EXHIBIT 10.1
RESEARCH AND LICENCE AGREEMENT
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Between
YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED
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a company duly registered under the laws of Israel of ▇▇ ▇▇▇
▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (hereinafter, "YEDA").
And
▇▇▇▇ LOGIC, INC.
a company duly registered under the laws of the state of
Washington, USA, having its principal place of business ▇/▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇ Offices, Toyota Towers, 65 ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (hereinafter, the
"COMPANY")
PREAMBLE:
WHEREAS: (A) in the course of research conducted at the Weizmann
Institute of Science ("THE INSTITUTE"), under the
supervision of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ("THE SCIENTIST") of
the Department of Immunology, the Scientist arrived at an
invention comprising methods of organ transplantation
utilising developing nephric tissue ("THE INVENTION"), all
as more fully described in U.S.A patent application number
60/317,452 (Yeda's Reference no. 2001-073), the first page
of which is attached hereto as APPENDIX "A" ("THE EXISTING
PATENT APPLICATION"); and
(B) the Company is: (i) interested in the performance of
further research at the Institute under the supervision of
the Scientist in the field of the Invention, as specified in
the research program attached hereto, marked APPENDIX "▇"
("▇▇▇ RESEARCH PROGRAM" and "THE RESEARCH"); and (ii)
willing, subject to and in accordance with the terms and
conditions of this Agreement, to finance the performance of
the Research in accordance with the budget attached hereto
and marked ▇▇▇▇▇▇▇▇ "▇" ("▇▇▇ RESEARCH BUDGET"); and
(C) Yeda is willing, subject to and in accordance with the
terms and conditions of this Agreement, to procure the
performance of the Research at the Institute as aforesaid;
and
(D) by operation of Israeli law and/or under the terms of
employment of the Scientist at the Institute and pursuant to
an agreement between the Institute, Yeda and the Scientist,
all right, title and interest in and to the Invention and in
any results deriving from the performance of the Research at
the Institute, vests and shall vest in Yeda; and
(E) subject to and in accordance with the terms of this
Agreement, the Company wishes to receive, and Yeda is
willing to grant to the Company, a worldwide exclusive
licence in respect of the Licensed Information (as
hereinafter defined) and under the Patents, for the
manufacture, development and sale of products for solid
organ transplantation from embryonic tissue ("PRODUCTS"),
all subject to and in accordance with the terms and
conditions of this Agreement below,
NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
1. PREAMBLE, APPENDICES AND INTERPRETATION
1.1. The Preamble and Appendices hereto form an integral part of this
Agreement.
1.2. In this Agreement the terms below shall bear the meanings assigned to
them below, unless the context shall indicate a contrary intention:
1.2.1. "AFFILIATED ENTITY" - shall mean, with respect to any company,
corporation, other entity or person
(hereinafter, collectively, "ENTITY"), an
entity which directly or indirectly, is
controlled by, or controls, or is under
common control with, such entity. For the
purposes of this definition, "CONTROL"
shall mean the ability, directly or
indirectly, to direct the activities of
the relevant entity (save for an ability
flowing solely from the fulfillment of the
office of director or another office) and
shall include, without limitation, the
holding, directly or indirectly, of more
than 30% (thirty percent) of the issued
share capital or of the voting power of
the relevant entity or the holding,
directly or indirectly, of a right to
appoint more than 30% (thirty percent) of
the directors of such entity or of a right
to appoint the chief executive officer of
such entity;
1.2.2. "DEVELOPMENT PROGRAM" - shall mean, with respect to any
Product or Products, a development program
specifying the activities and timetable
necessary to develop such Products to
commercialization, including the
performance of toxicological tests,
pharmacological and efficacy tests,
pre-clinical tests and clinical trials and
all steps required for obtaining
regulatory approvals from the U.S. Food
and Drug Administration ("THE FDA") or
equivalent regulating authorities in other
countries and the development of
procedures and facilities for commercial
production of such Products, sales
projections and proposed marketing
efforts;
1.2.3. "EXCHANGE RATE" - shall mean, with respect to any amount
to be calculated, or which is paid or
received in a currency other than US
Dollars, the average of the selling and
buying exchange rates of such currency (in
respect of cheques and remittances) and
the US Dollar prevailing at Bank Hapoalim
B.M. at the end of business on the date of
calculation, payment or receipt, as the
case may be;
1.2.4. "FIRST COMMERCIAL SALE" - shall mean, with respect to any
Product in any country, the first
commercial sale of such Product in such
country after FDA New Drug Approval or
equivalent approval in such country has
been obtained for such Product;
1.2.5. "LICENCE" - shall bear the meaning assigned to such
term in clause 7.1 below;
1.2.6. "LICENSED INFORMATION" - shall mean: (i) the Invention; and
(ii) all and any inventions, products,
materials, compounds, compositions,
substances, methods, processes,
techniques, know-how, data, information,
discoveries and other results of
whatsoever nature discovered or occurring
in the course of, or arising from, the
performance of the Research;
1.2.7. "NET SALES" - shall mean the total amount invoiced by
the Company and the total amount invoiced
by each Sublicensee in connection with the
sale of Products (for the removal of
doubt, whether such sales are made before
or after the First Commercial Sale of any
Product in any country); provided that,
with respect to sales which are not at
arms-length and/or are not in the ordinary
course of business and/or are not
according to then current market
conditions for such a sale, the term "NET
SALES" shall mean the total amount that
would have been due in an arms-length sale
made in the ordinary course of business
and according to the then current market
conditions for such sale or, in the
absence of such current market conditions,
according to market conditions for sale of
products similar to the Products, in all
cases after deduction of:
(i) sales taxes (including value added
taxes) to the extent applicable to
such sale and included in the
invoice in respect of such sale;
(ii) credits or allowances, if any,
actually granted on account of
price adjustments, recalls,
rejections or returns of Products
previously sold;
(iii) Bad debts recognized by the
Company's external auditors
according to customary accounting
rules;
and provided further that, with respect to
sales by the Company and/or a Sublicensee,
as applicable, to any Affiliated Entity of
the Company or Sublicensee, as the case
may be, that the term, "NET SALES" shall
mean the higher of: (a) "Net Sales", as
defined above, with respect to sales which
are not at arms-length and/or in the
ordinary course of business and/or
according to current market conditions;
and (b) the total amount invoiced by such
Affiliated Entity on resale to an
independent third party purchaser after
the deductions specified in subparagraphs
(i) and (ii) above, to the extent
applicable;
1.2.8. "PATENTS"- shall mean: (i) the Existing Patent
Application and all patents which may be
granted thereon; and (ii) all other patent
applications or applications for
certificates of invention covering
portions of the Licensed Information and
all patents or certificates of invention
which may be granted thereon; as well as
all continuations, continuations-in-part,
patents of addition, divisions, renewals,
reissues and extensions of any of the
aforegoing patents, but excluding patent
applications that have been withdrawn or
have expired;
1.2.9. "RESEARCH PERIOD" - shall bear the meaning assigned
to such term in clause 2.1 below;
1.2.10. "SUBLICENCE" and
"SUBLICENSEE" - shall bear the meanings respectively
assigned to such terms in clause 7.5
below;
1.2.11. "SUBLICENSING RECEIPTS" - shall mean consideration, whether
monetary or otherwise, actually received
(for the removal of doubt, whether
actually received before or after the
First Commercial Sale in any country) by
the Company for or from the grant of
Sublicences and/or pursuant thereto, or in
connection with the grant of an option for
a Sublicence, except for amounts received
by the Company which constitute royalties
based on sales of the Products by
Sublicensees;
the terms: "YEDA", "THE - shall bear the definitions assigned to
COMPANY","THE INSTITUTE", them respectively in the heading or the
"THE SCIENTIST", "THE preamble hereto, as the case may be.
