
responsibilities under this Agreement.

       

      3.7    Vacation

       

      The
Executive shall be entitled to four weeks paid vacation for each fiscal year of
the Company. In addition to the four weeks of paid vacation each fiscal year,
the Executive shall be entitled to statutory holidays and the number of paid
holidays provided for under the current policies and procedures of the Company.
The Executive may take in a fiscal year any of the four weeks paid vacation
earned but not taken in previous fiscal years, even if this would result in the
Executive taking more than six weeks paid vacation in the fiscal year, provided
that the Executive shall not be entitled to take more than 8 weeks paid vacation
in any fiscal year, and provided further that any vacation to be taken in a
fiscal year in excess of 4 weeks may only be taken at such times as are
reasonably convenient to the Executive and the Company as approved by the
President, such approval not to be unreasonably withheld. The Executive may
elect at any time and from time to time to receive payment in lieu of vacation
earned in previous years and not taken, in which event the Executive shall be
paid normal salary for each day of such vacation earned and not taken. Any
payment so received shall be deemed to constitute vacation taken. The parties
agree that as at July 31, 2008, a total of 40 vacation days have been
earned by the Executive, and not taken.

       

      3.8    Other
Benefits

       

      In
addition to any other compensation or benefits to be received by the Executive
pursuant to this Agreement, the Executive shall be entitled to participate in
all benefits which the Company may from time to time provide to its senior
employees, including the granting of stock options as approved by the Board or a
Board Committee.

       

      3.9    Consideration

       

      The
Executive acknowledges that his salary has been increased partially in
consideration of the terms and conditions of this Agreement, and in particular
but without limitation, ARTICLE 4 Non-Solicitation, ARTICLE 5 Confidentiality
and ARTICLE 6 Intellectual Property, and acknowledges that his increased salary
constitutes sufficient consideration therefor.

       

      ARTICLE
4 NON-SOLICITATION

      4.1    Terms

       

      During
the term of this Agreement and for 24 months following the termination or of
this Agreement, the Executive shall not:

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      (a)   solicit,
offer to employ or engage or accept as an employee any person who is employed or
engaged by the Company or any of its affiliates or who was so employed or
engaged during any part of the 12 months immediately preceding the date of the
Executive’s termination;

      (b)   advise
any person or entity not to do business with the Company or any of its
affiliates or otherwise take any action which may reasonably result in the
relations between the Company or any of its affiliates and any of its employees
or customers or potential employees or customers being impaired; or

      (c)   assist
any person or entity to do any things set out in clauses (a) or (b)
above.

       

      ARTICLE
5 CONFIDENTIALITY AND NON-DISCLOSURE

      5.1    Confidential
Information

       

      The term
“Confidential Information” means any and all information concerning any aspect
of the Company not publicly disclosed, which the Executive may receive or
develop as a result of his engagement by or involvement with the Company, and
including all clinical data, concepts, programs, processes, technical
information, trade secrets, systems, business strategies, financial information
and other information unique to the Company, its customers or principals. All
Confidential Information, including notes, diagrams, reports, notebook pages,
memoranda, biological and chemical materials and any excerpts thereof that
include Confidential Information are the property of the Company or parties for
whom the Company acts as agent or who are customers of the Company, as the case
may be, and are strictly confidential to the Company and/or such parties. The
Executive shall not make any unauthorized disclosure or use of and shall use his
best efforts to prevent unauthorized disclosure or use of such Confidential
Information.

       

      5.2    Use of Confidential
Information

       

      Except in
the necessary course of the business of the Company or as otherwise authorized
by the Company, and in accordance with such restrictions or conditions as the
Company may impose from time to time, the Executive will not:

       

              
(a)    duplicate,
transfer or disclose nor allow any other person to duplicate, transfer or
disclose any of the Company’s Confidential Information;

              
(b)    use the
Company’s Confidential Information without the prior written consent of the
Company; or

              
(c)    incorporate,
in whole or in part, within any domestic or foreign patent application any
proprietary or Confidential Information disclosed by the Company.

       

      5.3    Protection of Confidential
Information

       

      The
Executive will safeguard all Confidential Information at all times so that it is
not exposed to or used by unauthorized persons, and will exercise at least the
same degree of care used to protect the Executive’s own Confidential
Information.

