CONFIDENTIAL TREATMENT REQUESTED. Confidential portions of this document 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 document have been redacted
and separately filed with the Commission.
*****
Confidential material redacted and filed separately with the
Commission.
EXECUTION
COPY
LICENSE
AGREEMENT dated as of August 17, 2005 (the “Agreement
Date”)
between VivoQuest, Inc., a Delaware corporation
(“VivoQuest”),
and
XTL Biopharmaceuticals Ltd., an Israeli corporation (“Licensee”).
WHEREAS,
VivoQuest owns the patents and patent applications listed on Schedule I hereto;
WHEREAS,
subject to the terms and conditions hereinafter set forth, VivoQuest is willing
to grant to Licensee and Licensee is willing to accept from VivoQuest the
License (as hereinafter defined); and
WHEREAS,
within five business days of the execution of this agreement, VivoQuest will
issue a communication to ***** in the form attached hereto as Exhibit
A;
NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein, the parties hereto hereby agree as follows:
SECTION
1. Definitions.
(a)
As
used in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
shall
mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with such Person, and
in the
case of any natural Person shall include all relatives and family members
of
such Person. For purposes of this definition, a Person shall be deemed to
control another Person if such first Person directly or indirectly owns or
holds
five percent (5%) or more of the ownership interests in such other
Person.
“Asset
Purchase Agreement”
shall
mean that certain Asset Purchase Agreement dated as of the date hereof between
VivoQuest and Licensee.
“Contract”
means
any contract, indenture, note, bond, loan, mortgage, license, instrument,
lease
or agreement.
“Disclosed
Compound”
shall
mean a compound disclosed in a patent or patent application listed on Schedule
I.
“Fair
Market Value”
shall
mean, as to any security, the average closing bid price of such security
on the
principal stock exchange or interdealer quotation system in which such
securities are traded over a period of 20 consecutive trading days the latest
of
which shall be the trading day immediately preceding the date as of which
"Fair
Market Value" is being determined or, if such security is not then traded
on an
exchange or through an inter-dealer quotation system, the fair value of such
security as reasonably determined by the Board of Directors of Licensee.
*****
Confidential material redacted and filed separately with the
Commission.
“FDA”
shall
mean the United States Food and Drug Administration.
“Governmental
Body”
means
any government or governmental or regulatory authority or body thereof, or
political subdivision thereof, whether federal, state, local or foreign,
or any
agency, instrumentality or authority thereof, or any court or arbitrator
(public
or private).
“HCV
Product”
shall
mean a Licensed Product having as its active ingredient a Disclosed Compound
that has been approved by the FDA or a foreign regulatory counterpart for
the
treatment or prevention of hepatitis C virus infection, whether or not such
Licensed Product has been approved for another indication.
“Intellectual
Property Rights”
shall
mean means the rights associated with the following: (a) any and all trademarks,
service marks, brand names, certification marks, trade dress, assumed names,
trade names, logos and other indications of origin, sponsorship or affiliation,
together with the goodwill associated therewith (whether the foregoing are
registered or unregistered); registrations thereof in any jurisdiction and
applications to register any of the foregoing in any jurisdiction, and any
extension, modification or renewal of any such registration or application;
(b)
any and all inventions, developments, improvements, discoveries, know how,
concepts and ideas, whether patentable or not in any jurisdiction; (c) any
and
all patents, revalidations, industrial designs, industrial models and utility
models, patent applications (including reissues, continuations, divisions,
continuations-in-part and extensions) and patent disclosures; (d) any and
all
non-public information, trade secrets and proprietary or confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any Person; (e) any and all writings and other works, whether
copyrighted, copyrightable or not in any jurisdiction, such works including
computer programs and software (including source code, object code, data
and
databases); (f) any and all copyrights, copyright registrations and applications
for registration of copyrights in any jurisdiction, and any renewals or
extensions thereof; (g) any and all other intellectual property or proprietary
rights; (h) any and all agreements, licenses, immunities, covenants not to
xxx
and the like relating to any of the foregoing; and (i) any and all claims
or
causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing.
“Knowledge
of VivoQuest”
means
(regardless of case) any fact, circumstance, event or other matter in question,
of which any member of senior management of VivoQuest has actual knowledge
or
should have had actual knowledge after reasonable due inquiry
“Law”
means
any federal, state, local or foreign law (including common law), statute,
code,
ordinance, rule, regulation or binding administrative
pronouncement.
2
*****
Confidential material redacted and filed
separately with the Commission.
“Liability”
means
any liability (whether known or unknown, whether asserted or unasserted,
whether
absolute or contingent, whether accrued or unaccrued, whether liquidated
or
unliquidated, and whether due or to become due).
“License”
shall
mean the license granted to Licensee in Section 2(a).
“Licensed
Patents”
shall
mean (i) the patents listed on Schedule I, (ii) any and all U.S. and foreign
patent applications covering the Licensed Technology including, without
limitation, the patent applications listed on Schedule I, (iii) the patents
proceeding from such applications and (iv) all claims of and any divisions,
continuations, in whole or in part, reissues, re-examinations, renewals and
extensions of any such patents or patent applications.
“Licensed
Products”
shall
mean any product covered by a claim of any unexpired Licensed Patent which
has
not been disclaimed or held invalid by a court of competent jurisdiction
from
which no appeal can be taken, or which incorporates or is developed using
Licensed Technology.
“Licensed
IP”
shall
mean all Licensed Patents, the Licensed Technology and all other Intellectual
Property Rights of VivoQuest (including Intellectual Property Rights arising
under (i) the Contracts listed in Section 3.13 of the Seller Disclosure
Schedule, (ii) the Contracts identified in Section 3.13(b) of the Asset Purchase
Agreement and (iii) any other Contracts to which VivoQuest is or has at any
time
been a party, in each case whether or not any such Contract is an Included
Contract). Notwithstanding the foregoing, the Licensed IP excludes the
tradenames “VivoQuest” and “ChemQuest” and derivatives thereof.
“Licensed
Technology”
shall
mean all technology owned by VivoQuest or in which VivoQuest has any interest,
including all, lab notebooks, drawings, designs, design and manufacturing
documentation (such as xxxx of materials, build instructions and test reports),
schematics, algorithms, routines, software (including all source code),
databases and data collections, development and lab equipment, processes,
prototypes and devices, compounds and compound libraries and technical
information, know-how and concepts whether or not embodied in tangible form,
including all Intellectual Property Rights in or underlying such technology.
“Net
Sales”
shall
mean the amount actually collected in connection with sales of the Licensed
Products to any person or entity that is not an Affiliate or subcontractor
of
Licensee or a direct or indirect sublicensee of Licensee under the License,
after deduction of all trade, cash and quantity credits, discounts; refunds
or
rebates; allowances or credits for returns; sales commissions; and prepaid
freight, transportation insurance, sales taxes and other government charges
(including value-added tax). Sales of Licensed Products by Licensee or an
Affiliate, subcontractor or direct or indirect sublicensee of Licensee to
any
Affiliate, subcontractor or direct or indirect sublicensee shall be excluded,
and only the subsequent sale of such Licensed Products by Affiliates or direct
or indirect sublicensees of Licensee to unrelated end users shall be deemed
Net
Sales hereunder.
3
*****
Confidential material redacted and filed
separately with the Commission.