INVENTION","THE EXISTING
PATENT APPLICATION,"THE
RESEARCH PROGRAM", "THE
RESEARCH", "THE RESEARCH
BUDGET" and "PRODUCTS"
1.3. In this Agreement:
1.3.1. words importing the singular shall include the plural and vice-versa
and words importing any gender shall include all other genders and
references to persons shall include partnerships, corporations and
unincorporated associations;
1.3.2. any reference in this Agreement to the term "patent" shall also
include any re-issues, divisions, continuations or extensions
thereof (including measures having equivalent effect); and
1.3.3. any reference in this Agreement to the term "sale" shall include the
sale, lease, rental or other disposal of any Product;
1.3.4. "INCLUDING" and "INCLUDES" means including, without limiting the
generality of any description preceding such terms.
2. PERFORMANCE OF THE RESEARCH
2.1. In consideration of the sums to be paid by the Company to Yeda pursuant
to clause 3 below and, subject to the execution of such payments, Yeda
undertakes, subject to clause 2.2 below, to procure the performance of
the Research at the Institute under the supervision of the Scientist
during the 3 (three) year period commencing on April 9, 2003 ("THE
RESEARCH PERIOD"). By written agreement of the parties, the Research
Period may be extended by such period and upon such terms and
conditions as the parties shall so agree.
2.2. If the Scientist shall cease to be available for the supervision of the
performance of the Research, such cessation shall not constitute a
breach of this Agreement by Yeda. In the event that the Scientist shall
cease to be available as aforesaid, Yeda shall use its reasonable
efforts to find from amongst the scientists of the Institute a
replacement scientist acceptable to the Company (such acceptance to be
in writing, and not to be unreasonably withheld) but no undertaking to
find such a replacement is given by Yeda. If no such acceptable
replacement scientist can be found within 30 (thirty) days of the
Scientist becoming unavailable as aforesaid, then the Company shall be
entitled, by written notice to Yeda, to terminate the Research Period,
in which event the Research Period and the performance of Research
hereunder shall cease at the end of a further period of 15 (fifteen)
days from the date of receipt by Yeda of such written notice. In the
event of such termination, Yeda shall be released from any obligation
to procure the performance of the Research during the period after such
termination. The Company shall be released from any obligation to
finance the Research in respect of the period commencing at the end of
45 (forty five) days after the unavailability of the Scientist, but
without affecting the Licence and all the other terms and conditions of
this Agreement which shall remain in full force and effect (save for
those relating to the performance and financing of the Research).
2.3. For the avoidance of doubt, it is agreed that nothing in this Agreement
shall constitute a representation or warranty by Yeda, express or
implied, that any results (including any milestones specified in the
Research Program) will be achieved by the Research or that the Licensed
Information or any part thereof or any results achieved by the Research
are or will be commercially exploitable or of any other value and Yeda
furthermore makes no warranties and representations, express or
implied, whatsoever as to the Research, any results of the Research or
the Licensed Information.
3. FUNDING THE RESEARCH
The Company undertakes to pay to Yeda the Research Budget (in US
Dollars) as follows: (i) with regard to the first year of the Research
Period (commencing on April 9, 2003), the amount of US $450,000 (four
hundred and fifty thousand United States Dollars), of which a
non-refundable installment of US $225,000 (two hundred and twenty five
thousand United States Dollars) shall be due and payable on October 9,
2003 and a non-refundable installment of US $225,000 (two hundred and
twenty five thousand United States Dollars) shall be due and payable on
January 9, 2004; and (ii) with regard to the second and third years of
the Research Period, respectively, an amount which shall be not less
than US $900,000 (nine hundred thousand United States Dollars) and not
more than US $1,000,000 (one million United States Dollars) per year to
be determined by mutual agreement of the parties no later than 30
(thirty) days prior to the commencement of the relevant year, in 4
(four) equal 3 (three) monthly non-refundable installments, payable in
advance at the beginning of each 3 (three) month period during such
year. If the parties fail to reach agreement within the time frame
referred to above regarding the amount of the Research Budget payable
for the second or third year of the Research Period (as the case may
be), then the Research Budget for such year shall be US $900,000 (nine
hundred thousand United States Dollars) and Yeda shall procure the
performance of Research for such reduced amount. An invoice in respect
of an installment paid as aforesaid shall be issued by Yeda promptly
after the receipt by Yeda of such installment. All payments of the
Research Budget shall be made by direct wire transfer to Yeda's bank
account, the details of which Yeda shall notify to the Company. In the
event that the Research Budget for any given year during the Research
Period is not fully utilised during such year, the unutilised portion
of research funds shall be added to the Research Budget for the
following year. Yeda and/or the Institute shall not obtain finance for
the Research from other entities, unless such financing has been
approved by the Company and provided that such other entities are not
granted any rights in respect of the Research and/or the Licensed
Information which prejudice any rights granted to the Company under the
Licence.
4. REPORTING BY YEDA
The Scientist and the Company shall conduct a monthly meeting, whereby
the Scientist shall report and inform the Company on the ongoing
Research activities and update the Company on the scientific work
progress, the Company shall inform Yeda on the time and location of
such meetings and Yeda may send a representative to attend them. In
addition:
4.1. Yeda will procure the submission by the Scientist to the Company of:
(i) an interim written report on the progress of the Research in
each 6 (six) month period during the Research Period, within 60
(sixty) days of the end of each such 6 (six) month period, and of a
written report summarizing the results of the Research within 60
(sixty) days of the end of the Research Period; and
4.2. Yeda shall submit to the Company, with respect to each 3 (three)
month period of the Research Period, a financial report setting
forth the monies received and expended in connection with the
Research during such 3 (three) month period. Each report as
aforesaid shall be submitted to the Company not later than 30
(thirty) days after the end of the period covered by such report.
Charges in respect of Research expenditures shall be made in
accordance with the procedures prevailing at the Institute for
charging research expenditures to individual projects of applied
research.
5. TITLE
All right, title and interest in and to the Licensed Information and the
Patents and all right, title and interest in and to any drawings, plans,
diagrams, specifications, other documents, models, or any other physical
matter in any way containing, representing or embodying any of the
aforegoing, vest and shall vest in Yeda and subject to the License as
specified herein.
6. PATENTS; PATENT INFRINGEMENTS
6.1.
6.1.1. Subject to clauses 6.3 and 6.4 below, Yeda shall prosecute the
Existing Patent Application using the outside patent counsel
retained by Yeda for such purpose prior to the execution of this
Agreement, unless otherwise agreed by the parties in writing, and
shall maintain at the applicable patent office any patents issuing
from the Existing Patent Application. The Company and Yeda shall
consult with one another and cooperate fully with regard to the
prosecution of the Existing Patent Application and in maintenance of
such patents.
6.1.2. At the initiative of either party, the parties shall consult with
one another regarding the filing of patent applications (such term
herein to include any provisional patent applications, applications
for continuations, continuations-in-part, divisions, patents of
addition or renewals, as well as any other applications or filings
for similar statutory protection) in respect of any portion of the
Licensed Information and/or corresponding to the Existing Patent
Application, including the jurisdictions in which such applications
should be filed, the timing of the filing of such applications and
the contents thereof. Following such consultations, and subject to
clauses 6.3 and 6.4 below, Yeda shall retain outside patent counsel
that will be approved by the Company, to prepare, file and prosecute
patent applications as aforesaid in such jurisdiction or
jurisdictions as shall be determined by the parties in consultation
as aforesaid. Subject to clauses 6.3 and 6.4 below, Yeda shall also
maintain at the applicable patent office any patents granted as a
result of any of the above patent applications. The parties agree
that their joint policy will be to seek comprehensive patent
protection for all Licensed Information licensed to the Company
hereunder. The Company and Yeda shall cooperate fully in the
preparation, filing, prosecution and maintenance of such patent
applications and patents.
