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. January 26, 2003
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.
January
26, 2003
To:
Yeda
Research and
Development
Company Ltd.
Rehovot
Dear
Sirs,
| Re: |
Amendment
No. 3 to Research and Licence Agreement dated April 7,
1993
(“the R&L Agreement”) as amended on August 31, 1995 (“Amendment
No. 1”) (restated on January 25, 1998) and on January 25,
1998 (“Amendment No. 2”)
|
We
set
out below the amendments to Amendments No. 1 and No. 2 agreed
between
Yeda Research and Development Company Ltd. (“Yeda”)
and XTL
Biopharmaceuticals Ltd. (“the
Corporation”)
following discussions between the parties conducted at the Corporation’s request
(capitalised terms herein having the meanings ascribed thereto in the
R&L Agreement, unless otherwise defined herein):
| 1. |
Effective
on the date of signature hereof, Clause 2 of Amendment No. 1
is
hereby replaced by the following:
|
“2. Royalties
| 2.1. |
Royalty
Rates
|
Instead
of the royalties payable as specified in Clause 7(d)(ii) of the
R&L Agreement, the royalties payable to Yeda by XTL in consideration
of
the Licence granted under the R&L Agreement, shall be as
follows:
| 2.1.1. |
(a) *****
percent) of Net Sales (as hereinafter defined) from ***** using
the
Licensed Patents and/or the Licensed Technology (‘the
Therapeutical Products’).
‘Net
Sales’
as
used herein shall have the meaning ascribed to the term in the
R&L Agreement, references therein to ‘the
Products’
being read as references to the Therapeutical
Products.
|
*****
Confidential material redacted and filed separately with the
Commission.
(b) *****
percent) of any amount received by XTL from any third party and calculated
on
***** (as defined below) (“the
XTL Net Royalty”)_,
provided (i) that if ***** of the XTL Net Royalty is greater than ***** percent)
of Net Sales from such sales by such third party of such Therapeutical Products,
then the royalty payable to Yeda by XTL on such amount shall be ***** per
cent)
of Net Sales from such sales by such third party and (ii) if ***** per cent)
of
the XTL Net Royalty is less than ***** per cent) of Net Sales from such sales
by
such third party of such Therapeutical Products, then the royalty payable
to
Yeda by XTL on such amount shall be *****) of Net Sales from such sales by
such
third party;
‘Third
Party Royalties’,
for the
purpose of a deduction to be made from any amount received by XTL pursuant
to
this Section 2.1.1(b) above, shall mean any royalty calculated on
the said
amount and payable by XTL to a third party for the right to the use of a
compound included in the Therapeutical Product in respect of which the amount
has been received and/or for the right to the use of technology used directly
in
the development or production of the Therapeutical Product in respect of
which
the amount has been received, provided always that the duty to pay the royalty
to the third party has been established at arms length and in good faith
and the
size of such royalty is no greater than what would be due in an arms length
transaction entered into in good faith. “Third party” in this definition of
“Third Party Royalties” shall include Yeda itself, in the event a royalty as
aforesaid in the said definition is payable to Yeda by XTL in respect of
a
compound or technology other than that licensed under the R&L
Agreement.
| 2.1.2. |
*****
percent) of all amounts received by XTL from third parties (except
the
amounts governed by Section 2.1.1(b) above or Section 2.1.4
below) under or pursuant to agreements allowing such third parties
the use
of *****.
|
| 2.1.3. |
*****
percent) of all amounts received by XTL from a third party payable
upon
*****.
|
| 2.1.4. |
*****
percent) of all amounts received by XTL under or pursuant to agreements
with third parties *****.
|
| 2.1.5. |
*****
percent) of all amounts received by XTL as a result of any activities
under and/or *****. Where the amounts received by XTL as aforesaid
are the
result of activities not involving the grant of sublicences to
third
parties (‘Direct
Activities’)
and are amounts received in a transaction other than at arms length,
the
royalty due to Yeda shall be calculated on the amount that would
have been
received by XTL in a transaction at arms
length.