“Net
Sublicensing Revenues”
shall
mean, with respect to any product for any fiscal period, the fair value,
as
reasonably determined by Licensee, of the milestone payments, profit sharing
payments or royalty payments received by Licensee for the direct or indirect
sublicensing of such product (other than to Affiliates of Licensee or to
subcontractors), provided that “Net Sublicensing Revenues” shall exclude
payments based on the achievement of research and development milestones
and any
other payments that are not based on commercial sales of products.
“Non-HCV
Product”
shall
mean a Licensed Product having as its active ingredient a Disclosed Compound
that has been approved by the FDA or a foreign regulatory counterpart for
an
indication other than the treatment or prevention of hepatitis C virus infection
and has not been so approved for the treatment or prevention of hepatitis
C
virus infection.
“Option”
shall
mean the option granted to Licensee in Section 12.
“Order”
means
any order, injunction, judgment, decree, ruling, writ, assessment or arbitration
award entered, issued, made or rendered by any Governmental Body.
“Ordinary
Shares”
shall
mean the ordinary shares, par value NIS 0.02 per share, of
Licensee.
“Person”
shall
mean any individual, corporation, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, Governmental Body
or
other entity.
*****
“Transaction
Documents”
shall
mean this Agreement and the Asset Purchase Agreement.
(b)
Capitalized terms used and not otherwise defined in this Agreement shall
have
the meanings assigned to such terms in the Asset Purchase
Agreement.
SECTION
2. Grant
of License.
(a)
Subject to the terms and conditions hereinafter set forth, VivoQuest hereby
grants to Licensee, and Licensee hereby accepts from VivoQuest, in each case
effective as of the Closing Date, a worldwide, perpetual, irrevocable,
non-terminable (except as provided in Section 12), sublicensable right and
license under all of the Licensed IP to make, have made, use, have used,
sell,
have sold, offer for sale, import and have imported Licensed Products and
to
practice the Licensed IP, including any claimed method within the Licensed
IP.
The License is subject to (i) the rights of ***** and (ii) the rights of
the
U.S. government under 35 U.S.C. Section 200 et seq.
and the
regulations promulgated thereunder, as in effect from time to time. If the
Asset
Purchase Agreement is terminated, the license granted herein shall not come
into
effect and this Agreement shall terminate, provided that (x) Section 7 shall
survive such termination other than with respect to the Licensed IP, (y)
Section
10 shall survive such termination with respect to the matters described in
Section 10(a)(i) and 10(a)(ii) and (z) no such termination shall relieve
a
breaching party from Liability resulting from any breach by that party of
this
Agreement.
4
*****
Confidential material redacted and filed
separately with the Commission.
(b)
In
the event that at any time (i) ***** is entitled to a license under the *****
(or any agreement to which ***** becomes a party pursuant to the *****) with
respect to any portion of the Licensed IP in the field of hepatitis C virus
or
(ii) VivoQuest is obligated to refrain from entering into an agreement with
a
third party with respect to ***** in the field of hepatitis C virus, the
License
shall, without further act of any party, be deemed to be non-exclusive or
to
have terminated, as appropriate to avoid any conflict with the terms of the
***** or any such other agreement, with respect to such portion of the Licensed
IP in the field of hepatitis C virus, provided that the License shall, without
further act of any party, be deemed to have been reinstated in the field
of
hepatitis C virus at such time as the reinstatement no long is in conflict
with
the ***** or any such other agreement.
(c)
The
License granted to Licensee in Section 2(a) shall remain in force on a
country-by-country basis until ten (10) years from the first commercial sale
in
such country or until the expiration date of the last to expire of the Licensed
Patents, whichever shall be later. Licensee shall inform VivoQuest in writing
of
the date of first commercial sale with respect to each Licensed Product in
each
country as soon as reasonably practicable after the making of each such first
commercial sale. Upon the expiration of the License in any country, the License
shall be fully paid-up, royalty free and perpetual in such country.
(d)
To
the extent any of the tangible items within the Licensed Technology are not
located at VivoQuest’s Valley Cottage, New York facility as of the Closing Date,
VivoQuest shall deliver such tangible items to such facility within 5 business
days following the Closing Date.
(e)
If
***** does not provide the *****, including *****, to VivoQuest within the
period provided in the communication referenced in the letter agreement dated
the date hereof between Seller and Purchaser and Section 6.1(m) of the Asset
Purchase Agreement, or if any other basis for termination of the ***** exists
after the date hereof, VivoQuest shall, unless the Asset Purchase Agreement
has
terminated, effect the termination of the ***** if and as directed by Licensee,
and Licensee shall be entitled to participate in any discussions with *****
relating to such termination. VivoQuest shall provide the ***** to *****
as
promptly as practicable in accordance with the terms of the *****. The *****
shall be subject to the prior review and approval of Licensee. VivoQuest
acknowledges and agrees that money damages would not be an adequate remedy
for
any breach of its obligations under this paragraph and that in addition to
any
other remedies available to Licensee, Licensee shall be entitled to the remedies
of injunction, specific performance and other equitable relief for any
threatened or actual breach of such obligations.
5
*****
Confidential material redacted and filed
separately with the Commission.
SECTION
3. Consideration
for License.
(a)
In
consideration for the grant and during the term of the License, Licensee
shall
provide the following consideration to VivoQuest:
(i)
on
the Closing Date, US $941,176 in Ordinary Shares;
(ii)
upon
achievement of each the following technical milestones, the payments indicated
below, each of which shall be payable no more than one time:
Milestone
|
Consideration
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
All
or
any portion of the milestone payments described in (A) through (E) above
may, at
Licensee’s sole option, be satisfied by the delivery to VivoQuest of Ordinary
Shares. Any consideration required to be provided in the form of Ordinary
Shares
(or, where permitted to be provided in the form of Ordinary Shares, to the
extent Licensee elects to provide such consideration in the form of Ordinary
Shares) shall be satisfied by the delivery to VivoQuest of a number of Ordinary
Shares equal to the applicable US dollar amount divided by the Fair Market
Value
of one Ordinary Share as of the date such milestone payment is earned in
accordance with the foregoing schedule; and
(iii)
(A)
with respect to each HCV Product, for each fiscal year of Licensee, a royalty
of
***** of the first US $***** of Net Sales of such HCV Product by Licensee
and
its Affiliates and ***** of the Net Sales in excess of US $***** of such
HCV
Product by Licensee and its Affiliates;
(B)
for
each fiscal year of Licensee, with respect to each HCV Product, a royalty
equal
to the lower of (I) ***** of the Net Sales of such HCV Product by direct
or
indirect sublicensees of Licensee (other than Affiliates of Licensee) and
(II)
***** of Net Sublicensing Revenues attributable to such HCV Product;
and
(C)
for
each fiscal year of Licensee, with respect to each Non-HCV Product, a royalty
equal to the lower of (I) ***** of the Net Sales of such Non-HCV Product
by
License and direct or indirect sublicensees of Licensee (including Affiliates
of
Licensee) and (II) ***** of Net Sublicensing Revenues attributable to such
Non-HCV Product.
6
*****
Confidential material redacted and filed separately with the
Commission.
