Document:

Exhibit 10.2

 

1988 NONQUALIFIED STOCK OPTION PLAN

FOR NON-EMPLOYEE DIRECTORS

OF

NOBLE ENERGY, INC.

 

(As Amended Through April 27, 2004)

 

 

RECITALS

 

A.            Effective as of July 26, 1988 (the “Effective
Date”), the board of directors (the “Board of Directors”) of Noble Energy, Inc.
(formerly known as Noble Affiliates, Inc.), a Delaware corporation (the
“Company”), adopted this 1988 Nonqualified Stock Option Plan for Non-Employee
Directors (the “Plan”).

 

B.            The purposes of the Plan are to provide to
each of the directors of the Company who is not also either an employee or an
officer of the Company added incentive to continue in the service of the
Company and a more direct interest in the future success of the operations of
the Company by granting to such directors options (the “Options”, or
individually, the “Option”) to purchase shares of the Company’s common stock,
$3.33-1/3 par value (the “Common Stock”), subject to the terms and conditions
described below.

 

ARTICLE I

 

GENERAL

 

1.01         Definitions.  For purposes of this Plan and
as used herein, “non-employee director” shall mean an individual who (a) is
now, or hereafter becomes, a member of the Board of Directors by virtue of an
election by the shareholders of the Company, (b) is neither an employee nor an
officer of the Company and (c) has not elected to decline to participate in the
Plan pursuant to the next succeeding sentence. 
A director otherwise eligible to participate in the Plan may make an
irrevocable, one-time election, by written notice to the Company within 30 days
after his initial election to the Board of Directors or, in the case of the
directors in office on the Effective Date, prior to shareholder approval of the
Plan, to decline to participate in the Plan. 
For purposes of this Plan, “employee” shall mean an individual whose
wages are subject to the withholding of federal income tax under Section 3401
of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”), and “officer” shall mean an individual elected or appointed by the Board
of Directors or chosen in such other manner as may be prescribed in the By-laws
of the Company to serve as such, except that for the purposes of this Plan, the
Chairman of the Board will not be deemed to be an officer of the Company.

 

For purposes of this Plan,
and as used herein, the “fair market value” of a share of Common Stock is the
closing sales price on the date in question (or, if there was no reported sale
on such date, on the last preceding day on which any reported sale occurred) of
the Common Stock on the New York Stock Exchange.

 

 

1.02         Options.  The Options granted hereunder
shall be options that are not qualified under Section 422A of the Code.

 

ARTICLE II

 

ADMINISTRATION

 

The Plan shall be
administered by the Board of Directors. 
The Board of Directors shall have no authority, discretion or power to
select the participants who will receive Options, to set the number of shares
to be covered by each Option, or to set the exercise price or the period within
which the Options may be exercised, or to alter any other terms or conditions
specified herein, except in the sense of administering the Plan subject to the
express provisions of the Plan and except in accordance with Sections 3.02(a)
and 6.02 hereof.  Subject to the
foregoing limitations, the Board of Directors shall have authority and power to
adopt such rules and regulations and to take such action as it shall consider
necessary or advisable for the administration of the Plan, and to construe,
interpret and administer the Plan.  The
decisions of the Board of Directors relating to the Plan shall be final and
binding upon the Company, the Holders, as defined hereinafter, and all other
persons.  No member of the Board of
Directors shall incur any liability by reason of any action or determination
made in good faith with respect to the Plan or any stock option agreement
entered into pursuant to the Plan.

 

ARTICLE III

 

OPTIONS

 

3.01         Participation. 
Each non-employee director shall be granted Options to purchase Common
Stock under the Plan on the terms and conditions herein described.

