Exhibit 10.1

 

CONFIDENTIAL TREATMENT

 

LICENSE AGREEMENT

 

This LICENSE AGREEMENT (this “Agreement”), effective as of June 2, 2004 (the
“Effective Date”), is between CUBIST PHARMACEUTICALS, INC., a corporation
organized and existing under the laws of Delaware (together with its Affiliates
referred to herein as “CUBIST”) and XTL BIOPHARMACEUTICALS LTD., a corporation
organized and existing under the laws of Israel (together with its Affiliates
referred to herein as “XTL”).  XTL and CUBIST are sometimes hereinafter referred
to each as a “Party” and collectively as the “Parties.”

Background

 

XTL has developed monoclonal antibodies that are active against Hepatitis B
using XTL Know-How and has rights to XTL Patent Rights.  CUBIST desires to
obtain a license under the XTL Patent Rights and XTL Know-How upon the terms and
conditions set forth herein in order to Obtain Regulatory Approval and
commercialize such monoclonal antibodies, and XTL desires to grant such a
license.  In consideration of the foregoing premises and the mutual covenants
herein contained, the Parties hereby agree as follows:

 

Terms

 

Section 1.              DEFINITIONS.

 

1.1          Defined Terms.  Unless specifically set forth to the contrary
herein, the following terms, whether used in the singular or plural, shall have
the respective meanings set forth below:

 

“Additional HBV Products” shall mean any and all compounds, products, methods or
systems, other than a Product or a Directly Competitive Product, in any
formulation for the treatment or prevention of Hepatitis B, that is Controlled
by XTL as of the Effective Date or at any time during the term of this
Agreement.

 

“Affiliate” shall mean, with respect to any Person, (a) any other Person of
which fifty percent (50%) or more of the securities or other ownership interests
representing the equity, the voting stock or general partnership interest are
owned, controlled, or held, directly or indirectly by, or under common ownership
or control with, such Person; or (b) any other Person that, directly or
indirectly, owns, controls, or holds fifty percent (50%) or more of the
securities or other ownership interests representing the equity, the voting
stock or, if applicable, the general partnership interest, of such Person.

 

“Aggregate Designated Costs” shall have the meaning set forth in Section 7.4.

 

“Approved Third Party Licenses” shall have the meaning set forth in Section
12.10(c).

 

“Change of Control” shall mean, with respect to either Party, that a Third Party
shall have become the beneficial owner of securities representing at least fifty
percent (50%) or more of the aggregate voting power of the then outstanding
voting securities of such Party, or any sale by such Party of all or
substantially all of such Party’s assets; provided that in no event shall the
sale by a Party of securities in connection with a financing or offering
undertaken to raise working capital be deemed to be a Change of Control unless,
as a result of such financing or offering, a Person owns 50% or more of the
voting power of the Party.

 

“Code” shall have the meaning set forth in Section 13.6(d).

 

“Combination Product” shall mean (a) any product, or biologic or pharmaceutical
composition comprising, among other things, at least two distinct active
ingredients, one of which shall be a Product and at least one of the other
active ingredients is not a Product, or (b) two or more products, or biologic or
pharmaceutical compositions that are marketed and sold together in the same
package, where at least one of such products, or biologic or pharmaceutical
compositions is a Product and at least one of the other products, or biologic or
pharmaceutical compositions are not Products (including, without limitation, (i)
a pharmaceutical or biologic composition containing an active ingredient
distinct from the active ingredient of such Product, (ii) a delivery device or
(iii) a delivery system).

 

1

--------------------------------------------------------------------------------

 

“Commercialize” shall mean all activities relating to the commercialization of a
Product including, without limitation, promotion, marketing, sales and
distribution, whether conducted by a Party or for such Party by another, and
“Commercialization” shall be interpreted accordingly.

 

“Commercially Reasonable Efforts” means (a) with respect to any objective by any
Party, commercially reasonable, diligent, good faith efforts to accomplish such
objective as such Party would normally use to accomplish a similar objective
under similar circumstances; and (b) with respect to any CUBIST objective to
Obtain Regulatory Approval of or Commercialize any Product, efforts and
resources normally used by such Party with respect to a product owned by such
Party or to which such Party has similar rights which is of similar market
potential at a similar stage in the development or life of such product, taking
into account all relevant factors in all relevant jurisdictions, taken as a
whole, including, but not limited to, issues of safety, efficacy, product
profile, the competitiveness of the marketplace, the proprietary position of the
product (including whether the Product is reasonably likely to infringe the
intellectual property or other proprietary rights of a Third Party in any
jurisdiction), the regulatory structure involved and the Regulatory Approval for
the Product in each jurisdiction (including but not limited to, the extent of
the indications for such Product has been approved), the level of reimbursement
available for the Product in each jurisdiction, and the perceived market
potential of the Product (including the anticipated profitability of the
Product).

 

“Consent Agreement” shall mean that certain Consent and Amendment Agreement by
and among CUBIST, XTL, and Yeda executed on or about the Effective Date.

 

“Contract Year” shall mean each twelve month period during the term of this
Agreement commencing on January 1, and ending on December 31; provided that the
first Contract Year during the term of this Agreement will commence on the
Effective Date and end on December 31 and the last Contract Year during the term
of this Agreement will commence on January 1 and end upon expiration or
termination of this Agreement.

 

“Control” shall mean with respect to (a) any item of information or (b) any
intellectual property right or (c) any HBV Antibody (including any intellectual
property or other proprietary right embodied therein or related thereto,
including without limitation any method or process of manufacturing thereof or
any use thereof), the possession of the right (whether directly or indirectly
and whether by ownership, license or otherwise, other than pursuant to this
Agreement) by a Party to grant to the other Party access or a license as
provided in this Agreement under such item of information or intellectual
property right without violating the terms of any agreement or other
arrangements existing before or after the Effective Date between such Party and
any Third Party, and the term “Controlled” shall be interpreted accordingly.

 

“Coordinator” shall have the meaning set forth in Section 3.2.

 

“CUBIST Designated Costs” shall mean, with respect to any period, the Designated
Costs attributed to CUBIST.

 

“CUBIST Indemnitees” shall have the meaning set forth in Section 11.3(b).

 

“CUBIST Inventions” shall have the meaning set forth in Section 12.1.

 

“CUBIST Know-How” shall mean all inventions (including without limitation all
CUBIST Inventions), discoveries, improvements, methods, processes, formulas,
materials, data, know-how, technology, trade secrets and information, whether or
not patentable, that (a) are owned or Controlled by CUBIST as of the Effective
Date or at any time during the term of this Agreement, (b) are not, as of the
Effective Date or at any time thereafter, in the public domain or generally
known or available to the public or disclosed in any CUBIST Patents, and (c) are
necessary or useful to Obtain Regulatory Approval, manufacture, market, promote,
sell, import or export Products in the Territory.

 

“CUBIST Patents” shall mean any and all Patents that: (a) are owned or
Controlled by CUBIST as of the Effective Date or at any time during the term of
this Agreement; and (b) claim or cover any invention (including, without
limitation, any CUBIST Invention), discovery, improvement, method, process,
formula, material, trade secret, technology, data or information, solely to the
extent necessary or useful to Obtain Regulatory Approval, manufacture, market,
promote, sell, import or export Products in the Territory; provided, however,
that the CUBIST Patents are all to the extent and only to the extent that CUBIST
has the right to

 

2

--------------------------------------------------------------------------------

 

grant licenses or sublicenses thereunder.

 

“CUBIST Trademark” shall mean any Trademark Controlled by CUBIST.

 

“Designated Costs” shall mean the direct costs and expenses, in Dollars,
excluding any general and administrative overhead costs and expenses, actually
incurred from and after the Effective Date in performing those activities that
are necessary or advisable to Obtain Regulatory Approval for a commercially
viable formulation of HepeX-B for the prevention of recurrent Hepatitis B
infections in liver transplant patients in the Territory.  Subject to the
foregoing provisions of this definition, Designated Costs shall include:
internal human resources costs of either Party (calculated using actual local
salary and employee benefit rates for each Full Time Equivalent), expenses paid
to contractors, consultants or other third parties (such as testing
laboratories, clinical consultants, clinical research organizations, contract
manufacturing organizations and preclinical laboratories), including costs and
expenses associated with regulatory fees (such as PDUFA fees), laboratory
supplies, office supplies, travel expenses, and reasonable allocations of
facility and information technology costs.  Designated Costs shall not include
expenses for corporate overhead, profit margin, expenses for market research,
manufacture or supply for commercial use, commercial launch and other
Commercialization activities, post-marketing studies not required as a condition
to Obtaining Regulatory Approval in the Territory, or participation on the Joint
Alliance Team.  If the Parties are unable to agree whether a particular cost or
expense is a Designated Cost, either Party may submit the matter to the dispute
resolution procedures set forth in Section 14.

 

“Directly Competitive Product” shall mean any pharmaceutical or biologic
composition (other than a Product Commercialized by or for CUBIST or its
Affiliates or Sublicensees) that contains an HBV Antibody in any formulation for
the treatment or prevention of Hepatitis B.

 

“Disagreement Notice” shall have the meaning ascribed to it in Section 2.2.

 

“Dollars” shall mean U.S. dollars.

 

“ECACC” shall mean the European Collection of Cell Cultures.

 

“FDA” shall mean the United States Food and Drug Administration and any
successor agency.

 

“First Commercial Sale” shall mean, with respect to a Product, any transfer for
value in an arm’s-length transaction to a Third Party distributor, agent or end
user in a country or jurisdiction after obtaining all necessary Regulatory
Approvals as may be necessary for such transfer in such country or jurisdiction.

 

“HBIg” shall mean the immunoglobulin product containing polyclonal antibodies
(derived from human plasma) to hepatitis B surface antigen, and occasionally
referred to as “HBIg”.

 

“HBV Antibody” shall mean any and all human or humanized monoclonal
immunoglobulins, including intact immunoglobulin molecules and any portion or
fragment of an immunoglobulin molecule, [*], that is directed to and binds to
the Hepatitis B virus or any portion of the Hepatitis B virus.

 

“HepeX-B” shall mean, without regard to the actual trade name used, any Product
containing the human monoclonal antibody [*], and the human monoclonal antibody
[*], and no other antibodies or fragments of other antibodies.

 

“HepeX-B Plan” shall have the meaning set forth in Section 5.2.

 

“ICC” shall have the meaning set forth in Section 14.2(a).

 

“ICC Rules” shall have the meaning set forth in Section 14.2(a).

 

“IND” shall mean an Investigational New Drug Application, or its foreign
equivalent, regarding Product filed with a Regulatory Authority.

 

“Joint Alliance Team” shall have the meaning set forth in Section 3.1.

 

“Joint Invention” shall have the meaning set forth in Section 12.1.

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

3

--------------------------------------------------------------------------------

 

“Joint Patent” shall have the meaning set forth in Section 12.2.

 

“Know-How Royalty Rate” shall have the meaning set forth in Section 10.2.

 

“Legal Opinion” shall mean a legal opinion that satisfies each of the following
conditions: (a) is addressed to CUBIST for CUBIST’s benefit, (b) provides that
CUBIST’s exercise of its rights and licenses under, and its activities under and
pursuant to, this Agreement, to Obtain Regulatory Approval, make, have made,
use, promote, market, sell, have sold, offer to sell, import, export, and
Commercialize HepeX-B, would not infringe or misappropriate the intellectual
property rights addressed in that opinion (including by literal infringement and
infringement under the doctrine of equivalents and/or other applicable legal
standards), or that such intellectual property rights are invalid or
unenforceable, (c) is provided by a nationally recognized United States law firm
reasonably acceptable to both Parties, and (d) was obtained in connection with a
joint defense agreement pursuant to which such nationally recognized law firm
enters into an attorney-client relationship with both XTL and CUBIST for the
purpose of providing such legal opinion.

 

“Losses” shall have the meaning set forth in Section 11.3(a).

 

“Marketing Inquiry” shall have the meaning ascribed to it in Section 2.2.

 

“Major Markets” shall mean the United States of America, the United Kingdom,
Spain, Italy, France, Germany and Japan.

 

“Milestone Event” shall have the meaning set forth in Section 9.2(a).

 

“Net Sales” shall mean the aggregate gross sales actually received by CUBIST
from sales of a Product sold directly by CUBIST or its Affiliate to a Third
Party (that is not an Affiliate or Sublicensee of CUBIST unless the Affiliate or
Sublicensee is the end user of the Product) after deducting, if not previously
deducted, from the amount received the following amounts related specifically to
such sales and not otherwise recovered or reimbursed to CUBIST or its Affiliate:
(a) trade and quantity discounts in amounts customary in the trade and actually
allowed and taken; (b) returns, rebates, credits and allowances in amounts
customary in the trade; (c) chargebacks paid on sale or dispensing of Product;
and (d) sales or excise taxes, freight, postage, transportation, insurance
charges, custom duties and other governmental charges.

 

For purposes of clarification, sales of a Product sold directly by a Sublicensee
shall not be included in the calculation of Net Sales, and amounts received by
CUBIST and its Affiliates for the sale of Products among CUBIST and its
Affiliates for resale shall not be included in the computation of Net Sales
hereunder.

 

In the event that a Product is sold as a component of a Combination Product,
then Net Sales shall be determined by multiplying the Net Sales of the
Combination Product by the [*], in each case in the relevant country in which
sales were made.  In the event that no separate sale of either Product or the
relevant other product is made during the applicable royalty reporting period
and in the relevant country in which the sale of the Combination Product was
made, then Net Sales shall be determined by multiplying the Net Sales of the
Combination Product by [*], in each case determined in accordance with United
States generally accepted accounting principles for the relevant country in
which sales were made.  If the relevant other product is sold separately in
finished form and Product is not, then Net Sales shall be determined by
multiplying the Net Sales of the Combination Product by [*].

 

“Obtain Regulatory Approval” shall mean those actions required or advisable to
prepare and submit commercially viable Products for Regulatory Approval as soon
as reasonably practicable, including without limitation formulation,
modification and refinement activities, determination of dosage, conducting
clinical trials, and labeling the Products.

 

“OCS” shall have the meaning set forth in Section 11.2(h).

 

“OCS Technology” shall have the meaning set forth in Section 12.1.

 

“Patent Royalty Rate” shall have the meaning set forth in Section 10.1.

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

4

--------------------------------------------------------------------------------

 

“Patents” shall mean (a) unexpired letters patent (including inventor’s
certificates) which have not been revoked or cancelled by a government agency or
held invalid or unenforceable by a court of competent jurisdiction, from which
no appeal can be taken or has been taken within the required time period,
including without limitation any substitution, extension, registration,
confirmation, reissue, re-examination, renewal or any like filing thereof; (b)
pending applications for letters patent, including without limitation any
provisional application, utility application, continuing prosecution or
continuation application, divisional application, reissue application and/or
continuation in part thereof and (c) any foreign or international equivalents or
counterparts of such unexpired letters patent and pending applications for
letters patent.

 

“Person” shall mean any individual, entity, association, corporation,
partnership, limited liability company, government (or agency or subdivision
thereof), trust, joint venture, or proprietorship.

 

“Product(s)” shall mean any or all pharmaceutical or biological composition(s)
containing an HBV Antibody Controlled by XTL as of the Effective Date or any
time thereafter during the term of this Agreement, alone or in combination with
another antibody, antibody fragment or other active compound, for all
indications, in any formulation, by any route of administration, including
without limitation, HepeX-B.  Each distinct formulation of any of the items
referred to in the foregoing sentence shall be treated as a separate Product.

 

“Proprietary Information” shall mean all inventions, discoveries, improvements,
processes, formulas, materials, know-how and trade secrets, and all other
scientific, clinical, regulatory, marketing, financial and commercial
information or data, whether communicated in writing or orally or by sensory
detection, which is provided by, or on behalf of, one Party to the other Party
in connection with this Agreement.

 

“Recalculated Royalties” shall have the meaning set forth in Section 10.1.

 

“Regulatory Approval” shall mean any approvals (including supplements,
variations, amendments, pre- and post-approvals), licenses, registrations or
authorizations of any national, state or local regulatory agency, department,
bureau, commission, council or other governmental entity, necessary for the
sale, import or Commercialization of Products in the Territory.

 

“Regulatory Authority” shall mean the FDA or any foreign counterpart of the FDA,
as applicable.

 

“Retroactive Payment Quarter” shall have the meaning set forth in Section 10.1.

 

“Retroactive Royalty Country” shall have the meaning set forth in Section 10.1.

 

“Retroactive Royalty Year” shall have the meaning set forth in Section 10.1.

 

“Retroactive Valid Claim” shall have the meaning set forth in the definition of
Valid Claim.

 

“Sublicensee” shall mean, without derogating from the Consent Agreement, any
Person (other than an Affiliate of CUBIST) to whom CUBIST grants a sublicense to
the license rights granted by XTL to CUBIST hereunder.

 

“Sublicensee Revenues” shall mean the aggregate upfront, milestone, royalty and
other payments actually received by CUBIST or its Affiliates from each of its
Sublicensees (other than XTL, if applicable) with respect to XTL Technology or
Products, excluding payments made to reimburse CUBIST for any verifiable costs
actually incurred by CUBIST in connection with (a) activities to Obtain
Regulatory Approval, manufacture, market, promote, sell, offer to sell, import
or export Product and (b) the transaction contemplated between CUBIST and such
Sublicensee.

 

“Territory” shall mean all countries of the world.

 

“Third Party” shall mean a Person other than CUBIST or XTL or an Affiliate of
either Party.

 

“Third Party Infringement Claim” shall have the meaning set forth in Section
12.6(a).

 

“Third Party Transaction” shall have the meaning set forth in Section 2.3.

 

5

--------------------------------------------------------------------------------

 

“TM Infringement” shall have the meaning set forth in Section 12.5.

 

“Trademark” shall mean any word, phrase, slogan, design, symbol or product
packaging used or intended to be used to identify the Products or distinguish
them from competitive or related products, and shall include any application to
register or registration of or common law rights of the foregoing.

 

“Unlicensed Product” shall mean, with respect to any given country or
jurisdiction within the Territory, any pharmaceutical or biological composition
containing an HBV Antibody [*], for sale or use for the treatment or prevention
of Hepatitis B infection or re-infection in such country within the
Territory, other than [*] with respect to a Product or [*] granted or entered
into by CUBIST or any of its Affiliates or distributors.

