Licence Agreement (2014)Full Document 

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LICENCE AGREEMENT
 
Effective as of 31 July 2003 (“the Effective Date”)
 
Between
 
YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED
 
a company duly registered under the laws of Israel of P.O. Box 95, Rehovot 76100, Israel
 
(hereinafter “Yeda”)
of the one part;
 
and
 
BiondVax Pharmaceuticals Ltd.
 
a company duly registered under the laws of Israel of 54 Bialik Avenue, Ramat Hasharon 47205, Israel, Israel
 
(hereinafter the “Company”)
of the other part.
     
P R E A M B L E :
     
WHEREAS:
(A)
in the course of research conducted at the Weizmann Institute of Science (“the Institute”), under the supervision of Professor Ruth Arnon (“Prof. Arnon”) of the Department of Immunology, Prof. Arnon together with certain other scientists of the Institute (all of the aforementioned persons, collectively, “the Scientists”) arrived at an invention comprising a peptide-based vaccine for influenza (“the Invention”), all as more fully described in the patent applications listed in Appendix A(1) hereto (“the Existing Patent Applications”); and created and/or generated the know-how and other information relating to the Invention and the formulation and development thereof as described in Appendix A(2) hereto (which may be modified by mutual agreement of the parties from time to time) (“the Know-How”); and
 
 


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(B)
by operation of Israeli law and/or under the terms of employment of the Scientists at the Institute and pursuant to an agreement between the Institute, Yeda and the Scientists, all right, title and interest in and to the Invention, the Know-How and all Patents (as hereinafter defined) in respect of the Invention and the Know-How,’ vest and shall vest exclusively in Yeda; and
     
 
(C)
subject to and in accordance with the terms of this  Agreement, the Company wishes to receive, and Yeda is willing to grant to the Company, a worldwide exclusive licence under the Patents and the Know-How, for the manufacture, development and sale of influenza vaccines and any other product that cannot be manufactured, used, leased, sold, transferred or imported, in whole or in part, without infringing on one or more claims under the Patents (“Products”), all subject to and in accordance with the terms and conditions of this Agreement below; and
     
 
(D)
the Company hereby declares that, as at the Effective Date and until the date of signature of this Agreement, the Company was wholly-owned by Dr. Ron Babecoff (I.D. No. 068780410) of 54 Bialik Avenue, Ramat Hasharon 47205, Israel; Isaac Devash (I.D. No. 27038108) of 18 Belinson Street, Holon 58320 Israel and Rami Epstein (I.D. No. 57825473), of 70 Jabotinsky Street, Givatayim 53320, Israel (“the Founders”),
 
NOW THEREFORE` IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
     
1.
PREAMBLE, APPENDIX AND INTERPRETATION
   
1.1.
The Preamble and Appendix hereto form an integral part of this Agreement.
 
 


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1.2.
In this Agreement the terms below shall bear the meanings assigned to them below, unless the context shall indicate a contrary intention:
   
1.2.1.
 
“Affiliated Entity”
-
shall mean, with respect to any company, corporation, other entity or person (hereinafter, collectively, “entity”), an entity which directly or indirectly, is controlled by, or controls, or, is under common control with, such entity. For the purposes of this definition, “control” shall mean the ability, directly or indirectly, to direct the activities of the relevant entity (save for an ability flowing solely from the fulfillment of the office of director or another office) and shall include, without limitation, the holding, directly or indirectly, of more than 30% (thirty percent) of the issued share capital or of the voting power of the relevant entity or the holding, directly or indirectly, of a right to appoint more than 30% (thirty percent) of the directors of such entity or of a right to appoint the chief executive officer of such entity;
         
1.2.2.
 
“Development Program”
-
shall mean, with respect, to any Product or Products, a development program specifying the activities and timetable necessary to develop such Products to commercialisation, including the performance of toxicological tests, pharmacological and efficacy tests, pre-clinical tests and clinical trials and the steps required for obtaining regulatory approvals from the U.S. Food and Drug Administration (“the FDA”) or equivalent regulating authorities in other countries and the development of procedures and facilities for commercial production of such Products, sales projections and proposed marketing efforts;
 
 


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1.2.3.
 
“Exchange Rate”
-
shall mean, with respect to any amount to be calculated, or which is paid or received in a currency other than US Dollars, the rate reported in the Wall Street Journal for the purchase of US Dollars with such currency except if such currency is New Israel Sheqels, in which case such rate shall be the Bank Hapoalim Rate as defined below, on the last Business Day prior to the date of calculation, payment or receipt, as the case may be; for the purpose of the above, “Business Day” shall be a day, other than a Saturday, Sunday or other day on which the principal banks located in New York are not open for business during normal banking hours; and “Bank Hapoalim Rate” shall mean the average of the selling and buying exchange rates of New Israel Sheqels (in respect of cheques and remittances) and the US Dollar prevailing at Bank Hapoalim B.M. at the end of business on the date of calculation, payment or receipt, as the case may be;
         
1.2.4.
 