       

      5.4    Exception

       

      The
restrictive obligations set forth above shall not apply to the disclosure or use
of any information which:

       

      (a)   is or
later becomes publicly known under circumstances involving no breach of this
Agreement by the Executive;

      (b)   is
already known to the Executive at the time of receipt of the Confidential
Information;

      (c)   is
lawfully made available to the Executive by a third party; or

      (d)   is
disclosed by the Executive pursuant to a requirement of a governmental
department or agency or disclosure is otherwise required by operation of law,
provided that the Executive gives notice 

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      in
writing to the Company of the required disclosure immediately upon its becoming
advised of such required disclosure and provided also that the Executive delays
such disclosure so long as it is reasonably possible in order to permit the
Company to appeal or otherwise oppose such required disclosure and provides the
Company with such assistance as the Company may reasonably require in connection
with such appeal or other opposition.

       

      ARTICLE
6 INTELLECTUAL PROPERTY

      6.1    Disclosure of
Works

       

      The
Executive, acting in good faith, shall promptly disclose in writing to the
Company all discoveries, inventions, ideas, developments, improvements,
methodologies, designs, research data, know-how, works, creations and
intellectual property (whether or not the same are capable of patent, copyright,
industrial design or other intellectual property protection) developed, created,
made, conceived or contributed to, solely or jointly, in whole or in part, by
the Executive, during the period of his or her employment or engagement with the
Company or within the period immediately following the resignation or
termination of the Executive set forth in section 6.2 below (the “Period”),
whether foreseeable or unforeseeable, and whether or not developed, created,
made, conceived or contributed to prior to the execution of this Agreement,
outside of Company time or at any premises other than the Company’s, which,
wholly or partially:

       

             (a)    are
related to the business or research and development of the Company;

             (b)    resulted
from or with the use of any resources or facilities of the Company;

             (c)    resulted
from or in connection with the Executive’s activities, duties or services for
the Company; or

             (d)    were a
result of using any proprietary or Confidential Information of the
Company;

       

      (collectively,
the “Works”).

       

      6.2    “Period”

       

      The
“Period” for Works described in section 6.1(a) is the greater of 1 year and the
period, if any, during which the Executive is subject to a restriction on
competition pursuant to any employment or consulting agreement entered into, or
which may hereafter be entered into, with the Company. The “Period” for Works
described in section 6.1(b), 6.1(c) and 6.2(d) is indefinite.

       

      6.3    Ownership of
Works

       

      The
Executive specifically acknowledges that all Works, including but without
limitation those Works created during the Period immediately following the
Executive’s resignation or termination, are works deemed to be made in the
course of or as a result of his or her employment or engagement with the
Company, and all right, title and interest in and to such Works shall vest in
and be the exclusive property of the Company upon their creation. In addition,
the Executive hereby waives all moral rights which the Executive may have in
such Works. The Executive further acknowledges that part of his or her
compensation as an employee of, or consultant to, the Company is compensation in
respect of the provisions contained in this ARTICLE 6.

       

      6.4    Assignments

       

      The
Executive will, at the request of the Company, execute all necessary
applications, assignments and other documents and provide all necessary
assistance during and subsequent to his or her employment or engagement, without
further compensation but at the expense of the Company, to enable the Company or
its nominees to acquire, perfect and maintain all rights, title and interest in
and to such Works including without limitation patent and copyright protection
in any and all countries, and to permit the Company and its nominees to enforce
such rights. The Executive shall assign to the Company all patents or copyright
protection respecting such Works filed in the name of the Executive. Should the
Executive fail to cooperate with such assignment of a Work, then the

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Executive,
by execution of this Agreement, hereby appoints the President of the Company or
his/her appointee as the Executive’s Attorney-in-Fact, with the specific power
to create any patent, copyright or other intellectual property assignments
required by law to perfect assignment to the Company of any Work on behalf of
the Executive and the said President or his/her appointee will act in good faith
in exercising such power, and not beyond the scope of his authority
hereunder.

       

      6.5    Records

       

      The
Executive will keep and maintain for the Company precise and up to date written
records and materials for all Works, all copies of which shall be the property
of the Company. The Executive shall not take any action, directly or by the
assistance of any third party, which would adversely affect the value or the
validity of legal protection of the records, materials or Works.

