As filed with the Securities and Exchange Commission on September 10, 2013.  

 

   

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

 

 Form 20-F/A

Amendment No. 1

 

R REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
  Or
£

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended_____________________________________________________

  Or
£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Or
£ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File No. 000-55041

 

 

Can-Fite BioPharma Ltd .

(Exact name of Registrant as specified in its charter)

 

Can-Fite BioPharma Ltd., an Israeli Limited Company

(Translation of the Registrant’s name into English)

 

Israel

(Jurisdiction of incorporation)

 

10 Bareket Street, Kiryat Matalon, P.O. Box 7537, Petah-Tikva 4951778, Israel

(Address of principal executive offices)

 

Motti Farbstein
Chief Operating and Financial Officer
Tel: +972 (3) 924-1114

Fax: +972 (3) 924-9378

motti@canfite.co.il

10 Bareket Street, Kiryat Matalon, P.O. Box 7537, Petah-Tikva 4951778, Israel

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

Copies of communications to:

 

Robert L. Grossman, Esq. Ronen Kantor, Adv.
Greenberg Traurig, P.A. Kantor & Co. Law Offices
333 Avenue of the Americas 12 Abba Hillel Silver Rd.
(333 S.E. 2nd Avenue) Ramat Gan, Israel 52506
Miami, Florida 33131 Tel: 972-3-6133371
Tel: (305) 579-0500 Fax: 972-3-6133372
Fax: (305) 961-5756  

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

None

 

Securities registered or to be registered pursuant to Section 12(g) of the Act:

 

American Depositary Shares, each representing 2 Ordinary Shares, par value NIS 0.25 per share

(Title of Class)

 

Ordinary Shares, par value NIS 0.25 per share*

(Title of Class)

 

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

 

None

 

* Not for trading, but only in connection with the registration of the American Depositary Shares.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No ¨

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer  x

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨ International Financial Reporting Standards Other ¨
  as issued by the International Accounting Standards Board  x  

 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow: Item 17 ¨ Item 18 ¨

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ¨

 

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

 

 

 

 
 

 

EXPLANATORY NOTE

 

This Amendment No. 1 (this “Amendment”) to the Registration Statement on Form 20-F (File No. 000-55041) filed with the Securities and Exchange Commission by Can-Fite BioPharma Ltd. (the “Company”) on September 9, 2013 (the “Original Registration Statement”), is being filed solely to amend and restate Item 19 of Part III of the Original Registration Statement in its entirety and to file with this Amendment the full text of each exhibit listed therein that had been incorporated in the Original Registration Statement by reference to the Company’s previously filed Draft Registration Statement on Form 20-F and Amendment No. 1 to the Draft Registration Statement on Form 20-F.  Except as specifically provided in the immediately preceding sentence, the Original Registration Statement remains unmodified. 

  

 
 

 

ITEM 19. Exhibits

 

Index to Exhibits

 

Exhibit No.   Description
     
1.1   Amended and Restated Articles of Association of Can-Fite BioPharma Ltd.
     
2.1   Form of Amended and Restated Deposit Agreement, by and among Can-Fite BioPharma Ltd., The Bank of New York Mellon and the Owners and Holders of American Depositary Shares, dated ____________ (incorporated herein by reference, filed as Exhibit 1 to the Registration Statement on Form F-6 filed with the SEC on August 21, 2013).
     
4.1   Employment and Non-Competition Agreement with Barak Singer, dated February 22, 2011 (effective March 20, 2011).
     
4.2   Amendment to Employment and Non-Competition Agreement with Barak Singer, dated February 28, 2013.
     
4.3   Employment and Non-Competition Agreement with Motti Farbstein, dated June 10, 2003.
     
4.4   Consulting Agreement with BioStrategies Consulting, Ltd, dated September 27, 2005.
     
4.5   Service Management Agreement with F.D. Consulting International and Marketing Ltd., dated June 27, 2002. 
     
4.6   Master Services Agreement with Accellient Partners, dated May 10, 2010. 
     
4.7   Patent License Agreement— Exclusive , by and between the U.S. Public Health Service and Can-Fite BioPharma Ltd., dated January 29, 2003.
     
4.8   First Amendment to Exclusive Patent License Agreement L-249-2001/0, by and between the National Institutes of Health and Can-Fite BioPharma Ltd., dated August 15, 2005. 
     
4.9   Second Amendment to L-249-2001/0, by and between the National Institutes of Health and Can-Fite BioPharma Ltd., dated February 4, 2013.
     
4.10   License Agreement, by and between the University of Leiden and Can-Fite BioPharma Ltd., dated November 2, 2009.
     
4.11   License Agreement, by and between Seikagaku Corporation and Can-Fite BioPharma Ltd., dated September 22, 2006.  
     
4.12   Addendum to License Agreement, by and between Seikagaku Corporation and Can-Fite BioPharma Ltd., dated December 11, 2006. 
   
4.13   Representative Agreement, by and between Fuji Techno Interface Ltd. and Can-Fite BioPharma Ltd., dated September 22, 2006.  
     
4.14   Letter Agreement, by and between Seikagaku Corporation and Can-Fite BioPharma Ltd., dated December 8, 2009. 
     
4.15   License Agreement, by and between Kwang Dong Pharmaceutical Co., Ltd. and Can-Fite BioPharma Ltd., dated December 14, 2008. 
     
4.16   License Agreement, by and between Eye-Fite, Ltd. and Can-Fite BioPharma Ltd., dated November 21, 2011. 

 

1
 

 

Exhibit No.   Description
     
4.17   Services Agreement, by and among Denali Concrete Management Inc., Eye-Fite Ltd. and Can-Fite BioPharma Ltd., dated November 21, 2011. 
     
4.18   Letter from Can-Fite BioPharma Ltd. Regarding “Reimbursement for the Costs of the Clinical Trial”, dated February 24, 2013.  
     
4.19   Agreement, by and between Denali Concrete Management Inc. and Can-Fite BioPharma Ltd., dated November 21, 2011. 
     
4.20   Stock Purchase Agreement, by and between Denali Concrete Management Inc. and Can-Fite BioPharma Ltd., dated November 21, 2011.  
     
4.21   Subscription Agreement, by and between Denali Concrete Management Inc. and Can-Fite BioPharma Ltd., dated November 21, 2011. 
     
