Confidential Treatment Requested. Confidential portions of this documents have been redacted and separately filed with the Commission. ***** Confidential material redacted and filed separately with the Commission.
Confidential
Treatment Requested. Confidential portions of this documents have been redacted
and separately filed with the Commission.
*****
Confidential material redacted and filed separately with the
Commission.
Date:
January 25, 1998
Yeda
Research and Development Co. Ltd. Rehovot
Dear
Sirs,
Re:
Amendment
No. 2 to Research and Licence Agreement dated April 7,
1983
(“the Agreement”) as amended on August 31, 1885, “Amendment No. 1”)
(“the Agreement”) as amended on August 31, 1885, “Amendment No. 1”)
We
set
out below the amendments to the Agreement (as already amended by Amendment
No.
1) and to Amendment No. 1 agreed between Yeda Research and Development Co.
Ltd.
(“Yeda”)
and
XTL Biopharmaceuticals, Ltd. (“the
Corporation”)
following discussions between the parties conducted at the Corporation’s
request:
| 1. |
Clause
13(b)(i) of the Agreement shall be and is hereby replaced by the
following:
|
| "(i) | (A) |
Yeda
may terminate this Agreement by giving written notice to that effect
to
the Corporation if the aggregate of the royalties due to Yeda (x)
under
Paragraph 2.1.1 of - the letter agreement between the parties dated
August
31, 1995 (and amended on January 25, 1998) amending this Agreement
(hereinafter ‘the
Amendment’)
and (y) under Paragraph 2.1.2 of the Amendment on Third Party Sales
Receipts (as such expression is defined below), (hereinafter collectively
‘Product
Sale Royalties’)
and actually paid to Yeda on due date in respect of
the
***** of the term of the Licence shall be less than ***** United
States
Dollars) (hereinafter in this subparagraph (A) ‘the
Default Year’),
UNLESS
the Corporation shall have proved to Yeda’s reasonable satisfaction within
***** that the Corporation
and/or Collaboration Partners (as such expression is defined below)
have
spent at least ***** in the Default Year in funding the cost of
the
activities described in Clause 8(b) above (hereinafter ‘Development
Activities’)
towards commercialisation of pharmaceutical products in respect
of the
sale of which Yeda is entitled to royalties under.
Paragraph 2.1.1 of Amendment No. 1 and/or on the sale of which
there have
been calculated Third Party Sale Receipts (hereinafter collectively
‘Yeda
Royalty Bearing Products’).
Yeda shall give. any such notice of termination within *****
days of the end of the Default
Year.
|
‘Collaboration
Partner’
shall
mean an entity providing funding for the said Development Activities to the
Corporation or on its behalf pursuant to an agreement between the Corporation
and such entity whereby a sublicence has been granted to such entity with Yeda’s
consent in accordance with Paragraph 7(c) above. ‘Third
Party Sale Receipts’ shall
mean amounts received by XTL from third- parties on which Yeda is entitled
to a
royalty pursuant to Paragraph 2.1.2 of the Amendment and which are calculated
on
sales of pharmaceutical products by such
third
parties;
|
(B)
|
If
the aggregate payment due to Yeda on Product Sale Royalties and actually
made to Yeda in respect of the *****
of
the term of the Licence shall be less than *****
United States Dollars) (hereinafter in this Subparagraph (B) ‘the
Default Year’),
the Corporation shall pay Yeda within 30 (thirty) days of the end
of the
Default Year, the amount by which the Product Sale Royalties actually
paid
to Yeda in respect of the Default Year shall be less than *****
(hereinafter in this subparagraph (B) ‘the
Shortfall Amount’).
Payment of the Shortfall Amount (except to the extent that, it represents
payments due and payable to Yeda in respect of the Product Sale Royalties
other than pursuant to this subparagraph (B)) shall be fully credited
against future Product Sale Royalties becoming due to Yeda but shall
not
be refundable in any event.
|
*****
Confidential material redacted and filed separately with the
Commission.