 

“Valid Claim” shall mean an unexpired claim of an issued patent within XTL
Patents which has not been found to be invalid or unenforceable by a court or
other competent authority in the subject country, from which decision no appeal
is taken or can be taken.  In the event a claim in a pending patent application
Controlled by XTL issues in a country and such issued claim has not been found
to be invalid or unenforceable by a court or other competent authority in the
subject country, from which decision no appeal is taken or can be taken, such
claim shall retroactively be deemed a Valid Claim  in such country for the
purposes of royalty and Sublicensee Revenues payments under Section 10.1(b) and
Section 10.3(e) as of the date the applicable patent application was filed in
such country (a “Retroactive Valid Claim”).

 

“XTL Activities” shall have the meaning set forth in Section 5.1(b).

 

“XTL Designated Costs” shall mean, with respect to any period, the Designated
Costs attributed to XTL.

 

“XTL Indemnitees” shall have the meaning set forth in Section 11.3(a).

 

“XTL Inventions” shall have the meaning set forth in Section 12.1.

 

“XTL Know-How” shall mean all inventions (including without limitation all XTL
Inventions), discoveries, improvements, methods, processes, formulas, materials,
data, know-how, technology, trade secrets and information, whether or not
patentable, that (a) are owned or Controlled by XTL as of the Effective Date or
at any time during the term of this Agreement, (b) are not, as of the Effective
Date or at any time thereafter, in the public domain or generally known or
available to the public or disclosed in any XTL Patents, and (c) are necessary
or reasonably useful to Obtain Regulatory Approval, manufacture, market,
promote, sell, import or export Products in the Territory.

 

“XTL Licensor Payments” shall mean any amounts that are required to be paid to
Yeda pursuant to the XY Agreement as supplemented by the Consent Agreement, or
any amounts that XTL is required to pay to any other Third Party licensors
pursuant to written agreements entered into prior to the Effective Date which
are identified on Exhibit E to the extent that such payments are required (a)
with respect to sales of Product, or (b) with respect to milestone or royalty
payments that XTL receives, or is deemed to have received under XTL’s agreements
with such Third Parties, from CUBIST.

 

“XTL Patents” shall mean any and all Patents that: (a) are owned or Controlled
by XTL as of the Effective Date or at any time during the term of this
Agreement; and (b) claim or cover any invention (including, without limitation,
any XTL Invention), discovery, improvement, method, process, formula, material,
trade secret, technology, data or information, solely to the extent necessary or
reasonably useful to Obtain Regulatory Approval, manufacture, market, promote,
sell, import or export Products in the Territory (including, without limitation,
those Patents listed on Exhibit A); provided, however, that the XTL Patents are
all to the extent and only to the extent that XTL has the right to grant
licenses or sublicenses thereunder.

 

“XTL Technology” shall mean XTL Patents and XTL Know-How.

 

“XTL Trademarks” shall mean the trademarks Controlled by XTL as of the Effective
Date and set forth on Exhibit B hereto.

 

“XY Agreement” shall mean that certain Research and License Agreement between
Xenograft Technologies Ltd. (now known as XTL Biopharmaceuticals Ltd.) and Yeda
Research and Development Company Ltd. (hereinafter “Yeda”) executed on or about
April 7, 1993, as amended on or about August 31, 1995,

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

6

--------------------------------------------------------------------------------

 

January 25, 1998, and January 26, 2003 and as further amended as of the
Effective Date.

 

“Yeda Technology” shall have the meaning set forth in Section 12.1.

 

Section 2.              LICENSE; DILIGENCE; RIGHT OF FIRST NEGOTIATION.

 

2.1          License Grant.  Subject to the terms and conditions of this
Agreement and the provisions of the Consent Agreement, XTL hereby grants to
CUBIST the exclusive right and license (even as to XTL), including the right,
subject to the Consent Agreement, to sublicense (which includes the sublicense
to XTL under Section 2.5 below), under the XTL Technology and XTL Trademarks to
Obtain Regulatory Approval, make, have made (including under Section 3.3 below),
use, promote, market, sell, have sold, offer to sell, import or export Products
in the Territory.  CUBIST (excluding Cubist Affiliates) may grant sublicenses of
the rights licensed to CUBIST pursuant to this Section 2.1 (subject to the
limitations and obligations imposed pursuant to the Consent Agreement). Any
sublicense by CUBIST to a Sublicensee of the rights licensed by XTL to CUBIST
hereunder shall be consistent with the terms and conditions of this Agreement
and the Consent Agreement, and shall include an obligation for the Sublicensee
to comply with the obligations of this Agreement applicable to Sublicensees,
including, without limitation, the applicable obligations contained in Section
4.1(b) pertaining to reports, Section 8.1 pertaining to confidentiality and
Section 8.5 pertaining to records and audits.  CUBIST hereby agrees to remain
liable for performance under this Agreement by all Sublicensees (including
CUBIST Affiliates).

 

2.2          CUBIST Diligence.  (a)  Subject to, and in accordance with, the
terms and conditions of this Agreement and all requirements of applicable laws,
rules and regulations, CUBIST shall use Commercially Reasonable Efforts to
Obtain Regulatory Approval for HepeX-B in each of the Major Markets, and
subsequent to obtaining Regulatory Approval in a Major Market, to Commercialize
HepeX-B in such Major Market.  The sole remedy of XTL for any breach by CUBIST
of its obligations under this Section 2.2 with respect to any Major Market is to
terminate CUBIST’s rights and licenses under this Agreement with respect to such
Major Market pursuant to Section 13.4.  In the event CUBIST breaches its
obligations under Section 2.2 with respect to [*] or more Major Market
countries, XTL shall also have the right pursuant to Section 13.4 to terminate
CUBIST’s rights and licenses under this Agreement with respect to each country
that is not a Major Market country in which CUBIST is not then using
Commercially Reasonable Efforts to Obtain Regulatory Approval for HepeX-B, and
subsequent to obtaining Regulatory Approval in such country, to Commercialize
HepeX-B in such country.  For the avoidance of doubt, CUBIST shall not be
considered to be in violation of its diligence obligations under this Section
2.2 if the failure to use Commercially Reasonable Efforts as required under this
Section 2.2 is caused in material part by the wrongful acts or omissions of XTL
or any breach of this Agreement by XTL.

 

(b)           CUBIST shall be deemed to have used Commercially Reasonable
Efforts for all purposes of this Section 2.2 at all times following such time as
CUBIST (and its Affiliates and Sublicensees) has [*] which, combined, [*]. 
Notwithstanding anything to the contrary in this Agreement, the “safe harbor”
provisions of this Section 2.2(b) are not intended to set minimum standards of
performance by CUBIST, and CUBIST shall be entitled to demonstrate that other
efforts with respect to the Product should be deemed to be Commercially
Reasonable Efforts.

 

(c)           As set forth in Section 2.2(a), the parties agree that XTL’s sole
and exclusive remedy with respect to a material breach by CUBIST of its
obligations set forth in Section 2.2(a) shall be to terminate the rights and
licenses granted by XTL to CUBIST under this Agreement with respect to those
jurisdictions within the Territory in which CUBIST shall have failed to use
Commercially Reasonable Efforts; provided that within sixty (60) days after
receipt of any report provided by CUBIST under Section 4.1(b), XTL shall have
delivered to CUBIST written notice (a “Disagreement Notice”) of such failure,
which notice shall set forth in reasonable detail the nature of the alleged
failure; provided further that such failure has not been cured or waived within
60 calendar days following delivery of such notice.  If XTL does not deliver a
Disagreement Notice under this Section 2.2(c) within such sixty (60) day period,
CUBIST shall be deemed to be in full compliance with the terms of Section 2.2(a)
with respect to the time period covered by such CUBIST report.  XTL shall not
bring, commence, continue or prosecute any claim, legal action or proceeding
under, in relation to, arising out of or in connection with a breach of Section
2.2(a), except as set forth in Section 2.2(d).

 

(d)           If XTL and CUBIST are not able to resolve their disagreement with
respect to CUBIST’s compliance with Section 2.2(a) within sixty (60) days after
CUBIST’s receipt of a Disagreement Notice, then either XTL or CUBIST, acting
alone, may at any time following receipt of such Disagreement Notice by delivery

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

7

--------------------------------------------------------------------------------

 

to the other party of a written notice indicating such party’s election to have
the disagreement resolved by arbitration (a “Marketing Inquiry”), cause the
matter to be submitted to binding arbitration under Section 14.2; provided that
(i) the arbitrators shall be entitled to review and resolve only whether or not
CUBIST failed to materially comply with its obligations under Section 2.2(a)
during the applicable reporting period of time that is the subject of the
Marketing Inquiry, and (ii) the arbitrators shall be individuals who are
knowledgeable in the field of the development, manufacture, and sale of drugs
and drug products, and shall have no current or prior business relationships
with any of XTL, CUBIST, or any of their respective Affiliates.

 

2.3          Rights to Additional HBV Product.   Subject to the limitation set
forth below in this Section 2.3, in the event that XTL intends to grant a
license or sublicense (or to otherwise transfer rights other than pursuant to a
Change of Control of XTL) to a Third Party to obtain regulatory approval or
commercialize Additional HBV Products (a “Third Party Transaction”), XTL shall
so notify CUBIST (and shall provide together with such notice all such
information necessary or useful to CUBIST to determine whether to exercise its
rights under this Section 2.3 with respect to the Additional HBV Products as is
in XTL’s possession or control) prior to entering into negotiations or
discussions with such Third Party Transaction.  If, within [*] days after CUBIST
has received such notice (and information) from XTL, CUBIST notifies XTL in
writing that it wishes to negotiate to obtain a license or sublicense (or
otherwise acquire rights to) such Additional HBV Products, then the Parties
shall negotiate in good faith for a period of [*] days to see if the Parties can
reach agreement on commercially reasonable terms pursuant to which XTL would
license or sublicense (or otherwise transfer rights to) such Additional HBV
Products to CUBIST.  During the [*] day period in which CUBIST and XTL are
negotiating pursuant to this Section 2.3, such negotiations shall be exclusive
and XTL cannot carry on discussions or negotiations with any Third Party
regarding the grant of a license or sublicense (or other transfer of rights) to
such Third Party to obtain regulatory approval or commercialize Additional HBV
Products in any country or jurisdiction within the Territory.  If XTL and CUBIST
cannot reach agreement on such terms within such [*] days, then XTL shall be
free to enter into negotiations and discussions with such Third Party, and enter
into a Third Party Transaction; provided, however, in no event will XTL enter
into an agreement with such Third Party to obtain regulatory approval or
commercialize such Additional HBV Products on terms, considered in the totality
of the circumstances, any less favorable than the terms last offered or proposed
by CUBIST pursuant to the preceding provisions of this Section 2.3 without
providing CUBIST with written notice of such terms and giving CUBIST [*] days to
accept them.  Notwithstanding anything expressed or implied in the foregoing
provisions of this Section 2.3, in the event of a Change of Control of XTL,
CUBIST’s rights under this Section 2.3 shall terminate with respect to any
Additional HBV Product of which CUBIST was informed by XTL in writing pursuant
to Section 15.4 (without copies to legal counsel) at least thirty (30) days
prior to the Change of Control of XTL; provided that if CUBIST notifies XTL in
writing that it wishes to negotiate to obtain a license or sublicense (or
otherwise acquire rights to) such Additional HBV Product within [*] days after
XTL informed CUBIST of such Additional HBV Product, CUBIST’s rights under this
Section 2.3 shall not terminate with respect to such Additional HBV Product
unless and until XTL has negotiated in good faith for a period of up to [*] days
and has failed to reach agreement on commercially reasonable terms pursuant to
which XTL would license or sublicense (or otherwise transfer rights to) such
Additional HBV Product to CUBIST.

 

2.4          Directly Competitive Product.  During the term of this Agreement
and until the earlier to occur of (a) the [*] of expiration or termination of
this Agreement in its entirety, and (b) [*] shall not develop, research, market,
sell, distribute or otherwise Commercialize a Directly Competitive Product in
the Territory, nor will XTL provide any services, data or information to any
Third Party in the furtherance of, or with respect to, any of the foregoing;
provided, however, that the restrictions in this Section 2.4 shall not apply in
any jurisdictions with respect to which Cubist’s rights and licenses granted by
XTL under this Agreement have been terminated pursuant to Section 2.2.

 

2.5          Sublicensing.  (a)  If CUBIST proposes to sublicense to a Third
Party any rights to distribute promote, market or sell Product in the United
States and/or in more than [*] Major Markets in the European Union, then CUBIST
will notify XTL in writing thereof.  If, within thirty (30) days after XTL has
received such notice from XTL, XTL notifies CUBIST in writing that it wishes to
negotiate to become CUBIST’s Sublicensee with respect to the activities to
distribute, promote, market or sell Product described in CUBIST’s notice with
respect to such countries, then the Parties shall negotiate in good faith for a
period of [*] days to see if the Parties can reach agreement on commercially
reasonable terms pursuant to which XTL would serve as such Sublicensee.  During
the [*] day period in which CUBIST and XTL are negotiating pursuant to this
Section 2.5, such negotiations shall be exclusive and CUBIST cannot carry on
discussions or negotiations with any Third Party regarding the opportunity to
serve as such Sublicensee in such countries.  If XTL and CUBIST cannot reach
agreement on such terms within such [*] days, then CUBIST shall be free to enter
into negotiations and discussions with such Third Party, and grant such a
sublicense to such Third Party; provided, however, in no

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

8

--------------------------------------------------------------------------------

 

event will CUBIST grant such a sublicense to such Third Party on terms,
considered in the totality of the circumstances, any less favorable to CUBIST
than the terms last offered or proposed by XTL pursuant to the preceding
provisions of this Section 2.5 without providing XTL with written notice of such
terms and giving XTL [*] days to accept them.

 

(b)           Without limiting clause (a) above, if CUBIST proposes to
sublicense to a Third Party any rights to distribute promote, market, and sell
Product [*], then CUBIST will notify XTL in writing thereof and thereafter, XTL,
to the extent that it remains so interested, shall be included among the
interested parties with whom CUBIST holds discussions for such rights until such
time as CUBIST selects the party with whom it wishes to enter into negotiations
for a definitive agreement for such rights.  XTL acknowledges that beyond
inclusion and participation in the discussions for such rights, XTL has no
additional right or expectation whatsoever, and CUBIST has no additional
obligation to XTL in respect of such rights under this Section 2.5(b).

 

(c)           Notwithstanding anything expressed or implied in this Section 2.5,
in the event of a Change of Control of CUBIST, XTL’s rights under this Section
2.5 shall terminate (except with respect to any separate written agreement
entered into between CUBIST and XTL prior to the effective date of such Change
of Control; provided that CUBIST has promptly complied with the notice
provisions set forth in this Section 2.5 prior to such Change of Control).

 

2.6          Trademarks.  XTL hereby grants CUBIST an exclusive, royalty-free
license under its entire right, title and interest in and to the XTL Trademarks,
if any, to use and display the XTL Trademarks in connection with the
Commercialization of Product within the Territory.  CUBIST shall not be
obligated to use XTL Trademarks, and shall be free to select, create and use its
own trade names and marks for its use, in connection with the Commercialization
of Product in the Territory.

 

Section 3.              COORDINATION.

 

3.1          Joint Alliance Team.

 

(a)           Within thirty (30) days after the Effective Date, CUBIST and XTL
shall establish a committee to exchange information regarding, and to discuss
activities to Obtain Regulatory Approval and manufacture and supply of Product
in the Territory (the “Joint Alliance Team”), which shall (i) monitor activities
to Obtain Regulatory Approval under the HepeX-B Plan, (ii) discuss, formulate,
and recommend proposed modifications to the HepeX-B Plan for review by CUBIST
and XTL, (iii) serve as a forum for the review and discussion of the Parties’
efforts to Obtain Regulatory Approval and efforts to manufacture Product, (iv)
serve as a vehicle to facilitate the transfer to CUBIST of certain information,
data and technology related to Products, and (v) serve as a forum for the
discussion of disputes between the Parties before resorting to the dispute
resolution mechanism in Section 14 of this Agreement.

 

(b)           The Joint Alliance Team shall be composed of named representatives
of CUBIST and named representatives of XTL.  Each Party shall appoint its
respective representatives to the Joint Alliance Team from time to time, and may
substitute one or more of its representatives, in its sole discretion, effective
upon notice to the other Party of such change.  Of the initial representatives
to be designated by each Party, there shall be expertise in preclinical
development, process development, regulatory activities, clinical development,
and manufacturing and supply matters.  The Parties shall be free to change their
representatives from time to time and at any time.  Each representative serving
on the Joint Alliance Team shall have appropriate technical credentials,
experience and knowledge, and ongoing familiarity in the specific area of such
representative’s expertise. The chief business officer, or his/her designee, of
each Party shall serve as co-chair to the Joint Alliance Team. Additional
representatives or consultants may from time to time, by mutual consent of the
Parties, be invited to attend Joint Alliance Team meetings, subject to
compliance with the provisions of Section 8.1 of this Agreement.  The
co-chairpersons shall be responsible for calling meetings, preparing and
circulating an agenda in advance of each meeting, and preparing and issuing
minutes of each meeting within thirty (30) days thereafter.

 

(c)           The Joint Alliance Team shall hold meetings at such times as it
elects to do so, but in no event shall such meetings be held less frequently
than once every three (3) months unless otherwise agreed by the Parties.  The
first meeting of the Joint Alliance Team shall be held no later than sixty (60)
days after the Effective Date.  Meetings of the Joint Alliance Team may be held
by audio or video teleconference with the consent of each Party; provided that
at least two (2) meetings per year shall be held in person, one (1) per

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

9

--------------------------------------------------------------------------------

 

year at the location of each party or such other location as the Parties may
mutually agree.  Each Party shall be responsible for all of its own expenses of
participating in the Joint Alliance Team.  The co-chairpersons will alternate
responsibility for preparing minutes of each meeting of the Joint Alliance Team,
which minutes will not be finalized until the co-chairperson that did not
prepare such minutes reviews and confirms the accuracy of such minutes in
writing.

 

(d)           The Joint Alliance Team shall operate by consensus.  If the Joint
Alliance Team is unable to reach consensus on any particular issue,  CUBIST
shall have the right in its sole discretion to make the final decision.  The
Joint Alliance Team shall not have the power resolve any disputes concerning the
validity, interpretation or construction of, or the compliance with or breach
of, this Agreement, which disputes shall be resolved pursuant to Section 14. 
The rights and responsibilities of each Party shall be governed by this
Agreement, including the exhibits hereto, and the Joint Alliance Team shall not
have any power to amend, modify or waive compliance with this Agreement.