6.2. All applications to be filed in accordance with the provisions of
clause 6.1.2 above, shall be filed in the name of Yeda or, should the
law of the relevant jurisdiction so require, in the name of the
relevant inventors and then assigned to Yeda and shall be subject to
the Licence as provided herein.
6.3. In the event that, following such consultations between the parties
regarding the filing, prosecuting and/or maintenance (as applicable) of
patent applications and/or patents pursuant to clauses 6.1.1 and 6.1.2
above, the Company shall not wish to file and/or continue to prosecute
a patent application and/or maintain a patent in any country in
relation to any part of the Licensed Information (including the
Existing Patent Application), then Yeda, in its discretion, may elect
to file and/or continue to prosecute such patent application and/or
maintain such patent in such country at its own cost and expense. Yeda
shall notify the Company in writing of Yeda's election to file and/or
continue to prosecute such patent application and/or maintain such
patent in such country as aforesaid, at Yeda's expense (such notice,
"THE YEDA NOTICE"), and, in the event that the Company shall not,
within 30 (thirty) days of receipt of the Yeda Notice: (i) reimburse
Yeda for all out-of-pocket costs and fees incurred by Yeda until the
date of the Yeda Notice (the Yeda Notice to be supported by receipts or
other appropriate documents evidencing such costs and fees) in
connection with the said patent application (in the preparation and/or
filing and/or prosecution of such application) and/or such patent; and
(ii) undertake in writing to Yeda to bear all additional and future
expenses relating to such patent application and/or patent, then Yeda
shall be entitled, at any time after the expiry of the said 30 (thirty)
day period after such notice, to terminate the Licence granted to the
Company under this Agreement in respect of such patent application
and/or of such patent in such country, and to take whatever action it
deems fit (in its sole discretion) with respect to such patent
application and/or patent.
6.4.
6.4.1. The Company shall, on the date of signature of this Agreement,
reimburse Yeda the sum of US $18,623 (eighteen thousand six hundred
and twenty three United States Dollars), constituting the aggregate
costs and fees paid by Yeda prior to the date of signature of this
Agreement in connection the Existing Patent Application and shall
pay Yeda all additional amounts incurred, but not as yet paid, by
Yeda prior to the date of signature of this Agreement, within 30
(thirty) days of Yeda's first written request.
6.4.2. Without derogating from the provisions of clause 6.4.1 above, the
Company shall bear and pay all costs and fees incurred in the
preparation, filing, prosecution and the like of the Existing Patent
Application and of all patent applications filed in accordance with
the provisions of clause 6.1.2 above (including patent applications
corresponding to the Existing Patent Application), and the
maintenance at the appropriate patent office and the like of all
patents issuing from the Existing Patent Application and all patent
applications referred to above.
6.4.3. Unless otherwise instructed by Yeda in writing, the Company shall
pay directly to Yeda's relevant outside patent counsel amounts
payable by the Company pursuant to this clause 6.4 above or clause
6.3 above.
6.5. Should the Company: (i) determine that a third party is infringing one
or more of the Patents; or (ii) be sued on the grounds that the
manufacture, use or sale of a Product by it or by a Sublicensee under
any of the Patents or using the Licensed Information or any portion
thereof infringes upon the patent rights of a third party, then the
Company shall, after first having consulted Yeda, be entitled to ▇▇▇
for such infringement or defend such action (as the case may be), and,
Yeda may elect, at its own initiative, to join as a party to such
action or consent to such joinder (such consent by Yeda may for the
removal of doubt, be conditional upon, inter alia, the provision by the
Company of security, satisfactory to Yeda, for the payment of the
expenses or costs referred to in paragraph (a) below) and Yeda shall
cooperate and shall use its reasonable efforts to cause the Scientist
to cooperate with the Company in prosecuting or defending such
litigation, provided that: (a) any expenses or costs or other
liabilities incurred in connection with such litigation (including
attorneys fees, costs and other sums awarded to the counterparty in
such action) shall be borne by the Company, who shall indemnify Yeda
against any such expenses or costs or other liabilities, the above
without derogating from the provisions of clause 12 below; (b) in the
event that Yeda shall be named as a party in any such litigation then
Yeda shall be entitled to select its own legal counsel in such
litigation, at its own expense, provided that if the legal counsel of
the Company faces a conflict of interest in representing Yeda and the
Company then the Company shall bear and pay Yeda's reasonable legal
counsel expenses. If Yeda elects not to do so, the selection of the
legal counsel representing the Company and Yeda shall be made after
consultation with Yeda; (c) no settlement, consent order, consent
judgment or other voluntary final disposition of such action may be
entered into without the prior written consent of Yeda; and (d) if an
action is brought against the Company alleging the invalidity of any of
the Patents, after consultation with the Company, Yeda shall have the
right to take over the sole defence of the action and the Company shall
cooperate fully with Yeda in connection with any such action and all
related costs and expenses related thereto shall be paid by Yeda. Any
recovery in any litigation as aforesaid relating to an infringement
shall first be applied to cover costs and thereafter divided 84%
(eighty-four percent) to the Company and 16% (sixteen percent) to Yeda.
For the removal of doubt, Yeda shall not itself be obliged to take any
action to ▇▇▇ for any infringement or to defend any action as referred
to in this clause 6.5 above.
6.6. If the Company fails to take action to ▇▇▇▇▇ any alleged infringement
of a Patent, or to defend any action as aforesaid, within 60 (sixty)
days of a request by Yeda to do so (or within a shorter period, if
required to preserve the legal rights of Yeda under applicable law),
then Yeda shall have the right (but not the obligation) to take such
action at its expense and the Company shall cooperate in such action at
the Company's expense and, if required under applicable law or
contract, to be named as a party to any such action. Yeda shall have
full control of such action and shall have full authority to settle
such action on such terms as Yeda shall determine. Any recovery in any
such litigation shall be for the account of Yeda only.
6.7. If the Company initiates any action pursuant to clause 6.5 above or
becomes aware of any action initiated by any third party concerning any
alleged infringement, or discovers any allegation by a third party of
infringement resulting from the Patents, then the Company shall so
notify Yeda promptly in writing, giving full particulars thereof. The
Company shall promptly keep Yeda informed and provide copies to Yeda of
all documents regarding all such actions or proceedings instituted by
or against the Company as contemplated under any of the provisions of
clause 6.5.
7. LICENCE
7.1. Yeda hereby grants to the Company, and the Company hereby accepts from
Yeda, an exclusive worldwide licence under the Licensed Information and
the Patents, for the development, manufacture and sale of the Products
("THE LICENCE") during the period, for the consideration and subject to
the terms and conditions set out in this Agreement. For the removal of
doubt, no licence is granted hereunder with regard to the Licensed
Information and/or the Patents and/or any portion of any of the
aforegoing, with respect to any exploitation or activities (including
the aforegoing activities) relating to any product or services, other
than Products.
7.2. For the removal of doubt, nothing contained in this Agreement shall
prevent Yeda or the Institute from using the Licensed Information and
the Patents for academic research or other scholarly purposes, provided
that during the Research Period Yeda shall inform the Company about any
new application of the Licensed Information discovered or invented by
the Scientist in the course of such academic or scholarly research and
Company shall have the right to inform Yeda within 90 (ninety) days of
such notice, whether the Company wishes to commence negotiations to an
agreement with respect of further research, development and
commercializing of such new application, thereafter Yeda and the
Company shall negotiate the terms of their agreement with 6 (six)
months from the Company's response. For the purpose of clarification,
Yeda shall not disclose the new application to any third party other
than the Company within the said examination or negotiation periods. If
the Company does not inform Yeda of its intention to commence
negotiation or negotiations fail, then Yeda shall be free to
commercialize the new application to any third party. The Company
recognizes that the new application may be subject to right of third
parties (non commercial institutions) that provide financing for the
academic or scholarly research.