Notwithstanding
the foregoing:
(x)
if a
payment is owed by Licensee or a direct or indirect sublicense of Licensee
(including an Affiliate of Licensee) to one or more third parties with respect
to any sale of an HCV Product, Licensee may credit ***** of such third party
payments in determining the amounts payable to VivoQuest pursuant to clauses
(A)
and (B) above, provided that aggregate royalty payments to VivoQuest pursuant
to
clauses (A) and (B) above shall not be reduced by more than *****percent
(*****)
as a result of such third party payments, with excess amounts being carried
forward and credited in future periods, provided further that if such third
party payments are attributable to a breach of a representation, warranty
or
covenant by VivoQuest in the Transaction Documents (irrespective of any
limitation on the survival period applicable thereto), the entire amount
of such
payments may be credited without limitation as to the reduction in amounts
payable to VivoQuest pursuant to clauses (A) and (B) above except to the
extent
that the portion of any such reduction in excess of ***** percent (*****)
would
exceed any cap, or would not give effect to any threshold amount, applicable
to
liability for breach of such representation, warranty or covenant;
and
(y)
if a
payment is owed by Licensee or a direct or indirect sublicense of Licensee
(including an Affiliate of Licensee) to one or more third parties with respect
to any sale of a non-HCV Product, Licensee may credit ***** of such third
party
payments in determining the amounts payable to VivoQuest pursuant to clause
(C)
above, provided that aggregate royalty payments to VivoQuest pursuant to
clause
(C) above shall not be reduced by more than ***** percent (*****) as a result
of
such third party payments, with excess amounts being carried forward and
credited in future periods, provided further that if such third party payments
are attributable to a breach of a representation, warranty or covenant by
VivoQuest in the Transaction Documents (irrespective of any limitation on
the
survival period applicable thereto), the entire amount of such payments may
be
credited without limitation as to the reduction in amounts payable to VivoQuest
pursuant to clause (C) above except to the extent that the portion of any
such
reduction in excess of ***** percent (*****) would exceed any cap, or would
not
give effect to any threshold amount, applicable to liability for breach of
such
representation, warranty or covenant.
7
*****
Confidential material redacted and filed separately with the
Commission.
Only
one
royalty shall be paid hereunder with respect to the sale of any HCV Product
or
Non-HCV Product, whether or not it is covered by more than one claim of a
patent, by the claims of more than one patent, or by the claims of patents
of
more than one country.
(b)
For
the purpose of computing the royalties due to VivoQuest hereunder, the year
shall be divided into four parts ending on March 31, June 30, September 30,
and
December 31. Not later than ***** days after each December, March, June,
and
September in each calendar year during the term of the License, Licensee
shall
submit to VivoQuest a full and detailed report of royalties or payments due
VivoQuest under the terms of this Agreement for the preceding quarter year
(hereinafter the “Quarter-Year
Report”),
setting forth the Net Sales and/or lump sum payments and all other payments
or
consideration received by Licensee and its direct and indirect sublicensees
upon
which such royalties are computed, as well as any offsetting payments described
in clauses (x) and (y) of Section 3(a)(iii), and including at least
(i) the
quantity of each HCV Product and Non-HCV Product
sold;
(ii) the
selling price of each HCV Product and Non-HCV
Product;
(iii) a
detailed description of the amount of, and the justification
for, any offsetting payments;
(iv) the
revenues received from sublicensees; and
(v) the
royalty computations.
If
no
royalties or other payments are due, a statement shall be sent to VivoQuest
stating such fact. Payment of the full amount of any royalties or other payments
due to VivoQuest for the preceding quarter shall accompany each Quarter-Year
Report on royalties and payments. Licensee shall keep for a period of at
least
***** years after the date of entry, full, accurate and compete books and
records consistent with sound business and accounting practices and in such
form
and in such detail as to enable the determination of the amounts due to
VivoQuest from Licensee pursuant to the terms of this Agreement.
(c)
On
reasonable notice and during regular business hours, VivoQuest or the authorized
representative of VivoQuest shall each have the right to inspect the books
of
accounts, records and other relevant documentation of Licensee or any of
its
Affiliates insofar as they relate to the production, marketing and sale of
the
Licensed Products, in order to ascertain or verify the amount of royalties
and
other payments due to VivoQuest hereunder, and the accuracy of the information
provided to VivoQuest in the aforementioned reports.
8
*****
Confidential material redacted and filed
separately with the Commission.
(d)
In no
event will any Ordinary Shares be issued hereunder if the issuance of such
Ordinary Shares would cause the total number of Ordinary Shares issued pursuant
to the Transaction Documents to exceed 19.9% of the number of Ordinary Shares
outstanding on the date of this Agreement unless all requisite shareholder
approvals for the issuance of Ordinary Shares in excess of such amount have
been
obtained. Any amounts that would otherwise be satisfied by the issuance of
Ordinary Shares in excess of such amount will be paid in cash. The Ordinary
Shares issued from time to time hereunder are referred to herein collectively
as
the “Shares”.
(e)
(i)
VivoQuest acknowledges that the Shares are being acquired pursuant to an
exemption from registration under the Securities Act of 1933, as amended
(the
“Securities
Act”)
and
that the Shares may be transferred only pursuant to an effective registration
statement or an exemption from registration under the Securities Act. VivoQuest
represents that it is familiar with Rule 144 under the Securities Act. VivoQuest
shall not be permitted to transfer any Shares in the absence of an effective
registration statement unless VivoQuest has furnished Licensee with an opinion
of counsel, reasonably satisfactory to Licensee, that such disposition does
not
require registration of such Shares under the Securities Act. It is agreed
that
Licensee will not require opinions of counsel for transfers made pursuant
to
Rule 144 if Licensee is provided with any certificates or other evidence
of
compliance with Rule 144 reasonably required by it in connection with such
transfer (including without limitation a copy of the relevant Form 144).
(ii)
It
is understood that the certificates evidencing the Shares shall bear a legend
to
the following effect:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTES OF SUCH ACT.
The
certificates evidencing the Shares may also bear any legends required by
applicable blue sky laws.
(iii)
(A)
The Shares shall be freely tradeable on the London Stock Exchange (for so
long
as the Parent Ordinary Shares are listed on the London Stock Exchange), subject
to any restrictions imposed on a party to any transaction executed on the
London
Stock Exchange by the Laws of a country other than the United Kingdom to
which
such party is subject, including the other provisions of this section
3(e)).
(B)
In
the event any of the Shares evidenced by a certificate bearing a restrictive
legend as provided in Section 3(e)(ii) above are transferred by VivoQuest
or a
transferee of VivoQuest pursuant to Rule 904 under the Securities Act, as
currently in effect, Licensee shall instruct the transfer agent for the Ordinary
Shares to issue shares upon transfer free of any restrictive legend or notation
if Licensee is presented with a written certification to the following effect
from the transferor in such transfer:
9
*****
Confidential material redacted and filed
separately with the Commission.
The
undersigned registered holder is selling some or all of the shares evidenced
by
the accompanying certificate in a resale transaction in compliance with Rule
904
under the United States Securities Act of 1933.
Any
unsold balance of the shares represented by such certificate will continue
to
bear a restrictive legend until such time as they are the subject of a
transaction executed in accordance with this Section 3(e)(iii)(B) or until
such
legend may otherwise be removed in the opinion of counsel to Licensee.