“Initial Investment”
-
shall mean the investment of an aggregate amount of at least US $3,000,000 (three million United States Dollars) net in the issued and irredeemable share capital of the Company, whether in one transaction or multiple transactions, to be expended solely for the purpose of advancing the research and development of the Products;
         
1.2.5.
 
“Initial investment Date”
-
March 31, 2005 or, if earlier, the date upon which the Company shall have received the Initial Investment;
         
1.2.6.
 
“Licence”
-
shall mean an exclusive worldwide licence under the Patents and the Know-How for the development, manufacture (by the Company or by a Subcontractor on the Companys behalf), use, marketing, safe, distribution and importing of the Products, subject to the provisions of clause 2.1 below and the other terms and conditions of this Agreement;
 
 


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1.2.7
 
“Licensed Information”
-
shall mean: (a) the Invention; and (b) the Know-How;
         
1.2.8
 
“Net Sales”
-
shall mean the total amount invoiced by the Company and the total amount invoiced by each Sublicensee in connection with the sale of Products (for the removal of doubt, whether such sales are made before or after the receipt of FDA New Drug Approval or equivalent approval for the relevant Product in any country); provided that, with respect to sales which are not at arms-length and either are not in the ordinary course of business or according to then current market conditions for such a sale, the term “Net Sales” shall mean the total amount that would have been due in an arm’s length sale made in the ordinary course of business and according to the then current market conditions for such sale or, in the absence of such current market conditions, according to market conditions for the sale of products similar to the Products, in all cases after deduction of:
           
       
(i)
excises, customs, duties and sales taxes (including value added taxes), or other similar governmental charges to the extent applicable to such sale and included in the invoice in respect of such sale;
           
       
(ii)
normal and customary trade, cash and quantity discounts, rebates, chargebacks, credits or allowances, if any, actually granted or imposed on account of the sale of the Products; or on account of price adjustments, including retroactive price adjustments or reductions imposed by public authorities, recalls, refunds, rejections or returns of Products previously sold;
 
 

 
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(iii)
bad debts, provided that they are recorded as such in the Company’s books in accordance with acceptable accounting principles and practices; and
           
       
(iv)
normal and customary transportation and delivery charges actually incurred, including shipping insurance, to the extent that such items are separately itemised in the invoice;
           
       
and provided further that, with respect to sales by the Company and/or a Sublicensee, as applicable, to any Affiliated Entity of the Company or Sublicensee, as the case may be, the term, “Net Sales” shall mean the higher of: (a) “Net Sales”, as defined above, with respect to sales which are not at arm’s length and either are not in the ordinary course of business or according to current market conditions; and (b) the total amount invoiced by such Affiliated Entity on resale to an independent third party purchaser after the deductions specified in subparagraphs (i), (ii), (iii) and (iv) above, to the extent applicable. For the removal of doubt, it is recorded that royalties shall not be paid on both the sale and resale of the same Product by the Company, a Sublicensee and/or an Affiliated Entity of the Company or Sublicensee (as the case may be)but shall only be paid on the sale or resale (as the case may be) which has the highest “Net Sales” value as set forth in this clause 1.2.8 above. For the further removal, of doubt, Sublicensing Receipts shall not form part of the “Net Sales”. Notwithstanding the aforegoing, with respect to sales during the period until the end of the calendar quarter during which the Company reaches an aggregate cumulative gross income (turnover) of US $3,000,000 (three million United States Dollars), all references in the above definition of Net Sales to “invoiced” shall be replaced by “received” and the deductions specified in subparagraphs (i), (ii) and (iv) above shall only apply if and to the extent that amounts corresponding thereto are actually received, and, with respect to the deduction specified in subparagraph (ii) above, subsequently refunded; and, for the removal of doubt, the deduction specified in subparagraph (iii) above shall apply only after the Company reaches an aggregate cumulative gross income (turnover) of US $3,000,000 (three million United States Dollars);
 
 

 
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1.2.9.
 
“Patents”
-
shall mean: (i) the Existing Patent Applications and all corresponding patents which may be granted thereon in all jurisdictions; and (ii) all other patent applications or applications for certificates of invention covering portions of the Licensed Information and all patents or certificates of invention which may be granted thereon; as well as all continuations, continuations-in-part, patents of addition, divisions, refiles, renewals, reissues and extensions of any of the aforegoing patents.
 