7.3. The Licence shall remain in force in each country with respect to each
Product (if not previously terminated in accordance with the provisions
of this Agreement) until the later of:
7.3.1. the date of expiry of the last of the Patents in such country
covering such Product; or
7.3.2. the date of expiry of a period of 15 (fifteen) years commencing on
the date of receipt of FDA New Drug Approval or of equivalent
approval for such Product in such country.
For the purposes of clause 7.3.1 above: (i) a Product shall be deemed
to be covered by a Patent in any country even after the Patent in such
country covering such Product has expired, in the event that, and for
so long as, such Product is protected by "Orphan Drug" status (within
the meaning of such term under the U.S. Orphan Drug Act), by a
Supplementary Protection Certificate (within the meaning of such term
under Council Regulation (EU) No. 1768/92) or by any other provisions
granting similar statutory protection of such Product in such country;
and (ii) for the removal of doubt, "Patent" shall include also patent
applications and continuations-in-part.
The Company shall notify Yeda in writing immediately upon the receipt
of each such FDA New Drug Approval or of equivalent approval referred
to in clause 7.3.2 above, specifying its date, the country in which
such approval was obtained and the type of Product in respect of which
such approval was obtained.
7.4. A Sublicence under the Licence may be granted by the Company only with
the prior written consent of Yeda, which shall not be withheld
unreasonably. However, such prior consent shall not be needed if the
Company's shares are traded on a stock exchange located in the European
Union or the United States; provided further that: (i) the proposed
Sublicence is for monetary consideration only; (ii) the proposed
Sublicence is to be granted in a bona fide arms-length commercial
transaction; (iii) a copy of the agreement granting the Sublicence and
all amendments thereof shall be made available to Yeda, 14 days before
their execution and the Company shall submit to Yeda copies of all such
Sublicenses and all amendments thereof promptly upon execution thereof;
and (iv) the proposed Sublicence is made by written agreement, the
provisions of which are consistent with the terms of the Licence and
contain, inter alia, the following terms and conditions:
7.4.1. the Sublicence shall expire automatically on the termination of the
Licence for any reason;
7.4.2. the Sublicensee shall be bound by provisions substantially similar
to those in clause 10 below relating to confidentiality binding the
Company;
7.4.3. all terms necessary to enable performance by the Company of its
obligations hereunder;
7.4.4. that any act or omission by the Sublicensee which would have
constituted a material breach of this Agreement by the Company had
it been the act or omission of the Company, shall constitute a
material breach of the Sublicence agreement with the Company
entitling the Company to terminate the Sublicence, and the Company
hereby undertakes to inform Yeda forthwith upon receipt of knowledge
by the Company of such material breach (provided such breach has not
been cured within 30 days after the Company had issued the
Sublicensee a written notice with respect hereof) and, at the
request of Yeda, and at the Company's cost and expense, to exercise
such right of termination;
7.4.5. that the Sublicence shall not be assignable, otherwise transferable
or further sublicenseable;
7.4.6. that the Sublicensee shall grant to the Company the right, at
reasonable times and upon reasonable notice to the Sublicensee, to
send an independent auditor in order to examine those records of the
Sublicensee as may be necessary in order to determine the
correctness or completeness of any payment made by the Company to
Yeda under this Agreement, all without derogating from clauses 9.5
and 9.6 below. The Company shall exercise such audit right at Yeda's
written request, but not more than once a year per sublicensee. Yeda
or the Company shall bear all costs and expenses related thereto in
accordance with clause 9.5 (mutatis mutandis).
7.5. For the purposes of this Agreement, "SUBLICENCE" shall mean any right
granted, licence given, or agreement entered into, by the Company to or
with any other person or entity, permitting any use of the Licensed
Information and/or the Patents (or any part thereof) for the
development, manufacture and/or sale of Products (whether or not such
grant of rights, licence given or agreement entered into is described
as a sublicence or as an agreement with respect to the development
and/or manufacture and/or sale and/or distribution and/or marketing of
Products or otherwise) and the term "SUBLICENSEE" shall be construed
accordingly. For the removal of doubt, the Company shall not be
entitled to grant, directly or indirectly, to any person or entity any
right of whatsoever nature to exploit or use in any way the Licensed
Information or to develop, manufacture and/or sell the Products or any
part of any of the aforegoing, save by way of Sublicence within the
meaning of such term in this paragraph above and subject to the
conditions of this clause 7 relating to any such grant.
7.6. Nothing contained in this Agreement shall be deemed to be a
representation or warranty, express or implied, by Yeda that the
Existing Patent Application or any patent applications relating to the
Licensed Information or any portion thereof will be granted or that
patents obtained on any of the said patent applications are or will be
valid or will afford proper protection or that the Invention or any
other portion of the Licensed Information are or will be commercially
exploitable or of any other value or that the exploitation of the
Patents, the Invention or the Licensed Information will not infringe
the rights of any third party.
8. DEVELOPMENT AND COMMERCIALIZATION
8.1. Within 1 (one) year of the date of signature of this Agreement, the
Company shall submit to Yeda, for its written approval (not to be
unreasonably withheld), a Development Program for the development of
Products (such Development Program, as approved by Yeda, "THE INITIAL
DEVELOPMENT PROGRAM").
8.2. The Company undertakes, at its own expense, to use best efforts to
commercialise the Products and, without derogating from the generality
of the aforegoing, to use its best efforts to expedite the commencement
of the commercial sale of the Products. For such purpose and without
derogating from the generality of the aforegoing, the Company shall:
(i) invest in those research and development activities; and (ii) carry
out and/or have a third party carry out on its behalf the performance
of those trials (including phases I, II and III clinical trials), tests
and other works and activities, all as detailed in the Initial
Development Program, in accordance with the timetable specified
therein. The Company also undertakes to perform all such other tests,
works and activities as are detailed in all further Development
Programs (if any) submitted and approved pursuant to clause 8.5 below,
in accordance with the respective timetables included therein. The
Company further undertakes to continue with commercialisation of the
Products diligently throughout the period of the Licence.
8.3. The Company shall, after the delivery to, and approval by, Yeda of the
Initial Development Program under clause 8.1 above, provide Yeda on
June 30 and December 31 of each calendar year with written progress
reports ("PROGRESS REPORTS") which shall include detailed descriptions
of the progress and results, if any, of: (i) the tests and trials
conducted and all other actions taken by the Company pursuant to the
Initial Development Program or any other Development Program delivered
and approved pursuant to clause 8.5 below; (ii) manufacturing,
sublicensing, marketing and sales during the preceding 6 (six) months;
(iii) the Company's plans in respect of the testing, undertaking of
trials or commercialisation of Products for the following 6 (six)
months; and (iv) projections of sales and marketing efforts. The
Company shall also provide any reasonable additional data that Yeda
requires to evaluate the performance of the Company hereunder.
8.4. For the removal of doubt, without derogating from the remaining
provisions of this clause 8 or of clause 13.2 below, nothing contained
in this Agreement shall be construed as a warranty by the Company that
any Development Program to be carried out by it as aforesaid will
actually achieve its aims and the Company makes no warranties
whatsoever as to any results to be achieved in consequence of the
carrying out of any such Development Program.
8.5. Without derogating from the obligations of the Company pursuant to this
clause 8 above or from the provisions of clause 13.2 below, in the
event that the Company shall wish to develop and/or commercialise
Products in addition to those specified in the Initial Development
Program, the Company shall inform Yeda in writing, of a further
Development Program in respect of such additional Products and the
provisions of this clause 8 shall apply also with respect to such
further Development Program and to the development and
commercialisation of such additional Products, mutatis mutandis.