(f)
In
the event of a merger, consolidation or other transaction (a “Conversion
Transaction”)
as a
result of which substantially all of the outstanding Shares are converted
into
the right to receive, in whole or in part, equity securities, if such equity
securities are traded on a recognized securities exchange or interdealer
quotation system, in the United States, Europe or Israel, or another securities
exchange or interdealer quotation system reasonably acceptable to VivoQuest
(“Listed
Equity Securities”),
(i)
any Shares shall be eligible to participate in any Conversion Transaction
on the
same basis as other outstanding Shares and (ii) any consideration required
to be
provided to VivoQuest hereunder that would otherwise be permitted to be
satisfied through the issuance of Shares shall thereafter be permitted to
be
satisfied through the issuance of such Listed Equity Securities. For such
purpose, such Listed Equity Securities shall be valued at their aggregate
Fair
Market Value as of the date such Shares would have been valued. In the event
that, in any Conversion Transaction, substantially all of the outstanding
Shares
are converted into the right to receive equity securities that are not Listed
Equity Securities (or are converted into the right to receive a combination
of
such equity securities and cash), then, until such equity securities constitute
Listed Equity Securities, any further consideration required to be provided
to
VivoQuest hereunder that would otherwise be permitted to be satisfied through
the issuance of Shares shall be satisfied entirely in cash. In the event
of a
merger, consolidation or other transaction as a result of which substantially
all of the outstanding Shares are converted into the right to receive only
cash,
any further consideration required to be provided to VivoQuest hereunder
that
would otherwise be permitted to be satisfied through the issuance of Shares
shall be required to be satisfied entirely in cash, provided that if the
surviving or transferee entity in such transaction (or an Affiliate thereof)
has
a class of Listed Equity Securities, any portion of such consideration that
would otherwise be permitted to be satisfied through the issuance of Shares
shall thereafter be permitted to be satisfied through the issuance of such
Listed Equity Securities, valued at their aggregate Fair Market Value as
of the
date such Shares would have been valued.
(g)
Neither VivoQuest nor any transferee of VivoQuest shall sell, pledge, hedge
or
otherwise dispose of any economic interest in 50% of the Shares issued pursuant
to Section 3(a)(i) during the period ending 30 days after the Closing Date.
Furthermore, VivoQuest shall consult with Licensee prior to disposing of
any
Shares issued pursuant to Section 3(a)(i) on the open market to determine
whether Licensee may provide VivoQuest with an alternate opportunity for
liquidity at the same or better pricing, taking into account transaction
costs,
and without material delay.
10
*****
Confidential material redacted and filed
separately with the Commission.
(h)
Responsibility for the aggregate license payments under the ReBLikon GmbH
license required to be delivered by VivoQuest pursuant to Section 6.1(o)
of the
Asset Purchase Agreement shall be allocated as follows: the first $50,000
shall
be borne by Licensee, the next $50,000 shall be borne 50% by Licensee and
50% by
VivoQuest, and any portion in excess of $100,000 shall be borne by VivoQuest.
The portion of such aggregate license payments to be borne by VivoQuest shall
be
deducted from the Ordinary Shares to be issued to Seller pursuant to Section
3(a)(i) and (ii) of this Agreement.
SECTION
4. Method
of Payment.
(a) (i)
Royalties due to VivoQuest under Section 3(a)(iii) with respect to sales
in the
United States shall be paid to VivoQuest in United States dollars. All royalties
due to VivoQuest based on sales in countries other than the United States
shall
accrue in the currency of the country in which the sales are made. Licensee
shall utilize its best efforts to effect US dollar transfers with respect
to
such royalties. However, any and all loss of exchange value, taxes, or other
expenses incurred in the transfer or conversion of foreign currency into
US
dollars (measured, with respect to currency conversion, as of the end of
the
quarterly period during which the applicable royalties accrue), and any income,
remittance, or other taxes on such royalties required to be withheld at the
source shall be the exclusive responsibility of VivoQuest.
(ii)
It
is agreed and understood that the milestone payments to be made pursuant
to
Section 3(a)(ii) shall be made in United States dollars and that this Section
4(a) shall be inapplicable thereto.
(b)
Licensee shall be responsible for payment to VivoQuest of all royalties due
on
Net Sales of Licensed Products by direct or indirect sublicensees of Licensee
(including Affiliates of Licensee).
SECTION
5. Patents
and Patent Applications.
(a) At
the initiative of Licensee, the parties shall consult with each other regarding
the prosecution of all patent applications with respect to the Licensed IP.
VivoQuest shall use its best efforts to implement all requests made by Licensee,
at Licensee’s sole expense, with regard to the preparation, filing, prosecution
and/or maintenance of patent applications and/or patents within the Licensed
IP.
Such patent applications shall be filed, prosecuted and maintained by counsel
selected by Licensee.
(b)
All
applications and proceedings with respect to the Licensed Patents shall be
filed, prosecuted and maintained by VivoQuest at the direction and expense
of
Licensee, provided that Licensee shall have the right to assume direct oversight
of any or all such activities at any time. Against the submission of invoices,
Licensee shall reimburse VivoQuest for all costs and fees invoiced by outside
patent counsel to VivoQuest during the term of this Agreement in connection
with
the filing, maintenance, prosecution, protection and the like of the Licensed
Patents.
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(c)
Licensee shall be entitled to discontinue (or direct VivoQuest to discontinue)
in its sole discretion the prosecution or maintenance of any patents or patent
applications within the Licensed Patents, or to elect to forego the filing
of
any such patent application, without loss of any portion of the License
(including the exclusivity of the License in any jurisdiction).
(d)
Nothing herein contained shall be deemed to be a warranty by VivoQuest that
VivoQuest can or will be able to obtain any patent or patents on any patent
application or applications in the Licensed Patents or any portion thereof,
or
that any of the Licensed Patents will afford adequate or commercially worthwhile
protection.
SECTION
6. Representations
And Warranties.
(a)
Licensee hereby represents and warrants to VivoQuest as follow:
(i)
Licensee is a corporation duly organized, validly existing and in good standing
under the laws of Israel. Licensee has been granted all requisite power and
authority to carry on its business and to own and operate its properties
and
assets. The execution, delivery and performance of this Agreement have been
duly
authorized by the Board of Directors of Licensee.
(ii)
There is no pending or, to Licensee’s knowledge, threatened litigation involving
Licensee which would have any effect on this Agreement or on Licensee's ability
to perform its obligations hereunder.
(iii)
None of the execution and delivery by Licensee of this Agreement, the
consummation of the transactions contemplated hereby by Licensee, or compliance
by Licensee with any of the provisions hereof or thereof will (i) conflict
with,
or result in the breach of, any provision of Licensee’s charter documents;
(ii) conflict with, violate, result in the breach or termination of,
or
constitute a default under any Contract to which Licensee is a party or by
which
Licensee or its properties or assets is bound, or require a consent or waiver
by
any Person in order to avoid any such conflict, violation, breach, termination
or default; (iii) violate any Law or any Order by which Licensee is bound;
or
(iv) result in the creation of any Lien upon the properties or assets
of
Licensee. No governmental franchise, easement, permit, right, application,
filing, registration, license or other authorization (each a “Permit”),
Order, waiver, declaration or filing with, or notification to any Person
is
required on the part of Licensee in connection with the execution, delivery
and
performance of this Agreement or the compliance by either Licensee with any
of
the provisions hereof.
(b)
VivoQuest hereby represents and warrants to Licensee as follows:
(i)
VivoQuest is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is qualified to do business and
is
in good standing in the State of New York. VivoQuest has been granted all
requisite power and authority to carry on its business and to own and operate
its properties and assets. The execution, delivery and performance of this
Agreement have been duly authorized by the Board of Directors of VivoQuest.
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(ii)
There is no pending or, to VivoQuest's Knowledge, threatened litigation
involving VivoQuest which would have any effect on this Agreement or on
VivoQuest's ability to perform its obligations hereunder.