 

3.02         Stock Option Agreements. 
Each Option granted under the Plan shall be evidenced by a written stock
option agreement, which agreement shall be entered into by the Company and the
non-employee director to whom the Option is granted (the “Holder”), and which
agreement shall include, incorporate or conform to the following terms and
conditions, and such other terms and conditions not inconsistent therewith or
with the terms and conditions of this Plan as the Board of Directors considers
appropriate in each case:

 

(a)           Option Grant Date. 
Options shall be granted initially as of the Effective Date to each
non-employee director serving the Company as a director on such date.  Thereafter, on each July 1 during the term
of the Plan until and including July 1, 2001, Options shall be granted
automatically to the incumbent non-employee directors serving the Company as
directors on such date.  Beginning on
February 1, 2002, Options shall be granted to incumbent non-employee directors
each year on February 1 during the term of the Plan.  Options shall be granted to new non-employee
directors at the time of their election or appointment.  The date of grant of an Option pursuant to
the Plan shall be referred to hereinafter as the “Grant Date” of such
Option.  Notwithstanding anything herein
to the contrary, the Board of Directors may revoke, on or prior to July 1, 2001
or on or prior to each subsequent February 1, the next automatic grant of
Options otherwise provided for by the

 

2

 

Plan if no options have been
granted to employees since the preceding Grant Date under the Company’s 1982
Stock Option Plan or any other employee stock option plan that the Company
might adopt hereafter.

 

(b)           Number.  Each non-employee director
serving the Company as a director on the Effective Date shall be granted, as of
such date, an Option to purchase a number of shares of Common Stock equal to
the product obtained by multiplying (i) the number of completed years such
director has served the Company as a director by (ii) 500.  Thereafter, as of each subsequent Grant Date
prior to July 1, 2001, each then current non-employee director shall be granted
an Option to purchase the number of shares of Common Stock equal to the nearest
number of whole shares determined in accordance with the following formula,
subject to adjustment in accordance with Section 5.02 hereof:

 

	
   

  	
  30,000

  	
   

  	
   

  	
  =

  	
   

  	
  Number of Shares of

  Common Stock

  
	
  Number of Non-Employee
  Directors

  	
   

  	
   

  	
   

  

 

“Number of Non-Employee
Directors” shall mean the number of non-employee directors serving the Company
as a director on such Grant Date.  The
formula set forth above will not be affected by any decision of the Board of
Directors to revoke an automatic grant.

 

If,
on any July 1 during the term of the Plan prior to July 1, 2001, fewer than
30,000 shares of Common Stock (subject to adjustment in accordance with Section
5.02 hereof) remain available for grant on such date, such smaller number will
be substituted for 30,000 as the numerator in the formula described above to
determine the number of shares of Common Stock to be subject to each Option to
be granted to each non-employee director on such date.

 

Beginning
on July 1, 2001 and on each Grant Date thereafter, each new non-employee
director shall be granted an Option to purchase 10,000 shares of Common Stock,
upon election to the Board of Directors as a director, for his or her first
year of service as a director.  On each
subsequent Grant Date, each then current incumbent non-employee director who
has completed his or her first year of service as a director shall be granted
an Option to purchase 5,000 shares of Common Stock.

 

(c)           Price.  The price at which each share
of Common Stock covered by an Option may be purchased pursuant to this Plan
shall be the fair market value of the shares on the Grant Date of such Option.

 

(d)           Option Period. 
Each Option shall be exercisable from time to time over a period (the
“Option Period”) commencing one year from the Grant Date of such Option and
ending upon the expiration of ten years from the Grant Date, unless terminated
sooner pursuant to the provisions described in Section 3.02(e) below; provided,
however, that any Option granted pursuant to the Plan shall become exercisable
in full upon the mandatory retirement of the Holder as a regular director
because of age in accordance with Article III of the By-laws of the Company.

 

3

 

(e)           Termination of Service, Death, Etc. 
Each stock option agreement shall provide as follows with respect to the
exercise of the Option granted thereby in the event that the Holder ceases to
be a non-employee director for the reasons described in this
Section 3.02(e):

 

(i)  If the Holder ceases to be a director of the
Company on account of such Holder’s (A) fraud or intentional misrepresentation,
or (B) embezzlement, misappropriation or conversion of assets or opportunities
of the Company or any direct or indirect majority-owned subsidiary of the Company,
then the Option shall automatically terminate and be of no further force or
effect as of the date the Holder’s directorship terminated;

 