       

      ARTICLE
7 TERMINATION

      7.1    The Executive’s Right to
Terminate

       

      The
Executive may terminate his employment under this Agreement:

       

      
        	
                (a)

              	
                at
      any time upon providing 60 days notice in writing to the
      Company;

              

      

      
        	
                (b)

              	
                upon
      a material breach or default of any term of this Agreement by the Company
      if such material breach or default has not been remedied within 30 days
      after written notice of the material breach or default has been delivered
      by the Executive to the Company;

              

      

      
        	
                (c)

              	
                at
      any time within 180 days of the date on which there is a Change of
      Control; or

              

      

      
        	
                (d)

              	
                within 30 days of
      being informed by or on behalf of the Board of Directors that the
      Executive is required to perform his services primarily at a location
      outside of the York Region Greater Metropolitan Toronto area, Province of
      Ontario.

              

      

       

      For
purposes of section 7.1(c), the parties acknowledge and agree that there may be
more than one Change of Control during the term of this Agreement, and that
section 7.1(c) shall apply to each successive Change of Control.

       

      7.2    Company’s Right to
Terminate

       

      The
Company may terminate the Executive’s employment under this Agreement at any
time upon the occurrence of any of the following events

       

      
        	
                (a)
      

              	
                the
      Executive acting unlawfully, dishonestly, or in bad faith with respect to
      the business of the Company to the extent that it has a material and
      adverse effect on the Company;

              

      

      
        	
                (b)

              	
                the
      conviction of the Executive of an indictable offence under the Criminal
      Code involving fraud or dishonesty in respect of the
    Company;

              

      

      
        	
                (c)

              	
                a
      material breach or default of any term of this Agreement by the Executive
      if such material breach or default has had a material adverse effect on
      the Company and has not been remedied within 30 days after written notice
      of the material breach or default has been delivered by the Company to the
      Executive; or

              

      

      
        	
                (d)

              	
                the
      Executive dying or becoming permanently disabled. The Executive shall be
      deemed to have become permanently disabled if in any year during the
      employment period, because of ill health, physical or mental disability,
      or for other causes beyond the control of the Executive, the Executive has
      been continuously unable, as determined by two independent physicians of
      at least ten years' experience who are members in good standing of the
      Royal College of Physicians and Surgeons of Canada, to perform his duties
      for 180 consecutive days, or if, during any year of the employment period,
      the Executive has been unable, determined as set out above, to perform his
      duties for a total of 270 days, consecutive or not. The term “any year of
      the employment period” means any period of 12 consecutive months during
      the employment period.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      7.3    Severance Payment for
Termination under Section 7.1(b), 7.1(c), 7.1(d) or Voluntary
Termination

       

      In the
event of:

       

      
        	
                (a)

              	
                the
      termination of the Executive's employment pursuant to Section 7.1(b),
      Section 7.1(c) or Section 7.1(d) of this Agreement;
  or

              

      

      
        	
                (b)

              	
                the
      voluntary termination of the Executive's employment by the Company in
      circumstances other than those contemplated under Section 7.2
      hereof;

              

      

      then

      
        	
                (c)

              	
                the
      Company shall pay to the Executive within ten days of such termination a
      severance payment equal to the sum
of:

              

      

       

      
        	
                (i)

              	
                one
      years’ annual base salary and car allowance under section 3.1 in effect
      immediately prior to such termination (“Base Salary”);
  plus

              

      

      
        	
                (ii)

              	
                that
      number of months of Base Salary, if any, which is equal to the number of
      full years of employment worked by the Executive pursuant hereto from and
      after April 1, 2005, up to but not exceeding a maximum of one years’ Base
      Salary (for a maximum total payable under sections 7.3(i) and 7.3(ii)
      above, assuming the Executive provides his services continuously hereunder
      until or beyond 2017, of two years’ Base Salary,);
  plus.

              

      

      
        	
                (iii)

              	
                an
      amount equal to the amount of any bonuses paid to the Executive within the
      12 months immediately prior to termination;
plus

              

      

      
        	
                (iv)

              	
                all
      expenses incurred by the Executive up to the date of termination pursuant
      to ARTICLE 3 of this Agreement and not previously reimbursed;
      and

              

      

       

      
        	
                (d)

              	
                to
      the extent permitted under the Company’s life, disability, medical and
      other insurance or benefit plans in effect at any time during the 12 month
      period prior to termination and in which the Executive participated, the
      Company shall continue the coverage of the Executive under such plans for
      the number of months following termination which is equal to the number of
      months of annual Base Salary payable to the Executive under
      section7.3(c)(i), otherwise pay to the Executive the amount which the
      Executive shall be required to pay for the same type and amount of plan
      coverage for such period; and

              

      

      
        	
                (e)

              	
                the
      expiry date of any stock options of the Company held by the Executive at
      the date of termination shall be deemed to be extended, pursuant to
      section 7.1(e)(i) of the Company’s amended 2000 Stock Option Plan, to the
      earlier of the original expiry date of such options and 1 year following
      the date of termination of the Executive’s employment, such options shall
      continue to vest in accordance with their original vesting schedule during
      such extension, and the option agreement(s) evidencing such option(s)
      shall be deemed to be amended
accordingly.