(iii)
None of the execution and delivery by VivoQuest of this Agreement, the
consummation of the transactions contemplated hereby by VivoQuest, or compliance
by VivoQuest with any of the provisions hereof or thereof will (i) conflict
with, or result in the breach of, any provision of VivoQuest’s charter
documents; (ii) conflict with, violate, result in the breach or termination
of, or constitute a default under any Contract to which VivoQuest is a party
or
by which VivoQuest or its properties or assets is bound, or require a consent
or
waiver by any Person in order to avoid any such conflict, violation, breach,
termination or default; (iii) violate any Law or any Order by which VivoQuest
is
bound; or (iv) result in the creation of any Lien upon the properties
or
assets of VivoQuest. No Permit, Order, waiver, declaration or filing with,
or
notification to any Person is required on the part of VivoQuest in connection
with the execution, delivery and performance of this Agreement or the compliance
by either VivoQuest with any of the provisions hereof
(iv)
(A)
VivoQuest owns all right, title and interest in and to the Licensed Patents
and
the compounds listed on Schedule II to this License Agreement (the “Scheduled
Compounds”),
all
other Licensed IP (other than compounds in its compounds libraries that are
not
Scheduled Compounds) and, to its Knowledge, all compounds in its compounds
libraries that are not Scheduled Compounds, free and clear of all Liens (other
than Permitted Exceptions), including without limitation any claims of joint
ownership or right of use pursuant to any of the Contracts listed in Section
3.13 of the Seller Disclosure Schedule or in Section 3.13(b) of the Asset
Purchase Agreement, provided that not own all compounds listed in its pending
patent applications that are not Scheduled Compounds may be covered by valid
claims. No Licensed IP is held under license from a third party. The Licensed
IP
includes all Intellectual Property Rights and technology that was necessary
to
conduct the research and development programs conducted by VivoQuest through
the
date of this Agreement.
(B)
There
is no pending or, to the Knowledge of VivoQuest, threatened action, arbitration,
suit, notice, order, or legal, administrative or other proceeding before
any
court or governmental agency, authority or body, against, or affecting
VivoQuest, either directly or indirectly, with respect to the Licensed IP.
There
is no order, writ, injunction, or decree of any federal, state or local,
or
foreign court, department, agency, or instrumentality, which will directly
or
indirectly relate to the Licensed IP. VivoQuest has complied and is complying
with all law, ordinances, and government rules and regulations applicable
to it
and its properties, assets, and business.
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(C)
No
use of any of the Scheduled Compounds or any of the Licensed IP other than
compounds or, to the Knowledge of VivoQuest, any compounds that are not
Scheduled Compounds constitutes or has constituted an unauthorized use of,
or an
infringement, misappropriation or other violation or impairment of, the
Intellectual Property Rights of any Person and no valid grounds exist for
any
bona fide claims against VivoQuest with respect to the Scheduled Compounds
or
any of the Licensed IP other than compounds or, to the Knowledge of VivoQuest,
any compounds that are not Scheduled Compounds. No Person, including without
limitation any Person who was ever employed or engaged as a contractor by
VivoQuest, has asserted or, to the Knowledge of VivoQuest, threatened any
claim
of infringement against VivoQuest relating to the Licensed IP.
(D)
To
the Knowledge of VivoQuest, there is no unauthorized use or misappropriation
or
infringement of any Licensed IP, including by any employee or former employee
of
VivoQuest. VivoQuest has a policy requiring each employee and contractor
to
execute nondisclosure of proprietary information and confidentiality agreements
in the forms previously provided to Licensee and each such employee and
contractor has executed such agreements. Each such employee is or was an
“employee” for purposes of 17 U.S.C. 101.
(v)
VivoQuest was not organized for the specific purpose of acquiring Shares.
VivoQuest has sufficient knowledge and experience in investing in companies
similar to Licensee in terms of Licensee’s market capitalization and other
relevant factors so as to be able to evaluate the risks and merits of its
investment in Licensee and it is able financially to bear the risks thereof.
VivoQuest has had an opportunity to discuss the terms of the offering and
sale
of the Shares to be issued hereunder and Licensee’s business, management and
financial affairs with Licensee’s management and to obtain any additional
information regarding the foregoing which Licensee possesses or can acquire
without unreasonable effort or expense. Such Shares are being acquired for
VivoQuest’s own accounts and not with a view to, or the intention of, any
distribution in violation of the Securities Act or any applicable state
securities laws. VivoQuest understands that (i)
such
Shares have not been registered under the Securities Act by reason of the
issuance of such Shares in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof or Rule
505
or 506 promulgated under the Securities Act, (ii)
such
Shares must be held indefinitely unless a subsequent disposition thereof
is
registered under the Securities Act or is exempt from such registration,
(iii)
such
Shares will bear a legend to such effect and (iv)
Licensee will issue stop transfer instructions to its transfer agent consistent
with Section 3(e).
(v)
The
representations and warranties made by VivoQuest in the Asset Purchase Agreement
are correct and complete as of the date hereof, except as set forth in the
Seller Disclosure Schedule.
SECTION
7. Confidential
Information.
(a)
Except as otherwise provided in Sections 7(b) and (c) below, VivoQuest shall
maintain (i) the Licensed IP, (ii) all information provided to VivoQuest
by
Licensee and its officers, directors, attorneys and other agents (collectively,
“Representatives”)
and
(iii) the terms and provisions of this Agreement (the materials and information
described in clauses (i) through (iii) being referred to herein as the
“Confidential
Information”)
in
confidence and shall not release or disclose any tangible or intangible
component thereof to any third party without first receiving the prior written
consent of Licensee to said release or disclosure. Notwithstanding the
foregoing, VivoQuest may disclose the Licensed IP (i) in accordance with
the
instructions of Licensee pursuant to Section 5 and (ii) to VivoQuest’s
Representatives who are bound by confidentiality obligations equivalent to
those
provided herein.
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(b)
The
obligations of confidentiality set forth in Section 7(a) shall not apply
to any
component of the Licensed IP which: (i) was part of the public domain prior
to
the Closing Date or which becomes a part of the public domain other than
as a
consequence of a breach by VivoQuest of this Agreement; or (ii) is disclosed
to
VivoQuest by a third party who has the right to make such disclosure free
of any
confidentiality restriction.
(c)
If
VivoQuest or any of its Representatives is requested or required (by oral
questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process)
to
disclose any of the Confidential Information, VivoQuest shall provide Licensee
with prompt written notice of any such request or requirement so that Licensee
may seek a protective order or other remedy and/or waive compliance with
the
provisions of this Agreement. If Licensee seeks a protective order or other
remedy, VivoQuest shall provide such cooperation as Licensee shall reasonably
request. If, in the absence of a protective order or other remedy or the
receipt
by VivoQuest of a waiver from Licensee, VivoQuest or any of its Representatives
is required to disclose Confidential Information to any person, VivoQuest
or its
Representatives may, without liability hereunder, disclose to such person
only
that portion of the Confidential Information that is legally required to
be
disclosed.
(d)
VivoQuest agrees that because damages arising from violations of this Section
7
are extremely difficult to quantify with certainty, injunctive relief will
be
necessary to effect the intent of such Section. Accordingly, VivoQuest hereby
consents to the imposition of a preliminary or permanent injunction as a
remedy
to his breach of this Section 7 (without any requirement that Licensee post
a
bond).