4.22   Subscription Agreement, by and between Denali Concrete Management Inc. and Can-Fite BioPharma Ltd., dated November 21, 2011. 
     
4.23   Common Stock Purchase Warrant, by and between Denali Concrete Management Inc. and Can-Fite BioPharma Ltd., dated November 21, 2011. 
     
4.24   Memorandum of Understanding, by and between Morningside Asia Venture (HK) Limited and Can-Fite BioPharma Ltd., dated January 19, 2010.  
     
4.25   Can-Fite BioPharma Ltd. 2003 Share Option Plan.  
     
8.1   List of Subsidiaries of Can-Fite BioPharma Ltd. (1)
     
15.1   Consent of Kost Forer Gabbay & Kasierer, an independent registered public accounting firm and member firm of Ernst & Young Global Limited. (1)

 

 

(1) Incorporated herein by reference to the Registration Statement on Form 20-F (File No.000-55041) filed with the SEC on Septmeber 9, 2013. 

 

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SIGNATURES

 

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to the registration statement on its behalf.

 

  CAN-FITE BIOPHARMA LTD.  
     
  By: /s/ Pnina Fishman, Ph.D.  
    Pnina Fishman, Ph.D.  
    Chief Executive Officer  

Date: September 10, 2013

 

 

 

 

Exhibit 1.1 

 

Articles of Association

Pursuant to the Companies Law, 1999, of a Company Limited by Shares

CAN FITE BIOPHARMA LTD.

 

  Clause Page
1 Interpretation 1
2 Company Name 2
3 Company Purposes 2
4 Company Intent 2
5 Authorised Share Capital 2
6 Shareholder Liability 2
7 Public Company 4
8 Shares 4
9 Share Certificate; Share Warrant 5
10 Call on Shares 6
11 Share Forfeiture and Mortgage 7
12 Share Transfer and Delivery 9
13 Redeemable Shares 10
14 Recapitalisation 11
15 General Meetings 12
16 General Assembly Resolutions 13
17 Shareholders' Vote 14
18 Voting Rights 15
19 Board of Directors 16
20 Board's Authority 18
21 Board Meetings 19
22 Board Committee 20
23 Minutes 21
24 CEO 22
25 Local Management 22
26 Registry of Shareholders 23
27 Company Officers 24
28 Distribution 24
29 The Internal Auditor 25
30 The Auditing Accountant 25
31 Transactions Requiring Special Authorisation 25
32 Merger 26
33 Notices 26
34 Liquidation of the Company 27
35 Exemption from Liability 27
36 Liability Insurance 27
37 Indemnity 28
38 Binding the Company 29
39 Amendment of these Articles of Association 29

 

1. Interpretation

 

1.1. In these Articles, unless the wording demands a different interpretation, the following words and expressions shall bear the following meanings:

 

1
 

 

The Stock Exchange ” –   The Tel Aviv Stock Exchange Ltd.
     
The Board ” –   The Board of Directors duly elected pursuant to the provisions hereof.
     
Director ” –   A member of the Company’s Board and any person who acts as a Director in actual fact, be his/her title what it may.
     
The Securities Law ” -   The Securities Law, 1968, as amended from time to time, and the regulations promulgated thereunder.
     
The Companies Law ” -   The Companies Law 1999, as amended from time to time, and the regulations promulgated thereunder.
     
The Law ” –   The Companies Law, the Securities Lawand any other legislation in effect, pertaining to companies, applicable to the Company at that time.
     
The Company ” –   The abovementioned Company.
     
The Ledger ” –   The members’ ledger that must be kept pursuant to Section 127 of the Companies Law, the Material Shareholders Ledger that must be kept pursuant to Section 128 of the Companies Law, and in the event that the Company maintains an additional Ledger outside of Israel, any other Ledger, as the case may be.
     
The Office ” –   The Company’s Registered Office, at any particular time.
     
Writing ” –   Printed matter, lithograph, photograph, telegram, telex, facsimile, email and any other form of imprint or formation of words in visible form.
     
Securities ” –   Including, Shares, Bonds, Capital Notes, other Certificates and Documents that bestow a right to sell, convert or sell any such.
     
The Companies Ordinance ” -   The Companies Ordinance [New Version], 1983, as periodically amended.
     
The Articles ” –   The Company’s Articles of Association in its current version, or as shall be amended from time to time.

 

1.2. Sections 2, 3, 4, 5, 6, 7, 8, 10 of the Interpretation Law, 1981-5741, shall apply, mutatis mutandis , to the interpretation hereof, in the absence of any other provision relating to the subject matter, and in the absence of anything in the subject matter, or its context, that does not fit the said application.

 

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1.3. Except as provided for herein this article, every word and expression in these Articles, shall bear the meaning ascribed to them in the Companies Law, unless such would contradict the subject matter or its contents.

 

1.4. Subject to this article, in these Articles – unless the wording demands a different interpretation, the phrases defined in the Companies Law, shall bear the meanings ascribed to them therein; and words put forth in the singular shall include the plural, and vice versa, and words in the masculine shall include the feminine, and words which mean individuals shall include corporations.

 

2. The Company Name

 

The Company’s name is as follows:

 

In Hebrew: כן-פייט ביופרמה בע"מ

 

In English: CAN FITE BIOPHARMA LTD.

 

3. The Company Purposes

 

To carry out any lawful business

 

4. The Company Intent

 

The Company’s intent is to Law pursuant to commercial considerations to maximise its profits, however, the Company is entitled to donate a reasonable sum for a worthy goal, even if the donation is otherwise than in the framework of said commercial considerations, and pursuant to the discretion of the Company Board.

 

5. The Authorised Share Capital

 

5.1. The Company’s Authorised Share Capital is 5,000,000 NIS, divided into 500,000,000 ordinary shares of 0.01 NIS par value each (hereinafter: “ Ordinary Shares ”).

 

5.2. All Ordinary Shares shall be of equal rights vis-à-vis each other for all intents and purposes, and each Ordinary Share shall bestow on its holder:

 

(1) The right to be invited to and participate in all the Company’s General Meetings, both annual and regular, and a right to one vote on account of each Ordinary Share in his possession, at every ballot, in any General Meeting of the Company in which he participated;

 

(2) A right to receive Dividends, if and when such are distributed, and a right to receive Bonus Shares, if distributed;

 

(3) A right to participate in the distribution of the Company’s assets upon liquidation.