(ii)  If the Holder shall die during the Option
Period while a director of the Company (or during the additional five-year
period provided by paragraph (iii) of this Section 3.02(e)), the Option may be
exercised, to the extent that the Holder was entitled to exercise it at the
date of Holder’s death, within five years after such death (if otherwise within
the Option Period), but not thereafter, by the executor or administrator of the
estate of the Holder, or by the person or persons who shall have acquired the
Option directly from the Holder by bequest or inheritance or permitted
transfer; or

 

(iii)  If the directorship of a Holder is
terminated for any reason (other than the circumstances specified in paragraphs
(i) and (ii) of this Section 3.02(e)) within the Option Period, the Option may
be exercised, to the extent the Holder was able to do so at the date of termination
of the directorship, within five years after such termination (if otherwise
within the Option Period), but not thereafter.

 

(f)            Transferability.  Except
as provided in this subsection (f), no Option granted under the Plan shall be
(i) transferable otherwise than by will or the laws of descent and
distribution, or (ii) exercisable during the lifetime of the Holder by anyone
other than the Holder.  An Option
granted under the Plan to a Holder may be transferred by such Holder to a
permitted transferee (as defined below), provided that (i) there is no
consideration for such transfer (other than receipt by the Holder of interests
in an entity that is a permitted transferee); (ii) the Holder (or such Holder’s
estate or representative) shall remain obligated to satisfy all income or other
tax withholding obligations associated with the exercise of such Option; (iii)
the Holder shall notify the Company in writing that such transfer has occurred
and disclose to the Company the name and address of the permitted transferee
and the relationship of the permitted transferee to the Holder; and (iv) such
transfer shall be effected pursuant to transfer documents in a form approved by
the Board of Directors.  A permitted
transferee may not further assign or transfer any such transferred Option
otherwise than by will or the laws of descent and distribution.  Following the transfer of an Option to a
permitted transferee, such Option shall continue to be subject to the same
terms and conditions that applied to it prior to its transfer by the Holder,
except that it shall be exercisable by the permitted transferee to whom such
transfer was made rather than by the transferring Holder.  For the purposes of the Plan, the term
“permitted transferee” means, with respect to a Holder, (i) any child,
stepchild, grandchild, parent, stepparent, grandparent,

 

4

 

spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law of the Holder, including
adoptive relationships, (ii) any person sharing the Holder’s household (other
than a tenant or an employee), (iii) a trust in which the persons described in
clauses (i) and (ii) above have more than fifty percent of the beneficial
interest, (iv) a foundation in which the Holder and/or persons described in
clauses (i) and (ii) above control the management of assets, and (v) any other
entity in which the Holder and/or persons described in clauses (i) and (ii)
above own more than fifty percent of the voting interests.

 

(g)           Agreement to Continue in Service. 
Each Holder shall agree to remain in the continuous service of the
Company, at the pleasure of the Company’s shareholders, at least until the
earlier of one year after the date of the grant of any Option or the mandatory
retirement of the Holder as a regular director because of age in accordance
with Article III of the By-laws of the Company, at the retainer rate and fee
schedule then in effect or at such changed rate or schedule as the Company from
time to time may establish.

 

(h)           Exercise, Payments, Etc. 
Each stock option agreement shall provide that the method for exercising
the Option granted thereby shall be by delivery to the President of the Company
of, or by sending by United States registered or certified mail, postage
prepaid, addressed to the Company (for the attention of its President) of,
written notice signed by Holder specifying the number of shares of Common Stock
with respect to which such Option is being exercised.  Such notice shall be accompanied by the full amount of the
purchase price of such shares.  Any such
notice shall be deemed to be given on the date on which the same was deposited
in a regularly maintained receptacle for the deposit of United States mail,
addressed and sent as above-stated.  In
addition to the foregoing, promptly after demand by the Company, the exercising
Holder shall pay to the Company an amount equal to applicable withholding
taxes, if any, due in connection with such exercise.