SECTION
8. Infringement
of Licensed Patents.
(a)
In
the event VivoQuest acquires information that a third party is infringing
one or
more of the Licensed Patents, VivoQuest shall promptly notify Licensee in
writing of such infringement.
(b)
In
the event of an infringement of a Licensed Patent, Licensee shall have the
sole
and exclusive right, but shall not be required, to bring suit against the
infringer. Should Licensee elect to bring suit against an infringer, Licensee
shall have the right to join VivoQuest as a party plaintiff in any such suit
or
to bring such suit in the name of VivoQuest. Except to the extent resulting
from
a breach of any representation, warranty or covenant of VivoQuest in the
Transaction Documents, the expenses of any such suit that Licensee elects
to
bring, including any expenses of VivoQuest incurred in conjunction with the
prosecution of such suit or the settlement thereof, shall be paid for entirely
by Licensee and Licensee shall hold VivoQuest harmless from and against any
and
all costs of such litigation.
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(c)
In
the event Licensee exercises the right to xxx herein conferred, Licensee
shall
be entitled to retain all recoveries with respect thereto.
(d)
VivoQuest agrees to cooperate fully with Licensee at the request of Licensee,
including by giving testimony and producing documents lawfully requested
in the
prosecution of any suit by Licensee for infringement of the Licensed Patents;
provided that (except to the extent resulting from a breach of any
representation, warranty or covenant of VivoQuest in the Transaction Documents)
Licensee shall pay all reasonable expenses (including reasonable attorneys’
fees) incurred by VivoQuest in connection with such cooperation. VivoQuest
shall
cooperate fully with Licensee and shall endeavor to cause the VivoQuest
Representatives and all other present and former employees of VivoQuest to
cooperate with Licensee at the request of Licensee, including by giving
testimony and producing documents lawfully requested in the prosecution of
any
suit by Licensee for infringement of the Licensed Patents, provided that
(except
as aforesaid) Licensee shall pay all reasonable expenses (including reasonable
attorneys’ fees) incurred by VivoQuest in connection with such cooperation.
SECTION
9. Pre-Closing
Conduct.
(a)
During the period between the Agreement Date and the Closing Date (the
“Closing
Period”),
VivoQuest shall conduct its business in the ordinary course consistent with
past
practice. During the Closing Period, VivoQuest shall not, without the prior
written consent of Licensee, (i) enter into, amend, terminate or assert any
claim under or with respect to any Contract, (ii) dispose of any material
asset
or any interest therein, including without limitation any interest in any
of the
Licensed IP, (iii) incur any indebtedness, (iv) amend its charter documents
or
(v) issue any securities.
(b)
During the Closing Period, VivoQuest shall, and shall cause its employees,
directors, agents and Affiliates to, immediately suspend any existing
negotiations or discussions relating to any sale, joint venture or other
transfer of any interest in the Licensed IP, and VivoQuest shall not, and
shall
cause its employees, directors, agents and Affiliates not to, (i) solicit
any proposals or offers relating to a transaction involving any of the Licensed
IP or (ii) negotiate or engage in discussions with any third party
concerning any proposal or offer for a transaction involving any of the Licensed
IP.
SECTION
10. Indemnification.
(a)
VivoQuest covenants and agrees to defend, indemnify and hold harmless Licensee
and its Affiliates (including without limitation XTL Biopharmaceuticals Inc.)
and the respective its officers, directors, employees, agents, advisers and
representatives of the foregoing (collectively, the “Licensee
Indemnitees”),
from
and against, and to pay or reimburse Licensee Indemnitees for, any and all
claims, liabilities, obligations, losses, fines, costs, proceedings or damages
(whether absolute, accrued, conditional or otherwise and whether or not
resulting from third party claims), including all reasonable fees and
disbursements of counsel incurred in the investigation or defense of any
of the
same or in asserting any of their respective rights hereunder (collectively,
“Losses”),
resulting from or arising out of:
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(i) any
misrepresentation or breach of any warranty of VivoQuest contained in the
Transaction Documents; provided that in determining whether any such
misrepresentation or breach occurred, any dollar amount thresholds, materiality
qualifiers and material adverse effect qualifier contained in any such
representation or warranty shall be disregarded;
(ii) any
failure of VivoQuest to perform any covenant or agreement made or contained
in
the Transaction Documents or fulfill any obligation in respect thereof
(including without limitation any indemnification obligation contained in
the
Asset Purchase Agreement); or
(iii) except
as
provided in Section 10(b), any liability or obligation arising out of or
relating to the *****, including any claim by ***** that the ***** is breached
by virtue of VivoQuest’s entry into the Transaction Documents or the
consummation of the transactions contemplated thereby.
VivoQuest
shall not be required to indemnify Licensee Indemnitees with respect to any
claim for indemnification (other than a claim for indemnification based on
a
breach of the representations and warranties contained in Section 6(b)(iv)
of
this Agreement or Sections 3.9, 3.11(c), 3.12, 3.14 or 3.18 of the Asset
Purchase Agreement) resulting from or arising out of matters described in
clause (i) above pursuant to this Section 10(a) (and not resulting
from or
arising out of matters described in clause (ii) or (iii) above) or
resulting from or arising out of matters described in clause (i) of
Section
8.1 of the Asset Purchase Agreement (and not resulting from or arising out
of
matters described in clause (ii) or (iii) of Section 8.1 of the Asset
Purchase Agreement) unless and until the aggregate amount of all such claims
against VivoQuest exceeds $10,000 (the “Threshold
Amount”),
in
which case VivoQuest shall be required to indemnify Licensee Indemnitees
for the
amount of such claims in excess of the Threshold Amount. Claims thereafter
may
be asserted regardless of amount.
VivoQuest’s
maximum liability to Licensee Indemnitees under clause (i) above (and not
resulting from or arising out of matters described in clause (ii)
or (iii)
above) and resulting from or arising out of matters described in clause (i)
of Section 8.1 of the Asset Purchase Agreement (and not resulting from or
arising out of matters described in clause (ii) or (iii) of Section
8.1 of
the Asset Purchase Agreement) shall
not
exceed the Total Consideration. “Total
Consideration”
means,
as of the time any liability pursuant to this Section 10 is determined and
required to be satisfied, the sum of (x) $1,250,000, (y) the total amount
of
cash paid to VivoQuest pursuant to Sections 3(a)(ii) and (iii) of this Agreement
and (y) the aggregate Fair Market Value as of the applicable Value Date(s)
of
any Shares theretofore issued pursuant to Section 3(a)(ii) of this Agreement.
As
used herein, “Value
Date”
shall
mean, with respect to the Shares issued pursuant to Section 3(a)(ii) of this
Agreement, the date on which the relevant milestone is earned.
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(b)
Licensee covenants and agrees to defend, indemnify and hold harmless VivoQuest
and its Affiliates and the respective its officers, directors, employees,
agents, advisers and representatives of the foregoing (collectively, the
“VivoQuest
Indemnitees”)
from
and against any Losses resulting from or arising out of:
(i)
the
design, production, manufacture, sale, use in commerce or in human clinical
trials or promotion by Licensee or by a sublicense of Licensee of any Licensed
Product; and
(ii)
any
action taken from and after the Closing Date by a VivoQuest Indemnitee under
or
with respect to the ***** to the extent (A) such action is taken at the request
of and in accordance with any related instructions from Licensee and (B)
such
instructions are determined by a final nonappealable order of a court of
competent jurisdiction to have been given in bad faith.