 

6. Shareholder Liability

 

The liability of holders of Ordinary Shares shall be limited so that each Shareholder shall be liable to settle and pay exclusively the par value of his Shares. In the event that the Company allocates Shares at a discount from the par value thereof, pursuant to Section 304 of the Companies Law (hereinafter: “ Reduced Consideration ”), the liability of each Shareholder shall be limited to settlement of the sum of the Reduced Consideration on account of each Share thus allocated to him.

 

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7. Public Company

 

Upon the registration of the Shares for trading on the Stock Exchange, the Company shall become a public company, and shall maintain a Ledger of Material Shareholders, as defined in the Companies Law, in addition to the Ledger.

 

8. Shares

 

8.1. Notwithstanding the previous privileges granted to shareholders of the Company , the Company is entitled to issue Shares with preferential rights or Shares with deferred rights or to issue, from the unissued Capital, Redeemable Securities, subject to Section 309a of the Companies Law, or to issue Shares with other special limited rights or upon limitations as to the distribution of Dividends, voting rights, or other matters, as the Company may from time to time decide by resolution adopted at a General Meeting by an ordinary majority of Shareholders.

 

8.2. If at any time the Share Capital is divided into different classes of Shares, the Company is entitled, by resolution adopted at a General Meeting by an ordinary majority of Shareholders, unless the terms and conditions of the issuance of that Class of Shares stipulates otherwise, to convert, expand, add or otherwise change the rights, privileges, advantages, limitations and provisions, related or unrelated at that time to one of the Classes, or as shall be resolved by resolution adopted at a General Meeting by an ordinary majority of Shareholders of that Class.

 

8.3. The special rights granted to shareholders or a Shares of different Class, including Shares with preference rights or other special rights, shall not be deemed altered in any way by the creation or issue of additional Shares of equal ranking thereto, unless the terms and conditions of the issue of those Shares stipulates otherwise.

 

The provisions hereof relating to General Meetings shall apply, mutatis mutandis , to any and every meeting of a said Class.

 

8.4. The Company’s unissued Shares shall be under the supervision of the Board, which may allocate them, up to the limit of the Company’s Authorised Share Capital, to such persons, in consideration of cash or non-cash consideration, on such terms and conditions and limitations, whether above their par value, whether at their par value and whether (subject to the provisions of the Companies Law) for consideration lower than their par value, and at such times and dates that the Board deems fit, and the Board shall have the authority to present any person with a Call on the Share for whichever such Shares, at their par value or above their par value or (subject to the provisions of the Companies Law) for consideration lower than their par value, for such times and for such consideration and terms and conditions as the Board deems fit.

 

8.5. Upon the allocation of Shares, the Board is entitled to differentiate as amongst Shareholders in relation to the amounts of the Call on the Share and/or times of settlement thereof.

 

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8.6. If, according to the terms and conditions of the issuance of any Shares, payment of the consideration on account of such Shares, in whole or in part, is by instalments, then each instalment shall be paid to the Company at its time of settlement by that person who is the registered a shareholder at that time or by his administrators.

 

8.7. The Company is entitled to pay, at any time, a commission, to any person for his function as an underwriter or his consent to serve as an underwriter, conditionally or unconditionally, for any Security, including Bond Stock in the Company or his consent to underwrite, conditionally or unconditionally, any Security, Bond or Stock of Bonds in the Company. On each event the commission may be paid or settled in cash or Securities or Bonds or Stock of Bonds in the Company.

 

9. Share Certificate; Share Warrant

 

9.1. Subject to the provisions of the Companies Law and pursuant thereto, a Share Certificate shall bear the seal or stamp or the Company, and the signatures of two Directors, or as the Board may determine.

 

9.2. Any Shareholder registered in the Ledger of Members is entitled to receive one Share Certificate on account of the Shares registered to his name, or, if the Board approves (following payment of the sum determined by the Board from time to time), several Share Certificates, each for one or more such Shares; every Share Certificate shall mention the number of Shares on account of which it was issued and the serial numbers thereof.

 

A Share Certificate registered in the name of two or more persons, shall be handed over to that person, from amongst the joint owners, whose name appears first in the Ledger of Members.

 

9.3.  

  

(a) The Company is entitled to deliver a Share Certificate on account of Shares that the full consideration of which was paid to the Company, which shall grant the holders thereof the rights to the Shares stipulated therein, and the right to transfer the same by handing over the Share, and the provisions hereof relating to transfer of Shares shall not apply to the Shares set forth in such Share Certificate.

 

(b) A Shareholder lawfully possessed of a Share Certificate is entitled to return it to the Company for cancellation and to turn it into a Share Registered to a Name; and entitled, in consideration of a fee to be determined by the Board, to have his name registered in the Ledger of Members on account of the Share mentioned in the Share Certificate, and that he be issued with a certificate of a Share Registered to a Name.

 

(c) A holder of a Share Certificate is entitled to deposit the Share Certificate at the Office, and for as long as it is so deposited, the depositor shall have the right to demand convening a meeting of the Company, subject and pursuant to the provisions of the Companies Law and these Articles, to be present at such meeting, to vote therein, and to make use of the remaining rights of a Shareholder at any Meeting convened upon his said demand within 30 days after said deposit, in the same manner as if his name was registered in the Ledger of Members as the holder of the Shares included in the Share Certificate. Only one person shall be recognised as the depositor of the Share, and the Company is obliged to return the Share Certificate to the depositor, should he request so in writing 30 days in advance.

 

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In the event that a Share Certificate was not so deposited, its holder shall not have the rights set forth in this sub-Article (c), and he shall have, subject to the provisions of these Articles, all the remaining rights bestowed upon a Shareholder in the Company.

 

9.4. In the event that a Share Certificate is lost or destroyed, the Board is entitled to issue a new certificate or warrant instead, provided that the certificate or warrant was not rescinded by the Company, or it was proven, to the satisfaction of the Board, that the certificate or warrant were lost or destroyed, and received satisfactory sureties against any possible damages, and all in consideration of a payment, if the Board resolves to impose such.