It
is
agreed, without, derogating from Yeda's rights to other or additional relief
and
remedies, including the right to xxx for the Shortfall Amount, that failure
to
make the Shortfall Payment as aforesaid shall entitle Yeda to terminate this
Agreement by giving written notice of termination to the Corporation within
*****
of the
end of the Default Year.
|
(C)
|
If
the aggregate payment due to Yeda as Product Sale Royalties and actually
paid to Yeda in respect of the
*****
year of
the
term of the Licence shall be less than US *****
US
Dollars) (hereinafter in this subparagraph (C) ‘the
Default Year’),
Yeda
shall be entitled to, terminate the Agreement by service of written
notice
to that effect on the Corporation, unless (x) the Corporation shall
pay
Yeda by no later than ***** from the end of the Default Year, the
amount
by which the Product Sale Royalties actually paid to Yeda in respect
of
such year shall be less than US $***** (hereafter in this subparagraph
(C)
‘the
Shortfall Amount’)
and (y)
sales
of Yeda Royalty Bearing Products shall have commenced before or during
that year or the Corporation shall have demonstrated to Yeda’s reasonable
satisfaction that regulatory approval for sale of a Yeda Royalty
Bearing
Product in
the
US or a major European country has
been
requested before or during the said year and that the Corporation
has
taken every reasonable, lawful action possible in that year to expedite
grant of such approval. Payment of the Shortfall Amount (except to
the
extent that it represents payments due and payable to Yeda in respect
of
Product Sales Royalties other than pursuant to this subparagraph
(C))
shall be fully credited against future Product Sale Royalties becoming
due
to Yeda but shall not be refundable in any event. Yeda shall give
any such
notice of termination within ***** days of
the end of the Default Year.
|
| (D) |
If
the aggregate payment due to Yeda as Product Sale Royalties and actually
paid to Yeda on due date in respect of the *****
shall be less than US *****
US
Dollars) (hereinafter in this subparagraph (D) ‘the
Default Year’),
Yeda shall be entitled to terminate the Agreement by service of written
notice to that effect on the Corporation within *****
days of the end of the Default
Year.
|
| (E) |
If
commercial exercise of the Licence by way of sale of Yeda Royalty
Bearing
Products, once commenced, shall cease thereafter for a period of
*****
consecutive months or more, Yeda shall be entitled to terminate the
Agreement by service of written notice to that effect on the Corporation
within 60 days of the end of such period and, unless sales of Yeda
Royalty
Bearing Products shall have been renewed in the meantime, also at
any time
thereafter, provided,
however, in the event Yeda desires to terminate the Agreement after
such
*****
period, Yeda shall give the Corporation written notice at least
*****
days in advance of the desired date of
termination.
|
| (F) |
Nothing
in this Clause 13(b)(i) above shall be deemed to justify failure
to make
any payment due and payable to Yeda under any of the provisions of
this
Agreement other than under this Clause 13(b)(i) above or to derogate
from
Yeda's rights with respect to such failure pursuant to Clause 13(b)(ii)
below or otherwise."
|
*****
Confidential material redacted and filed separately with the
Commission.
|
2.
|
The
following provision shall be added as Clause 13(b)(vii) to the
Agreement:
|
"For
the
removal of doubt, the parties record that the effective commencement date of
the
Licence shall be deemed to be April 7, 1993 and the years of the Licence term
shall be determined accordingly."
|
3.
|
Amendment
No. 1 is hereby amended as shown in the restated version thereof
attached
hereto as Appendix
A.
|
| 4. |
Yeda
acknowledges that the Corporation has made the payments and provided
the
guarantee referred
to
in Paragraphs 3.2 and 3.3 of Amendment No.
1.
|
|
5.
|
The
Agreement (including Amendment No. 1) continues in full force as
amended
above.
|
Please
confirm your agreement to
the
amendments provided hereinbefore, whereupon they shall become
effective.
Yours
sincerely,
Xxxxxx
Xxxxxx, Ph.D.
President
and CEO
Agreed
YEDA
RESEARCH AND DEVELOPMENT CO. LTD.
*****
Confidential material redacted and filed
separately with the Commission.
Appendix
A
Restated
version effective as of January 25, 1998, (replacing original version dated
August 31, 1995 of Amendment No. 1 to Research and
Licence
Agreement between Yeda Research and Development Co Ltd and XTL
Biopharmaceuticals Ltd (previously Xenograft Technologies
Ltd))
|
To:
|
Yeda
Research and Development Company
Ltd.
|
XX
Xxx 00
Xxxxxxx
00000
Dear
Sirs,
Re:
Amendment
of Research and License Agreement
This
letter, when counter-signed by an authorized representative of Yeda Research
and
Development Ltd. (“Yeda”) will constitute an agreement between Yeda and XTL
Biopharmaceuticals Ltd. (formerly named Xenograft Technologies
Ltd.-“XTL”)
to
extend the period of research under the Research and License Agreement entered
into by Yeda and XTL on April 7, 1993 (the “R&L
Agreement”)
and
otherwise to amend the R&L Agreement, as hereinafter provided (unless
otherwise herein defined, all
capitalized
terms appearing herein having the meanings ascribed to them in the R&L
Agreement):
1.