 

(e)           Notwithstanding anything express or implied to the contrary in
this Agreement, CUBIST may terminate the Joint Alliance Team and its functions
hereunder, [*].  Upon termination of the Joint Alliance Team, CUBIST shall
assume sole responsibility to update the HepeX-B Plan from time to time in
accordance with Section 5.2.

 

3.2          Coordinators.  Each Party shall appoint a designee (a
“Coordinator”) to coordinate its activities under this Agreement.  The
Coordinators shall serve as primary contacts between the Parties with respect to
this Agreement.  Each Party shall notify the other Party within thirty (30) days
of the date of this Agreement of the appointment of its Coordinator and shall
notify the other Party as soon as practicable upon changing such appointment. 
The Coordinator appointed by each Party shall be responsible for (a) preparing
such Party’s representatives serving on the Joint Alliance Team for meetings of
the Joint Alliance Team, (b) coordinating the distribution and exchange of
information to, from and among such Party’s representatives serving on the Joint
Alliance Team, and (c) assisting in the coordination of the day-to-day
activities of such Party’s representatives serving on the Joint Alliance Team so
that the Joint Alliance Team can function effectively and such representatives
can more effectively discharge their responsibilities as members of the Joint
Alliance Team.

 

3.3          Non-exclusive Right of Negotiation for Manufacturing Rights.
  Subject to the provisions of this Section 3.3, CUBIST hereby grants XTL a
non-exclusive right of negotiation during the term of this Agreement to obtain
all or any portion of the rights to manufacture and supply Product in the
Territory.  In the event that CUBIST proposes to engage a Third Party
manufacturer to manufacture and supply Product in the Territory, then CUBIST
will notify XTL in writing thereof and thereafter, XTL, to the extent that it
remains so interested, shall be included among the interested parties with whom
CUBIST holds discussions for the right to manufacture Products in the Territory
until such time as CUBIST selects the party with whom it wishes to enter into
negotiations for a definitive agreement for such rights.  XTL acknowledges that
beyond inclusion and participation in the discussions for such rights, XTL has
no additional right or expectation whatsoever, and CUBIST has no additional
obligation to XTL in respect of such non-exclusive negotiation rights.  CUBIST
shall consider commercially reasonable criteria in selecting its Third Party
manufacturers, including without limitation, the Product specifications, the
cost of goods sold, regulatory requirements and prior experience and
performance.  Without limiting the generality of the foregoing, XTL acknowledges
that CUBIST shall have complete liberty to select its manufacturing partners,
and to determine all manufacturing activities, as CUBIST, in its sole
discretion, sees fit, but consistent with CUBIST’s obligations to use
Commercially Reasonable Efforts as set forth in Section 2.2. Notwithstanding
anything expressed or implied to the contrary in this Section 3.3, XTL shall be
afforded the opportunity to participate in such negotiations only once during
the term of this Agreement and in the event that XTL foregoes its non-exclusive
right of negotiation for the manufacture and supply of a particular Product, or
if XTL participates in such negotiations but is not selected by CUBIST, then
XTL’s non-exclusive rights under this Section 3.3 shall terminate. XTL’s rights
under this Section 3.3 will terminate upon a Change of Control of CUBIST (except
with respect to any separate written manufacturing agreement entered into
between CUBIST and XTL prior to the effective date of such Change of Control;
provided that CUBIST has promptly complied with the notice provisions set forth
in this Section 3.3 prior to such Change of Control).

 

3.4          Independence.  Subject to the terms of this Agreement, the
activities and resources of each Party shall be managed by such Party, acting
independently and in its individual capacity.  The relationship between CUBIST
and XTL is that of independent contractors, and neither Party shall have the
power to bind or obligate the other Party in any manner, other than as is
expressly set forth in this Agreement.

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

10

--------------------------------------------------------------------------------

 

Section 4.              INFORMATION SHARING.

 

4.1          Product Information.  (a)    During the term of this Agreement, XTL
shall have an ongoing obligation to transfer to CUBIST all information,
including technical data, in XTL’s possession or Control and related to the
Product as CUBIST may reasonably require; provided that in the event that XTL is
unable to transfer any information or technology to CUBIST required to be
transferred under this Agreement, upon CUBIST’s written request, XTL shall
arrange for the prompt transfer of such information or technology to an [*] at
XTL’s expense.  On the first business day of each quarter during the term of
this Agreement, XTL shall provide CUBIST with a written report detailing the
activities undertaken by XTL under the HepeX-B Plan and the results obtained
from such activities.  At any time during the term of this Agreement, upon
reasonable request by CUBIST, XTL shall deliver to CUBIST or its designee copies
of all files in the possession or control of XTL or its agents that relate to
the Product or activities undertaken by XTL under the HepeX-B Plan.  During the
term of this Agreement and for [*] year thereafter, XTL shall maintain all data
and other records in XTL’s possession that are obtained or generated by XTL, its
Affiliates or its Third Party service providers in the course of providing
services under the HepeX-B Plan (collectively, “Records”) in a safe and secure
manner and in accordance with all applicable laws and regulations.  XTL shall
make available all Records to CUBIST for examination and duplication, during
normal business hours and at mutually agreeable times.  During the term of this
Agreement, XTL shall provide CUBIST with reasonable access to pertinent [*]
related to any Products.  For the purposes of calculating Designated Costs,
XTL’s activities under this Section 4.1(a) (with the exception of XTL’s
obligation to transfer information or technology [*] in connection with HepeX-B
shall be considered to be [*].

 

(b)           On or before [*] each Contract Year, CUBIST shall provide to XTL
written progress reports summarizing in reasonable detail CUBIST’s activities to
Obtain Regulatory Approval during the [*] period ending on the preceding [*],
respectively, as well as anticipated activities to be undertaken during the [*]
period.  CUBIST shall also notify XTL in writing of any material developments as
a result of CUBIST’s activities to Obtain Regulatory Approval within thirty (30)
days thereafter.

 

4.2          Pre-Clinical and Clinical Data; Regulatory Filings.  XTL will
provide to CUBIST all relevant pre-clinical or clinical information (including
without limitation that with respect to Product safety) relating to or in
connection with Product in a timely fashion and to permit CUBIST to comply with
any applicable law or regulation.  No later than [*] days after the Effective
Date, XTL will provide CUBIST copies of all regulatory filings, INDs, and orphan
drug designations, and the results of all pre-clinical and clinical testing of
Products performed by or on behalf of XTL.  On an ongoing basis during the term
of this Agreement, XTL will provide to CUBIST (i) all information in XTL’s
possession or control regarding pre-clinical testing and clinical testing
performed or to be performed by or on behalf of XTL with respect to the Products
(including, without limitation, information concerning the design and plans with
respect to such pre-clinical testing or clinical testing) as such information
becomes available, (ii) the results of all pre-clinical and clinical testing
performed by or on behalf of XTL with respect to the Products as such
information becomes available, (iii) all information in XTL’s possession
regarding Products necessary or useful for making regulatory filings in the
Territory with respect to Products as such information becomes available, and
(iv) copies of all regulatory filings made by or on behalf of XTL with respect
to Products promptly after such regulatory filings are made.  CUBIST shall have
a right of access, a right of reference and the right to use and incorporate all
information provided to it pursuant to this Section 4.2 in its applications for
Regulatory Approval of Products within the Territory and for all other purposes
related to Obtaining Regulatory Approval, manufacture and Commercialization of
Products.  For the purposes of calculating Designated Costs, XTL’s activities
under this Section 4.2 in connection with HepeX-B shall be considered to be [*].

 

4.3          No Retained Rights.  Notwithstanding anything expressed or implied
in the foregoing provisions of this Section 4 to the contrary, nothing in this
Section 4 or elsewhere in this Agreement is intended to diminish the scope of
the exclusive rights licensed by XTL to CUBIST pursuant to Section 2 or to
suggest that, from and after the Effective Date, XTL retains any rights to
Obtain Regulatory Approval for, manufacture, use or Commercialize any Product
for the prevention or treatment of Hepatitis B, except to the extent necessary
for XTL to perform its obligations under the HepeX-B Plan in accordance with the
provisions of this Agreement.

 

Section 5.              REGULATORY APPROVAL ACTIVITIES.

 

5.1          Regulatory Approval Activities.  (a) Subject to, and in accordance
with, the terms and conditions of this Agreement and all requirements of
applicable laws, rules, and regulations, XTL shall use

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

11

--------------------------------------------------------------------------------

 

Commercially Reasonable Efforts to conduct its activities to Obtain Regulatory
Approval set forth in the HepeX-B Plan; provided, however, that subject to
Section 5.1(b), XTL shall not have any obligation to [*] to which XTL has[*] if
(i) prior to the first iteration of the HepeX-B Plan, [*], (ii) the initial
HepeX-B Plan [*], and/or (iii) [*]; provided that in all cases, XTL may not
refuse to provide any data or information pursuant to Sections 4.1(a) or 4.2. 
XTL hereby acknowledges and agrees that it shall not be entitled to engage in
any activities to Obtain Regulatory Approval with respect to any Product
intended for treatment or prevention of Hepatitis B, unless and until such
activities have been incorporated into the HepeX-B Plan and CUBIST shall have
provided written consent to XTL engaging in such development activities.  The
Parties shall use Commercially Reasonable Efforts to minimize the costs and
expenses incurred by them as a result of the performance of their obligations
under this Section 5.  Notwithstanding anything in this Section 5 or elsewhere
in this Agreement to the contrary, XTL shall cease any activities to Obtain
Regulatory Approval, including any pre-clinical and clinical activity for
Products, upon receipt of written notice from CUBIST to cease such activity, or
as soon as practicable thereafter.

 

(b)           If and to the extent requested by CUBIST and included in the
HepeX-B Plan, XTL shall use Commercially Reasonable Efforts to deliver to CUBIST
the following (collectively, as described in Exhibit D and as revised from time
to time by mutual written consent of the Parties, the “XTL Activities”): (i)
[*], including development and implementation of a testing plan to demonstrate
comparability [*]; (ii) a commercially viable, concentrated [*]; (iii) complete
the [*] and underway as of the Effective Date.

 

5.2.         HepeX-B Plan.  All activities of the Parties (including allocation
of responsibilities of each Party or its designee) contemplated under this
Agreement to Obtain Regulatory Approval, including without limitation,
pre-clinical and clinical Product activities, any XTL Activities requested by
CUBIST, and all scientific, clinical, manufacturing, regulatory and other
activities to be undertaken for a commercially viable Product, and a budget for
the foregoing, shall be set forth in a plan, as modified from time to time (the
“HepeX-B Plan”).  In addition, the HepeX-B Plan will indicate whether any
budgeted costs are Designated Costs.  Within [*] days after the Effective Date,
the Joint Alliance Team shall propose a detailed initial HepeX-B Plan for each
Party’s review.  An initial guideline identifying major concepts for inclusion
in the HepeX-B Plan is attached as Exhibit C; if requested by CUBIST, any or all
of the XTL Activities shall also be included in the HepeX-B Plan.  The Joint
Alliance Team will propose recommended changes to the HepeX-B Plan at least
[*].  No modification to the HepeX-B Plan will be effective unless and until
approved by CUBIST and provided to XTL pursuant to Section 15.4 (without copies
to legal counsel).  CUBIST will have the sole right to determine whether to [*]
CUBIST’s sole discretion, but subject to [*].  XTL has the right to review [*]
to the HepeX-B Plan for the purpose of (a) [*] under the HepeX-B Plan should
constitute [*]; and (b) to [*] under the modified HepeX-B Plan (other than XTL
Activities) as contemplated in Section 5.1(a).  XTL shall have [*] days from
receipt of any proposed modified HepeX-B Plan pursuant to Section 15.4 (without
copies to legal counsel) to inform CUBIST whether it disputes the categorization
of any such costs as Designated Costs.  If XTL timely informs CUBIST that [*],
the Parties shall then have [*] business days to discuss [*], and if the Parties
cannot agree after good faith discussions whether any [*], the matter shall be
resolved in accordance with the dispute resolution process set forth in Section
14.  If XTL does not inform CUBIST within [*] days after receipt of any proposed
modified HepeX-B Plan that it agrees to [*] proposed under the modified HepeX-B
Plan as contemplated in Section 5.1(a), XTL will be deemed to have elected [*].

 

5.3          Use of Data by XTL. All data generated by XTL from any activities
engaged in by XTL pursuant to, and in accordance with, the provisions of this
Section 5 shall not be used by XTL and its Affiliates, except to support
Regulatory Approval in the Territory of Product or to Commercialize Product in
the Territory without the prior written consent of CUBIST, which shall not be
unreasonably withheld.

 

5.4          Costs and Expenses.  The costs and expenses incurred by both
Parties in connection with any and all activities engaged in pursuant to, and in
accordance with, the provisions of this Section 5, shall be allocated in the
manner set forth in Section 7.

 

5.5          Health Hazards. Each Party will notify the other Party of any
material health hazards with respect to Products that may impact employees
involved in the activities to Obtain Regulatory Approval, manufacture,
production or supply of Products as soon as practicable, and in any event within
forty-eight (48) hours, after such Party becomes aware of such hazards.

 

5.6          XTL Compliance.  In connection with any activities undertaken by
XTL to Obtain Regulatory Approval in connection with any Product, XTL shall
comply with all applicable laws, rules and regulations regarding such
activities, as such laws, rules and regulations are in effect where such
activities are undertaken.

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

12

--------------------------------------------------------------------------------

 

5.7          No Debarred Personnel.  In the course of the development of Product
or any component thereof, XTL has not used prior to the Effective Date, and
neither XTL nor CUBIST shall not use during the term of this Agreement, the
services of any employee, consultant, contractor, or clinical investigator that
has been debarred by the FDA or any other Regulatory Authorities or that is the
subject of debarment proceedings by the FDA or any other Regulatory Authority.

 

Section 6.              REGULATORY ACTIVITIES

 

6.1          Regulatory Activities.  Subject to, and in accordance with, the
terms and conditions of this Agreement (including Section 6.3), and all
requirements of applicable laws, rules, and regulations, CUBIST shall be
responsible for filing and obtaining Regulatory Approvals for Products in the
Territory.  XTL shall not be entitled to engage in any regulatory activities
with respect to any Product without the prior written consent of CUBIST.  XTL
shall use Commercially Reasonable Efforts to assist CUBIST in complying with all
requirements of applicable laws, rules, and regulations related to Regulatory
Approval of Product in the Territory.  Notwithstanding anything in this Section
6 or elsewhere in this Agreement to the contrary, XTL shall cease any regulatory
activity and all attempts to Obtain Regulatory Approval with respect to any
Product upon receipt of written notice from CUBIST to cease such activity, or as
soon as practicable thereafter.

 

6.2          REGULATORY APPROVALS.  TO THE EXTENT PERMITTED BY APPLICABLE LAWS,
RULES AND REGULATIONS, CUBIST SHALL FILE IN ITS OWN NAME, AND OWN, ALL DRUG,
BIOLOGIC AND DEVICE APPROVAL APPLICATIONS AND REGULATORY APPROVALS FOR PRODUCTS
IN THE TERRITORY, AND SHALL BE SOLELY RESPONSIBLE FOR ALL COMMUNICATIONS WITH
REGULATORY AUTHORITIES IN SUCH COUNTRIES RELATING THERETO. UPON CUBIST’S
REASONABLE REQUEST, XTL SHALL COOPERATE WITH AND ASSIST CUBIST IN THE
COMMUNICATION WITH ANY REGULATORY AUTHORITY OR IN THE PREPARATION AND SUBMISSION
OF ANY REGULATORY FILING REGARDING PRODUCT, AND WILL PROVIDE SUCH INFORMATION
AND DATA IN XTL’S POSSESSION OR CONTROL THAT IS NECESSARY TO OBTAIN REGULATORY
APPROVAL.  IF XTL IS REQUIRED BY APPLICABLE LAWS OR REGULATIONS OR A REGULATORY
AUTHORITY HAVING JURISDICTION IN THE TERRITORY TO DISCLOSE INFORMATION DIRECTLY
TO SUCH REGULATORY AUTHORITY RELATING TO PRODUCT, XTL SHALL NOTIFY CUBIST IN
WRITING OF THE REQUIREMENT AND THE PARTICULARS OF THE INFORMATION REQUIRED TO BE
DISCLOSED, AND XTL SHALL COORDINATE WITH CUBIST IN MAKING ANY SUCH DISCLOSURE. 
FURTHER, WITH RESPECT TO ANY SUCH REQUIRED DISCLOSURES, CUBIST SHALL HAVE THE
RIGHT TO BE PRESENT AND TO PARTICIPATE AT ALL FACE-TO-FACE MEETINGS AND
SCHEDULED CONFERENCE CALLS BETWEEN XTL AND SUCH REGULATORY AUTHORITY WITH
RESPECT TO PRODUCT AND CUBIST SHALL HAVE THE RIGHT TO LEAD ANY SUCH FACE-TO-FACE
MEETINGS OR SCHEDULED CONFERENCE CALLS.  PROMPTLY AFTER THE EFFECTIVE DATE, XTL
SHALL TRANSFER AND ASSIGN TO CUBIST ANY AND ALL SUCH DRUG, BIOLOGIC AND DEVICE
APPROVAL APPLICATIONS, INDS, ORPHAN DRUG DESIGNATIONS OR REGULATORY APPROVALS
HELD BY XTL AS OF THE EFFECTIVE DATE.

 

6.3          Costs and Expenses. The costs and expenses incurred by both Parties
in connection with any and all regulatory activities engaged in pursuant to, and
in accordance with, the provisions of this Section 6, shall be allocated in the
manner set forth in Section 7.

 

Section 7.              PRODUCT COSTS AND EXPENSES.

 

7.1          Collaboration Support.  The Parties acknowledge that XTL will incur
costs from and after the Effective Date in furtherance of its activities set
forth in the HepeX-B Plan.  Subject to the last sentence of this Section 7.1,
CUBIST shall pay XTL [*] in contemplation of costs, of which (a) [*] after the
Joint Alliance Team’s initial presentation of the HepeX-B Plan for approval,
unless CUBIST dissolves the Joint Alliance Team prior to such initial
presentation, in which case, CUBIST will pay such amount within [*] days after
[*]; (b) [*] shall be paid on or prior to [*]; and (c) [*] shall be paid on the
last business day of [*].  Notwithstanding anything to the contrary express or
implied in this Section 7.1, CUBIST shall have no obligation to make any payment
under this Section 7.1 if XTL is in material breach of its obligations under
this Agreement.