(c)
(i)
In the case of any claim asserted by a third party against a party entitled
to
indemnification under this Agreement (the “Indemnified
Party”),
notice shall be given by the Indemnified Party to the party required to provide
indemnification (the “Indemnifying
Party”)
as
soon as practicable after such Indemnified Party has actual knowledge of
any
claim as to which indemnity may be sought, and the Indemnified Party shall
permit the Indemnifying Party (at the expense of such Indemnifying Party)
to
assume the defense of any third party claim or any litigation with a third
party
resulting therefrom; provided,
however,
that
(a) the counsel for the Indemnifying Party who shall conduct the defense
of
such claim or litigation shall be subject to the approval of the Indemnified
Party (which approval shall not be unreasonably withheld or delayed),
(b) the Indemnified Party may participate in such defense at such
Indemnified Party’s expense (which shall not be subject to reimbursement
hereunder except as provided below), and (c) the failure by any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying
Party
of its indemnification obligation under this Agreement except and only to
the
extent that such Indemnifying Party is actually and materially damaged as
a
result of such failure to give notice. Except with the prior written consent
of
the Indemnified Party, no Indemnifying Party, in the defense of any such
claim
or litigation, shall consent to entry of any judgment or enter into any
settlement that provides for injunctive or other nonmonetary relief affecting
the Indemnified Party or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Indemnified Party of a general
release from any and all liability with respect to such claim or litigation.
If
the Indemnified Party shall in good faith determine that the conduct of the
defense of any claim subject to indemnification hereunder or any proposed
settlement of any such claim by the Indemnifying Party might be expected
to
affect adversely the ability of the Indemnified Party to conduct its business,
or that the Indemnified Party may have available to it one or more defenses
or
counterclaims that are inconsistent with one or more of those that may be
available to the Indemnifying Party in respect of such claim or any litigation
relating thereto, the Indemnified Party shall have the right at all times
to
take over and assume control over the defense, settlement, negotiations or
litigation relating to any such claim at the sole cost of the Indemnifying
Party; provided,
however,
that if
the Indemnified Party does so take over and assume control, the Indemnified
Party shall not settle such claim or litigation without the prior written
consent of the Indemnifying Party, such consent not to be unreasonably withheld
or delayed. If the Indemnifying Party does not accept the defense of any
matter
as above provided within ten (10) days after receipt of the notice from the
Indemnified Party described above, the Indemnified Party shall have the full
right to defend against any such claim or demand at the sole cost of the
Indemnifying Party and shall be entitled to settle or agree to pay in full
such
claim or demand. In any event, the Indemnifying Party and the Indemnified
Party
shall reasonably cooperate in the defense of any claim or litigation subject
to
this Article 10 and the records of each shall be reasonably available to
the
other with respect to such defense.
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(ii)
With
respect to any claim for indemnification hereunder which does not involve
a
third party claim, the Indemnified Party will give the Indemnifying Party
written notice of such claim. The Indemnifying Party may acknowledge and
agree
by notice to the Indemnified Party in writing to satisfy such claim within
twenty (20) days of receipt of notice of such claim from the Indemnified
Party.
If the Indemnifying Party shall dispute such claim, the Indemnifying Party
shall
provide written notice of such dispute to the Indemnified Party within such
20-day period, setting forth in reasonable detail the basis of such dispute.
Upon receipt of notice of any such dispute, the Indemnified Party and the
Indemnifying Party shall use reasonable efforts to resolve such dispute within
thirty (30) days of the date such notice of dispute is received. If the
Indemnifying Party shall fail to provide written notice to the Indemnified
Party
within twenty (20) days of receipt of notice from the Indemnified Party that
the
Indemnifying Party either acknowledges and agrees to pay such claim or disputes
such claim, the Indemnifying Party shall be deemed to have acknowledged and
agreed to pay such claim in full and to have waived any right to dispute
such
claim. Once (a) the Indemnifying Party has acknowledged and agreed to pay
any
claim pursuant to this Section 10, (b) any dispute under this Section 10
has
been resolved in favor of indemnification by mutual agreement of the
Indemnifying Party and the Indemnified Party, or (c) any dispute under this
Section 10 has been finally resolved in favor of indemnification by order
of a
court of competent jurisdiction or other tribunal (including an arbitrator
contemplated by this agreement) having jurisdiction over such dispute, then
the
Indemnifying Party shall pay the amount of such claim to the Indemnified
Party
within twenty (20) days of the date of acknowledgement by the Indemnifying
Party
or final resolution in favor of indemnification, as the case may be, to such
account and in such manner as is designated in writing by the Indemnified
Party.
(d)
All
representations and warranties contained in this Agreement shall survive
the
Closing until March 31, 2007; provided,
however,
that
the representations and warranties stated in Section 6(b)(iv) shall survive
indefinitely and the representations and warranties incorporated by reference
to
the Asset Purchase Agreement in Section 6(b)(v) shall survive for the period
provided in the Asset Purchase Agreement.
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(e)
Absent fraud or criminal activity, and except for equitable relief a party
is
entitled to seek under the Transaction Documents or applicable law, the
indemnifications provided for in this Article 10 shall be the sole
and
exclusive post-Closing remedies available to either party against the other
party for any claims under or based upon this Agreement. In no event shall
VivoQuest be entitled to terminate the License as a remedy for any alleged
breach of this Agreement by Licensee. VivoQuest acknowledges that the
representations and warranties contained in the Transaction Documents shall
not
be deemed waived or otherwise affected by any investigation by or on behalf
of
Licensee.
(f)
If
VivoQuest shall have any Liability to Licensee or any other Licensee Indemnitee
pursuant to the Transaction Documents, Licensee shall be entitled, in addition
to any other right or remedy it may have, to exercise rights of set-off against
any payments or securities payable or deliverable to VivoQuest in connection
with the Transaction Documents or otherwise, including without limitation
pursuant to Section 3 of this Agreement.
SECTION
11. *****. (a) From and after the date of this Agreement, VivoQuest (i) shall
comply in all respects with the terms and conditions of the *****, (ii) shall
consult with Licensee prior to taking any action under or with respect to
the
*****, (iii) shall not take any action under or with respect to the *****
except
in conformity with Licensee’s instructions and shall take all actions reasonably
requested by Licensee under or with respect to the ***** and (iv) shall not
enter into any amendment of the ***** or any license or other agreement with
***** (or, with respect to the Licensed IP, any other party) without the
consent
of Licensee.
(b)
In
the event that ***** and VivoQuest execute an agreement for hepatitis C virus
for *****, VivoQuest shall include in such agreement a provision permitting
the
assignment of VivoQuest’s rights and a delegation of VivoQuest’s obligations
under such agreement to Licensee, and upon Licensee’s written request, VivoQuest
shall assign such rights to Licensee provided that Licensee simultaneously
assumes such obligations. Prior to such assignment, VivoQuest shall administer
such agreement for the benefit of Licensee and in accordance with Licensee’s
instructions and all consideration to VivoQuest under such agreement shall
be
transferred to Licensee on a pass-through basis, net of direct, out-of-pocket
expenses of such administration.
SECTION
12. Licensee
Option.