 

10. Call on Shares

 

10.1. The Board may, from time to time, at its discretion, present the Shareholders with a Call on Shares to pay any outstanding consideration on account of the Shares held by each Shareholder, and which according to the terms and conditions of the allocation of the Shares they are not to be settled upon fixed times and dates, and each Shareholder is obliged to pay the Company the sum of the Call presented to him, at the time and place as determined by the Board. A Call on Shares may divide the payment into instalments. The date of the Call shall be the date of the Board’s resolution pertaining to the Call.

 

10.2. A prior notice of fourteen (14) days shall be provided regarding each Call on Shares, which shall mention the rate of the payment, the place of payment, provided that prior to the time of settlement of such a Call on Shares the Board is entitled, by written notice to the Shareholders, to cancel the Call or extend its time for settlement, and provided that such resolution was adopted prior to the time of settlement of the Call.

 

10.3. Joint owners of a Share shall be jointly liable for payment of any instalment and Call on a Share due on account of such Share.

 

10.4. If, according to the terms and conditions of the allocation of any Share, or otherwise, any sum must be settled on a fixed date or by instalments on fixed dates, then any such sum or instalment shall be settled as if it were a Call on a Share duly presented by the Board, and for which notice was duly given, and to such sum or instalment all the provisions of these Articles pertaining to Calls on Shares shall apply.

 

10.5. In the event that the sum of a Call on Shares or instalment was not paid by or prior to its date of settlement, the person who is at that time the owner of the Share on account of which the Call was presented or for which the instalment was due, shall be obliged to pay interest on the said sum, at a rate to be determined by the Board from time to time, or at the rate permitted at that time by law, from the day fixed for such payment until payment in fact, however the Board is entitled to waive the payment of interest, in whole or in part.

 

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10.6. Should the Board see fit, it is entitled to receive from a Shareholder who wishes to advance monies not yet Called or that the settlement of which is not yet due, and that have not yet been settled on account of his Shares, or any part thereof. The Board is entitled to pay the Shareholder for the monies advanced in the abovementioned manner, or for any part thereof, interest to the day the monies should have been settled had they not been so advanced, at a rate to be agreed upon between the Board and the Shareholder.

 

11. Share Forfeiture and Mortgage

 

11.1. In the event that a Shareholder fails to pay the consideration he committed to, in whole or in part, at the times and dates and on the terms and conditions determined, whether a Call on Share was issued or not, the Board may at any time provide notice to that Shareholder and demand he pay the unsettled sum, plus interest accrued and any other expense the Company was made to suffer on account of such non-settlement.

 

11.2. The notice shall set a date, at least fourteen (14) days after the date of the notice, and a place or places, in which the Call or abovementioned instalment must be paid, plus interest and the abovementioned expenses. The notice shall stipulate, that in the event of non-payment at the fixed time and date and the place set forth in the notice, the Company may forfeit the Shares on account of which the Call was made or on account of which the instalments have become conclusively due.

 

11.3. In the event of failure to fulfil the requirements included in the abovementioned notice, then at any time thereafter, prior to the payment of the Call on the Share or the instalment, interest and expenses due on account of those Shares, the Board may resolve to forfeit the Shares on account of which the said notice was provided. Such forfeiture shall include all the dividends declared in respect of the forfeit Shares which have not been distributed in fact prior to the forfeiture.

 

11.4. Any Share thus forfeit shall be deemed the property of the Company, and the Board may, taking account of the provisions hereof, sell it, reallocate it, or otherwise transfer it, as it deems fit.

 

11.5. Forfeit Shares that have not yet been sold shall be treasury stock in accordance with the Companies Law, and shall not grant any rights whatsoever for as long as they are the property of the Company.

 

11.6. The Board may at any time prior to the sale, reallocation or other transfer of any Share forfeited as abovementioned, rescind the forfeiture on such terms and conditions that the Board deems fit.

 

(a) Any Shareholder whose Share have been forfeit shall cease to be the owner of the said forfeit Shares, however he shall continue to be indebted to the Company for all Calls on Shares, payment instalments, interest and expenses due on account of those Shares or for them, at the time of forfeiture, plus interest at the maximum rate permissible at law at that time, unless the forfeit Shares have been sold and the Company has received the full consideration to which the Shareholder committed, plus the expenses accompanying the sale.

 

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(b) In the event that the consideration received on account of the forfeit Shares was greater than the consideration to which the owner of the Shares thus forfeit was committed to, the Shareholder is entitled to recoup the partial consideration he gave for them, if any, subject to the terms and conditions of the allocation, and provided that the consideration remaining in the hands of the Company shall be no less than the full consideration committed to by the owner the Share thus forfeit, plus the expenses accompanying the sale.

 

11.7. The provisions hereof pertaining to forfeiture of Shares shall apply also to events of non-payment of a fixed consideration the time of settlement of which, according to the terms and conditions of the allocation of the Share, is due, as if it were a sum due for settlement by virtue of a Call on Shares presented and for which notice was given.

 

11.8. The Company shall have the right to a first ranking mortgage over any and all Shares registered to the name of any Shareholder, except for fully paid up Shares, and over the income from the sale of such Shares, for the settlement of the debts and liabilities of that Shareholder to the Company, whether individually or jointly with any other person, whether the time for settlement of such debts or fulfilment of such obligation is due or not, whatever the source of the debts may be, and no rights in Equity shall be created in any Share. The abovementioned lien and mortgage shall apply to all Dividends declared from time to time for such Shares. Unless resolved otherwise, registration by the Company of a transfer of Shares shall be deemed a waiver on behalf of the Company of such lien or mortgage (if any) over the Shares.

 

11.9. To realise the abovementioned mortgage, the Board shall be entitled to sell the Mortgaged Shares in a manner it deems fit, pursuant to it’s discretion; however, no Share may be sold unless the period of time set forth in Article 11.2 above has passed, and the Shareholder (or such person entitled to be given notice following his death or insolvency or liquidation or the receivership of his assets) was provided written notice stipulating that the Company intends to sell the Share, and the Shareholder or person so entitled to the Share, has not paid the abovementioned debts or has not met the abovementioned obligations after the passing of fourteen (14) days from the date the said notice was sent.