 

7.2          Overall Designated Costs. The Parties shall use Commercially
Reasonable Efforts to minimize the Designated Costs.  It is the intent of the
Parties, to the extent practicable, to endeavor to limit the Designated Costs to
not more than [*].

 

7.3          Designated Costs.  (a)  In addition to the payments under Section
7.1, and subject to Section 7.4, CUBIST shall bear all Designated Costs;
provided that any XTL Designated Costs are incurred in the performance of
activities that are set forth in an approved HepeX-B Plan in effect as of the
time XTL incurred such Designated Costs or became obligated to incur such
Designated Costs.  XTL shall submit quarterly invoices in Dollars to CUBIST no
later than [*] after the end of each quarter which set forth in reasonable

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

13

--------------------------------------------------------------------------------

 

detail the XTL Designated Costs for the immediately preceding quarter.  If not
previously approved by CUBIST in writing, CUBIST shall inform XTL within [*]
days of receipt of an invoice whether it disputes the categorization of any such
costs listed in such invoice as Designated Costs.  The Parties shall have [*]
business days to discuss such costs, and if the Parties cannot agree after good
faith discussions whether any itemized costs listed in such invoice are
Designated Costs, the matter shall be resolved in accordance with the dispute
resolution process set forth in Section 14.  CUBIST shall not be responsible for
any costs set forth in an invoice that are not Designated Costs.  Subject to the
immediately preceding sentence and Section 7.4 below, CUBIST shall reimburse
Designated Costs that are not subject to a good faith dispute within [*] days
after receipt of such invoice.

 

(b)           CUBIST shall provide to XTL, no later than [*] days after the end
of each quarter, a report which sets forth in reasonable detail the CUBIST
Designated Costs for the immediately preceding quarter.  XTL shall inform CUBIST
within [*] days of receipt of any such report whether it disputes the
categorization of any such costs listed in such invoice as Designated Costs. 
The Parties shall have [*] business days to discuss such costs, and if the
Parties cannot agree after good faith discussions whether any itemized costs
listed in such report are Designated Costs, the matter shall be resolved in
accordance with the dispute resolution process set forth in Section 14.

 

7.4          CUBIST Designated Costs Cap.  Notwithstanding anything express or
implied to the contrary contained herein, CUBIST shall be responsible for up to
[*] of the Designated Costs (whether incurred by CUBIST or XTL).  Thereafter,
the Parties shall each bear fifty percent (50%) of the Designated Costs in
excess of [*].  From and after the date that the aggregate amount of undisputed
Designated Costs is equal to or greater than [*], after receipt of each invoice
from XTL, CUBIST shall determine the aggregate Designated Costs for such quarter
by adding the undisputed XTL Designated Costs for such quarter (to the extent
such Designated Costs are in excess of the aggregate Designated Costs of [*]
plus the undisputed CUBIST Designated Costs for such quarter (to the extent such
Designated Costs are in excess of the aggregate Designated Costs of [*] (the sum
of the XTL Designated Costs and the CUBIST Designated Costs for such quarter
referred to herein as the “Aggregate Designated Costs”).  If the undisputed XTL
Designated Costs for such quarter are greater than fifty percent (50%) of the
Aggregate Designated Costs for such quarter, then CUBIST shall pay to XTL an
amount equal to (i) the XTL Designated Costs for such quarter minus (ii) the
result of the Aggregate Designated Costs for such quarter divided by two (2). 
CUBIST shall pay such amount within [*] days of receipt of the invoice for XTL
Designated Costs for such quarter.  If the undisputed CUBIST Designated Costs
for such quarter are greater than fifty percent (50%) of the Aggregate
Designated Costs for such quarter, then XTL shall pay to CUBIST an amount equal
to (I) the CUBIST Designated Costs for such quarter minus (II) the result of the
Aggregate Designated Costs for such quarter divided by two (2).  CUBIST shall
deliver an invoice to XTL for such amount, which invoice shall set forth in
reasonable detail the CUBIST Designated Costs for the immediately preceding
calendar quarter.  XTL may either make such payment within [*] days of receipt
of the invoice or [*] under [*] hereunder such that the [*] are no less than the
[*], until XTL’s share of Designated Costs is offset in full.  A one-time fee of
[*] shall be assessed on every amount that [*] pursuant to this Section 7.4.  In
addition, interest shall accrue pursuant to Section 10.8 on all [*] that XTL [*]
pursuant to this Section 7.4 beginning [*] months after XTL’s receipt of
CUBIST’s invoice therefor.  XTL shall have no obligation to pay any Designated
Costs that have not been [*] as of the termination or expiration of this
Agreement.  XTL shall have no obligation to share in any Designated Costs
incurred [*], and interest shall cease to accrue with respect to any previously
incurred Designated Costs.  For the avoidance of doubt, XTL’s obligation to
share in any Designated Costs under this Section 7.4 shall be limited to
HepeX-B, unless otherwise agreed by the Parties in writing.

 

7.5          Practices.  XTL will perform its activities under the HepeX-B Plan
in accordance with then current Good Laboratory Practices, Good Clinical
Practices (as required of a sponsor of a clinical trial), and Good Manufacturing
Practices, if and to the extent required by the HepeX-B Plan, and in such event,
XTL will include in each agreement with each of its subcontractors, if any,
performing any such activities contemplated under the HepeX-B Plan a requirement
that such subcontractors perform its activities in accordance with then current
Good Laboratory Practices, Good Clinical Practices, and Good Manufacturing
Practices, as and if applicable.

 

Section 8.              CONFIDENTIALITY; PUBLICATION; RECORDS.

 

8.1          Nondisclosure Obligation.  All Proprietary Information disclosed by
or on behalf of one Party to the other Party under this Agreement that is marked
“confidential” or “proprietary”, and in the case of oral information, is
summarized in a writing that is marked “confidential” or “proprietary” and
delivered to the

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

14

--------------------------------------------------------------------------------

 

other Party within thirty (30) days of disclosure of such information, shall be
maintained in confidence by the receiving Party and shall not be disclosed to a
non-Party or used for any purpose whatsoever without the prior written consent
of the other Party, except to the extent that such Proprietary Information:

 

(a)           is known by recipient at the time of its receipt, and not through
a prior disclosure by or on behalf of the disclosing Party, as documented by
contemporaneous business records;

 

(b)           is properly in the public domain through no fault of the
recipient;

 

(c)           is subsequently disclosed to a receiving Party by a Third Party
who may lawfully do so and is not directly or indirectly under an obligation of
confidentiality to the disclosing Party, as documented by written business
records in existence prior to the receipt of such information from the
disclosing Party;

 

(d)           is developed by the recipient independently of, and without
reference to or use of, Proprietary Information received from the disclosing
Party;

 

(e)           is required to be disclosed to governmental or other regulatory
agencies in order to obtain patents, to obtain approval to conduct clinical
trials or to market Products, or to comply with applicable governmental or stock
exchange or quotation system regulations; provided, however, that such
disclosure may be only to the extent reasonably necessary to obtain patents or
approval, or to comply with laws or regulations as appropriate and that
confidential treatment will be sought to the extent reasonably practicable;

 

(f)            is disclosed to actual or potential permitted sublicensees or
permitted assignees and/or other third parties (1) for the purpose of conducting
activities under this Agreement (or for such actual or potential permitted
sublicensees or permitted assignees and/or other third parties to determine
their interest in performing such activities) in accordance with this Agreement
or (2) for the purpose of allowing the Party making such disclosure to
effectively exploit its rights under this Agreement and obtain all of the
benefits under this Agreement to which such Party is entitled as contemplated by
this Agreement; provided, however, that such actual or potential permitted
sublicensees or permitted assignees and/or other third parties have agreed to be
bound by confidentiality obligations substantially equivalent to the terms
herein for no less than five years from the date of disclosure;

 

(g)           is disclosed to employees, officers, directors, consultants,
agents, investors or potential investors of, or lenders or potential lenders to,
the Party making such disclosure; provided, however, that such employees,
officers, directors, consultants, agents, investors, potential investors,
lenders and potential lenders have agreed to be bound by confidentiality
obligations substantially equivalent to the terms herein for no less than five
years from the date of disclosure; and provided further that notwithstanding the
provisions set forth above in this subsection (g), neither Party shall disclose
Proprietary Information of the other Party to potential investors or potential
lenders except to the extent that such disclosure is made in the context of such
potential investors’ or potential lenders’ due diligence investigation of the
Party making such disclosure;

 

(h)           is used by the receiving Party for the purpose of conducting
activities under this Agreement in accordance with its respective terms or is
used by the receiving Party for the purpose of allowing the receiving Party to
effectively exploit its rights under this Agreement and obtain all of the
benefits under this Agreement to which such receiving Party is entitled as
contemplated by this Agreement; or

 

(i)            is required to be disclosed by law, regulation or court order;
provided that notice is promptly delivered to the other Party in order to
provide an opportunity to challenge or limit the disclosure obligations; and
provided further that such disclosure may be only to the extent reasonably
necessary to comply with the applicable law, regulation or court order.

 

The disclosing Party shall identify any Proprietary Information delivered to the
receiving Party that is confidential information of a Third Party and the
disclosing Party shall inform the receiving Party of any restrictions,
limitations and qualifications imposed on such Proprietary Information by such
Third Party.  XTL agrees that with respect to any CUBIST Proprietary Information
disclosed to Yeda as contemplated by the XY Agreement and the Consent Agreement,
that XTL shall mark all such CUBIST Proprietary Information as “confidential” or
“proprietary”, and in the case of oral information, XTL shall summarize such
CUBIST Proprietary Information in a writing that is marked “confidential” or
“proprietary” and deliver such summary

 

15

--------------------------------------------------------------------------------

 

to Yeda within thirty (30) days of disclosure of such CUBIST Proprietary
Information.

 

8.2          No Disclosure of Terms.  Either Party may disclose the existence of
this Agreement, but, except to the extent otherwise provided below in this
Section 8.2, neither Party shall disclose the terms of this Agreement without
the prior written consent of the other Party.  Notwithstanding the foregoing,
either Party may disclose the terms of this Agreement pursuant to the provisions
of subparagraphs (b), (e), (f) (with financial terms redacted), (g), or (i) of
Section 8.1 to the same extent as if the terms of this Agreement were
Proprietary Information of the non-disclosing Party.

 

8.3          No Publication.  XTL shall not publish or publicly present any
information (a) relating to this Agreement, (b) any activities conducted under
or in relation to this Agreement, or (c) relating to any Product, in all cases
without the prior written consent of CUBIST. Neither Party shall make public use
of the other Party’s name or identifying marks except as otherwise permitted
under this Agreement, with the prior written consent of the other Party or as
required by applicable law or regulation.  CUBIST shall not use the names of
Yeda, the Weizmann Institute of Science, Rehovot, or Professor Yair Reisner in
any advertising, sales literature, or promotional material unless (i) the prior
written approval of Yeda thereto has been obtained or (ii) such use or
disclosure is to governmental authorities for the purposes of obtaining approval
or permission for the exercise of its license rights to any XTL Technology
licensed to XTL pursuant to the XY Agreement or is in the fulfillment of any
legal duty owed to any governmental authority or is required by applicable law. 
Nothing in this Section 8.3 shall limit XTL’s ability to apply for any patent
protection.

 

8.4          Press Releases, Etc.  Notwithstanding anything set forth in Section
8.1, 8.2 or 8.3 above to the contrary, XTL may not issue any news release or
other public announcement relating to this Agreement or to the Parties’
performance hereunder, without the prior written consent of CUBIST, which shall
not be unreasonably withheld or delayed, except to the extent required by
applicable law, regulation or stock exchange or quotation system requirement;
provided that XTL uses Commercially Reasonable Efforts to submit to CUBIST a
draft of such news release or public announcement at least five (5) days prior
to the date of planned issuance thereof and shall review and consider in good
faith any comments provided by CUBIST.  CUBIST may issue any news release or
other public announcement relating to Product without the prior written consent
of XTL, subject to the confidentiality provisions of Sections 8.1, 8.2 and 8.3;
provided, however, that CUBIST may not issue any news release or other public
announcement relating to this Agreement or to XTL’s performance hereunder,
without the prior written consent of XTL, which shall not be unreasonably
withheld or delayed, except to the extent required by applicable law, regulation
or stock exchange or quotation system requirement; and provided further that,
unless precluded by applicable law, regulation or stock exchange or quotation
system requirement, CUBIST will use Commercially Reasonable Efforts to submit to
XTL a draft of such news release or public announcement at least five (5) days
prior to the date of planned issuance thereof so as to afford XTL the
opportunity to object if such proposed press release would violate applicable
Israeli law, regulation or stock exchange or quotation system requirement.  In
the event of such objection, the parties will diligently cooperate to arrive at
a revised draft of such proposed press release that does not so violate such
applicable Israeli law, regulation or stock exchange or quotation system
requirement.

 

8.5          Records; Audit Rights.  Each Party shall keep or cause to be kept
full and accurate books of account and records containing all particulars that
may be necessary to determine, in a manner consistent with generally accepted
accounting principles in the United States, the sums or credits due under this
Agreement, including, but not limited to Designated Costs, Net Sales and
Sublicensee Revenues.  At the written request (and expense) of either Party, the
other Party and its Affiliates, and in the case of CUBIST, its licensees and
sublicensees shall permit an independent certified public accountant appointed
by such Party and reasonably acceptable to the other Party, accompanied by
representatives of the financial department of the audited Party at reasonable
times, upon reasonable notice and no more frequently than once per Contract
Year, to examine only those records as may be necessary to determine the
correctness or completeness of any report or payment made under this Agreement,
including but not limited to Designated Costs, Net Sales and Sublicensee
Revenues (including a breakdown of the components thereof so as to enable
calculation of royalties payable to Yeda under the XY Agreement), with respect
to any Contract Year ending not more than [*] prior to such Party’s request. 
Results of any such examination shall be (i) made available to both Parties,
(ii) limited to information necessary to report any error in any payment or
report made under this Agreement and (iii) subject to the provisions of this
Section 8. The Party requesting the audit shall bear the full cost of the
performance of any such audit, unless such audit discloses a variance of more
than [*] from the amount of the original report, royalty or payment
calculation.  In such case, the Party being audited shall bear the full cost of
the performance of such audit.

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

16

--------------------------------------------------------------------------------

 

Section 9.              LICENSE AND MILESTONE PAYMENTS.

 

9.1          Consideration for License.  In consideration for the licenses
granted to CUBIST under Section 2, CUBIST shall make a cash payment to XTL of
USD [*] within three (3) business days after the Effective Date of this
Agreement.

 

9.2          Milestones.  (a)  Subject to the terms and conditions in this
Agreement (including, without limitation, the provisions of Sections 9.2(b),
9.2(c) and 9.3 below), CUBIST shall make cash payments to XTL in the respective
amounts set forth below upon attainment of the milestones events (each a
“Milestone Event”)  set forth below:

 

Milestone Event

 

Payment Amount

 

[*]

 

USD [*]

 

[*]

 

USD [*]

 

 

(b)           CUBIST shall promptly notify XTL in writing upon the achievement
of any of the milestones set forth above in Section 9.2(a) and CUBIST shall have
[*] days after the occurrence of the Milestone Event to make the corresponding
milestone payment due.  All milestone payments shall be in Dollars.

 

(c)           CUBIST shall make only one of the payments set forth in Section
9.2(a) and only upon the first achievement of the applicable Milestone Event by
the first iteration of HepeX-B to achieve such milestone.  After the achievement
of a given Milestone Event and the payment required to be made by CUBIST
pursuant to Section 9.2(a), no further payment shall be due or owed by CUBIST in
connection with any Milestone Event, regardless of how many times the same
Milestone Event is achieved by different or multiple Products.  If the first
achievement of the Milestone Event occurs after [*], then no payment shall be
due or owed by CUBIST pursuant to Section 9.2(a).

 

9.3          Reduction of Milestone Payments.  Notwithstanding any provision in
this Section 9 or elsewhere in this Agreement to the contrary, CUBIST shall be
entitled to reduce payments required pursuant to Section 9.2 above as set forth
in Section 7.4, Section 11.3, or Section 12.10, or pursuant to the Consent
Agreement, as further contemplated under Section 10.4.

 

Section 10.            ROYALTIES.

 

10.1        Royalties on Net Sales of HepeX-B covered by a Valid Claim. 
(a)             For each Contract Year during the term of this Agreement, CUBIST
shall pay to XTL, subject to the terms and conditions of this Agreement
(including, without limitation, the provisions of Sections 10.2, 10.4, 10.5 and
10.9), a royalty with respect to Net Sales of HepeX-B sold by CUBIST or its
Affiliates, in any and all countries where the manufacture, use or sale of
HepeX-B are covered by a Valid Claim in such country (each a “Patent Country”),
equal to:

 

(i)            if Net Sales of HepeX-B in Patent Countries during such Contract
Year are equal to or less than [*], ten percent (10%) of the aggregate Net Sales
for HepeX-B sold in Patent Countries during such Contract Year of the aggregate
Net Sales for HepeX-B sold in Patent Countries during such Contract Year, and

 

(ii)          if Net Sales of HepeX-B in Patent Countries during such Contract
Year are greater than [*], then the lesser of (A) the Patent Royalty Rate, and
(B) seventeen percent (17%); multiplied by the aggregate Net Sales for HepeX-B
sold in Patent Countries during such Contract Year.

 

For purposes of this Section 10, the “Patent Royalty Rate” shall equal:

 

[*]

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

17

--------------------------------------------------------------------------------

 

For purposes of illustration only, if aggregate Net Sales of HepeX-B in Patent
Countries during a Contract Year is equal to [*], then the Patent Royalty Rate
shall equal to [*], or [*].