8.6. The Company shall ▇▇▇▇, and cause all its Sublicensees to ▇▇▇▇, all
Products that are manufactured or sold under this Agreement with the
number or numbers of each Patent applicable to such Product.
9. ROYALTIES
9.1. In consideration for the grant of the Licence, the Company shall pay
Yeda:
9.1.1. a non-refundable and non-creditable licence fee of US $50,000 (fifty
thousand United States Dollars) per year (or part thereof) during
the term of this Agreement ("THE ANNUAL LICENCE FEE") to be paid in
advance at the beginning of each 1 (one) year period during the term
of this Agreement, commencing on the first day after the date of
termination or expiry of the Research Period. For the removal of
doubt, the first Annual Licence Fee shall be paid on the first day
after the end of the Research Period and thereafter on each
anniversary of such date. Notwithstanding, if the Scientist shall
cease to be available for the supervision of the performance of the
Research, the Annual Licence Fee shall commence upon the fifth
anniversary of this Agreement.
9.1.2. a royalty of 4% (four percent) of Net Sales by or on behalf of the
Company or any Sublicensees; provided that, in the event that there
are any sales of a Product that are not, at the time of such sales,
covered by a Valid Patent Claim (as hereinafter defined) in such
country, then the royalty rate referred to in this clauses 9.1.2
above shall, with respect to Net Sales of such Product made in such
country during the period such Product is not so covered by a Valid
Patent Claim as aforesaid, be reduced to 3% (three percent), such
royalties, for the removal of doubt, being payable at such lower
rates in respect of the use of the Licensed Information under this
Agreement.
For the purposes of this clause 9.1.2 above, "VALID PATENT
CLAIM" shall mean: (i) a claim under an issued and
unexpired patent which is included in the Patents; or (ii)
a claim in a pending patent application (including a
provisional application) patent application which is
included in the Patents; and
9.1.3. 33% (thirty-three percent) of all Sublicensing Receipts;
provided that, with respect to those Sublicensing Receipts
received pursuant to or in connection with a Sublicence
executed after the first anniversary of the date of
signature of this Agreement, and subject to the fulfilment
of the Company's obligations under this Agreement, the
percentage payable in respect of Sublicensing Receipts as
aforesaid shall be 16% (sixteen percent).
For the removal of doubt, the Company undertakes that all sales (within
the meaning of such term in clause 1.2.7 above) of Products by the
Company and each Sublicensee shall be for cash consideration only.
9.2. In calculating Net Sales and Sublicensing Receipts, all amounts shall
be expressed in US Dollars and any amount received or invoiced in a
currency other than US Dollars shall be translated into US Dollars, for
the purposes of calculation, in accordance with the Exchange Rate
between the US Dollar and such currency on the date of such receipt or
invoice, as the case may be. For the removal of doubt, in calculating
amounts received by the Company, whether by way of Net Sales or
Sublicensing Receipts, any amount deducted or withheld in connection
with any such payment on account of taxes on net income (including
income taxes, capital gains tax, taxes on profits or taxes of a similar
nature) payable by the Company in any jurisdiction, shall be deemed,
notwithstanding such deduction or withholding, to have been received by
the Company. In the event that the Sublicensing Receipts comprise, in
whole or in part, of non-cash consideration (including shares or other
securities of the Sublicensee or any other entity), then the Company
agrees, promptly upon Yeda's request, to execute and deliver such
documents and instruments and do any other acts as may be necessary, so
that Yeda receives the percentage share of such non-cash consideration
as provided in clause 9.1.3.
9.3.
9.3.1. Amounts payable to Yeda pursuant to this clause 9 shall be paid to
Yeda in US Dollars (i) in the case of Net Sales, on a quarterly
basis and no later than 30 (thirty) days after the end of each
calendar quarter, commencing with the first calendar quarter in
which any Net Sales are made or royalties are received by the
Company; or (ii) in the case of Sublicensing Receipts, no later than
7 (seven) days after any such Sublicensing Receipts are received by
the Company from any Sublicensees.
9.3.2. The Company shall submit to Yeda: (i) no later than 14 (fourteen)
days after any Sublicensing Receipts are received, an interim
written report setting out amounts owing to Yeda in respect of such
Sublicensing Receipts; and (ii) no later than 30 (thirty) days after
the end of each calendar quarter, commencing with the first calendar
quarter in which any Net Sales are made or Sublicensing Receipts are
received by the Company, a full and detailed report, in a form
agreed upon between the Parties, certified as being correct by the
chief financial officer of the Company, setting out all amounts
owing to Yeda in respect of such previous calendar quarter to which
the report refers, and with full details of:
9.3.2.1. (i) the sales made by the Company and Sublicensees, including a
breakdown of Net Sales according to country, identity of seller,
currency of sales, dates of invoices, number and type of
Products sold;
(ii) the Sublicensing Receipts, including a breakdown of
Sublicensing Receipts according to identity of Sublicensees,
countries, the currency of the payment and date of receipt
thereof;
(iii) deductions applicable, as provided in the definition of
"Net Sales"; and
9.4. The Company shall keep and shall procure Sublicensees to keep complete,
accurate and correct books of account and records consistent with sound
business and accounting principles and practices and in such form and
in such details as to enable the determination of the amounts due to
Yeda in terms hereof. The Company shall supply Yeda within 6 months
from the end of each calendar year, commencing with the first calendar
year in which any amount is payable by the Company to Yeda under this
clause 9, a report signed by the Company's independent auditors in
respect of the amounts due to Yeda pursuant to this clause 9 in respect
of the year covered by the said report and containing details in
accordance with clause 9.3 above in respect of the quarterly reports.
The Company shall require its Sublicensees to, retain the aforegoing
books of account for 6 (six) years after the end of each calendar year
during the period of this Agreement, and, if this Agreement is
terminated for any reason whatsoever, for 6 (six) years after the end
of the calendar year in which such termination becomes effective.
9.5. At Yeda's expense, and not more than once a year, Yeda shall be
entitled to appoint representatives to inspect during normal business
hours and after it had scheduled the said inspection with the Company,
to make copies of the Company's and Sublicensees' books of accounts,
records and other documentation (including technical data and lab
books) (reinstated) to the extent relevant or necessary for the
ascertainment or verification of the amounts due to Yeda under this
clause 9. The Company shall take all steps necessary so that all such
books of account, records and other documentation of the Company are
available for inspection as aforesaid at a single location of the
Company. In the event that any inspection as aforesaid reveals any
underpayment by the Company to Yeda in respect of any year of the
Agreement in an amount exceeding 5% (five percent) of the amount
actually paid by the Company to Yeda in respect of such year then the
Company shall (in addition to paying Yeda the shortfall together with
interest thereon in accordance with clause 13.4 below), bear the costs
of such inspection. The provisions of this clause 9.5 shall survive the
termination of this Agreement for whatsoever reason.
10. CONFIDENTIALITY
10.1. The Company shall maintain in confidence all information or data
relating to the Patents, the Licensed Information, this Agreement
and the terms hereof (hereinafter, collectively referred to as "THE
CONFIDENTIAL INFORMATION"), except and to the extent that the
Company can prove that any such information or data is in the public
domain at the date of the signing hereof or becomes part of the
public domain thereafter (other than through a violation by the
Company or a Sublicensee of this obligation of confidentiality) and
except with regard to that portion, if any, of the Confidential
Information expressly released by Yeda from this obligation of
confidentiality by notice in writing to the Company to such effect.
Notwithstanding the foregoing, the Company may disclose to its
personnel and Sublicensees the Confidential Information to the
extent necessary for the exercise by it of its rights hereunder or
in the fulfilment of its obligations hereunder, provided that it
shall bind such personnel and such Sublicensees with a similar
undertaking of confidentiality in writing. The Company shall be
responsible and liable to Yeda for any breach by its personnel or
any Sublicensee of such undertakings of confidentiality as if such
breach were a breach by the Company itself.