 

11.10. The proceeds of any such sale, after the expenses of the sale have been settled, shall be used to settle the debts and fulfil the obligations of the owner of such a Share (including the debts, obligations and liabilities and contracts the time for settlement or fulfilment of which is not yet due) and the provisions of Article 11.6(b) shall apply, mutatis mutandis .

 

11.11. In the event of a sale following forfeiture or for the realisation of a mortgage under the powers and authorities granted above, the Board shall be entitled to appoint a person to sign a deed of transfer for the sold Shares and to register the purchaser in the Ledger of Members as the owner of the sold Shares, and the purchaser shall not be obliged to ensure theses actions were duly and properly taken, and it shall be none of his business what the proceeds of sale were used for, and following the registration of his name in the Ledger of Members on account of those Shares, the validity of the sale shall not be called into question, and the only remedy available to any person injured as a result of the sale, shall be suing the Company, and only the Company, for damages.

 

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12. Share Transfer and Delivery

 

12.1. A Share transfer shall not be registered unless the Company was provided with the appropriate deed of transfer. A Company Share deed of transfer shall be signed by the transferor and transferee, and the transferor shall be deemed continuing to be the Shareholder until such a time as the name of the transferee is recorded in the Ledger of Members on account of the transferred Share.

 

A Share deed of transfer shall be drafted and filled out in the following form, or such similar form, or in the ordinary or customary way approved by the Board:

 

“I, ____________, of __________ (“The Transferor”), in consideration of _______________ NIS paid to me by ____________, of __________ (“The Transferee”), do hereby transfer to the Transferee _________ shares ___________ of _____________ par value each, marked numbers _________ to ______________ in _______________ Ltd., to be in the hands of the Transferee, his executors, guardians, and attorneys, under all the terms and conditions on which I held them prior to the execution hereof, and I, the Transferee, do hereby agree to receive the said shares on the abovementioned terms and conditions.

 

And in Witness hereof we have signed our names this ____ Day of ________ in the year __________

 

         
         
Transferor     Transferee  
         
         
Witness to Transferor’s Signature   Witness to Transferee’s Signature”

 

12.2. The Company is entitled to seal the Ledger of Members for such a time that the Board sees fit, provided that it is does not exceed thirty (30) days a year. The Company shall provide notice to the Shareholders of the sealing of the Ledger of Members pursuant to the provision hereof, for the purposes of providing notices to the Shareholders. The Company is entitled to fix a determining date for the purposes of the right to receive invitations to General Meetings, to participate and vote therein, and for the purposes of the right to receive a Dividend, provided that such date won't be more than seven (7) days prior to the date fixed for the convention of the General Meeting.

 

12.3.  

 

(a) Any and every deed of transfer shall be handed in to the Office for recording. Deeds of transfer recorded shall remain in the possession of the Company, but any deed of transfer which the Board refuses to register, shall be, upon demand, returned to the person who delivered it, together with the Share Certificate (if handed in).

 

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(b) The Company is entitled to demand payment of a fee for the registration of the transfer, which fee shall be fixed by the Company Board.

 

12.4. The administrators and executors of a deceased Shareholder, or, in the absence of administrators or executors, the persons entitled as the heirs of the deceased Shareholder, shall be the only individuals the Company shall recognise as owners of rights in the Share that was registered to the name of the deceased.

 

In the event that a Share is registered in the name of two or more owners, the Company shall exclusively recognise the surviving partner or partners as those persons who own the rights to the Share or any beneficial interest therein. In the event that a Share is registered in the name of several owners jointly as mentioned, each one of them shall be entitled to transfer his right.

 

12.5. The Company may recognise the receiver or liquidator of a Shareholder which is a corporation in liquidation or in the process of winding up or the trustee in bankruptcy or any receiver of a bankrupt Shareholder as owners of the rights in and to the Shares registered to the name of such Shareholder.

 

12.6. Any person who gains an interest in Shares owing to the death of a Shareholder, shall be entitled, on production of proof of probation of a will or the appointment of an administrator or the granting of an inheritance order, testifying that he has the right to the Shares of the deceased Shareholder, to be registered as the Shareholder on account of those Shares, or may, subject to the provisions hereof, transfer those Shares.

 

12.7. The receiver or liquidator of a Shareholder that is a corporation in liquidation or in the process of winding up, or the trustee in bankruptcy or any receiver of a bankrupt Shareholder, may, having produced such evidence the Board demands of him, testifying that he has the right to the Shares of the Shareholder in liquidation or winding up or bankruptcy, with the consent of the Board (which consent the Board may withhold without giving any reasons for its refusal) be registered as the Shareholder on account of those Shares, or he may, subject to the provisions hereof, transfer those Shares.

 

12.8. All the abovementioned pertaining to the transfer of Shares shall apply to the transfer of other Company Securities, mutatis mutandis .

 

13. Redeemable Shares

 

13.1. The right to redeem shall be limited to the eventuality of a winding up of the Company following the settlement of all the Company’s obligations to its creditors at the time of winding up.

 

13.2. Redeemable Shares shall grant the holders thereof the following rights:

 

(a) Voting rights;

 

(b) Rights to participate in Dividends.

 

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14. Recapitalisation

 

14.1. The Company is entitled, from time to time, by resolution of the General Assembly, passed by an ordinary majority of Shareholder votes, to increase the Company’s Authorised Share Capital in Classes of Shares as it shall determine.

 

14.2. Unless stated otherwise in the resolution approving the said Capital increase, the provisions hereof shall apply to the New Shares.

 

14.3. By resolution of the General Meeting passed by an ordinary majority of Shareholder votes, the Company is entitled:

 

(a) To consolidate and distribute its Share Capital into Shares of higher par value than those extant, and in the event of no par value – to capital comprising a smaller number of Shares, provided that such will not alter the proportional respective holdings of the Shareholders in the issued capital.

 

For the purposes of carrying out any such resolution, the Board is entitled to settle in a manner it deems fit any difficulty arising, and inter alia , to issue Certificates for Share fractions or Certificates in the name of a number of Shareholders that shall include the fractions of Shares to which they are entitled.