 


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For the purposes of this Agreement, the term “Patent” shall also mean “Orphan Drug” status (within the meaning of such term under the US Orphan Drug Act), Supplementary Protection, Certificate (within the meaning of such term under Council Regulation (EU) No. 1768/92) or any other similar statutory protection;
         
1.2.10.
 
Subcontracting Agreement” and “Subcontractor
-
 
Subcontracting Agreement” shall mean a bona fide subcontracting agreement pursuant to which a contractor is engaged on a pure commissioned work basis for the sole purpose of manufacturing or developing any of the Products (or part thereof) on the Company’s behalf, for monetary, consideration only; and the term “Subcontractor” shall be construed accordingly;
         
1.2.11.
 
Sublicence” and “Sublicensee
-
Sublicence” shall mean any right granted, licence given, or agreement entered into, by the Company to or with any other person or entity, permitting any use of the Licensed Information and/or the Patents (or any part thereof) for the development, manufacture and/or sale of Products (whether or not such grant of rights, licence given or agreement entered into is described as a sublicence or as an agreement with respect to the development and/or manufacture and/or sale and/or distribution and/or marketing of Products or otherwise); provided, however, that a Subcontracting Agreement shall not be deemed to be a “Sublicence”; and the term “Sublicensee” shall be construed accordingly;

 


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1.2.12.
 
Sublicensing Receipts
-
shall mean consideration, whether monetary or otherwise, received (for the removal of doubt, whether received before or after the receipt of FDA New Drug Approval or equivalent approval for any Product in any country) by the Company for or from the grant of Sublicences and/or pursuant thereto, or in connection with the grant of an option for a Sublicence, except for:
           
       
(i)
amounts received by the Company which constitute royalties based on sales of the Products by Sublicensees;
           
       
(ii)
amounts received from a Sublicensee and actually expended by the Company (as evidenced by invoices, receipts or other appropriate documents) in respect of future research and development activities to be performed at the Company or on behalf of such Sublicensee, provided that:
           
         
(a)
such research and development, activities are performed pursuant to a research and development program and research and development budget, a copy of which is furnished to Yeda;
             
         
(b)
the amounts attributed to overheads in the said research and development budget do not, in the aggregate, exceed an amount equal to 35% (thirty-five percent) of the total research and development budget,

 


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it being agreed, for the removal of doubt, that any amounts received by the Company as aforesaid which are not actually expended by the Company in the conduct of such research and development activities shall be deemed to be Sublicensing Receipts;
         
   
the terms: “the Effective Date”,Yeda”, “the Company”, “the Institute”, “Prof. Arnon”, “the Scientists”, “the Invention”, “the Existing Patent Applications”, “the Know-How” “Products” and “the Founders
-
shall bear the definitions assigned to them respectively in the heading or the preamble hereto, as the case may be.
         
1.3.
In this Agreement:
   
         
1.3.1.
 
words importing the singular shall include the plural and vice-versa and words importing any gender shall include all other genders and references to persons shall include partnerships, corporations and unincorporated associations;
     
1.3.2.
 
any reference in this Agreement to the term “patent” shall also include any re-issues, divisions, continuations or extensions thereof (including measures having equivalent effect); and
     
1.3.3.
 
any reference in this Agreement to the term “sale” shall include the sale, lease, rental or other disposal of any Product;
     
1.3.4.
 
including” and “includes” means including, without limiting the generality of any description preceding such terms.
 
 

 
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2.
LICENCE
       
2.1.
 
Yeda hereby grants the Licence to the Company, and the Company hereby accepts the Licence from Yeda, during the period, for the consideration and subject to the terms and conditions set out in this Agreement. For the removal of doubt, no licence is granted hereunder with regard to the Licensed information and/or the Patents and/or any portion of any of the aforegoing, with respect to any exploitation or activities (including the activities referred to in clause 1.2.6 above) relating to any product or services, other than Products.
       
2.2.
 
The Company hereby acknowledges that it is aware that the invention constitutes. Background Information (as such term is defined in Annex II of the EU Consortium Agreement entitled “A multi-disciplinary approach to the development of eptiope-based vaccines”, Proposal No. PL 970294 (the “EU Agreement”)), that it had reviewed the documents relating to the EU Agreement and that it is aware that Yeda has procured that the parties to the said EU Consortium Agreement have been notified of this Agreement by the Institute pursuant to section 16 of the EU Agreement .
       
   
For the removal of doubt, nothing contained in this Agreement shall prevent Yeda or the Institute from using the Licensed Information and the Patents for non-commercial academic research or other scholarly purposes.
       
2.3.
 
The Licence, shall remain in force in each country with respect to each Product (if not previously terminated in accordance with the provisions of this Agreement) until:
       
2.3.1.
 
in the case in which there is any Patent covering such Product in such country, the date of expiry in such country of the last of the Patents covering such Product; or
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