|
| 2.1.6. |
For
the avoidance of doubt, it is expressly stated that royalties shall
not be
due pursuant to Sections 2.1.2, 2.1.4 or 2.1.5 above on
*****.
|
| 2.1.7. |
For
the avoidance of doubt, it is expressly stated, that nothing in
this
Section 2.1 above or elsewhere in this letter shall be deemed
to
derogate from the provisions of Clause 7(c) of the R&L Agreement
governing the grant of sublicences.
|
*****
Confidential material redacted and filed separately with the
Commission.
|
2.1.8.
|
A
table exemplifying the provisions of Clause 2.1 above is attached
as
Appendix A hereto. If there shall be any contradiction between
the table
and the provisions of Clause 2.1, the provisions of Clause 2.1
shall
govern.
|
| 2.1.9. |
*****.
|
| 2.2. |
Payment
of Royalties
|
The
provisions of Clause 7(d)(iii) of the R&L Agreement shall apply,
mutatis
mutandis,
to the
royalties payable to Yeda pursuant to Section 2.1 above, references
to ‘Net
Sales’ in the said Clause 7(d)(iii) being deemed references to ‘Net Sales’
as defined in Section 2.1.1 above for the purpose of that Section
and to
amounts received by XTL from Direct Activities (as defined in Section 2.1.5
above) and references to "Sublicensing Receipts" in Clause 7(d)(iii)
being
deemed references to amounts subject to royalty payment to Yeda pursuant
to
Sections 2.1.2, 2.1.3, 2.1.4 or 2.1.5 above (not being amounts resulting
from Direct Activities (as defined in Section 2.1.5 above)).
| 2.3. |
For
the avoidance of doubt, it is expressly stated that payment of
royalties
under the R&L Agreement shall continue as
follows:
|
| 2.3.1. |
Payment
of royalties pursuant to Section 2.1.1 shall continue with
respect to
sales of any Therapeutical Product as
follows:
|
(aa) if
the
Therapeutical Product sold is made and/or sold in a country where a Licensed
Patent or Patents issue including claims covering, in whole or in part, such
product or the manufacture thereof—then, *****;
(bb) on
sales
of a Therapeutical Product made and sold in any other country,
*****.
| 2.3.2. |
Payment
of royalties pursuant to Section 2.1.2 shall continue as
follows:
|
(aa) payment
of royalties on amounts paid to XTL and attributable to activities of the
paying
third party under a Licensed Patent or Patents in a particular country shall
continue: *****;
(bb) payment
of royalties on amounts paid to XTL and attributable to activities of the
paying
third party in a particular country in which there is no Licensed Patent
shall
continue *****;
(cc) payment
of royalties on amounts paid to XTL and not attributable to the paying third
party's activities in any particular country, shall continue until:
*****.
| 2.3.3. |
Payment
of royalties pursuant to Section 2.1.3 shall continue as
follows:
|
*****
Confidential material redacted and filed separately with the
Commission.
(aa) payment
of royalties on amounts paid to XTL and attributable to activities of XTL
or of
the paying third party under a Licensed Patent or Patents in a particular
country shall continue: *****,
(bb) payment
of royalties on amounts paid to XTL and attributable to activities of XTL
or the
paying third party in a particular country in which there is no Licensed
Patent
shall continue *****;
(cc) payment
of royalties on amounts paid to XTL and not attributable to XTL's or the
third
party's activities in any particular country shall continue until:
*****.
| 2.3.4. |
Payment
of royalties pursuant to Section 2.1.4 shall continue as
follows:
|
(aa) payment
of royalties on amounts paid to XTL and attributable to activities of the
paying
third party under a Licensed Patent or Patents in a particular country shall
continue: *****;
(bb) payment
of royalties on amounts paid to XTL and attributable to activities of the
paying
third party in a country in which there is no Licensed Patent shall continue
*****;
(cc) payment
of royalties on amounts paid to XTL and not attributable to the third party's
activities in any particular country shall continue, until: *****.