              

      

       

      7.4    Voluntary
Termination of the Executive
by the Company

       

      For
greater clarity of Sections 7.1(b) and 7.3(b) of this Agreement, the occurrence
of any of the following events shall be deemed not to constitute a material
breach or default by the Company of this Agreement, but shall be deemed to
constitute voluntary termination of the Executive’s employment by the Company,
entitling the Executive to the severance payment set forth in section
7.3:

       

      
        	
                (a)

              	
                the
      Board fails to reappoint the Executive as Vice President, Research or
      comparable officer of the Company immediately following the close of each
      annual general or other meeting of the  Company at which directors
      are elected;

              

      

      
        	
                (b)

              	
                the
      Board removes the Executive from the position of Vice President, Research
      or comparable officer of the Company;
or

              

      

      
        	
                (c)

              	
                the
      Board changes the Executive’s responsibilities or authority in a
      fundamental respect and such change is not accepted by the
      Executive.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      7.5    Payment following
Termination under Section 7.2(a), 7.2(b), or 7.2(c)

       

      In the
event of the termination of the Executive's employment pursuant to Sections
7.2(a), 7.2(b), or 7.2(c) of this Agreement, the Company shall pay to the
Executive the full amount of compensation accrued pursuant to subsection 3.1 of
this Agreement as of the date of termination.

       

      7.6    Severance Payment for
Termination under Section 7.2(d)

       

      In the
event of the termination of the Executive's employment pursuant to Section
7.2(d) of this Agreement, the Company shall pay the following amounts to the
Executive within ten days of the termination:

       

          (a)          
the
amount of compensation accrued pursuant to subsection 3.1 of this Agreement as
of the date of termination;

          (b)          
the
amount of compensation payable under subsection 3.1 of this Agreement for one
year after the date of termination; and

          (c)   an amount
equal to the annual bonus most recently paid to the Executive pursuant to
subsection 3.3 of this Agreement multiplied by the fraction of which the number
of days between the fiscal year end of the Company related to the bonus and the
date of termination is the numerator, and 365 is the denominator.

       

      7.7    Remedies

       

      The right
of the Company to terminate the employment of the Executive under Section
7.2(a), 7.2(b) and 7.2(c) hereof and the right of the Executive to terminate his
employment under Section 7.1(b) hereof are in addition to and not in derogation
of any other remedies which may be available to the Company or the Executive at
law or in equity.

       

      7.8    Transition and Return of
Property

       

      Upon the
termination of Executive’s employment with the Company, the Executive will
deliver to the Company all books, records, lists, brochures and other property
or intellectual property rights belonging to the Company or developed in
connection with the business of the Company, and will execute such transfer
documentation as is necessary to transfer such property or intellectual property
rights to the Company. In addition, following termination of the Executive’s
employment with the Company, the Executive will provide the Company with all
such assistance and cooperation as the Company may reasonably require to enable
a smooth transition of the duties and responsibilities of the Executive to such
other individual as the Company shall appoint.

       

      ARTICLE
8 GENERAL

       

      8.1    Personal
Nature

       

      The
obligations and rights of the Executive under this Agreement are personal in
nature, based upon the singular skill, qualifications and experience of the
Executive.

       

      8.2    Right To Use Employee’s Name
And Likeness

       

      During
the term of this Agreement, the Executive hereby grants to the Company the right
to use the Executive’s name, likeness and/or biography in connection with the
services performed by the Executive under this Agreement and in connection with
the advertising or exploitation of any project with respect to which the
Executive performs services for the Company.

       

      8.3    Legal
Advice

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
Executive hereby represents, warrants and acknowledges to the Company that he
has had the opportunity to seek and was not prevented nor discouraged by the
Company from seeking independent legal advice prior to the execution and
delivery of this Agreement and that, in the event that he did not avail himself
of that opportunity prior to signing this Agreement, he did so voluntarily
without any undue pressure by the Company or otherwise, and agree that his
failure to obtain independent legal advice shall not be used by him as a defence
to the enforcement of his obligations under this Agreement.