General
| 1.1. |
XTL
has advised Yeda that XTL contemplates promoting certain of its major
activities by allowing third parties to develop and manufacture products
using the results, including the products, obtained by
XTL as a result, inter
alia,
of the exercise by it of the License granted by Yeda to XTL under
the
R&L Agreement and, subject to compliance with the provisions of the
R&L Agreement (as herein amended), including those governing the grant
of sublicences, Yeda has no objection
thereto.
|
| 1.2. |
XTL
wishes to modify and diversify the
rates of royalties due to Yeda under the R&L Agreement as hereinafter
provided and Yeda agrees thereto.
|
2.
Royalties
|
2.1.
|
Royalty
Rates
|
Instead
of the royalties payable as specified in Clause 7(d)(ii) of the R&L
Agreement, the royalties payable to Yeda by XTL in consideration of the Licence
granted under the R&L Agreement, shall be as follows:
|
2.1.1.
|
*****
percent) of Net Sales (as hereinafter defined) from sales by XTL
of
pharmaceutical products developed and/or made under and/or using
the
Licensed Patents and/or the Licensed Technology. “Net
Sales”
as used herein shall have the meaning ascribed to the term in the
R&L
Agreement, references therein to “the
Products”
being read as references to the pharmaceutical products referred
to
hereinbefore.
|
*****
Confidential material redacted and filed
separately with the Commission.
|
2.1.2.
|
*****
percent) of all amounts received by XTL from third parties (except
the
amounts governed by Section 2.1.4 below) under or pursuant to agreements
allowing such third parties the use of results, including products,
developed and/or made by XTL under and/or using the Licensed Patents
and/or the Licensed Technology (including, without limitation, results
obtained by XTL’s use of *****),
provided
that if XTL shall be obliged to pay a royalty of more than *****
per cent) on any such amounts to a third party pursuant to a bona
fide
arms-length agreement with such third party (“a
third party royalty”),
then the rate of royalty payable to Yeda pursuant to this Section
2.1.2 on
amounts subject to a third party royalty shall be reduced by the
percentage - up to a maximum of *****
per cent) - by which the third party royalty rate *****
cent), so that if, for example, the third party royalty rate is
*****
per cent) the rate of royalty payable to Yeda pursuant to this Section
2.1.2 shall be *****
per cent), and if, as a further example, the third party royalty
rate is
*****
per cent), the rate of royalty payable to Yeda pursuant to this Section
2.1.2 shall be reduced by *****
(and not by *****)
and shall be *****
per cent).
|
| 2.1.3. |
*****
percent) of all amounts received by XTL from a third party payable
upon
XTL reaching milestones specified in an agreement with such third
party
providing for performance of development activities by XTL for such
third
party under and/or using the Licensed Patents and/or the Licensed
Technology.
|
| 2.1.4. |
*****
percent) of all amounts received by XTL under or pursuant to agreements
with third parties allowing such third parties to use outside XTL’s
premises chimeric mammals or other animal models (collectively,
“Models”)
made and/or developed by XTL under and/or using the Licensed Patents
and/or the Licensed Technology or allowing such third parties to
produce
Models under and/or using the Licensed Patents and/or the Licensed
Technology.
|
| 2.1.5. |
*****
percent) of all amounts received by XTL as a result of any activities
under and/or using the Licensed Patents and/or the Licensed Technology
(including the grant of sublicences to third parties to carry out
activities under and/or using the Licensed Patents and/or the Licensed
Technology), other than those specified in Sections 2.1.1, 2.1.2,
2.1.3 or
2.1.4 above. Where the amounts received by XTL are the result of
activities not involving the grant of sublicences to third parties
(“Direct
Activities”)
and are amounts received in a transaction other than at arms length,
the
royalty due to Yeda shall be calculated on the amount that would
have been
received by XTL in a transaction at arms
length.
|
| 2.1.6. |
For
the avoidance of doubt, it is expressly stated that royalties shall
not be
due pursuant to Sections 2.1.2. 2.1.4 or 2.1.5 above on funds received
by
XTL which are paid by a third party in order to cover, and are actually
applied by XTL in covering, the cost of research and development
by XTL
for such third party of products generating any of the amounts in
respect
of which royalties are payable pursuant to Sections 2.1.2, 2.1.4
or 2.1.5
above.