 

Notwithstanding the foregoing authority of the Board, in the event that as a result of consolidation there shall be Shareholders, the consolidation of whose Shares leaves fractions, the Board is entitled, with the consent of the General Assembly passed by ordinary majority of Shareholder votes:

 

(1) To sell the total number of fractions and for such purposes to appoint a trustee in whose name the Share Certificates that include fractions shall be made, who shall sell them and the proceeds of sale, after deduction of commissions and expenses, shall be distributed amongst those entitled; or

 

(2) To allocate to each Shareholder who is left by the consolidation with fractions, Shares of the Class of Shares prior to the consolidation, fully paid up, at such a number that their consolidation with the fraction shall be sufficient for one complete Consolidated Share, and such allocation shall be deemed valid close in time prior to the consolidation; or

 

(3) Determine that Shareholders shall not be entitled to receive a Consolidated Share on account of a Consolidated Share fraction, arising from the consolidation of half or less of the number of Shares the consolidation of which created one Consolidated Share, and shall be entitled to receive one Consolidated Share on account of a fraction of a Consolidated Share arising from the consolidation of more than half the number of Shares the consolidation of which created one Consolidated Share;

 

In the event that actions pursuant to the foregoing paragraphs (2) or (3) shall necessitate issuing additional Shares, then the settlement of such shall be done in the same way as settlement on account of Bonus Shares. Such consolidation and division shall not be deemed an alteration of the rights of the Shares which are the subject matter of the consolidation and division.

 

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(c) To distribute, by way of new distribution of existing Shares, all or part thereof, its Share Capital, in whole or in part, to Shares of lower par value than the existing Shares, and in the event that its Shares had no par value,to Share Capital comprising a larger number of Shares, provided that such will not alter the proportional respective holdings of the Shareholders in the issued Capital.

 

(d) To cancel any Authorised Share Capital which on the date of the resolution had yet to be allocated, provided that the Company has no obligations, including no conditional obligations, to allocate the Shares.

 

15. General Meetings

 

15.1. In addition to the resolutions the authority to adopt which is given to the General Assembly, and set forth herein these Articles and/or in the Companies Law, the decisions of the Company on the following matters shall be taken at General Meetings by ordinary majority of votes of participating Shareholders:

 

(a) Amendment of these Articles pursuant to Article 39 hereinafter.

 

(b) Exercising the powers and authorities of the Board in the event that the Assembly has determined that the Board is prevented from exercising its power and authorities, and that the exercise thereof is essential to the proper management of the Company pursuant to Section 52(a) of the Companies Law.

 

(c) Appointment of the Company’s auditor, fixing his terms of employment and terminating his appointment pursuant to the provisions of Sections 154 through 167 of the Companies Law.

 

(d) Approval of actions and transactions which require the General Assembly’s approval pursuant to the provisions of Sections 255, 270(1)-(3), 271 through 273 of the Companies Law.

 

(e) Increase the Share Capital and cancellation thereof, pursuant to the provisions of Section 286 & 287 of the Companies Law.

 

(f) A merger pursuant to Section 320(a) of the Companies Law, and subject to Section 320(A1) of the Companies Law.

 

15.2. The General Assembly is entitled to assume powers and authorities granted to another organ.

 

15.3. The Company shall hold an annual General Meeting every year, and no later than after fifteen (15) months following the preceding General Meeting. A General Meeting that is not an annual meeting shall be an Extraordinary Meeting.

 

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15.4. The agenda at the annual General Meeting shall include the following subjects:

 

(a) Discussion of the Companies audited financial statements, with the enclosed Board report;

 

(b) Appointment of Directors pursuant to Article 19.1, and determining their remuneration as Directors;

 

(c) Appointment of a financial auditor;

 

(d) Matters for which an Extraordinary Meeting must be convened under Section 63 of the Companies Law;

 

(e) Matters that one or more Shareholders, representing at least five (5) percent of the issued Capital and at least one (1) percent of the voting rights in the Company, or one or more Shareholders, who have at least five (5) percent of the voting rights in the Company, have asked the Board to include, provided that they are matters to be properly discussed at a General Meeting.

 

15.5. Any time the Board deems fit, it is entitled to convene an Extraordinary Meeting by resolving to do so, and Extraordinary Meetings shall be convened pursuant to demands as set forth in the Companies Law.

 

15.6. Notice of a General Meeting, on the agenda of which there are no matters for which voting may be by written ballot under Section 87 of the Companies Law, shall be published up to at least fourteen (14) days prior to the Convention, and notice on the agenda of which there are such matters, shall be published at least twenty one (21) days before the Convention. Notice shall be published in no less than two daily newspapers, of wide circulation in Israel, published in Hebrew. In any event, no notice shall be sent to each one of the Shareholders registered on the Company’s Ledger of Members.

 

The notice shall specify the type of meeting, the time and place of the meeting, a list of the items on the agenda, an extract of proposed resolutions, the required majority to adopt the resolutions and the date for the determination of entitlement of Shareholders to vote in the General Meeting, as set forth in Section 182 of the Companies Law. In the event that an adjourned Meeting is set for a date later than that stipulated for in Section 78(b) of the Companies Law, namely, more than seven (7) days, that date shall be specified in the notice.

 

16. General Assembly Resolutions

 

16.1. No discussion in General Assembly may be commenced unless a legal quorum is present within half an hour of the time scheduled for the meeting. Unless otherwise provided for by Companies Law or by these regulations, legal quorum will be present when at least two (2) shareholders holding together twenty five percent (25%) of company's votes are present in person or by their attorneys.

 

16.2. If half an hour after the time scheduled for the meeting legal quorum is not present, meeting shall be postponed to same day on following week, same time and place, or to a later date, if specified on notice as to meeting, and if the matters for which first meeting was called will be covered on postponed meeting. If no legal quorum is present on second meeting half an hour after the time scheduled for the meeting, then meeting shall take place with any number of attendees.

 

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If general assembly was convened at shareholders' request as covered in Companies Law, postponed meeting will only be held if the minimum number of shareholders required for holding a meeting was present, as covered in Section 63 of Companies Law, i.e., one or more shareholders holding at least five (5) percent of issued capital and one (1) percent at least of the voing rights in the company, or one or more shareholders holding at least five (5) percent of the company's voting rights.

 

16.3. The chairman of the Board will chair every General Assembly. If there is no chairman or if he is not present within fifteen (15) minutes of the time scheduled for the meeting, or if he does not wish to chair the assembly, the shareholders present in the meeting will select one of them as chairman.