| 2.3.5. |
Payment
of royalties pursuant to Section 2.1.5 shall continue as
follows:
|
(A) where
the
royalties are on amounts received by XTL on any Direct Activity, the duty
to pay
royalties shall continue:
(aa) if
the
activity or any part thereof is carried out in any country under a Licensed
Patent or Patents—then: *****;
(bb) if
the
activity is carried out in any other country, *****;
(B) Where
the
royalties are due on amounts received by XTL on activities not being a Direct
Activity, the duty to pay royalties shall continue as follows:
(aa) payment
of royalties on amounts paid to XTL and attributable to activities of the
paying
third party under a Licensed Patent or Patents in a particular country shall
continue: *****;
(bb) payment
of royalties on amounts paid to XTL and attributable to activities of the
paying
third party in a particular country in which there is no licensed Patent
shall
continue *****;
*****
Confidential material redacted and filed separately with the
Commission.
(cc) payment
of royalties on amounts paid to XTL and not attributable to the third party's
activities in any particular country shall continue: *****.
| 2.4. |
The
License granted under the R&L Agreement shall remain in force (if
not previously terminated according to the provisions of the R&L
Agreement (as amended hereby)) for the purpose of each of the activities
specified in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4 and 2.1.5,
as long
as there is a duty to pay royalties in respect of such activity,
as
provided in Section 2.3 above. Clause 7(b)(ii) of
the
R&L Agreement is replaced by the provisions of this
Section 2.4 above.”
|
| 2. |
Effective
of the date of signature hereof, Clause 1 of Amendment No. 2
is
replaced by the following:
|
| “1. |
Clause 13(b)(i)
of the R&L Agreement shall be and is hereby replaced by the
following:
|
(i) (A) Yeda
may
terminate this Agreement by giving written notice to that effect to the
Corporation if the aggregate of the royalties due to Yeda under
Paragraph 2.1.1 of the letter agreement between the parties dated
August 31, 1995 (and amended on January 25, 1998) amending this Agreement
(hereinafter 'the
Amendment')
(hereinafter collectively 'Product
Sale Royalties')
and
actually paid to Yeda on due date in respect of the ***** year of the term
of
the Licence shall be less than US $***** United States Dollars)
(hereinafter in this subparagraph (A) 'the
Default Year'),
UNLESS
the
Corporation shall have proved to Yeda's reasonable satisfaction within *****
days of the end of the Default Year that the Corporation and/or Collaboration
Partners (as such expression is defined below) have spent at least US *****
United States Dollars) in the Default Year in funding the cost of the activities
described in Clause 8(b) above (hereinafter 'Development
Activities')
towards
commercialisation of Therapeutical Products in respect of the sale of which
Yeda
is entitled to royalties under Paragraph 2.1.1 of Amendment No. 1
(hereinafter collectively 'Yeda
Royalty Bearing Products').
Yeda
shall give any such notice of termination within ***** of the end of the
Default
Year.
'Collaboration
Partner'
shall
mean an entity providing funding for the said Development Activities to the
Corporation or on its behalf pursuant to an agreement between the Corporation
and such entity whereby a sublicence has been granted to such entity with
Yeda's
consent in accordance with Paragraph 7(c) above.
(B) If
the
aggregate payment due to Yeda on Product Sale Royalties and actually made
to
Yeda in respect of the ***** year of the term of the Licence shall be less
than
US $***** United States Dollars) (hereinafter in this subparagraph (B)
'the
Default Year'),
the
Corporation shall pay Yeda within ***** days of the end of the Default Year,
the
amount by which the Product Sale Royalties actually paid to Yeda in respect
of
the Default Year shall be less than US $***** (hereinafter in this
subparagraph (B) 'the
Shortfall Amount').