|
| 2.1.7. |
For
the avoidance of doubt, it is expressly stated, that nothing in this
Section 2.1 above or elsewhere in this letter shall be deemed to
derogate
from the provisions of Clause 7(c) of the R&L Agreement governing the
grant of sublicences.
|
*****
Confidential material redacted and filed
separately with the Commission.
|
2.2.
|
Payment
of Royalties
|
The
provisions of Clause 7(d)(iii) of the R&L Agreement shall apply,
mutatis
mutandis, to
the
royalties payable to Yeda pursuant to Section 2.1 above, references to
“Net
Sales”
in the
said Clause 7(d)(iii) being deemed references to “Net
Sales”
as
defined in Section 2.1.1 above for the purpose of that Section and to amounts
received by XTL from Direct Activities (as defined in Section 2.1.5 above)
and
references to “Sublicensing Receipts” in Clause 7(d)(iii) being deemed
references to amounts subject to royalty payment to Yeda pursuant to Sections
2.1.2, 2.1.3, 2.1.4 or 2.1.5 above (not being amounts resulting from Direct
Activities (as defined in Section 2.1.5 above)).
|
2.3.
|
For
the avoidance of doubt, it is expressly stated that payment of royalties
under the R&L Agreement shall continue as
follows:
|
|
2.3.1.
|
Payment
of royalties pursuant to Section 2.1.1 shall continue with respect
to
sales of any pharmaceutical product as
follows:
|
|
(aa)
|
if
the product sold is made and/or sold in a country where a Licensed
Patent
or Patents issue including claims covering, in whole or in part,
such
product or the manufacture thereof-then, (i) until the date of expiry
of
the last of the Licensed Patents covering such product in such country
to
expire, or (ii) until termination of the ***** commencing on the
date of
the first commercial sale of such product in such country, whichever
is
the longer period;
|
|
(bb)
|
on
sales of a product made and sold in any other country, until the
date of
expiry of a period of ***** years commencing on the date of the first
commercial sale of such product in such
country.
|
| 2.3.2. |
Payment
of royalties pursuant to Section 2.1.2 shall continue as
follows:
|
|
(aa)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of the
paying third party under a Licensed Patent or Patents in a particular
country shall continue (i) until the expiry of the last to expire
of the
said Licensed Patents, or (ii) until termination of the ***** period
commencing on the first date on which XTL receives an amount relating
to
activities in such country on which a royalty is due to Yeda pursuant
to
Section 2.1.2, whichever is the longer
period;
|
|
(bb)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of the
paying third party in a particular country in which there is no Licensed
Patent shall continue until termination of the ***** commencing on
the
first date on which XTL receives an amount relating to activities
in such
country on which a royalty is due to Yeda pursuant to Section
2.1.2;
|
|
(cc)
|
payment
of royalties on amounts paid to XTL and not attributable to the paying
third party’s activities in any particular country, shall continue until
*****, whichever is the longer
period.
|
*****
Confidential material redacted and filed
separately with the Commission.
|
2.3.3.
|
Payment
of royalties pursuant to Section 2.1.3 shall continue as
follows:
|
|
(aa)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of XTL
or of the paying third party under a Licensed Patent or Patents in
a
particular country shall
continue *****,
whichever is the longer period,
|
|
(bb)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of XTL
or the paying third party in a particular country in which there
is no
Licensed Patent shall continue until termination of the *****
commencing on the date on which XTL first receives an amount relating
to
activities in such country on which a royalty is due to Yeda pursuant
to
Section 2.1.3;
|
|
(cc)
|
payment
of royalties on amounts paid to XTL and not attributable to XTL’s or the
third party’s activities in any particular country shall continue until
*****,
whichever is the longer period.
|
|
2.3.4.
|
Payment
of royalties pursuant to Section 2.1.4 shall continue as
follows:
|
|
(aa)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of the
paying third party under a Licensed Patent or Patents in a particular
country shall continue *****, whichever is the longer
period;
|
|
(bb)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of the
paying third party in a country in which there is no Licensed Patent
shall
continue until termination of the ***** commencing on the date on
which
XTL first receives an amount relating to activities in such country
on
which a royalty is due to Yeda pursuant to Section
2.1.4;
|
|
(cc)
|
payment
of royalties on amounts paid to XTL and not attributable to the third
party’s activities in any particular country shall continue, until *****,
whichever is the longer period.