 

16.4. The General Assembly's chairman shall be permitted, with the consent of the assembly where a legal quorum is present, to postpone the meeting to another time and location, and must postpone it as above if the assembly instructs him to do so. At the postponed meeting, only matters on the agenda which discussion was not completed or commenced at the meeting where the postponement was resolved will be discussed.

 

16.5. Subject to the provisions of Companies Law and these Articles that require an extended majority of shareholders, any proposed resolution brought before the assembly shall be decided upon by simple majority of the votes of shareholders present and voting.

 

16.6. The General Assembly's chairman shall not have an additional or decisive vote.

 

16.7. The Chairman's announcement that a resolution was made unanimously or by certain majority or was rejected, and the meeting's minutes signed by the chairman, will serve as prima facie evidence of contents of minutes.

 

17. Shareholders' Vote

 

17.1. Subject to any special provisions, privileges and limitations as to the voting of shareholders involved at that time with any shares, when voting by counting votes or by secret ballot, every shareholder whether present himself or by attorney or proxy, will have one vote for each share he owns granting him a voting right.

 

17.2. A corporation constituting a company shareholder is permitted, by the decision of its Directors or another managing body, to authorize any person it may deem fit to serve as its representative at any general assembly. A person authorized as covered above will be permitted to use – on behalf of the corporation he represents – the same voting rights the corporation itself may have used were it an individual shareholder.

 

17.3. Subject to the provisions of Companies Law, general assembly resolutions on issues listed below will also be made by proxy:

 

(a) Appointing and dismissing Directors;
(b) Approving actions or transactions requiring General Assembly's approval as per Sections 255 and 268 to 275 of Companies Law;

 

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(c) Approving merger as per Section 320 of Companies Law;
(d) Issues covered by the Ministry of Justice in the regulations that were set forth or will be set forth under Section 89 of Companies Law;

 

Subject to the provisions of Companies Law, proxy will be deposited in Office or any other location designated for convening the assembly at least forty eight (48) hours prior to the time scheduled for commencing the meeting where person specified in proxy is to vote. However, the General Assembly chairman is permitted to waive this requirement and accept proxy when meeting commences.

 

18. Voting Rights

 

18.1. Minor shareholders and shareholders who were declared by court to be incompetent, may vote only through their guardians, and each guardian as above may vote through an attorney.

 

18.2. In the event of co-owners of a share, the opinion of one co-owner will be accepted, whether given personally or by attorney – and the opinion of remaining co-owners will not be accepted. For this purpose, the co-owner whose opinion shall be heard shall be determined by the order their names are listed in the book of shareholders.

 

18.3. Shareholders can vote personally or by attorney, or in the case of a corporation, by representative as covered in Article 18.4 below or by attorney with proper power of attorney as covered below.

 

18.4. Any document appointing an attorney for voting (hereinafter “Letter of Appointment” ) will be signed by the appointer or his attorney authorized in writing to do so, or if the appointer is a corporation, the appointment will be done in writing, signed as legally required and stamped with the corporation seal or signed by its authorized attorney.

 

18.5. Letter of appointment and power of attorney (if any) based on which letter of appointment was signed, or its copy approved to board's satisfaction, will be deposited in office or any other location designated for convening the assembly at least forty eight (48) hours prior to the time scheduled for commencing the meeting, in which the person specified in letter of appointment is supposed to vote. However, the General Assembly chairman is permitted to waive this requirement for all attendees of certain meeting and accept power of attorney when meeting commences.

 

18.6. A Shareholder holding more than one share will be entitled to appointing more than one attorney, subject to following provisions:

 

(a) Letter of appointment specifies type and number of shares for which it is granted;
(b) Should number of shares of any kind specified in letters of appointment granted by one shareholder exceed number of shares of that kind held by him, all Letters of Appointment granted by that shareholder for excessive shares shall be canceled, without detracting from the validity of the vote for shares held by him;

 

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(c) in case that only an attorney is appointed by a shareholder, but the Letter of Appointment does not specify the number and type of shares for which it was granted, than such Letter of Appointment shall be deemed as granted for all shares held by the shareholder on date the letter of appointment was deposited with the company or handed to the General Assembly chairman, as the case may be. If the Letter of Appointment was granted for a number of shares smaller than number of shares held by shareholder, shareholder shall be deemed as refraining from voting for remaining shares he holds, and letter of appointment shall be valid only for the number of shares specified on it.

 

18.7. Any Letter of Appointment for an attorney, whether for a specifically named meeting or otherwise, will be made as follows, as far as circumstances permit:

 

"I, ________________, of __________________ shareholder of _____________ Ltd. (hereinafter “The Company” ) hereby appoint _________, whose ID is ____________, of ______________, or in his/her absence, ___________, whose ID is ____________, of ______________, or in his/her absence, ___________, whose ID is ____________, of ______________, to vote for me and on my behalf for ___ shares of type ____________ held by me, at the company's annual / special general assembly / at a shareholder meeting of type _____________ to be held on day ____________ of month __________, year _____________, and at any meeting postponed from that meeting.

 

In witness whereof I hereby sign on this ____ day of month _________ year ________.                                Signature”

 

18.8. Vote based on the provisions of a document appointing an attorney will be valid despite the appointer's decease or cancellation of the power of attorney or transferring the share for which voting was done as covered above, unless notice in writing of such decease, cancellation or transfer was received at the office or by the meeting's chairman prior to voting.

 

19. Board of Directors

 

19.1. The number of Board members for the Company shall be no more than thirteen (13) (hereinafter “Normal Directors” ), plus the number of external Directors which appointment is legally required (hereinafter “External Directors” ).

 

19.2.  

 

(a) The Company Directors will be elected by resolution of Annual General Assembly, with the normal Directors appointed every Annual General Assembly, and External Directors appointed as legally required. Election of Board members as above will be done by shareholders present at the meeting, personally or by attorney, or, subject to the provisions of Companies Law, by proxy, by simple majority of shareholder votes.

 

(b) A Director's tenure will commence on the date of his appointment by the assembly as above. A Director appointed as above by general assembly shall serve until the end of the next annual assembly after the annual assembly when he was appointed.