10.2. In addition to and without derogating from the aforegoing, the
Company undertakes not to make mention of the names of Yeda, the
Institute or any scientists or other employee of the Institute
(including the Scientist) or any employee of Yeda in any manner or
for any purpose whatsoever in relation to this Agreement, its
subject matter and any matter arising from this Agreement or
otherwise, unless the prior written approval of Yeda thereto has
been obtained.
10.3. Notwithstanding the provisions of clauses 10.1 and 10.2 above, the
Company shall not be prevented from mentioning the name of Yeda, the
Institute and/or any scientists or other employees of the Institute
(including the Scientist) or any employee of Yeda or from disclosing
any information if, and to the extent that, such mention or
disclosure is to competent authorities for the purposes of obtaining
approval or permission for the exercise of the Licence, or in the
fulfilment of any legal duty owed to any competent authority
(including a duty to make regulatory filings); provided that, any
mention or disclosure in a private placement memorandum, a public
offering registration statement or any other filing with the United
States Securities and Exchange Commission ("THE SEC") or similar
body shall not be deemed fulfilment of a legal duty to a competent
authority, and any such mention or disclosure shall be subject to
Yeda's consent, which consent shall not be withheld unreasonably.
Notwithstanding the aforegoing, the Company shall be permitted to
file this Agreement with the SEC if in the opinion of outside
counsel to the Company, the filing of this Agreement with the SEC is
required by the rules and regulations promulgated by the SEC.
10.4. No termination of this Agreement, for whatever reason, shall release
the Company from any of its obligations under this clause 10 and
such obligations shall survive any termination as aforesaid.
10.5. Yeda shall maintain in confidence all information received by Yeda
from the Company which has been designated by the Company in writing
and in advance as confidential, except and to the extent that: (i)
any such information or data is in the public domain at the date of
the signing hereof or becomes part of the public domain thereafter
(other than through a violation by Yeda of this obligation of
confidentiality) or is released by the Company from this obligation
of confidentiality by notice in writing; (ii) Yeda is required to
disclose such information in order to fulfill its obligations under
this Agreement (including in connection with the filing and
prosecution of patent applications in accordance with the provisions
of clause 6 above); or (iii) Yeda is required to disclose such
information in fulfilment of any legal duty owed to any competent
authority. For the removal of doubt, the provisions of this clause
10.5 shall not apply in respect of any information (not being
Licensed Information) independently developed at the Institute
without reference to the confidential information received from the
Company.
10.6. Subject to the terms herein, Yeda shall have the right to allow the
scientists of the Institute to publish articles relating to the
Licensed Information in scientific journals or posters or to give
lectures or seminars to third parties relating to the Licensed
Information, on the condition that, to the extent that the
information to be published or disclosed is Licensed Information
which is not in the public domain, a draft copy of the said
contemplated publication or disclosure shall have been furnished to
the Company at least 60 (sixty) days before the making of any such
publication or disclosure and the Company shall have failed to
notify Yeda in writing, within 15 (fifteen) days from receipt of the
said draft publication or disclosure, of its opposition to the
making of the contemplated publication or disclosure. Should the
Company notify Yeda in writing within 15 (fifteen) days from the
receipt of the draft contemplated publication or disclosure that it
opposes the making of such publication or disclosure because it
includes material (which has been specified in said notice) in
respect of which there are reasonable grounds (which have also been
specified in said notice) requiring the preventing or postponement,
as the case may be, of such publication or disclosure so as not
adversely to affect the Company's interests under the Licence
because such Licensed Information is patentable subject-matter for
which patent protection pursuant to clause 6.1 above should be
sought, then Yeda shall not permit such publication or disclosure
unless there shall first have been filed an appropriate patent
application in respect of the material to be published or disclosed
as aforesaid. The Company acknowledges that it is aware of the
importance to the researchers of publishing their work and,
accordingly, the Company will use its best efforts not to oppose
such publications.
10.7. Yeda's obligations under this clause 10 shall terminate upon
termination of this Agreement.
11. NO ASSIGNMENT
The Company may not assign or encumber all or any of its rights or
obligations under this Agreement or arising therefrom, without the prior
written consent of Yeda, which consent may be conditioned by Yeda that any
consideration, received by the Company, in respect of assignment as
aforesaid shall be deemed to be Sublicensing Receipts and the provisions of
clause 9 above shall apply with respect thereto, mutatis mutandis). For the
purposes of this clause 11, the merger of the Company with another entity
(whether or not the Company is the surviving entity) shall be deemed to be
an assignment. Notwithstanding the aforegoing, the Company may assign all
of its rights and obligations (other than those undertakings set forth in
clause 12A below, it being understood that a breach of clause 12A below by
the Company shall constitute a breach of this Agreement by such assignee
and that nothing herein shall derogate from the provisions of clause 13.2.3
below) to a wholly-owned subsidiary of the Company, provided that (a) no
such assignment shall relieve the Company of its obligations hereunder
should such assignee refuse or fail to perform any obligations hereunder
that are assigned to it; (b) such assignee confirms in writing (in form and
substance satisfactory to Yeda) that it accepts and assumes all the rights
and obligations under this Agreement assigned to it by the Company
hereunder; (c) such assignee may not further assign its rights and
obligations under this Agreement; and (d) it shall be deemed to be a
material breach of this Agreement, by the Company and such assignee, should
such assignee cease to be a wholly-owned subsidiary of the Company, unless
all rights and obligations of such assignee under this Agreement can be,
and are, to Yeda's satisfaction, assigned back to the Company.
12. EXCLUSION OF LIABILITY AND INDEMNIFICATION
12.1. Yeda, the Institute and the directors, officers and employees of Yeda
and/or of the Institute (hereinafter collectively "THE INDEMNITEES")
shall not be liable for any claims, demands, liabilities, costs,
losses, damages or expenses (including legal costs and attorneys' fees)
of whatever kind or nature caused to or suffered by any person or
entity (including the Company or any Sublicensee) that directly or
indirectly arise out of or result from or are encountered in connection
with this Agreement or the exercise of the Licence, including directly
or indirectly arising out of or resulting from or encountered in
connection with the development, manufacture, sale or use of any of the
Products by the Company, any Sublicensee or any person acting in the
name of or on behalf of any of the aforegoing, or acquiring, directly
or indirectly, any of the Products from any of the aforegoing, or
directly or indirectly arising out of or resulting from or encountered
in connection with the exploitation or use by the Company or any
Sublicensee of the Licensed Information or any part thereof, including
of any data or information given, if given, in accordance with this
Agreement.
12.2. In the event that any of the Indemnitees should suffer any damages,
claim, demand, liability, loss, cost or expense (including legal costs
and attorneys' fees) as aforesaid in clause 12.1, or shall be requested
or obliged to pay to any person or entity any amount whatsoever as
compensation for any damages, demand, claim, liability, cost, loss or
expense as aforesaid, then the Company shall indemnify and hold
harmless such Indemnitees from and against any and all such damages,
claim, demand, liability, loss, cost or expense (including attorney's
fees and legal costs) of whatever kind or nature as aforesaid. Without
limiting the generality of the aforegoing, the Company's
indemnification as aforesaid and the exclusion of liability in clause
12.1 above shall extend to product liability claims and to damages,
claims, demands, liabilities, losses, costs and expenses attributable
to death, personal injury or property damage or to penalties imposed on
account of the violation of any law, regulation or governmental
requirement.