|
|
2.3.5.
|
Payment
of royalties pursuant to Section 2.1.5 shall continue as
follows:
|
|
(A)
|
Where
the royalties are on amounts received by XTL on any Direct Activity,
the
duty to pay royalties shall
continue:
|
|
(aa)
|
if
the activity or any part thereof is carried out in any country under
a
Licensed Patent or Patents-then, *****,
whichever is the longer period;
|
(bb)
if
the
activity is carried out in any other country, until the date of expiry of a
period of *****
commencing on the first date on which XTL receives an amount as a result of
that
activity in that country;
|
(B)
|
Where
the royalties are due on amounts received by XTL on activities not
being a
Direct Activity, the duty to pay royalties shall continue as
follows:
|
|
(aa)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of the
paying third party under a Licensed Patent or Patents in a particular
country shall continue *****,
whichever is the longer period;
|
*****
Confidential material redacted and filed
separately with the Commission.
|
(bb)
|
payment
of royalties on amounts paid to XTL and attributable to activities
of the
paying third party in a particular country in which there is no licensed
Patent shall continue until termination of the ***** commencing on
the
first date on which XTL receives an amount relating to activities
in such
country on which a royalty is due to Yeda pursuant to Section
2.1.5;
|
|
(cc)
|
payment
of royalties on amounts paid to XTL and not attributable to the third
party’s activities in any particular country shall continue, *****,
whichever is the longer period.
|
|
2.4.
|
The
License granted under the R&L Agreement shall remain in force (if not
previously terminated according to the provisions of the R&L Agreement
(as amended hereby)) for the purpose of each of the activities specified
in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4 and 2.1.5, as long as there
is a
duty to pay royalties in respect of such activity, as provided in
Section
2.3 above. Clause 7(b)(ii) of the R&L Agreement is replaced by the
provisions of this Section 2.4
above.
|
|
3.
|
Payments
for Sponsored R&D
|
|
3.1.
|
Subject
to the amendments contained herein, the period of research which
XTL is
obliged to fund under the R&L Agreement is hereby extended by 1 (one)
year and shall continue until August 31,
1996 (the
“Extension Period”).
|
|
3.2.
|
XTL
shall pay Yeda an aggregate amount in New Israel Sheqels equal (at
the
representative rate of exchange in force on the date of payment)
to
*****
(plus VAT against VAT invoice) in consideration of Yeda’s undertaking to
procure the performance (under the supervision of Xxxx. Xxxxxxx)
of
research in the Extension Period in accordance with the Research
Plan and
the Budget attached hereto as Appendices
“A”
and “B”,
respectively, as follows:
|
|
3.2.1.
|
an
amount in New Israel Sheqels equal (at the representative rate of
exchange
in force on the date of payment) to US
***** (plus
VAT against VAT invoice) on March 31,
1996;
|
|
3.2.2.
|
an
amount in New Israel Sheqels equal to US *****
(plus VAT against VAT invoice) on each of May 15, 1996
and
July
31, 1996.
|
|
3.3.
|
Simultaneously
with counter-signature hereof by Yeda, XTL shall provide Yeda with
a bank
guarantee from an Israeli bank, in form acceptable to Yeda, in order
to
secure XTL’s obligations under Sections 3.2.1
and
32.2
above.
50% of the bank charges and commissions actually paid by XTL to the
issuing bank in respect of the bank guarantee shall be reimbursed
by Yeda
to XTL, against proof of the amount paid by XTL, forthwith upon receipt
by
Yeda of the amount payable by XTL pursuant to Section 3.2.1
above.
|
*****
Confidential material redacted and filed separately with the
Commission.
4. Entire
Agreement
Except
as
set forth in this letter, all the terms of the R&L Agreement shall remain
unchanged. The R&L Agreement, as amended hereunder, sets forth the
entire
understanding
between Yeda and XTL regarding the R&L Agreement (except as supplemented by
written instrument of even or subsequent date), and supersedes any other prior
agreement or understanding, oral or written.
Please
indicate your acceptance of the terms of this letter by affixing your signature
below.
Very
truly yours,
Xxxxxx
Xxxxxx, Ph.D.
President
and CEO
Agreed
and Accepted:
YEDA
RESEARCH AND DEVELOPMENT COMPANY LTD.
XXXXXX
XXXXX XXXX.
XXXXX XXXXXXXX
President Chairman of the Board of Directors
President Chairman of the Board of Directors