Payment of the Shortfall Amount (except to the extent that it represents
payments due and payable to Yeda in respect of the Product Sale Royalties
other
than pursuant to this subparagraph (B)) shall be fully credited against
future Product Sale Royalties becoming due to Yeda but shall not be refundable
in any event.
*****
Confidential material redacted and filed separately with the
Commission.
It
is
agreed, without derogating from Yeda's rights to other or additional relief
and
remedies, including the right to xxx for the Shortfall Amount, that failure
to
make the Shortfall Payment as aforesaid shall entitle Yeda to terminate this
Agreement by giving written notice of termination to the Corporation within
***** days of the end of the Default Year.
(C) If
the
aggregate payment due to Yeda as Product Sale Royalties and actually paid
to
Yeda in respect of the ***** year or the ***** year of the term of the Licence
shall be less than US $***** US Dollars) (hereinafter in this
subparagraph (C) 'the
Default Year'),
*****.
Payment of the Shortfall Amount (except to the extent that it represents
payments due and payable to Yeda in respect of Product Sales Royalties other
than pursuant to this subparagraph (C)) shall be fully credited against
future Product Sale Royalties becoming due to Yeda but shall not be refundable
in any event. Yeda shall give any such notice of termination within *****
days
of the end of the Default Year.
(D) If
the
aggregate payment due to Yeda as Product Sale Royalties and actually paid
to
Yeda on due date in respect of the ***** or any subsequent year of the term
of
the Licence shall be less than US ***** US Dollars) (hereinafter in
this
subparagraph (D) 'the
Default Year'),
Yeda
shall be entitled to terminate the Agreement by service of written notice
to
that effect on the Corporation within ***** days of the end of the Default
Year.
(E) If
commercial exercise of the Licence by way of sale of Yeda Royalty Bearing
Products, once commenced, shall cease thereafter for a period of *****
consecutive months or more, Yeda shall be entitled to terminate the Agreement
by
service of written notice to that effect on the Corporation within *****
days of
the end of such period and, unless sales of Yeda Royalty Bearing Products
shall
have been renewed in the meantime, also at any time thereafter, provided,
however, in the event Yeda desires to terminate the Agreement after such
*****
period, Yeda shall give the Corporation written notice at least ***** days
in
advance of the desired date of termination.
(F) Nothing
in this Clause 13(b)(i) above shall be deemed to justify failure to
make
any payment due and payable to Yeda under any of the provisions of this
Agreement other than under this Clause 13(b)(i) above or to derogate
from
Yeda's
rights with respect to such failure pursuant to Clause 13(b)(ii) below
or
otherwise."
| 3. |
Except
as set forth in this letter, all the terms of the R&L Agreement
(as amended by Amendments No. 1 and No. 2 (as they
are amended
hereby)) shall remain unchanged. The R&L Agreement, as amended as
aforesaid, sets forth the entire understanding between Yeda and
XTL
regarding the R&L Agreement and supersedes any other prior
agreement or understanding, oral or
written.
|
Please
indicate your acceptance of the terms of this letter by affixing your signature
below.
Very
truly yours,
By: _________________________
Title: _________________________
Agreed
and accepted:
YEDA
RESEARCH AND DEVELOPMENT
COMPANY
LTD.
By: _________________________
By: ___________________________
Title: _________________________
Title: ____________________________
Includes
confidential material redacted in the to-be-publicly-filed copy of
the
Agreement.
APPENDIX
A
(to
Amendment No. 3 to Research and License Agreement dated April 7, 1993
(“the
R&L Agreement”) as amended on August 31, 1995 (“Amendment No. 1”) (restated
on January 25, 1998) and on January 25, 1998 (“Amendment No.
2”)
*****
|
*****
|
*****
|
*****
|
|||
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
*****
|
*****
|
*****
|
|||
|
*****
|
*****
|
*****
|
*****
|
||
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
Note:
One
page of material has been redacted and filed separately with the
Commission.