12.3. The Company shall at its own expense insure its liability pursuant to
clause 12.2 above during the period beginning clinical trials and
continuing during the entire period that the Licence is in force in any
country, plus an additional period of 7 (seven) years. Such insurance
shall be in reasonable amounts and on reasonable terms in the
circumstances, having regard, in particular, to the nature of the
Products, and shall be subscribed for from a reputable insurance
company. The named insured under such insurances shall be the Company,
Yeda and the Institute and the beneficiaries thereof shall include also
the respective employees, officers and directors of Yeda and the
Institute. The policy or policies so issued shall include a
"cross-liability" provision pursuant to which the insurance is deemed
to be separate insurance for each named insured (without right of
subrogation as against any of the insured under the policy, or any of
their representatives, employees, officers, directors or anyone in
their name) and shall further provide that the insurer will be obliged
to notify each insured in writing at least 30 (thirty) days in advance
of the expiry or cancellation of the policy or policies. The Company
hereby undertakes to comply punctually with all obligations imposed
upon it under such policy or policies and in particular, without
limiting the generality of the aforegoing, to pay in full and
punctually all premiums and other payments for which it is liable
pursuant to such policy or policies. The Company shall be obliged to
submit to Yeda copies of the aforesaid insurance policy or policies
within 14 (fourteen) days of the date of issue of each such policy.
12.4. The provisions of this clause 12 shall survive the termination of
this Agreement for whatsoever reason.
12A. UNDERTAKINGS BY THE COMPANY
The Company hereby undertakes, within 120 (one hundred and twenty) days of
the date of signature of this Agreement:
12A.1. to issue to Yeda (i) a warrant, exercisable at an aggregate exercise
price of US $900 (Nine Hundred United States Dollars) to purchase up to
2.23% of the issued and outstanding shares of common stock of the
Company immediately following the exercise of such warrant
(representing partial consideration for the grant by Yeda of the
Licence to the Company) and (ii) a warrant, exercisable at an aggregate
exercise price of US $1,100 (One Thousand One Hundred United States
Dollars) to purchase up to 2.67% of the issued and outstanding shares
of the Company immediately following the exercise of such warrant
(representing Yeda's share, under the Institute's internal rules, of
the equity securities provided, or to be provided, by the Company to
the Scientist in consideration for the Scientist's entering into a
consulting agreement with the Company) provided that the maximum number
of shares of common stock that Yeda may exercise under the warrants
described in subclauses 12A.1(i) and 12A.1(ii) above shall be 771,713
and 923,979, respectively (in each case as such number of shares of
common stock shall be appropriately adjusted in the event of stock
splits, stock dividends, capital reorganisations, reclassifications,
recapitalisations and the like as well as issuances or sales by the
Company of shares for par value only, for consideration less than par
value and for no consideration, all in accordance with the terms and
conditions of said warrant, which shall be satisfactory to Yeda and to
the Company). Each such warrant shall be exercisable for a period
beginning one year after the date of signature of this Agreement and
ending at the later of (a) one year following the termination of this
Agreement and (b) ten years after the date of signature of this
Agreement and to have such further terms and conditions as shall be
satisfactory to Yeda and the Company; and
12A.2. to enter into an agreement granting registration rights to Yeda, such
agreement to have such terms and conditions as shall be satisfactory to
Yeda and the Company.
13. TERM AND TERMINATION
13.1. Unless otherwise agreed to in writing, this Agreement shall terminate
upon the occurrence of the later of the following:
13.1.1. the date of expiry of the last of the Patents; or
13.1.2. the expiry of a continuous period of 20 (twenty) years during which
there shall not have been a First Commercial Sale of any Product in
any country.
13.2. Notwithstanding anything to the contrary contained in this Agreement:
13.2.1. Yeda shall be entitled, at its option: (i) to modify the Licence
hereunder so that it is non-exclusive only, by written notice to the
Company (any such amendment of this Agreement by Yeda as aforesaid,
being effective immediately, the Company's consent thereto (written
or otherwise) not being required, notwithstanding the provisions of
clause 17.2 below); or (ii) to
terminate this Agreement (including the Licence hereunder) by giving
the Company 30 (thirty) days' written notice:
(a) The Company shall fail to achieve commercialization of at
least 1 (one) Product specified in the Development Program
relating to such Product, within 12 (twelve) months of the
date for successful achievement of the last development
milestone as set out in Development Program;
(b) within 3 three years of the identification of the first
Product to be developed, Phase I clinical trials shall not
have commenced with respect to such Product, unless the
Company shall have invested, during such 3 (three) year
period, an aggregate amount of at least US $3,000,000 (three
million United States Dollars) in research and development in
respect of such Product;
(c) within 7 (seven) years of the identification of the first
Product to be developed, Phase III clinical trials shall not
have commenced with respect to such Product, unless the
Company shall have invested, during such 7 (seven) year
period, including the amount set forth in sub-section 13.2.1
(ii)(b) above an aggregate amount of at least US $6,000,000
(six million United States Dollars) in research (other than
the Research) and development in respect of such Product;
(d) First Commercial Sale of at least one Product shall not have
commenced within 1 (one) year of the first date upon which all
milestones relevant to the development and/or
commercialisation of any Product pursuant to any Development
Program have been achieved; or
(e) commercial sale of any Product having commenced, there shall
be a period of 12 (twelve ) months or more during which no
sales of any Product shall take place (except as a result of
force majeure or other factors beyond the control of the
Company).
13.2.2. Without derogating from the aforegoing, Yeda shall be entitled to
terminate this Agreement (unless previously terminated in accordance
with the provisions of this Agreement), by written notice to the
Company (effective immediately), if the Company contests the
validity of any of the Patents;
13.2.3. Without derogating from the aforegoing and from any other remedy
available to Yeda for breach of this Agreement by the Company, Yeda
shall be entitled to terminate this Agreement by written notice to
the Company (effective immediately) if the Company fails to comply
with any of the provisions of clauses 12A.1 and 12A.2, within 120
(one hundred and twenty) days of the date of signature of this
Agreement.
13.3. Without derogating from the parties' rights hereunder or by law to any
other or additional remedy or relief, it is agreed that either Yeda or
the Company may terminate this Agreement and the Licence hereunder by
serving a written notice to that effect on the other upon or after: (i)
the commitment of a material breach hereof by the other party, which
material breach cannot be cured or, if curable, which has not been
cured by the party in breach within 21 (twenty-one) days (or, in the
case of failure by the Company to pay any amount due from the Company
to Yeda pursuant to or in connection with this Agreement on or before
the due date of payment, 10 (ten) days) after receipt of a written
notice from the other party in respect of such breach, or (ii) the
granting of a winding-up order in respect of the other party, or upon
an order being granted against the other party for the appointment of a
receiver, or if such other party passes a resolution for its voluntary
winding-up, or if a temporary or permanent liquidator or receiver is
appointed in respect of such other party, or if a temporary or
permanent attachment order is granted on such other party's assets, or
a substantial portion thereof, or if such other party shall seek
protection under any laws or regulations, the effect of which is to
suspend or impair the rights of any or all of its creditors, or to
impose a moratorium on such creditors, or if anything analogous to any
of the aforegoing in this clause 13.3(ii) above under the laws of any
jurisdiction occurs in respect of such other party and the order or act
as aforesaid is not cancelled within 60 (sixty) days of the grant of
such order or the performance of such act.
13.4. Any amount payable hereunder by one of the parties to the other, that
has not been paid by its due date of payment, shall bear interest from
its due date of payment until the date of actual payment, at the
maximum rate prevailing from time to time during the period of arrears
at Bank Hapoalim B.M. in respect of unapproved overdrafts in current
accounts.