 

ARTICLE IV

 

[Deleted]

 

ARTICLE V

 

AUTHORIZED COMMON STOCK

 

5.01         Common Stock.  The
total number of shares of Common Stock as to which Options may be granted
pursuant to the Plan shall be 750,000, in the aggregate, except as such number
of shares shall be adjusted from and after the Effective Date in accordance
with the provisions of Section 5.02 hereof.  If any outstanding Option under the Plan shall expire or be
terminated for any reason before the end of the Option Period, the shares of
Common Stock allocable to the unexercised portion of such Option may again be
subject to the Plan.  The Company shall,
at all times during the life of any outstanding Options, retain as authorized
and unissued Common Stock at least the number of shares from time to time
included in the outstanding Options or otherwise assure itself of its ability
to perform its obligation under the Plan.

 

5

 

5.02         Adjustments Upon Changes in Common Stock.  In
the event the Company shall effect a split of the Common Stock or dividend
payable in Common Stock, or in the event the outstanding Common Stock shall be
combined into a smaller number of shares, the maximum number of shares as to
which Options may be granted under the Plan shall be increased or decreased
proportionately.  In the event that
before delivery by the Company of all of the shares of Common Stock in respect
of which any Option has been granted under the Plan, the Company shall have
effected such a split, dividend or combination, the shares still subject to the
Option shall be increased or decreased proportionately and the purchase price
per share shall be increased or decreased proportionately so that the aggregate
purchase price for all the then optioned shares shall remain the same as
immediately prior to such split, dividend or combination.

 

In the event of a
reclassification of the Common Stock not covered by the foregoing, or in the
event of a liquidation or reorganization, including a merger, consolidation or
sale of assets, the Board of Directors of the Company shall make such
adjustments, if any, as it may deem appropriate in the number, purchase price
and kind of shares covered by the unexercised portions of Options theretofore
granted under the Plan.  The provisions
of this Section 5.02 shall only be applicable if, and only to the extent that,
the application thereof does not conflict with any valid governmental statute,
regulation or rule.

 

ARTICLE VI

 

GENERAL PROVISIONS

 

6.01         Termination of the Plan.  The
Plan shall terminate whenever the Board of Directors adopts a resolution to
that effect.  If not sooner terminated
under the preceding sentence, the Plan shall wholly cease and expire at the
close of business on July 25, 2006. 
After termination of the Plan, no Options shall be granted under this
Plan, but the Company shall continue to recognize Options previously granted.

 

6.02         Amendment of the Plan. 
Subject to the limitations set forth in this Section 6.02, the Board of
Directors may from time to time amend, modify, suspend or terminate the
Plan.  No such amendment, modification,
suspension or termination shall (a) impair any Options theretofore granted
under the Plan or deprive any Holder of any shares of Common Stock which he
might have acquired through or as a result of the Plan, or (b) be made without
the approval of the shareholders of the Company where such change would (i)
increase the total number of shares of Common Stock which may be granted under
the Plan or decrease the purchase price under the Plan (other than as provided
in Section 5.02 hereof), (ii) materially alter the class of persons eligible to
be granted Options under the Plan, (iii) materially increase the benefits
accruing to Holders under the Plan or (iv) extend the term of the Plan or the
Option Period.

 

6.03         Treatment of Proceeds. 
Proceeds from the sale of Common Stock pursuant to Options granted under
the Plan shall constitute general funds of the Company.

 

6.04         Effectiveness. 
This Plan as originally adopted became effective as of the Effective
Date.  The Plan as amended, effective
April 27, 2004, was approved and adopted by the Board of Directors on January
27, 2004.  The Plan was amended by the
Board of Directors on January 27, 2004

 

6

 

subject to the approval of such amendment by
the affirmative vote of the holders a majority of the outstanding shares of
Common Stock present in person or by proxy entitled to vote at the next annual
meeting of the stockholders of the Company.

 

6.05         Paragraph Headings.  The
paragraph headings included herein are only for convenience, and they shall
have no effect on the interpretation of the Plan.

 

IN WITNESS WHEREOF, the
undersigned has executed this amendment to the 1988 Nonqualified Stock Option
Plan for Non-Employee Directors on this 22nd day of March, 2004, effective as
of April 27, 2004.

 

	
   

  	
  NOBLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Charles D.
  Davidson

  	
   

  
	
   

  	
  Name:

  	
  Charles D. Davidson

  
	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
					

 

7Exhibit
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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]