       

      8.4    Waiver

       

      No
consent or waiver, express or implied, by any party to this Agreement of any
breach or default by any other party in the performance of its obligations under
this Agreement or of any of the terms, covenants or conditions of this Agreement
shall be deemed or construed to be a consent or waiver of any subsequent or
continuing breach or default in such party’s performance or in the terms,
covenants and conditions of this Agreement. The failure of any party to this
Agreement to assert any claim in a timely fashion for any of its rights or
remedies under this Agreement shall not be construed as a waiver of any such
claim and shall not serve to modify, alter or restrict any such party’s right to
assert such claim at any time thereafter.

       

      8.5    Notices

       

              
(a)          Any
notice relating to this Agreement or required or permitted to be given in
accordance with this Agreement shall be in writing and shall be personally
delivered or mailed by registered mail, postage prepaid to the address of the
parties set out on the first page of this Agreement. Any notice shall be deemed
to have been received if delivered, when delivered, and if mailed, on the fifth
day (excluding Saturdays, Sundays and holidays) after the mailing thereof. If
normal mail service is interrupted by strike, slowdown, force majeure or other
cause, a notice sent by registered mail will not be deemed to be received until
actually received and the party sending the notice shall utilize any other
services which have not been so interrupted or shall deliver such notice in
order to ensure prompt receipt thereof.

              
(b)          Each
party to this Agreement may change its address for the purpose of this Section
8.5 by giving written notice of such change in the manner provided for in this
Section.

       

      8.6    Applicable
Law

       

      This
Agreement shall be governed by and construed in accordance with the laws of the
province of Ontario and the federal laws of Canada applicable therein, which
shall be deemed to be the proper law hereof. The parties hereto hereby submit to
the jurisdiction of the courts of Ontario. All obligations of the parties under
this Agreement are subject to receipt of all necessary approvals of the
applicable securities regulatory authorities.

       

      8.7    Severability

       

      If any
provision of this Agreement for any reason be declared invalid, such declaration
shall not affect the validity of any remaining portion of the Agreement, which
remaining portion shall remain in full force and effect as if this Agreement had
been executed with the invalid portion thereof eliminated, and it is hereby
declared the intention of the parties that they would have executed the
remaining portions of this Agreement without including therein any such part,
parts or portion which may, for any reason, be hereafter declared
invalid.

       

      8.8    Entire
Agreement

       

      This
Agreement constitutes the entire agreement between the parties hereto and
supercedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written and there are no
representations or warranties, express or implied, statutory or otherwise other
than set forth in this Agreement and there are no agreements collateral hereto
other than as are expressly set forth or referred to herein. This Agreement
cannot be amended or supplemented except by a written agreement executed by all
parties hereto.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      8.9     
Arbitration

       

      In the
event of any dispute arising with respect to any matter relating to this
Agreement, the matter in dispute shall be referred to a single arbitrator under
the Commercial Arbitration
Act then in effect in Ontario, except in a case where this Agreement
explicitly provides for another remedy or dispute resolution process, as in
Section 8.14 of this Agreement.

       

      8.10    Non-Assignability

       

      This
Agreement shall not be assigned by any party to this Agreement without the prior
written consent of the other parties to this Agreement.

       

      8.11    Burden And
Benefit

       

      This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.

       

      8.12    Time

       

      Time is
of the essence of this Agreement.

       

      8.13    Survival

       

       

      ARTICLE
4, ARTICLE 5, ARTICLE 6, and sections 7.7 and 7.8 of this Agreement shall
survive the termination of the Executive’s employment with the Company and the
termination of this Agreement.

       

      8.14    Equitable
Remedies

       

      The
Executive acknowledges that any breach by him of any provision of ARTICLE 4,
ARTICLE 5 or ARTICLE 6 may result in material damage to the Company which cannot
be adequately compensated by a monetary award, and consents to the issuance of
an injunction or other equitable remedy to prohibit, prevent or enjoin any such
breach.

       

      8.15    Counterparts

       

      This
Agreement may be executed in counterparts and such counterparts together shall
constitute one and the same instrument.

       

      IN WITNESS WHEREOF the parties
have duly executed this Agreement as of the date set out on the first page, with
effect as of June 1, 2007.

       

      HELIX
BIOPHARMA CORP.

       

      Per: /s/ Gordon M.
Lickrish                                       
 

       

       

       

      Authorized
Signatory                            /s/ Heman Chao

                                HEMAN
CHAO

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