13.5. In the event Yeda desires to exploit the Licensed Information, or any
part thereof, in order to conduct sponsored research with respect to,
or pursue commercialisation of, a given Product and the Company has not
already submitted to Yeda a Development Program in respect of such
Product in accordance with clause 8 above, then:
13.5.1. Yeda shall notify the Company in writing of the Product in respect
of which it desires to conduct sponsored research or it desires to
commercialise (such notice specifically referring to this clause
13.5), such notice to identify the Product with reasonable
specificity and particularity (such Product being "THE PROPOSED
PRODUCT" and such notice being "THE PRODUCT NOTICE");
13.5.2. upon receipt of a Product Notice, the Company shall have 3 (three)
months to provide Yeda with a Development Program ("THE PRODUCT
DEVELOPMENT PROGRAM") for the development and commercialisation of
the Proposed Product;
13.5.3. in the event the Company fails to provide Yeda with a Product
Development Program within the 3 (three) month period referred to in
clause 13.5.2 above, Yeda may, by notice in writing, terminate the
Licence hereunder in respect of the Proposed Product and Yeda shall
be entitled to use the Licensed Information in order to conduct
sponsored research with respect to the Proposed Product or to use,
or to grant licences to use, the Licensed Information and the
Patents to develop, manufacture, sell, offer for sale, import and
otherwise distribute the Proposed Product; provided that, any such
licence shall be in writing and shall include confidentiality
obligations on the licensee similar, mutatis mutandis, to those
imposed on the Company pursuant to clauses 10.1 to 10.4 above.
13.6. Upon the termination of this Agreement for whatever reason: (i) all
rights in and to the Licensed Information and the Patents shall revert
to Yeda and the Company shall not be entitled to make any further use
thereof and the Company shall deliver to Yeda all drawings, plans,
diagrams, specifications, other documentation, models or any other
physical matter in the Company's possession in any way containing,
representing or embodying the Licensed Information; and (ii) the
Company shall grant to Yeda a non-exclusive, irrevocable, perpetual,
paid-up, worldwide licence in respect of the Company's Information. In
this clause 13.6 above, the term "THE COMPANY'S INFORMATION" shall mean
any invention, product, material, method, process, technique, know-how,
data, information or other result which does not form part of the
Licensed Information, discovered or occurring in the course of or
arising from the performance by the Company of the development work
pursuant to clause 8 above, including any regulatory filing or
approval, filed or obtained by the Company in respect of the Products.
13.7. The termination of this Agreement for any reason shall not relieve the
Company of any obligations which shall have accrued prior to such
termination.
13.8. In the event that this Agreement shall be terminated, other than by way
of termination by Yeda pursuant to clause 13.2.2 or 13.3 above, and
that, at any time within 5 (five) years following such termination,
Yeda shall grant to a third party a licence in respect of the Company's
Information or any part thereof (alone or together with any part of the
Licensed Information) and Yeda shall receive in respect of such licence
consideration, then, subject to the Company having complied and
continuing to comply with all its obligations under this Agreement
which remain in existence following termination of this Agreement as
aforesaid (including the provisions of clause 13.6 above, Yeda shall
pay to the Company 16% (sixteen percent) of the Net Proceeds actually
received by Yeda in respect of such a licence, until such time as the
Company shall have received, in aggregate, the full amount of the
Research Budget actually paid by the Company to Yeda. Yeda shall pay to
the Company amounts, if any, payable under this clause 13.8 above,
within 30 (thirty) days from the end of each quarter on which the
relevant Net Proceeds were received.
For the purpose of this clause 13.8, "NET PROCEEDS" means royalties or
other consideration of any kind invoiced by Yeda in respect of such
licence (excluding funds for research and/or development at the
Institute or payments for the supply of services) after deduction of
all costs, fees and expenses incurred by Yeda in connection with such
licence (including, without limitation, patent related costs, and all
attorneys fees and expenses and other costs and expenses in connection
with the negotiation, conclusion and administration of such licence).
14. NOTICES
Any notice or other communication required to be given by one party to the
other under this Agreement shall be in writing and shall be deemed to have
been served: (i) if personally delivered, when actually delivered; or (ii)
if sent by facsimile, the next business day after receipt of confirmation
of transmission; or (iii) 10 (ten) days after being mailed by certified or
registered mail, postage prepaid (for the purposes of proving such
service--it being sufficient to prove that such notice was properly
addressed and posted) to the respective addresses of the parties set out
below, or to such other address or addresses as any of the parties hereto
may from time to time in writing designate to the other party hereto
pursuant to this clause 14:
14.1. to Yeda at: ▇.▇. ▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: the CEO
Facsimile: (08)
9470739
14.2. to the Company at: ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇-
Law Offices
Toyota Towers
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇
Attention: Adv. ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇▇▇▇
15. VALUE ADDED TAX
The Company shall pay to Yeda, against submission of appropriate tax
invoices, all amounts of Value Added Tax imposed on Yeda in connection with
the transactions under this Agreement, if any. All amounts referred to in
this Agreement shall be exclusive of Value Added Tax.
16. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed in all respects by the laws of Israel and
the parties hereby submit to the exclusive jurisdiction of the competent
Israeli courts, except that Yeda may bring suit against the Company in any
other jurisdiction outside Israel in which the Company has assets or a
place of business.
17. MISCELLANEOUS
17.1. The headings in this Agreement are intended solely for convenience or
reference and shall be given no effect in the interpretation of this
Agreement.
17.2. This Agreement constitutes the entire agreement between the parties
hereto in respect of the subject matter hereof, and supersedes all
prior agreements or understandings between the parties relating to the
subject matter hereof (including the Memorandum of Understanding
between the parties dated February 12, 2002) and, subject to clause
13.2.1(i) above, this Agreement may be amended only by a written
document signed by both parties hereto. No party has, in entering into
this Agreement, relied on any warranty, representation or undertaking,
except as may be expressly set out herein.
17.3. This Agreement may be signed in any number of counterparts, no one of
which need be signed by more than one party, and all such copies, when
duly executed, shall be considered an original of one and the same
document.
17.4. No waiver by any party hereto, whether express or implied, of its
rights under any provision of this Agreement shall constitute a waiver
of such party's rights under such provisions at any other time or a
waiver of such party's rights under any other provision of this
Agreement. No failure by any party hereto to take any action against
any breach of this Agreement or default by another party hereto shall
constitute a waiver of the former party's rights to enforce any
provision of this Agreement or to take action against such breach or
default or any subsequent breach or default by such other party.
17.5. If any provision of this Agreement is held to be unenforceable under
applicable law, then such provision shall be modified as set out below
and the balance of this Agreement shall be interpreted as if such
provision were so modified and shall be enforceable in accordance with
its terms. The parties shall negotiate in good faith in order to agree
on the terms of an alternative provision which complies with applicable
law and achieves, to the greatest extent possible, the same effect as
would have been achieved by the invalid or unenforceable provision.
17.6. Nothing contained in this Agreement shall be construed to place the
parties in relationship of partners or parties to a joint venture or to
constitute either party an agent, employee or legal representative of
the other party and neither party shall have power or authority to act
on behalf of the other party or to bind the other party in any manner
whatsoever.
17.7. All payments to be made to Yeda hereunder shall be made free and clear
of and without any deduction for or on account of any set-off,
counterclaim or tax.
17.8. Each party agrees to execute, acknowledge and deliver such further
documents and instruments and do any other acts, from time to time, as
may be reasonably necessary, to effectuate the purposes of this
Agreement.
17.9. None of the provisions of this Agreement shall be for the benefit of,
or enforceable by, any person who is not a party to this Agreement.
IN WITNESS WHEREOF THE PARTIES HERETO HAVE SET THEIR SIGNATURES AS OF THIS 8TH
DAY OF OCTOBER 2003.
for YEDA RESEARCH AND for ▇▇▇▇ LOGIC, INC.
DEVELOPMENT COMPANY LIMITED
By: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇ ▇▇▇▇
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Title: CEO Chairman Title: Chief Executive Officer
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