 

(b)           In the event of the issuance of a Retroactive Valid Claim in a
country that was not a Patent Country prior to such filing (the “Retroactive
Royalty Country”), for each Contract Year during which the application for the
Retroactive Valid Claim was pending (but in no event more than [*] prior to the
date of issuance of such Retroactive Valid Claim in the Retroactive Royalty
Country), through the date of issuance (each such Contract Year, a “Retroactive
Royalty Year”), CUBIST shall recalculate the aggregate royalties payable under
Sections 10.1(a) and 10.2 for each such Retroactive Royalty Year by including
the Net Sales of such Retroactive Royalty Country in the calculations for Patent
Countries under Section 10.1(a), and reducing by such amount the Net Sales in
the calculations for Know-How Countries under Section 10.2 (collectively the
“Recalculated Royalties”).  CUBIST will pay to XTL, subject to the terms and
conditions of this Agreement (including, without limitation, the provisions of
Sections 10.2, 10.4, 10.5 and 10.9), a retroactive royalty with respect to each
Retroactive Royalty Year in an amount equal to (i) the Recalculated Royalties,
minus (ii) any amounts paid or payable to XTL under Section 10.1(a) and Section
10.2 for such Retroactive Royalty Year prior to effecting any setoffs or offsets
under this Agreement.  For the first Retroactive Royalty Year, such retroactive
payment will only apply for Net Sales effected after the effective date of
filing of the application for the Retroactive Valid Claim.  Such retroactive
royalty payments will be paid in [*], each [*] after each of the next [*] (each
a [*]; provided that if such aggregate payment together with amounts payable
under Section 10.3(e) for the same Retroactive Valid Claim(s) exceeds [*] of the
royalties paid or payable prior to effecting any setoffs or offsets under this
Agreement for the Contract Year immediately preceding the Contract Year in such
Retroactive Valid Claim issued, then CUBIST may elect to pay such retroactive
royalty payments in [*] after each of the next [*].  If CUBIST elects to pay in
[*], interest shall accrue pursuant to Section 10.8 on all such retroactive
royalty payments beginning on the thirty-first (31st) day after the [*] that are
then unpaid.

 

10.2        Know-How Royalties.  Notwithstanding any provision in this Section
10 or elsewhere in this Agreement to the contrary but subject to Section
10.4(a), for each Contract Year during the term of this Agreement, CUBIST shall
pay to XTL a royalty with respect to annual Net Sales of HepeX-B sold by CUBIST
or its Affiliates in any country where the manufacture, use or sale of HepeX-B
is not covered by a Valid Claim in such country (each a “Know-How Country”) in
an amount equal to:

 

(a)           if Net Sales of HepeX-B in the Territory during such Contract Year
are equal to or less than [*] of the aggregate Net Sales for HepeX-B sold in
Know-How Countries during such Contract Year, and

 

(b)           if Net Sales of HepeX-B in the Territory during such Contract Year
are greater than $[*], then the lesser of (i) the Know-How Royalty Rate, and
(ii) [*]; multiplied by the aggregate Net Sales for HepeX-B sold in all Know-How
Countries during such Contract Year.

 

For purposes of this Section 10, the “Know-How Royalty Rate” shall equal:

 

[*]

 

For purposes of illustration only, if aggregate Net Sales of HepeX-B by CUBIST
or its Affiliates during a Contract Year in the Territory is equal to [*]
(representing [*] of aggregate Net Sales in Patent Countries and $[*} of
aggregate Net Sales in Know-How Countries), then the Know-How Royalty Rate under
this Section 10.2 shall equal [*], or [*].

 

10.3        Royalties on Net Sublicensee Revenues.  (a)  Subject to Sections
10.3(b), (c) and (d), for each Contract Year during the term of this Agreement,
CUBIST shall pay to XTL, subject to the terms and conditions of this Agreement,
an amount equal to [*] of the aggregate annual Sublicensee Revenues for such
Contract

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

18

--------------------------------------------------------------------------------

 

Year.

 

(b)           Notwithstanding anything to the contrary in Section 10.3(a) above,
but subject to the other terms and conditions of this Agreement, for each
Contract Year during the term of this Agreement, CUBIST shall pay to XTL an
amount equal to (i) [*] of the aggregate annual Sublicensee Revenues for such
Contract Year with respect to rights to Commercialize Product in the United
States of America, and (ii) if CUBIST sublicenses rights to Commercialize
Product in more than [*] European Major Markets, CUBIST shall pay to XTL [*] of
the aggregate annual Sublicense Revenues for such Contract Year with respect to
rights to Commercialize Product in the [*] European Major Market country in
which CUBIST has sublicensed rights to Commercialize Product.  In the event it
is not clear which of several countries are the [*] European Major Market
countries in which CUBIST has sublicensed rights to Commercialize Product,
CUBIST shall have the right in its sole discretion to identify which [*] of
those countries are the [*] European Major Market countries; provided that such
determination may not be subsequently changed by CUBIST without XTL’s prior
written consent.  To the extent that Sublicensee Revenues are applicable to more
than one country listed above, the percentage of such Sublicensee Revenues that
CUBIST shall be required to pay to XTL shall be calculated based on an
appropriate weighted average of the applicable countries.

 

(c)           With respect to Sublicensee Revenues that relate solely to
Know-How Countries in a particular Contract Year, the amount payable by CUBIST
to XTL under Sections 10.3(a) or 10.3(b) will be reduced by one half.

 

(d)           With respect to Sublicensee Revenues (other than Sublicensee
Revenues based on sales) from a particular Sublicensee that relate to both
Patent Countries and Know-How Countries in a particular Contract Year, the
amount payable by CUBIST to XTL under Sections 10.3(a) and 10.3(b) will be
reduced by a percentage between [*] (in the event that all countries are
Know-How Countries) calculated using a weighted average.  The weighted average
shall be based on the reasonable estimate provided in good faith by CUBIST to
XTL within thirty (30) days after execution of the underlying sublicense
agreement of the [*].  If XTL disputes such good faith estimate, then XTL may
submit the matter to the dispute resolution procedures set forth in Section 14.

 

(e)           For each Retroactive Royalty Year applicable for a particular
country that was not a Patent Country during such Retroactive Royalty Year
absent such Retroactive Valid Claim, CUBIST will pay to XTL, subject to the
terms and conditions of this Agreement (including, without limitation, the
provisions of Sections 10.2, 10.4, 10.5 and 10.9), a retroactive royalty in an
amount equal to (i) the amounts that would have been payable with respect to
such country under Sections 10.3(a), (b), or (d), minus (ii) any amounts paid or
payable to XTL under Section 10.3 with respect to such country prior to
effecting any setoffs or offsets.  For the first Retroactive Royalty Year, such
retroactive payment will only apply for Sublicensee Revenues received after the
effective date of filing of the application for the Retroactive Valid Claim. 
Such retroactive royalty payments will be paid in [*] after each of the next
[*]; provided that if such aggregate payment together with amounts payable under
Section 10.1(b) for the same Retroactive Valid Claim(s) exceeds [*] of the
royalties paid for the Contract Year immediately preceding the Contract Year in
such Retroactive Valid Claim issued, then CUBIST may elect to pay such
retroactive payments in [*].  If CUBIST elects to pay in [*], interest shall
accrue pursuant to Section 10.8 on all such retroactive royalty payments
beginning on the thirty-first (31st) day after the [*] that are then unpaid.

 

10.4        Setoffs and Offsets.  (a)  Notwithstanding any provision in this
Section 10 or elsewhere in this Agreement to the contrary but subject to Section
10.4(b), CUBIST shall be entitled to reduce payments otherwise required pursuant
to this Section 10 pursuant to Section 7.4, 11.3, or 12.10, or pursuant to the
Consent Agreement.  In addition, notwithstanding any provision in this Agreement
to the contrary except Section 10.4(b), for any given country within the
Territory, CUBIST shall have no obligation to make payments to XTL under Section
10.2 or 10.3 for any Contract Year with respect to a country where Product is
not covered by a Valid Claim, if the aggregate unit sales of Unlicensed Products
during such Contract Year by all Third Parties in such country constitute more
than [*] of the market share on a per unit basis with respect to all unit sales
of both such Unlicensed Products and HepeX-B in such country.  CUBIST shall have
no obligation to make payments to XTL under Section 10.2 or Section 10.3 for any
Contract Year in any country within the Territory:  (i) that is not a [*]; (ii)
where HepeX-B is [*]; and (iii) where unit sales of Unlicensed Product that is
also covered by a Valid Claim by all Third Parties in such country constitute
more than [*] of the market share on a per unit basis with respect to all unit
sales of both such Unlicensed Product and HepeX-B.

 

(b)           With respect to any amount payable by CUBIST to XTL under Section
9 or Section 10, in no

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

19

--------------------------------------------------------------------------------

 

event may CUBIST setoff or offset amounts under Section 7.4, Section 11.3, or
Section 12.10 or pursuant to the Consent Agreement against such payment in an
amount exceeding such amount payable.  Setoffs and offsets permitted pursuant to
Section 9.3, Section 11.3, and Section 10.4 will be applied in the following
order:  (i) first to reductions pursuant to [*]; and (ii) second to reductions
pursuant to [*]; (iii) third to reductions pursuant to [*]; and (iv) fourth to
reductions pursuant to [*]; provided that in no event will such offsets or
setoffs reduce any such payment to an amount less than the amount of the XTL
Licensor Payment applicable for such payment period.  Any amounts setoff or
offset amounts that are not actually setoff or offset against a particular
payment amount, will be carried forward to the next milestone or royalty payment
period.

 

(c)           XTL shall use any XTL Licensor Payment amount received under this
Section 10.4 for the sole and exclusive purpose of paying such Third Parties; if
XTL fails to use such amounts for such purpose, and does not remedy such failure
as soon as reasonably practicable, and in any event no later than [*] days after
receipt of written notice from CUBIST, and except as otherwise agreed in the
Consent Agreement with respect to Yeda, CUBIST may withhold XTL Licensor Payment
amounts from subsequent payments under Section 9 or Section 10 to apply against
any setoffs or offsets under Section 7.4, Section 11.3, or Section 12.10.

 

(d)           It is agreed that the references to the Consent Agreement in the
definition of the XTL Licensor Payments and in Sections 9.3 and 10.4(a) and (b)
shall not derogate from the rights of Yeda under the Consent Agreement, and for
the purpose of those rights, shall be deemed not to have been made.

 

10.5        Term of Royalties.  XTL’s right to receive (and CUBIST’s obligation
to pay) royalties under this Section 10 with respect to any country in the
Territory shall expire (and Net Sales in such country after expiration will not
be applied in the calculation of any royalty rates hereunder) upon the later of
(a) ten (10) years from the First Commercial Sale of HepeX-B in such country, or
(b) the expiration of the last to expire Valid Claim, if any, covering the
manufacture, use, or sale of HepeX-B in such country; provided that if there is
no such Valid Claim in such country, then the period described in clause (a)
above shall control; and further provided that if clause (a) controls and if the
XY Agreement requires XTL to pay royalties with respect to sales of HepeX-B
under this Agreement for up to an additional two (2) years after such ten (10)
year period, then during such additional period, CUBIST will pay directly to
Yeda on behalf of XTL, such royalty amount to which Yeda is entitled under the
XY Agreement and the Consent Agreement, calculated as if CUBIST were to continue
to pay to XTL the amounts due to XTL under this Agreement and the Consent
Agreement during the said two (2) year period.  In the event that, in accordance
with the provisions of this Section 10.5, the right of XTL to receive (and
CUBIST’s obligation to pay) royalties under this Section 10 in connection with
sales of HepeX-B in any country in the Territory expires, CUBIST shall
nevertheless remain obligated to pay accrued royalties to XTL in connection with
all sales of HepeX-B in such country that occurred prior to the effective date
of such expiration.

 

10.6        Royalty Payments and Reports.  Royalties shall be calculated by
converting all applicable Net Sales and Sublicensee Revenues into Dollars in
accordance with the provisions of Section 10.8 below and applying the
appropriate royalty percentages set forth in, or determined in accordance with,
Section 10.1 or Section 10.2 or Section 10.3, as applicable.  During the term of
this Agreement, royalties accrued to XTL pursuant to this Section 10 shall be
paid within [*] days after the close of each Contract Year.  Royalty payments
shall be made in Dollars.  Within [*] days of the end of each Contract Year,
CUBIST shall furnish to XTL a report showing: (i) the calculation of Net Sales
for HepeX-B that were sold in the Territory on a country-by-country basis during
such Contract Year, (ii) the calculation of Sublicensee Revenues attributed to
HepeX-B that was sold in the Territory on a country-by-country basis during such
Contract Year, (iii) royalties accrued to XTL pursuant to Section 10.1 and
pursuant to Section 10.2 during such Contract Year, and (v) the currency
exchange rates used in determining the amount of Dollars payable to XTL.  If no
royalty payments are due for any Contract Year hereunder, CUBIST shall so
report.  All reports delivered pursuant to this Section 10.6 and any information
that can be derived therefrom shall constitute Proprietary Information of CUBIST
for purposes of Section 8.1.

 

10.7        Exchange Rate.  The rate of exchange to be used in computing
Designated Costs, Net Sales and Sublicensee Revenues in each country within the
Territory shall be made at the average rate of exchange for such country’s
currency published in the Wall Street Journal (New York Edition) for the last
business day of each month in the applicable period.

 

10.8        Interest on Overdue Payments. Any amounts not paid by CUBIST or XTL
when due under this

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

20

--------------------------------------------------------------------------------

 

Agreement shall be subject to interest from and including the date payment is
due through and including the date upon which CUBIST or XTL has made such
payment calculated at the annual rate equal to the prime rate plus [*] percent,
as prime is reported in the Wall Street Journal (New York Edition), as
determined for each month on the last business day of the previous month.  For
the avoidance of doubt, this Section 10.8 shall not apply to amounts XTL has
elected to have CUBIST offset against future payments pursuant to Section 7.4.

 

10.9        Taxes.  If CUBIST is required by law, rule or regulation to withhold
taxes from any payments due to XTL from CUBIST hereunder, CUBIST will (i) deduct
those taxes from the remittable amount, (ii) pay the taxes to the proper taxing
authority, and (iii) send evidence of the obligation together with proof of
payment to XTL within thirty (30) business days following that payment. CUBIST
will provide to XTL such assistance as XTL may reasonably require at XTL’s
expense (including without limitation submission of documents to relevant
revenue authorities) in claiming exemption from any such withholding
requirements or seeking deductions under any double taxation or other similar
treaty or agreement from time to time in force.  In the event that XTL delivers
to CUBIST an opinion from legal counsel reasonably acceptable to CUBIST that tax
withholding is not required, CUBIST shall not make such withholding, in which
case, XTL shall, pursuant to the procedures in Section 11.3, indemnify, defend
and hold harmless the CUBIST Indemnitees with respect to any Losses resulting
from a Third Party claim arising out of CUBIST’s not making such withholding. 
Without limiting the generality of the foregoing provisions of this Section
10.9, but subject to the immediately preceding sentence, CUBIST shall be
responsible for all taxes imposed on or attributable to it under applicable law,
and XTL shall be responsible for all taxes imposed on or attributable to it
under applicable law.

 

10.10      Products other than HepeX-B.  (a) If, at any time during the term of
this Agreement before sales of HepeX-B are being made by CUBIST or a
Sublicensee, [*], at all times during the remainder of the term of this
Agreement, under [*].

 

(b)           Prior to Commercializing any Product other than HepeX-B
(irrespective of whether sales of HepeX-B are made or not): (i) by written
notice to XTL, CUBIST may elect to abide by the royalty provisions of this
Section 10 with respect to such Product, and references to “HepeX-B” in Section
10, except with respect to this Section 10.10, will be deemed to include such
Product, except that CUBIST shall have the right to make setoffs and offsets
pursuant to [*] only with respect to [*], which CUBIST could not setoff or
offset against [*] otherwise [*] with respect to HepeX-B; or (ii) if requested
by CUBIST, the Parties agree to negotiate in good faith the financial terms and
diligence obligations associated with such Product to account for any material
increases in costs and expenses with respect to such Product.

 

(c)           In the event CUBIST invokes clause (ii) of Section 10.10(b), if
after good faith negotiation, the Parties are unable to mutually agree upon
financial terms for such Product, then the matter shall be submitted to the
dispute resolution procedures set forth in Section 14.  In the event of
arbitration, the arbitrator will determine commercially reasonable financial
terms in light of (i) any additional costs required to Obtain Regulatory
Approval for such new Product, (ii) the anticipated market for such new Product,
(iii) the commercial viability of HepeX-B and the respective investment of the
Parties in HepeX-B, and (iv) financial and due diligence terms for other
similarly situated products in the marketplace.

 

Section 11.            RISK ALLOCATION.

 

11.1        Mutual Representations and Warranties.  Each Party hereby represents
and warrants to the other Party that:

 

(a)           it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated, and has
full corporate power and authority and the legal right to own and operate its
property and assets and to carry on its business as it is now being conducted
and as contemplated in this Agreement;

 

(b)           it has the corporate power and authority and the legal right to
enter into this Agreement and perform its obligations hereunder; it has taken
all necessary corporate action on its part required to authorize the execution
and delivery of this Agreement and the performance of its obligations hereunder;
and this Agreement has been duly executed and delivered on behalf of such Party,
and constitutes a legal, valid and binding obligation of such Party that is
enforceable against it in accordance with its terms;

 

(c)           it has not entered, and will not enter, into any agreement with
any Third Party that is in

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

21

--------------------------------------------------------------------------------

 

conflict with the rights granted to the other Party under this Agreement, and
has not taken and will not take any action that would in any way prevent it from
granting the rights granted to the other Party under this Agreement, or that
would otherwise materially conflict with or adversely affect the rights granted
to the other Party under this Agreement; and

 

(d)           its performance and execution of this Agreement will not result in
a breach of any other contract to which it is a party.