(a)
VivoQuest hereby grants to Licensee an irrevocable option, exercisable in
whole
at any time or in part from time to time, upon written notice to VivoQuest,
to
take title to and assume all legal and equitable attributes of ownership
of all
or any portion of the Licensed IP. If Licensee exercises such option with
respect to any portion of the Licensed IP that is then subject to the *****
Agreement, Licensee shall, to the extent reasonably practicable, consult
with
VivoQuest prior to doing so.
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(b)
If
Licensee exercises its option to take title to and assume all legal and
equitable attributes of ownership of any of the Licensed IP, the license
granted
in Sections 2 of this Agreement shall cease to exist with respect to such
Licensed IP as a consequence thereof, but VivoQuest shall continue to be
entitled to the consideration provided for in Section 3 as if such license
had
not terminated with respect to such Licensed IP. After the expiration of
a
reasonable transition period determined by Licensee (not to exceed 120 days
with
respect to any exercise of such option), Section 5 shall cease to apply with
respect to such Licensed IP and Licensee shall have full control and
responsibility for all patents and patent applications with respect to such
Licensed IP. VivoQuest shall provide reasonable assistance to Licensee with
any
exercise of such option, including by promptly transferring to Licensee all
relevant patents and patent applications owned by VivoQuest.
(c)
In
connection with any exercise of the option granted to Licensee pursuant to
this
Section 12, VivoQuest shall and shall cause its Affiliates to execute such
patent assignments and other agreements and instruments as shall be reasonably
requested by Licensee in order to transfer and reflect of record the transfer
of
the ownership of the Licensed IP with respect to which such option is
exercised.
(d)
VivoQuest hereby assigns to Licensee, effective as of the Closing Date, all
of
VivoQuest’s rights under or with respect to the Employee Non-Disclosure,
Non-Competition and Assignment of Intellectual Property Agreements listed
in
paragraph (i)b. of Section 3.13 of the Seller Disclosure Schedule. The
provisions of Section 1.3 of the Asset Purchase Agreement shall apply, mutatis
mutandis, to the assignment of any tangible or intangible asset pursuant
to this
Agreement.
SECTION
13. Assignment.
Neither
Licensee nor VivoQuest shall have the right to assign, delegate or transfer
at
any time to any party, in whole or in part, any or all of the rights, duties
and
interest herein granted without first obtaining the written consent of the
other
to such assignment, which consent shall not be unreasonably withheld, provided
that no prior written consent shall be required (i) for any such assignment
of
Licensee’s rights and obligations hereunder (a) in connection with a sale or
other transfer (whether directly or indirectly, including by merger or
consolidation) of the business of Licensee relating to this Agreement, (b)
to an
Affiliate of Licensee or (c) as security for the obligations of Licensee
or any
Affiliate of Licensee under a credit agreement entered into with a bank or
other
financial institution or (ii) in connection with the assignment of this
Agreement (together with its remaining transferable assets, if any) by VivoQuest
to a liquidating trust in accordance with applicable Law. No assignment of
this
Agreement shall relieve the assigning party of any of its obligations or
liability hereunder. Any attempted assignment not in compliance with this
Section 13 shall be of no force or effect.
SECTION
14. Publicity.
VivoQuest shall not issue any press release or make any other public
announcement relating to the subject matter of this Agreement without the
prior
written consent of Licensee. Licensee shall be free to issue any such press
release or other public announcement from and after the date
hereof.
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separately with the Commission.
SECTION
15. Payment
Net of Tax.
All
compensation due to VivoQuest hereunder shall be paid or provided net of
all
applicable duties, customs, shipping, import, export, value-added, withholding
and any international, federal, state or local taxes (each of the foregoing
an
“Imposition”
and
collectively, “Impositions”)
imposed on or as a consequence of the payment or provision of such compensation
by Licensee; provided that
VivoQuest shall have no liability for any tax based on Licensee’s net income.
Without limitation of the foregoing, all payments to VivoQuest hereunder
shall
be reduced by applicable withholding tax (at the statutory rate or, if VivoQuest
provides any certificates or other evidence required to establish, in accordance
with applicable law, that it is the beneficiary of a lower treaty rate, such
lower rate). Shares to be delivered to VivoQuest hereunder, other than the
Shares to be delivered pursuant to Section 3(a)(i) or with respect to milestone
event (A) pursuant to Section 3(a)(ii), shall be reduced by a number of Shares
reasonably determined by Licensee to have a Fair Market Value, as of the
date
the remainder of such Shares are issued to Licensee, equal to any Impositions
required to be satisfied by Licensee with respect thereto. VivoQuest shall
reimburse Licensee in cash for Licensee’s withholding tax liability (at an
assumed rate of 15%) relating to the Shares issued pursuant to Section 3(a)(i)
or with respect to milestone event (A) pursuant to Section 3(a)(ii). Licensee
shall provide to VivoQuest original or certified copies of all Tax payments
or
other evidence of payment of Taxes by Licensee with respect to transactions
or
payments under this Agreement that is reasonably requested by VivoQuest for
the
purpose of determining its entitlement to any tax credit or deduction.
SECTION
16. Miscellaneous.
(a) If
any provision of this Agreement is determined to be invalid or void, the
remaining provisions shall remain in effect.
(b)
This
Agreement shall be deemed to have been made in the State of New York and
shall
be governed and interpreted in all respects under the laws of the State of
New
York without regard to conflicts of law rules.
(c)
All
notices and other communications under this Agreement shall be in writing
and
shall be deemed given when delivered personally or mailed by certified mail,
return receipt requested, to the parties (and shall also be transmitted by
facsimile to the Persons receiving copies thereof) at the following addresses
(or to such other address
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as
a
party may have specified by notice given to the other party pursuant to this
provision):
If
to
VivoQuest, to:
*****
With
a
copy to:
*****
If
to
Licensee:
*****
With
a
copy to:
*****
Any
such
notice or communication shall be deemed to have been received (i) when
delivered, if personally delivered or transmitted by electronic mail, with
receipt acknowledgment by the recipient by return electronic mail, (ii) when
sent, if sent by facsimile on a business day during normal business hours
(or,
if not sent on a business day during normal business hours, on the next business
day after the date sent by facsimile), (iii) on the next business day after
dispatch, if sent by nationally recognized, overnight courier guaranteeing
next
business day delivery, and (iv) on the 5th
business
day following the date on which the piece of mail containing such communication
is posted, if sent by mail.
(d)
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject mater hereof and thereof and no variation, modification or waiver
of
any of the terms or conditions hereof or thereof shall be deemed valid unless
made in writing and signed by both parties hereto. This Agreement supersedes
any
and all prior agreements or understandings, whether oral or written, with
respect to such subject matter between Licensee and VivoQuest.
(e)
No
waiver by either party of any non-performance or violation by the other party
of
any of the covenants, obligations or agreements of such other party hereunder
shall be deemed to be a waiver of any subsequent violation or non-performance
of
the same or any other covenant, agreement or obligation, nor shall forbearance
by any party be deemed to be a waiver by such party of its rights or remedies
with respect to such violation or non-performance.
(f)
The
descriptive headings contained in this Agreement are included for convenience
and reference only and shall not be held to expand, modify or aid in the
interpretation, construction or meaning of this Agreement.
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Confidential material redacted and filed separately with the
Commission.
(g)
It is
not the intent of the parties to create a partnership or joint venture or
to
assume partnership responsibility or liability.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of
the date and year first above written.
VIVOQUEST, INC. | ||
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By: | ||
Name:
Title:
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XTL BIOPHARMACEUTICALS LTD. | ||
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By: | ||
Name:
Title:
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