 

11.2        XTL Representations and Warranties.  XTL represents and warrants
that:

 

(a)           XTL has not taken any action or omission to encumber any of its
right, title and interest in and to the XTL Technology in the Territory in any
way that would have a material adverse effect on the rights and licenses granted
to CUBIST hereunder;

 

(b)           XTL has sufficient rights in and to the XTL Patents and XTL
Know-How to grant the rights set forth in this Agreement to CUBIST, and XTL will
do all such things and take all such actions as may be necessary to maintain
such sufficient rights in good standing during the term of this Agreement,
including the payment of any amounts and the performance of any obligations to
any Third Party licensor of XTL Technology as required under any agreement or
arrangement with any such Third Party (including without limitation the XY
Agreement);

 

(c)           XTL has not misappropriated the trade secrets (or, to XTL’s
knowledge after due and reasonable investigation, infringed) the intellectual
property rights of any other Person in its activities to Obtain Regulatory
Approval hereunder, and, to XTL’s knowledge after due and reasonable
investigation, the exercise of the licenses granted to CUBIST under the XTL
Patents and XTL Know-How, including to Obtain Regulatory Approval,
Commercialize, or manufacture Products in the Territory do not infringe any
patent rights Controlled by any Third Party which such patent is granted or
published as a patent application on or prior to the Effective Date;

 

(d)           XTL is unaware of any activities by any Third Party that would
constitute infringement of any XTL Patents or misappropriation of any XTL
Know-How;

 

(e)           XTL is not aware of any claims, judgments or settlements against
or owed by XTL and has not received notice of any pending or threatened claims
or litigation relating to Product, the XTL Patents or XTL Know-How;

 

(f)            to XTL’s knowledge, after due and reasonable investigation, XTL
has not used, prior to the Effective Date, in connection with HepeX-B, the
services of any employee, consultant or clinical investigator that has been
debarred by the FDA or any other regulatory authority or is the subject of
debarment proceedings by the FDA or any other regulatory authority;

 

(g)           XTL has obtained the consent of the Office of the Chief Scientist
of Israel (the “OCS”) to the transfer out of Israel of manufacturing rights as
detailed under this Agreement by XTL and no provision of this Agreement,
including the license grant set forth in Section 2.1, or the performance by
either Party of their respective obligations hereunder will violate or be in
conflict with any statute, regulation, rule, judgment, order, decree or
injunction of any governmental agency or body of Israel;

 

(h)           CUBIST is not and will not be liable to OCS for any loan or
obligation incurred by XTL without CUBIST’s prior express, written consent;

 

(i)            neither the execution and delivery of this Agreement by XTL nor
the performance of its obligations  hereunder will constitute a violation of, or
be in conflict with, or constitute or create a default or accelerate or
adversely affect any obligations under, any agreement or commitment to which XTL
is a party or by which any XTL Patent or XTL Know-How is subject, including
without limitation the XY Agreement;

 

(j)            there is no fact known to XTL that has not been disclosed in
writing to CUBIST (i) that could reasonably be expected to have a material
adverse effect upon the right to the XTL Patents or the XTL Know-How granted
hereunder, or (ii) that could reasonably be expected to materially and adversely
affect the ability of XTL to perform its obligations under this Agreement;

 

22

--------------------------------------------------------------------------------

 

(k)           XTL owns or Controls the human monoclonal antibody [*], as
referred to and described in [*], and the human monoclonal antibody [*], as
referred to and described in [*]; and

 

(l)            to XTL’s actual knowledge, (i) any clinical studies of HepeX-B
undertaken by or on behalf of XTL complied with applicable then current Good
Clinical Practices, (ii) any HepeX-B manufactured by or on behalf of XTL for use
in humans complied with applicable then current Good Manufacturing Practices and
(iii) any pre-clinical activities undertaken by or on behalf of XTL and intended
by XTL for inclusion in an application for Regulatory Approval complied with
applicable then current Good Laboratory Practices.

 

11.3        Indemnity.  (a)  CUBIST hereby agrees to defend, hold harmless and
indemnify XTL and its agents, directors, officers and employees (the “XTL
Indemnitees”) from and against any and all suits, claims, actions, demands,
liabilities, expenses and/or losses, including, without limitation, reasonable
legal expenses and attorneys’ fees (collectively “Losses”) resulting directly or
indirectly from a claim of a Third Party with respect to: (i) the manufacture,
handling, storage, use, promotion, sale, offer for sale, distribution,
importation or exportation of Products by or on behalf of CUBIST or its
Sublicensees (other than by XTL or other than such Losses that result from
claims arising out of an XTL indemnification obligation under Section 11.3(b)),
(ii) a material breach of any of the provisions of this Agreement by CUBIST or
any of its agents or employees; or (iii) the negligence, recklessness, or
willful misconduct by CUBIST or any of its agents or employees in the
performance of any obligations of CUBIST under this Agreement.  The foregoing
indemnification obligations will not apply in the event and to the extent that
such Losses arose as a result of any XTL Indemnitee’s negligence, willful
misconduct, or breach of this Agreement.

 

(b)           XTL hereby agrees to defend, hold harmless and indemnify CUBIST
and its agents, directors, officers, employees, Sublicensees and distributors
(the “CUBIST Indemnitees”) from and against any and all Losses resulting
directly or indirectly from a claim of a Third Party with respect to: (i) a
material breach of any of the provisions of this Agreement by XTL or any of its
agents or employees; (ii) the negligence, recklessness, or willful misconduct by
XTL or any of its agents or employees in the performance of any obligations of
XTL under this Agreement; (iii) the infringement of any Third Party intellectual
property right which such intellectual property is issued or published prior to
the Effective Date caused by Obtaining Regulatory Approval, Commercialization,
or the manufacture, use, promotion, marketing, sale, offer for sale, importation
or exportation of HepeX-B in the Territory by CUBIST and its sublicensees or
distributors; or (iv) the misappropriation of any Third Party intellectual
property right by XTL or any of its agents or employees which is known after due
and reasonable investigation as of the Effective Date.

 

(c)           XTL hereby agrees to defend, hold harmless and indemnify CUBIST
Indemnitees from and against [*] any and all Losses resulting directly or
indirectly from a claim of a Third Party with respect to: (i) the infringement
of any Third Party intellectual property right which such intellectual property
is not issued or published prior to the Effective Date caused by Obtaining
Regulatory Approval, Commercialization, and the manufacture, use, promotion,
marketing, sale, offer for sale, importation or exportation of HepeX-B in the
Territory by CUBIST and its Sublicensees or distributors; and (ii) the
misappropriation of any Third Party intellectual property right by XTL or any of
its agents or employees which is not known or knowable as of the Effective Date.

 

(d)           If either Party is seeking indemnification under this Section 11.3
in connection with a Third Party claim:  (i) it shall inform the indemnifying
Party of such Third Party claim giving rise to the obligation to indemnify as
soon as reasonably practicable after receiving notice of the claim; (ii) except
as provided in Section 11.3(d)(iii) with respect to claims under Section
11.3(b)(iii), Section 11.3(b)(iv) or Section 11.3(c), the indemnifying Party
shall have the right to assume the defense of, and take control of, any such
Third Party claim for which it is obligated to indemnify the indemnified Party
under this Section 11.3, the indemnified Party shall cooperate with the
indemnifying Party (and its insurer) as the indemnifying Party may reasonably
request, the indemnified Party shall have the right to participate, at its own
expense and with counsel of its choice, in the defense of any claim or suit that
has been assumed by the indemnifying Party, and neither Party shall have any
obligation to indemnify the other Party in connection with any settlement made
without the indemnifying Party’s written consent, provided that the indemnifying
Party does not unreasonably withhold or delay any such written consent; and
(iii) with respect to claims under Section 11.3(b)(iii), Section 11.3(b)(iv) or
Section 11.3(c), CUBIST shall have the right to assume the defense of, and take
control of, any such claim, XTL will cooperate with CUBIST as CUBIST may
reasonably request, XTL shall have the right to participate, at its own expense
and with counsel of its choice, in the defense of any such claim or suit that
has been assumed by CUBIST, and XTL shall not have any obligation to indemnify
CUBIST in connection with any settlement made without XTL’s written consent,
provided that XTL does not unreasonably withhold or

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

23

--------------------------------------------------------------------------------

 

delay any such written consent.

 

(e)           Notwithstanding anything expressed or implied to the contrary in
this Section 11, the amount of any Losses subject to indemnification shall be
reduced by the amount of any insurance proceeds received by the indemnified
Party with respect to such Losses; and there shall be no obligation under this
Agreement to indemnify such indemnified Party for the amount of Losses so
reduced.

 

(f)            XTL [*] under its indemnification obligations as set forth in
Section 11.3(b)(iii) and (iv) and under Section 11.3(c), or [*] such that the
[*] are no less than the [*], until XTL’s indemnification payment obligations
under Section 11.3(b)(iii) and (iv) and under Section 11.3(c) are [*].  Interest
shall begin to accrue on any such XTL payment obligations commencing as of the
date first due at a rate determined in accordance with Section 10.8 on any such
amounts [*].  XTL shall have no obligation to pay any amounts under its
indemnification obligations as set forth in Section 11.3(b)(iii) and (iv) and
under Section 11.3(c) that have not been [*] as of the termination or expiration
of this Agreement.

 

11.4        Limitation of Liability. EXCEPT (i) AS A RESULT OF ANY INFRINGEMENT
BY A PARTY OF THE INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY, (ii) AS A
RESULT OF THE FAILURE OF SUCH PARTY TO PERFORM AND OBSERVE ITS CONFIDENTIALITY
OBLIGATIONS TO THE OTHER PARTY UNDER THIS AGREEMENT OR (iii) PURSUANT TO A
PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 11.3, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES OF THE OTHER PARTY IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.

 

11.5        Insurance.  XTL and CUBIST shall each procure and maintain
insurance, including product liability insurance, adequate to cover its
obligations hereunder and that are consistent with normal business practices of
prudent companies similarly situated.  It is understood that such insurance
shall not be construed to create a limit of the Parties’ liability with respect
to its indemnification obligations under this Section 11.  CUBIST and XTL shall
provide each other with written evidence of such insurance upon request (which
evidence need not necessarily be insurance certificates).  CUBIST and XTL shall
provide the other with written notice at least ten (10) days prior to the
cancellation, non-renewal or material change in such insurance that materially
adversely affects the other Party’s rights hereunder.

 

Section 12.            INTELLECTUAL PROPERTY.

 

12.1        Inventions.  (a) The entire right, title and interest in and to all
discoveries, improvements, processes, formulas, data, inventions, enhancements,
know-how and trade secrets, patentable or otherwise, that arise from activities
under this Agreement or that are necessary or useful in connection with
Obtaining Regulatory Approval, manufacture, marketing, promotion, sale, import
or export of Products, and that were or are developed or invented: (i) solely by
employees of CUBIST (“CUBIST Inventions”) shall be owned solely by CUBIST; (ii)
solely by employees of XTL (“XTL Inventions”) shall be owned solely by XTL; and
(iii) jointly by employees of CUBIST and XTL (“Joint Inventions”) shall be owned
jointly by CUBIST and XTL; provided, however, that if the joint ownership by
CUBIST and XTL of any Joint Invention conceived using technology funded in whole
or in part by OCS (“OCS Technology”) would result in the transfer of any rights
outside of Israel in breach or violation of Section 19b1 of the Israeli
Encouragement of Development and Research in Industry Law, 1984, then such Joint
Invention shall be solely owned by XTL, and XTL hereby grants to CUBIST, for any
such Joint Invention: (A) an exclusive, perpetual, worldwide, irrevocable, fully
paid up license (with the right to sublicense) to Obtain Regulatory Approval,
make, have made, use, promote, market, sell, have sold, offer to sell, import or
export Products, and (B) a co-exclusive perpetual, worldwide, irrevocable, fully
paid up license (with each Party having the right to sublicense) for any and all
other purposes.  Notwithstanding anything to the contrary above, none of the
foregoing shall serve to or require (x) CUBIST to assign or transfer, or
otherwise relinquish, any of CUBIST’s right, title or interest in or to any
CUBIST Invention, Joint Invention, CUBIST Patent, Joint Patent or CUBIST
Know-How without the prior written consent of CUBIST, or (y) XTL to assign or
transfer, or otherwise relinquish, any of XTL’s right, title or interest in or
to any XTL Invention, Joint Invention, XTL Patent, Joint Patent  or XTL Know-How
without the prior written consent of XTL.  Commencing as of the Effective Date,
XTL shall not use any OCS Technology in the performance of its obligations under
this Agreement unless prior to such use (1) XTL notifies CUBIST in writing of
XTL’s intent to use OCS Technology, (2) XTL specifically identifies the OCS
Technology contemplated to be used and the purpose for which XTL intends to use
it, and (3) CUBIST gives its prior written consent to such use of such OCS
Technology.  Inventorship shall be determined in accordance with U.S. patent
law. All clinical data collected

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

24

--------------------------------------------------------------------------------

 

pursuant to services paid for in whole or in part by CUBIST will be owned by
CUBIST.

 

(b)           Notwithstanding anything to the contrary in this Agreement, in the
case any CUBIST Invention, XTL Invention or Joint Invention is conceived through
the use of the Licensed Technology or Licensed Patents (as such terms are
defined under the XY Agreement) (excluding the human monoclonal antibody [*], as
referred to and described in [*], and the human monoclonal antibody [*], as
referred to and described in [*], including any portions or fragments thereof)
(collectively the “Yeda Technology”), the parties shall not [*], which shall
include the terms and conditions for such registration or use of the CUBIST
Invention, XTL Invention or Joint Invention and relating to the ownership
thereof.  It is agreed, without derogating from the Consent Agreement, that
commencing as of the Effective Date, XTL shall not use any Yeda Technology in
the performance of its obligations under this Agreement unless prior to such use
(i) XTL notifies CUBIST in writing of XTL’s intent to use Yeda Technology (in
which case XTL shall also deliver a copy of such notice to Yeda), (ii) XTL
specifically identifies the Yeda Technology contemplated to be used and the
purpose for which XTL intends to use it, and (iii) CUBIST gives its prior
written consent to such use of such Yeda Technology.

 

12.2        Filing, Prosecution and Maintenance of Patents.  (a)  CUBIST shall
be entitled to file, prosecute and maintain in the Territory all patent
applications and patents that claim any CUBIST Inventions at its sole expense.

 

(b)           XTL agrees to file, prosecute and maintain the XTL Patents at its
sole expense, provided, however, that XTL shall (i) use outside counsel
reasonably acceptable to CUBIST, (ii) provide CUBIST with all material
documentation and correspondence from, sent to or filed with patent offices in
the Territory regarding any XTL Patent, (iii) provide CUBIST with a reasonable
opportunity to review and comment upon all filings with such patent offices in
advance of submissions to such patent offices, and (iv) shall consider, in good
faith, incorporating any comments provided by CUBIST.  In the event that XTL is
unwilling, unable or otherwise fails to file or prosecute any XTL Patent in any
country in the Territory, CUBIST shall have the right, but not the obligation,
and XTL shall provide CUBIST with thirty (30) days written notice to permit
CUBIST to, file, prosecute and/or maintain such XTL Patent in such country, and
XTL shall execute such documents and perform such acts as may be reasonably
necessary to allow CUBIST to file, prosecute and maintain such XTL Patent in
such country in a timely manner; provided that in any event any such XTL Patents
shall always be registered in XTL’s name or in the name of the relevant licensor
of XTL as identified in writing to CUBIST by XTL.

 

(c)           With respect to all filings, prosecution and maintenance of any
Patent pursuant to this Section 12.2, the filing Party shall be responsible for
payment of all costs and expenses related to such Patent filing, prosecution or
maintenance.

 

(d)           With respect to any Joint Inventions, CUBIST shall have the first
right to file, prosecute and maintain in the Territory, upon appropriate
consultation with XTL, Patents that claim or cover any Joint Invention (a “Joint
Patent”); however, in the event that CUBIST elects not to file any patent
application in the Territory with respect to any Joint Invention, XTL shall have
such right and upon exercise by XTL of such right, XTL shall have the right to
prosecute and maintain in the Territory, upon appropriate consultation with
CUBIST, the Joint Patents to which such Joint Invention relates.  Each of XTL
and CUBIST shall execute such documents and perform such acts as may be
reasonably necessary to allow CUBIST, in the first instance, and XTL, in the
second instance, to file, prosecute and maintain Joint Patents in any country
within the Territory in a timely basis.  CUBIST shall promptly give notice to
XTL of the grant, lapse, revocation, surrender, invalidation or abandonment in
the Territory of any Joint Patent being prosecuted by CUBIST.  XTL shall
promptly give notice to CUBIST of the grant, lapse, revocation, surrender,
invalidation or abandonment of any Joint Patent being prosecuted by XTL.

 

12.3        Option of the Parties to Prosecute and Maintain Patents.  Each Party
shall give notice to the other Party of any desire to cease prosecution of
patent applications and/or maintenance in the Territory of XTL Patents that such
Party is then prosecuting or maintaining, and, in such case, shall permit the
other Party, in its sole discretion, to continue such prosecution or maintenance
in the Territory at its own expense.  If the other Party then elects to continue
prosecution or maintenance in the Territory, each Party shall execute such
documents and perform such acts as may be reasonably necessary to allow
continuation of such prosecution or maintenance in the Territory.

 

12.4        Legal or Administrative Proceedings.  (a)  Each Party shall, within
ten (10) days of learning of such

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

25

--------------------------------------------------------------------------------

 

event, inform the other of any request for, or filing or declaration of, any
interference, opposition, reexamination, revocation, nullity proceeding or
declaration of non-infringement and/or invalidity, whether by administrative or
legal proceeding, sounding in equity or in law (or the equivalent of any of the
foregoing), whether initiated by a Third Party or any patent office, in the
Territory relating to any XTL Patent.  XTL and CUBIST shall thereafter consult
and cooperate fully to determine a course of action with respect to any such
proceeding.  Each Party shall have the right to review and comment upon any
submission to be made in connection with such proceeding and the Party
responsible for prosecuting or maintaining the Patent at issue in such
proceeding shall consider, in good faith, incorporating any comments provided by
the other Party.

 

(b)           Neither Party shall initiate any reexamination, interference,
reissue, revocation, nullity or declaration of non-infringement proceeding in
the Territory with respect to XTL Patents or Joint Patents without the prior
written consent of the other Party.

 

(c)           In connection with any interference, opposition, reexamination,
revocation, nullity proceeding or declaration of non-infringement and/or
invalidity, whether by administrative or legal proceeding, sounding in equity or
in law (or the equivalent of any of the foregoing), whether initiated by a Third
Party or any Patent Office, in the Territory relating to any XTL Patent or Joint
Patent, XTL and CUBIST will cooperate fully and will provide each other with any
information or assistance that either may reasonably request.  The Parties shall
keep each other informed of developments in any such action or proceeding,
including to the extent permissible by law and contracts, the status of any
settlement negotiations and the terms of any offer related thereto.

 

(d)           XTL, in the case of XTL Patents, shall bear the expense of any
interference, opposition, reexamination, revocation, nullity proceeding or
declaration of non-infringement and/or invalidity, whether by administrative or
legal proceeding, sounding in equity or in law (or the equivalent of any of the
foregoing), whether initiated by a Third Party or any Patent Office, relating
thereto.  The expenses of any interference, opposition, reexamination,
revocation, nullity proceeding or declaration of non-infringement and/or
invalidity, whether by administrative or legal proceeding, sounding in equity or
in law (or the equivalent of any of the foregoing), whether initiated by a Third
Party or any Patent Office, with respect to Joint Patents shall be shared
equally by the Parties.

 

(e)           This Section 12.4 applies to any proceeding before the United
States Patent and Trademark Office or similar patent authority in the Territory
and to any proceeding before a court, arbitration panel or similar body of
competent jurisdiction.

 

12.5        Enforcement.  (a)  Either Party shall give written notice to the
other Party of (i) any actual, alleged or threatened infringement of any XTL
Trademark or CUBIST Trademark or of any unfair trade practices, trade dress
imitation, passing off of counterfeit goods, or like offenses, or any such
claims brought by a Third Party against a Product (hereinafter “TM
Infringement”), (ii) any infringement of any XTL Patent and/or CUBIST Patent,
and/or Joint Patent, and (iii) any misappropriation or misuse of XTL Know-How
and/or CUBIST Know-How and/or Joint Inventions; in each case that such Party has
knowledge of.  XTL and CUBIST shall thereafter consult and cooperate fully to
determine a course of action, including but not limited to the commencement of
legal action by either or both XTL and CUBIST, to terminate any infringement of
XTL Patents Joint Patents, or Joint Inventions or to terminate any
misappropriation or misuse of XTL Know-How.  CUBIST shall have the first right
to initiate and prosecute legal action anywhere in the Territory, at CUBIST’s
expense and in its own name, and, as necessary, in the name of XTL, with respect
to XTL Patents, XTL Know-How, Joint Patents, and Joint Inventions.  Subject to
the provisions of this Section 12.5, CUBIST shall control and conduct such legal
action in its sole discretion, including without limitation, the terms and
conditions of any settlement.  In the event that CUBIST notifies XTL in writing
that it elects not to initiate and/or prosecute any such legal action, or if
CUBIST does not take material action to abate any such actual, alleged or
threatened infringement within ninety (90) days after the date of notice to
CUBIST of such actual, alleged or threatened infringement, XTL shall thereafter
have the right to initiate and prosecute such action in the Territory in its own
name.

 

(b)           For any infringement action concerning XTL Patents or Joint
Patents or any misappropriation or misuse of XTL Know-How or Joint Inventions,
in the event that CUBIST elects to initiate or prosecute such action but is
unable to do so solely in its own name, XTL will join such action voluntarily,
and at CUBIST’s expense, will execute all documents necessary for CUBIST to
initiate, prosecute and/or maintain such action.  In the event that XTL elects
to be represented by its own counsel in connection with any matter pertaining to
such action, XTL shall pay all of the costs and expenses of its own counsel.  In
connection with any such action, XTL and CUBIST will cooperate fully and will
provide each other with any information or assistance

 

26

--------------------------------------------------------------------------------

 

that either may reasonably request, provided, however, CUBIST shall control and
conduct such legal action in its sole discretion, including without limitation,
the terms and conditions of any settlement.  The Parties shall keep each other
informed of developments in any such action or proceeding, including to the
extent permissible by law and contracts, the status of any settlement
negotiations and the terms of any offer related thereto.

 

(c)           Any recovery of damages or an award received by either or both of
XTL and CUBIST in connection with or as a result of any action contemplated by
this Section 12.5 or Section 12.6 below, whether by settlement or otherwise,
shall be shared in order as follows:

 

(i)            the Party or Parties that prosecuted the action shall recoup all
of its or their costs and expenses incurred in connection with the action;

 

(ii)           the other Party (to the extent that it did not prosecute the
action) shall then, from funds remaining, recover its costs and expenses
incurred in connection with the action to the extent that such costs and
expenses are reasonably incurred to comply with such Party’s obligations under
Section 12.5 or to the extent that such other Party participates in the
prosecution of such action but not as a party thereto; and

 

(iii)          any amount remaining shall be included for royalty payment
purposes under Section 10.1 within Net Sales in Patent Countries for the royalty
period in which such amount was received.

 

12.6        Avoidance of Third Party Infringement Claims.  If a Product becomes
the subject of a claim by a Third Party that the activities undertaken to Obtain
Regulatory Approval, manufacture, use, sell, Commercialize or export or import
Product constitutes, causes or results in infringement of any patent rights of
such Third Party or other related intellectual property rights (any such claim,
a “Third Party Infringement Claim”), the Party first having notice of such Third
Party Infringement Claim shall promptly notify the other Party.  In the event
that there is a Third Party Infringement Claim that arises from the use or
practice of any XTL Patents or XTL Know-How in connection or associated with the
activities undertaken to Obtain Regulatory Approval, manufacture, use, sell,
offer for sale, Commercialize, export or import Product, the Parties shall
confer in good faith as promptly as practicable after both Parties become aware
of such Third Party Infringement Claim as to whether it is feasible to alter
their approach to their activities with respect to the Product so as to avoid
such Third Party Infringement Claim without adversely affecting their rights
under this Agreement.  In the event the Parties determine in good faith that it
is feasible to alter their approach to such activities without adversely
affecting their rights under this Agreement, the Parties shall implement such
alternative approach to such activities.

 

12.7        Patent Term Restoration and Regulatory Data Exclusivity.  The
Parties shall cooperate with each other in obtaining patent term restoration or
extension, supplementary protection certificates, or their equivalents, with
respect to XTL Patents, CUBIST Patents, Joint Patents, and regulatory data
exclusivity and the like, with respect to HepeX-B, in the Territory.

 

12.8        Patent Marking.  CUBIST shall mark all Products sold with
appropriate patent numbers or indicia at XTL’s request to the extent required
and/or permitted by law.

 

12.9        Trademarks.  (a)  CUBIST shall have the right to determine
appropriate trademark, trade dress and other related intellectual property usage
in connection with marketing Products under this Agreement.  CUBIST shall have
the exclusive right to use any trademarks in connection with marketing Products
under this Agreement in the Territory.

 

(b)           XTL agrees to file, prosecute and maintain the XTL Trademarks at
its sole expense, provided, however, that XTL shall (i) use outside counsel
reasonably acceptable to CUBIST, (ii) provide CUBIST with all material
documentation and correspondence from, sent to or filed with trademark offices
in the Territory regarding any XTL Trademark, (iii) provide CUBIST with a
reasonable opportunity to review and comment upon all filings with such
trademark offices in advance of submissions to such patent offices, and (iv)
shall consider, in good faith, incorporating any comments provided by CUBIST. 
In the event that XTL is unwilling, unable or otherwise fails to file or
prosecute any XTL Trademark in any country in the Territory, XTL shall provide
CUBIST with thirty (30) days notice to permit CUBIST to file, prosecute and/or
maintain such XTL Trademark in such country, and XTL shall execute such
documents and perform such acts as may be reasonably necessary to allow CUBIST
to file, prosecute and maintain such XTL Trademark in such country in a timely
manner.

 

27

--------------------------------------------------------------------------------

 

(c)           With respect to all filings, prosecution and maintenance of any
Trademark pursuant to this Section 12.9, the filing Party shall be responsible
for payment of all costs and expenses related to such Trademark filing
prosecution or maintenance.

 

12.10      Third Party Licenses.  (a)  The Parties shall confer and discuss
whether any license from a Third Party is necessary or advisable to avoid,
settle, resolve or satisfy any claim that the activities to Obtain Regulatory
Approval, make, have made, use, promote, market, sell, have sold, offer to sell,
import or export HepeX-B by CUBIST or its Sublicensees in any country within the
Territory infringes or misappropriates any intellectual property rights of such
Third Party.  Prior to September 30, 2004, the Parties shall confer and agree
upon a strategy as to how to address any Third Parties, if any, then known to
the Parties from whom it would be necessary or advisable to obtain a license to
avoid, settle resolve, or satisfy any claim that the activities to Obtain
Regulatory Approval, Commercialize, manufacture, use, promote, market, sell,
offer, import or export of HepeX-B by CUBIST or its Sublicensees in any country
within the Territory infringes or misappropriates any intellectual property
rights of such Third Party (the “Strategy”).  To assist in devising the
Strategy, [*].  If the parties, after good faith discussion and due
consideration of the [*], are unable to mutually agree upon the Strategy, then
CUBIST may, acting in good faith, make final decisions with respect to devising
the Strategy.  The Strategy may be modified from time to time pursuant to the
mutual agreement of the Parties; provided that if the parties, after good faith
discussion and due consideration [*], are unable to mutually agree, then CUBIST
may, acting in good faith, make final decisions with respect to revising the
Strategy.

 

(b)           CUBIST shall be responsible for obtaining licenses identified in
the Strategy on commercially reasonable terms.  CUBIST will provide XTL with
five (5) business days to review and [*] the scope of such license is reasonably
limited to permit CUBIST to exercise its rights and licenses under, and its
activities under and pursuant to, this Agreement to Obtain Regulatory Approval,
make, have made, use, promote, market, sell, have sold, offer to sell, import,
export, and Commercialize HepeX-B, and [*] commercially reasonable terms; such
[*], XTL will be deemed to have [*].  CUBIST shall pay all amounts required to
be paid to the Third Parties pursuant to such licenses described in Section
12.10(b).  If and to the extent practicable, CUBIST shall endeavor to use
reasonable efforts to obtain a clause in any such license permitting assignment
of such license to XTL; provided that in no event shall CUBIST be in breach of
this Agreement or in any way otherwise liable for any failure to obtain any such
assignment clause in any such license; and further provided that CUBIST will
have no obligation to include or accept an assignment clause that requires
CUBIST to retain or incur any further liability under such license subsequent to
such assignment.  XTL may not reject any such license due to the failure of such
license to contain such assignment clause as contemplated under this Section
12.10(b).

 

(c)           With respect to licenses obtained pursuant to Section 12.10(b)
which were [*], or with respect to which [*] (“Approved Third Party Licenses”)
wherein the intellectual property rights were described in an issued patent or
published in a patent application as of the Effective Date, unless with respect
to any such licenses that were not mutually agreed-upon in the Strategy, XTL
obtains a Legal Opinion, at XTL’s expense, that is in form and substance
reasonably acceptable to CUBIST (provided that CUBIST must notify XTL within
thirty (30) days after receipt of the executed Legal Opinion if CUBIST deems
such Legal Opinion to not be reasonably acceptable), CUBIST shall have the right
to reduce [*].  In the event that [*], unless paid by XTL, [*].  CUBIST will
reasonably cooperate with [*] to provide such information as may be reasonably
necessary to enable the law firm to render its opinion.

 

After a Change of Control of CUBIST, (i) amounts previously paid by CUBIST with
respect to the licenses described under this Section 12.10(c), plus any accrued
interest through the date of the Change of Control, and not yet paid by XTL or
offset pursuant to this Section 12.10(c), will continue to be offset against
milestone and royalty payments otherwise owed to XTL pursuant to Sections 9 and
10 before any other offsets pursuant to this Agreement; provided that such
milestones and royalties shall not be reduced by more than [*], (ii) only [*] of
amounts required to be paid by CUBIST pursuant to such licenses after a Change
of Control of CUBIST shall be offset against milestone and royalty payments
otherwise owed to XTL pursuant to Sections 9 and 10 before any other offsets
pursuant to this Agreement; provided that such milestones and royalties shall
not be reduced by more than [*], and (iii) interest shall cease to accrue on all
amounts paid by CUBIST pursuant to the licenses obtained or to be obtained under
this Section 12.10(c) but not otherwise offset as permitted under this
Agreement.

 

(d)           With respect to Approved Third Party Licenses wherein the
intellectual property rights were neither described in an issued patent nor
published in a patent application as of the Effective Date, unless

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

28

--------------------------------------------------------------------------------

 

with respect to any such licenses that were not mutually agreed-upon in the
Strategy, XTL obtains a Legal Opinion, at XTL’s expense, that is in form and
substance reasonably acceptable to CUBIST (provided that CUBIST must notify XTL
within thirty (30) days after receipt of the executed Legal Opinion if CUBIST
deems such Legal Opinion to not be reasonably acceptable), [*].  In the event
that [*], unless paid by XTL, [*].    CUBIST will reasonably cooperate with the
[*] to provide such information as may be reasonably necessary to enable the law
firm to render its opinion.

 

After a Change of Control of CUBIST, (i) amounts previously paid by CUBIST with
respect to the licenses described under this Section 12.10(d), plus any accrued
interest through the date of the Change of Control, and not yet paid by XTL or
offset pursuant to this Section 12.10(d), will continue to be offset against
milestone and royalty payments otherwise owed to XTL pursuant to Sections 9 and
10 before any other offsets pursuant to this Agreement; provided that such
milestones and royalties shall not be reduced by more than [*], and (ii)
interest shall cease to accrue on all amounts paid by CUBIST pursuant to the
licenses obtained or to be obtained under this Section 12.10(d) but not
otherwise offset as permitted under this Agreement.

 

(e)           XTL shall have no obligation to pay any amounts incurred by CUBIST
pursuant to the Third Party licenses obtained under this Section 12.10, which
amounts have not been offset against milestone and royalty payments as of the
termination or expiration of this Agreement.

 

12.11      Limitation.  Notwithstanding any other provision in this Section 12,
except with respect to the Patents listed in Exhibit A, (a) neither Party shall
be obligated to prepare, file, prosecute and maintain Patents, or to bring or
pursue enforcement proceedings or defend declaratory judgment actions under this
Section 12 if, and to the extent that, such Party is not entitled to do so under
its licenses from Third Parties, and (b) any rights conveyed under this Section
12 permitting a Party to prepare, file, prosecute and maintain certain Patents,
or to bring and pursue enforcement proceedings, or defend declaratory judgment
actions shall be subject to all applicable licenses from Third Parties, and are
conveyed only to the extent permitted under such agreements.  With respect to
Patents Controlled by XTL after the Effective Date, XTL shall promptly notify
CUBIST in writing if XTL is not entitled under its licenses to such Patents from
Third Parties to perform the activities listed in (a) above, or if any rights
listed in (b) above that have been conveyed to CUBIST are restricted by XTL’s
licenses from Third Parties to such Patents.

 

Section 13.            TERM AND TERMINATION.

 

13.1        Term.  This Agreement shall be effective as of the Effective Date
and remain in effect until the earlier of (a)  the effective date of termination
pursuant to Section 13.2 or Section 13.3 below, and (b) the expiration of the
term of this Agreement on the date on which CUBIST is no longer obligated,
pursuant to this Agreement, to make payment to XTL of any royalties in
connection with sales of Products in the Territory. In the event that the term
of this Agreement expires pursuant to clause (b) of this Section 13.1, then the
licenses granted by XTL to CUBIST shall survive such expiration and shall be
fully paid-up, royalty-free, perpetual and irrevocable licenses.

 

13.2        Termination by CUBIST.  (a)  This Agreement may be terminated by
CUBIST at any time during the term of this Agreement for any reason or no reason
if CUBIST gives at least one hundred and eighty (180) days prior written notice
of termination to XTL.

 

(b)           CUBIST may terminate this Agreement upon twenty (20) days’ prior
written notice to XTL if (i) in CUBIST’s judgment continuation of the activities
contemplated hereunder is inappropriate, impractical, or inadvisable either for
reasons of safety or efficacy; or (ii) the emergence of any adverse event or
side effect with the Product is of such magnitude or incidence in the opinion of
CUBIST to support termination.  Upon CUBIST’s delivery of such notice to XTL,
CUBIST shall have no further obligations under this Agreement except as provided
under Section 13.5.

 

(c)           CUBIST may terminate this Agreement pursuant to this Section 13.2
on a Product by Product or country by country basis.

 

13.3        Termination By Either Party Upon Bankruptcy or Insolvency. This
Agreement may be terminated in its entirety by either Party by giving written
notice of termination to the other Party in the event that such other Party
files or institutes any bankruptcy, liquidation or receivership proceedings, or
in the event that such other Party makes an assignment of a substantial portion
of the assets of such other Party for the benefit of its

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

29

--------------------------------------------------------------------------------

 

creditors; provided, however, that, in the case of any involuntary bankruptcy
proceeding such right to terminate shall only become effective if such other
Party consents to the involuntary bankruptcy or such proceeding is not dismissed
within sixty (60) days after the filing thereof.

 

13.4        Termination for Breach. (a)   If either Party (the “Non-Breaching
Party”) believes that the other Party (the “Breaching Party”) is in material
breach of this Agreement with respect to one or more Products, then the
Non-Breaching Party may deliver notice of such breach to the Breaching Party. 
The Breaching Party shall have thirty (30) days to cure such breach; provided
that, if cure cannot be reasonably effected within such thirty (30) day period,
the Breaching Party may elect to deliver to the Non-Breaching Party within such
thirty (30) day period a plan to cure such breach within a timeframe that is
reasonably prompt in light of the circumstances then prevailing, and the
Non-Breaching Party shall have the right to approve or reject in writing such
proposed plan in its absolute discretion.  If the Non-Breaching Party approves
in writing such proposed plan, then the cure period will be extended in
accordance with the terms of such plan and the Breaching Party shall use
Commercially Reasonable Efforts to carry out such plan and cure the breach in
accordance with the provisions of such plan.

 

(b)   If the Breaching Party fails to cure such breach as provided for in
Section 13.4(a), the Non-Breaching Party may terminate this Agreement either in
its entirety or with respect to one or more Products upon written notice to the
Breaching Party; provided that, the Non-Breaching Party gives such written
notice of termination within six (6) months after the Breaching Party has failed
to cure such breach as provided for in Section 13.4(a).

 

(c)   If the Non-Breaching Party gives notice of termination under this
Section 13.4 and the Breaching Party disputes whether such termination is proper
under this Section 13.4, then the issue of whether this Agreement may properly
be terminated upon expiration of the notice period (unless such breach is cured
as provided in Section 13.4(a)) shall be resolved in accordance with Section 14
(Dispute Resolution).  If as a result of such dispute resolution process it is
determined that the notice of termination was proper, then such termination
shall be deemed to have been effective thirty (30) days following the date of
the notice of termination.  If as a result of such dispute resolution process it
is determined that the notice of termination was improper, then no termination
shall have occurred and this Agreement shall remain in effect.

 

13.5        Effect of Expiration or Termination of this Agreement.  (a)  In the
event of termination or expiration of this Agreement, then, except to the extent
otherwise provided in this Section 13.5(a) and Section 13.5(f) below, neither
Party shall have any liability or obligation to the other Party under this
Agreement.  Notwithstanding the foregoing sentence, the licenses granted to
CUBIST under Section 2 shall survive expiration of this Agreement pursuant to
Section 13.1(b), and in such event, such licenses shall be deemed to be fully
paid up, irrevocable and perpetual.

 

(b)           In the event that CUBIST terminates this Agreement pursuant to
Section 13.4, then this Agreement shall terminate, and, except to the extent
otherwise provided in Section 13.5(f) below, neither Party shall have any
liability or obligation to the other Party under this Agreement.

 

(c)           In the event that CUBIST terminates this Agreement pursuant to
Section 13.2, or in the event that XTL terminates this Agreement pursuant to
Section 13.4, then this Agreement shall terminate, and, except to the extent
otherwise provided in this Section 13.5(c), Section 13.5(d) and Section 13.5(f)
below, neither Party shall have any further liability or obligation to the other
Party under this Agreement, including with respect to Section 9 and Section 10. 
The licenses granted to CUBIST under Section 2 shall terminate.  Notwithstanding
anything to the contrary in this Section 13.5(c), in the event that CUBIST
terminates this Agreement pursuant to Section 13.2 or XTL terminates this
Agreement pursuant to Section 13.4, CUBIST shall have the right to sell in the
Territory all of its inventory of Products for a period of twelve (12) months
from the effective date of termination, subject to CUBIST’s payment obligations
under Section 10.

 

(d)           If requested by XTL within ten (10) days after the effective date
of a termination pursuant to Section 13.2 or a termination by XTL pursuant to
Section 13.4, either with respect to this Agreement in its entirety, or with
respect to a particular Product in one or more countries, CUBIST will: (i)
transfer to XTL all INDs, Regulatory Approval applications, Regulatory Approvals
and orphan drug designations for such terminated Products in the terminated
countries in effect as of the time of any such termination, (ii) subject to the
scope of use limitations described in clause (iii) below, provide to XTL a copy
of all information, data, records and reports (but specifically excluding
know-how of CUBIST and CUBIST Patents) in Cubist’s Control

 

30

--------------------------------------------------------------------------------

 

created or obtained in the performance of CUBIST’s or XTL’s activities under
this Agreement that are directly related to the Products (or in the event of a
termination with respect to a particular Product, such terminated Product) and
necessary or reasonably useful for XTL to Obtain Regulatory Approval and
Commercialize the Products (or in the event of a termination with respect to a
particular Product, such terminated Product) in the terminated countries
(collectively, the “Data”), and (iii) grant to XTL a non-exclusive license in
the terminated countries in and to the Data solely for the purpose of using and
incorporating the Data in its applications for and in the maintenance of
Regulatory Approval of Products (or in the event of a termination with respect
to a particular Product, such terminated Product) within the terminated
countries and to Obtain Regulatory Approval, manufacture and Commercialize
Products (or in the event of a termination with respect to a particular Product,
such terminated Product) in the terminated countries, and (iv) if permitted
under any Third Party licenses obtained by CUBIST after the Effective Date
pursuant to the Strategy, CUBIST will assign to XTL such licenses, or if any
such license covers countries other than the terminated countries will grant to
XTL a sublicense under such license with respect to the terminated countries, to
Obtain Regulatory Approval, make, have made, use, promote, market, sell, have
sold, offer to sell, import or export HepeX-B in the terminated countries;
provided that if any such license requires consents of the Third Party licensor
to effect such assignment, CUBIST will request such consent and if such consent
is not provided or is otherwise qualified, CUBIST will have no obligation to
assign such license.  In addition, upon any such termination, CUBIST shall
either (y) negotiate in good faith with XTL to enter into an agreement to supply
such terminated Product to XTL on commercially reasonable terms, or (z) if such
termination terminated this Agreement in its entirety, provide to XTL all
biological materials in CUBIST’s Control created or obtained under this
Agreement with respect to Products (subject to CUBIST’s sell-off rights with
respect to inventory under Section 13.5(c)), and a copy of all information,
data, records and reports (but specifically excluding know-how of CUBIST and
CUBIST Patents) in Cubist’s Control created or obtained in the performance of
CUBIST’s or XTL’s activities under this Agreement that are directly related to
the terminated Products and necessary or reasonably useful for XTL to
manufacture such terminated Products, and such data and information shall be
deemed to be included within the Data.  Notwithstanding the foregoing, CUBIST
will have no obligation to assign or otherwise transfer to XTL any INDs,
Regulatory Approval applications, Regulatory Approvals or orphan drug
designations if any of the foregoing are in effect with respect to any country
other than the terminated countries.  XTL and CUBIST will negotiate in good
faith with respect to mutually agree upon reasonable and appropriate
compensation to CUBIST for the commercial value received as a result of the
transfers and licenses provided as set forth in this Section 13.5(d); if the
Parties are unable to so mutually agree within ninety (90) days after the
effective date of termination of this Agreement the Parties shall refer the
matter to the dispute resolution process set forth in Section 14, and in any
arbitration, the arbitrator will take into consideration, among other factors,
the investment of CUBIST in creating or obtaining the Data and the Parties’
investment in obtaining such transferred INDs, Regulatory Approval applications,
Regulatory Approvals and orphan drug designations, and amounts paid by CUBIST
but offset under Section 10.4 with respect to any assigned Third Party licenses.

 

(e)           In the event this Agreement is terminated due to the rejection of
this Agreement by or on behalf of a Party under Section 365 of the United States
Bankruptcy Code (the “Code”), and the equivalent provisions, if any, of the
bankruptcy laws of other countries in which CUBIST exercises the license granted
hereunder, all licenses and rights to licenses granted under or pursuant to this
Agreement by one Party to the other are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the Code, and any such equivalent law,
licenses of rights to “intellectual property” as defined under Section 101(35A)
of the Code.  The Parties agree that the licensed Party, as a licensee of such
rights under this Agreement, shall retain and may fully exercise all of its
rights and elections under the Code, and any such equivalent law, and that upon
commencement of a bankruptcy proceeding by or against a Party under the Code,
the other Party shall be entitled to a complete duplicate of or complete access
to, any such intellectual property and all embodiments of such intellectual
property.  Such intellectual property and all embodiments thereof shall be
promptly delivered to the other Party (i) upon any such commencement of a
bankruptcy proceeding upon written request therefor by a Party, unless the Party
elects to continue to perform all of its obligations under this Agreement or
(ii) if not delivered under (i) above, upon the rejection of this Agreement by
or on behalf of the Party upon written request therefor.  The foregoing is
without prejudice to any rights either Party may have arising under the Code or
other applicable law.

 

(f)            Termination of this Agreement shall not relieve either Party of
any obligation of such Party accruing prior to such termination.  Any
termination of this Agreement shall be without prejudice to the rights of either
Party against the other accrued or accruing under this Agreement prior to
termination.  The provisions of Section 1, Section 8.2, Section 8.3, Section
8.4, Section 11.3, Section 11.4, Section 12.1, Section 13, Section 14 and
Section 15 shall survive the termination of this Agreement.  Section 8.1 and

 

31

--------------------------------------------------------------------------------

 

Section 8.5 shall survive termination of this Agreement for a period of five (5)
years.

 

(g)           CUBIST shall reimburse XTL for all non-cancelable out-of-pocket
expenses XTL incurs after a termination of this Agreement (by CUBIST pursuant to
Section 13.2, or by XTL pursuant to Section 13.4) with respect to Third Party
service providers contracted by XTL to assist in the performance of XTL’s
obligations hereunder; provided that (i) such obligations are set forth in a
written agreement between XTL and such Third Party service provider, (ii) the
terms and provisions of such written agreement, including those relating to such
non-cancelable expenses, are commercially reasonable, (iii) XTL has used
commercially reasonable efforts to minimize such non-cancelable expenses; and
(iv) such non-cancelable expenses relate solely and directly to the performance
of XTL obligations under this Agreement.

 

Section 14.            DISPUTE RESOLUTION.

 

14.1        Escalation. The Parties recognize that disputes as to certain
matters may from time to time arise during the term of this Agreement which
relate to either Party’s rights and/or obligations hereunder.  It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation.  To accomplish this objective, the
Parties agree to follow the procedures set forth in this Section 14.1 if and
when a dispute arises under this Agreement.  Any dispute arising under this
Agreement shall, by either Party providing written notice to the other Party, be
referred to the respective chief executive officers of the Parties for attempted
resolution by good faith negotiations within  fourteen (14) days after such
notice is received.  In the event that the designated officers are not able to
resolve such dispute within such fourteen (14) day period, and do not agree to
extend the time period for resolving the dispute, or if the terms and conditions
of the resolution or settlement of the dispute are breached, the dispute shall
be submitted for mediation by a mutually acceptable Third Party within thirty
(30) days after expiration of the previous fourteen (14) day period, unless the
Parties agree to extend the period for submitting the dispute for mediation.  In
the event that such dispute is not resolved within thirty (30) days after such
dispute is submitted for mediation, unless the parties otherwise agree to extend
the time period for resolving the dispute, then such dispute shall be resolved
by arbitration pursuant to the provisions of Section 14.2. Pending resolution of
any dispute covered by this Section 14.1, both Parties will continue their
performance under this Agreement of any obligations (including, without
limitation, payment obligations) that are not the subject of such dispute.

 

14.2        Arbitration.  (a) Any claim, dispute, or controversy arising out of
or relating to this Agreement that is not resolved in accordance with the
provisions of Section 14.1 and that the Parties agree to submit to binding
arbitration pursuant to this Section 14.2 will be submitted by the parties to
arbitration under rules then in effect (“ICC Rules”) of the International
Chamber of Commerce (“ICC”) in New York City, New York, U.S.A. as modified
herein or by agreement of the Parties.  Any such arbitration shall be conducted
in New York City, New York, U.S.A. by three (3) arbitrators.  Each Party shall
select one (1) arbitrator and such arbitrators shall jointly appoint the third
arbitrator who shall act as the chairman.  If either Party fails to appoint an
arbitrator within thirty (30) days of a request by the other Party, or if the
arbitrators selected by the parties cannot agree on a chairman within thirty
(30) days after they have been selected, then either Party may request the ICC
to appoint such co-arbitrator (for the non-responsive Party) or the chairman. 
Such appointment shall be binding on the Parties.  Each Party irrevocably and
unconditionally (i) consents to the jurisdiction of any such proceeding and
waives any objection that it may have to personal jurisdiction or the laying of
venue of any such proceeding; and (ii) knowingly and voluntarily waives its
rights to have disputes tried and adjudicated by a judge and jury except as
otherwise expressly provided herein. The Parties will cooperate with each other
in causing the arbitration to be held in as efficient and expeditious a manner
as practicable. Unless the Parties agree otherwise, they shall be limited in
their discovery to directly relevant documents.  Responses or objections to a
document request shall be served twenty (20) days after receipt of the request. 
The arbitrators shall resolve any discovery disputes.  Nothing herein shall
prevent the Parties from settling any dispute by mutual agreement at any time.

 

(b)           The arbitration shall be of each Party’s individual claims only,
and no claim of any other Party shall be subject to arbitration in such
proceeding.  Except as otherwise required by law, the Parties and the
arbitrator(s) shall maintain as confidential all information or documents
obtained during the arbitration process, including the resolution of the
dispute.  The arbitration shall be conducted in English language.

 

(c)           The arbitrator(s) shall not have the authority to award any
injunctive relief or to award exemplary or punitive damages, and the Parties
expressly waive any right to such damages.  The arbitrator(s) shall have the
authority to award actual money damages (including interest on unpaid amounts
from the

 

32

--------------------------------------------------------------------------------

 

date due).  The costs and expenses of the arbitration, but not the costs and
expenses of the Parties, shall be shared equally by the Parties; provided that
the non-prevailing Party in any arbitration shall pay the other Party’s costs
and expenses (including travel expenses) and reimburse such Party for its
portion of the arbitration costs. In the event that neither Party wins totally,
reimbursement shall be made proportionally in accordance with the ICC Rules. 
Any award rendered by the arbitrator(s) shall be final and binding upon the
Parties.  Judgment upon the award may be entered in any court of competent
jurisdiction.  If a Party fails to proceed with arbitration, unsuccessfully
challenges the arbitration award, or fails to comply with the arbitration award,
the other Party is entitled to costs, including reasonable attorneys’ fees, for
having to compel arbitration or defend or enforce the award.

 

Section 15.            MISCELLANEOUS.

 

15.1        Force Majeure.  Neither Party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached the Agreement
for failure or delay in fulfilling or performing any term of the Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party including, but not limited to, earthquakes, fire,
floods, embargoes, insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, acts of God, acts of war or terrorism, or acts,
omissions or delays in acting by any governmental authority or the other Party. 
The affected Party shall notify the other Party of such force majeure
circumstances as soon as reasonably practical.

 

15.2        Assignment.  Neither party may assign its rights or obligations
hereunder without the prior written consent of the other party which will not be
unreasonably withheld or delayed; provided that either may assign this Agreement
to one of its Affiliates, or pursuant to a merger, consolidation or sale of
substantially all of its assets or stocks or other ownership interests without
such prior written consent.  The Parties agree that the issue of whether prior
written consent to an assignment was unreasonably withheld or delayed by a Party
shall be governed by the laws of the Commonwealth of Massachusetts without
reference to any rules of conflicts of laws.  This Agreement will bind and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

15.3        Severability.  In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, unless the absence of the invalidated provision(s) adversely affect the
substantive rights of the Parties.  The Parties shall in such an instance use
their best efforts to replace the invalid, illegal or unenforceable provision(s)
with valid, legal and enforceable provision(s) that, insofar as practical,
implement the purposes of this Agreement.

 

15.4        Notices.  All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered personally,
sent by telecopier (and promptly confirmed by personal delivery, registered or
certified mail or overnight courier), sent by internationally-recognized
overnight courier, addressed as follows:

 

If to CUBIST, to:

If to XTL, to:

CUBIST Pharmaceuticals, Inc.

XTL Biopharmaceuticals Ltd.

65 Hayden Avenue

Building 3

Lexington, MA  02421

Kiryat Weizmann

Attention:  Chief Executive Officer

Rehovot 76100

Telecopier No.: (781) 861-1412

Israel

 

Attention:  Chief Executive Officer

 

Telecopier No.: (972) 8.940.5017

 

 

With a copy to:

With a copy to:

CUBIST Pharmaceuticals, Inc.

Heller Ehrman White & McAuliffe  LLP

65 Hayden Avenue

4350 La Jolla Village Drive, 7th Floor

Lexington, MA  02421

San Diego, CA 92122

Attention:  General Counsel

Attention:  Stephen C. Ferruolo

Telecopier No.: (781) 860-1407

Telecopier No.: (858) 450-8499

 

 

And

 

 

33

--------------------------------------------------------------------------------

 

Bingham McCutchen  LLP

 

150 Federal Street

 

Boston, MA  02110

 

Attention:  Julio E. Vega, Esq.

 

Telecopier No.: (617) 951-8736

 

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.  Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by telecopier on a business day, on the business day after
dispatch if sent by internationally-recognized overnight courier.

 

15.5        English Language.  All notices, disclosures or information delivered
or made available by either Party or its employees and agents to the other Party
and its employees or agents pursuant to this Agreement shall be made in
English.  The English language version of this Agreement shall control
notwithstanding the translation of this Agreement into any other language.

 

15.6        Applicable Law.  Except as otherwise expressly set forth in Section
15.2, this Agreement shall be governed by and construed in accordance with the
laws of the United States and the State of New York without reference to any
rules of conflict of laws.  The Parties irrevocably consent to the exclusive
personal jurisdiction (except as to actions for the enforcement of a judgment,
in which case such jurisdiction shall be non-exclusive) of the federal and state
courts located in New York, New York, and venue in New York, New York.

 

15.7        Entire Agreement.  The Agreement contains the entire understanding
of the Parties with respect to the subject matter hereof.  All express or
implied agreements and understandings, either oral or written, heretofore made
are expressly merged in and made a part of the Agreement.  Except as expressly
set forth in this Agreement, the Agreement may be amended, or any term hereof
modified, only by a written instrument duly executed by both Parties.

 

15.8        Headings.  The captions to the several sections hereof are not a
part of the Agreement, but are merely guides or labels to assist in locating and
reading the several sections hereof.

 

15.9        Independent Contractors.  It is expressly agreed that CUBIST and XTL
shall be independent contractors and that the relationship between the two
Parties shall not constitute a partnership, joint venture or agency.  Neither
CUBIST nor XTL shall have the authority to make any statements, representations
or commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other Party.

 

15.10      Waiver.  The waiver by either Party hereto of any right hereunder or
the failure to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.

 

15.11      Counterparts.  The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

15.12      Waiver of Rule of Construction.  Each Party has had the opportunity
to consult with counsel in connection with the review, drafting and negotiation
of this Agreement.  Accordingly, the rule of construction that any ambiguity in
this Agreement shall be construed against the drafting Party shall not apply.

 

15.13      Third Party Beneficiaries.  Except as otherwise expressly provided in
this Agreement, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give to any Third Party any rights or remedies by
reason of this Agreement.  Except as otherwise expressly provided in this
Agreement, there are no intended Third Party beneficiaries under or by reason of
this Agreement.

 

 

[The remainder of this page is intentionally left blank.]

 

34

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have executed this License Agreement as of the
Effective Date.

 

 

XTL BIOPHARMACEUTICALS LTD.

 

CUBIST PHARMACEUTICALS, INC.

 

 

 

 

 

 

By:

/s/ Martin Becker

 

 

By:

/s/ Oliver Fetzer

 

Name: Martin Becker

 

Name: Oliver Fetzer

Title: CEO and President

 

Title: SVP, Corporate Development and CBO

 

 

[SIGNATURE PAGE TO LICENSE AGREEMENT]

 

35

--------------------------------------------------------------------------------

 

Exhibit A

(XTL Patents as of the Effective Date)

 

[*]

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

--------------------------------------------------------------------------------

 

Exhibit B

(XTL Trademarks)

 

[*]

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

--------------------------------------------------------------------------------

 

Exhibit C

(HepeX-B Plan Guidelines)

 

[*]

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

--------------------------------------------------------------------------------

 

Exhibit D

(XTL Obligations)

 

[*]

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

--------------------------------------------------------------------------------

 

Exhibit E

(XTL Licensor Payments)

 

[*]

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested. Material has been omitted and filed
separately with the Commission.

 

--------------------------------------------------------------------------------