 

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(c) Notwithstanding the above, a general assembly may dismiss any Director at any time, by simple majority resolution, with the exception of an outside Director, prior to termination of his tenure, so long as the Director is given reasonable opportunity to voice his position before the general assembly. Additionally, any general assembly may appoint another person as Director by simple majority resolution in place of the dismissed Director. A Director appointed as above shall serve in such position only for the tenure of the Director in place of which he was appointed.

 

19.3.  

 

(a) At any time, a Director may appoint a person to serve as his substitute Director, subject to the provisions of Companies Law (hereinafter “Alternative Director” ). Any person disqualified to be appointed as Director, or serving as Director or alternative Director shall not be appointed as alternative Director. So long as the alternative Director's appointment is effective, he shall be entitled to be invited to all board meetings (without revoking the Director's right to be invited) and attend and vote at any board meeting from which appointing Director is absent.

 

(b) Alternative Director shall have, subject to the provisions of his Letter of Appointment, all rights held by the Director he substitutes, and he shall be treated as Director.

 

19.4.  

 

(a) Director appointing Alternative Director shall be permitted to cancel appointment at any time. Alternative Director's tenure shall be terminated if the Director appointing him notifies the company in writing of his resignation or if his tenure as Director was otherwise terminated.

 

(b) Any appointment of an Alternative Director and cancellation of his appointment shall be done by notifying the company in writing.

 

19.5. A Director ceasing to serve in such position can be reappointed, but in the event of termination of his tenure due to being convicted of an offense as specified in Article 19.6 (c) below, he can be reappointed only if five (5) years have passed since the date of his conviction as covered in Section 226 of Companies Law.

 

19.6. A Director's position shall automatically become vacant under any one of the following conditions:

 

(a) If he resigns from his position as covered in Section 229 of Companies Law.
(b) If he is convicted of an offense as covered in Section 232 of Companies Law.
(c) If the court decides to direct his tenure to be terminated as covered in Section 233 of Companies Law.
(d) If he declares bankruptcy, and if a corporation, if it has decided on voluntary liquidation or liquidation order is issued on it.

 

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(e) In event of his decease.
(f) If he becomes incompetent.

 

19.7. If no other Director is appointed in place of the Director whose tenure was terminated at the annual general assembly, then the Director whose tenure was ended shall be appointed to an additional tenure, or if notwithstanding the above no Director is appointed or a Director's office becomes vacant, then the remaining Directors shall be permitted to take any action, so long as their number is minimally three. Additionally, the remaining Directors shall be permitted to appoint a Director in place of the Director whose tenure was terminated, who will serve in his office until the next annual general assembly.

 

19.8. Directors shall not be paid wages with company funds, unless the company resolves as covered in Sections 270 (3) and 273 of Companies Law. A Director shall be entitled to have his reasonable transportation expenses reimbursed, as well as other expenses connected to his attending board meetings and fulfilling his duties as board member. Reward and expenses for outside Directors shall be paid according to Company Regulations (Rules for Reward and Expenses for Outside Director), 2000, or any other regulations replacing these in the future.

 

20. Board's Authority

 

20.1. In addition to the powers generated to the Board according to the Companies Law and these Articles, and without detracting from such, the Board shall outline the Company's policy and shall supervise the execution of the CEO's duties and actions, including:

 

(a) Determining the Company's plans, principles for their funding, and priorities among them;
(b) Reviewing the Company's financial condition and determining the limit for credit it may use;
(c) Determining organizational structure and wage policy;
(d) Being permitted to decide on issuing a series of bonds;
(e) Responsibility for preparing financial statements and for their approval as per Section 171 of the Companies Law;
(f) Appointing and dismissing CEO as covered in Section 250 of the Companies Law;
(g) Deciding on actions and transactions requiring his approval as per Sections 253 and 268 to 275 of the Companies Law and the provisions of these Articles;
(h) Being permitted to allocate shares and convertible securities up to the Company's registered share capital as per Section 288 of the Companies Law;
(i) Being permitted to distribute as covered in Sections 307 and 308 of the Companies Law;
(j) Voicing his opinion to the general assembly as to a special acquisition offer as per Section 329 of the Companies Law;
(k) Being permitted to determine, from time to time, who would be authorized to sign bills of exchange, promissory notes, invoices, acceptance documents, endorsements, checks, contracts and any kind of other documents on behalf of the company, but such authorized signatories would be obligated to sign with the company seal, or next to its printed or written name.

 

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20.2. The board will act, on any of the matters listed in Article 20.1 above, according to the Companies Law and these Articles.

 

20.3. The Board's powers according to Article 20.1 (a) to (j) above cannot be delegated to the CEO, except as covered in Section 288 (b) (2) of the Companies Law.

 

20.4. Recommendations, reports and approvals to be given by the board as per regulation 20.1 above shall be accompanied by the Board's explanations to the recommendation, report or approval, as the case may be.

 

20.5. Chairman of the Board shall direct Board meetings. On first Board meeting after each annual general assembly, Board will elect one of its members to serve as chairman of the board. Appointment of chairman of the board shall remain in effect until first annual general assembly after his appointment.

 

21. Board Meetings

 

21.1. The Board shall convene for meetings as per Company's needs, and at least once every three (3) months.

 

21.2. The Chairman of the Board shall be permitted to convene the Board at any time. Additionally, any two Directors (and if number of board members does not exceed five (5) – any one Director) shall be permitted to demand a Board meeting on a specified subject.

 

21.3. Any notice of a board meeting can be communicated verbally, by telephone, in writing (including fax or e-mail) or by telegram, so long as notice is given at least 12 hours prior to the time established for the meeting, unless all board members or their replacements (if any) have agreed on shorter notice or on convening without notice. A Director travelling or staying outside of Israel at any time, shall not be entitled to be provided with notice of a board meeting for the length of his trip, so long as if he has appointed an alternative Director as per these regulations, such notice would be sent to that alternative Director.

 

21.4. Notice of a Board meeting shall specify its date and place and contain reasonable details of all issues on the agenda.

 

The agenda shall include all issues established as per Article 21.2 above, and any issue a Director or the CEO requested the chairman to add to the agenda within a reasonable period of the board meeting.

 

21.5. Until board resolves otherwise, most Board members for that time, who are not legally prevented from participating and voting at the Board meeting, shall constitute a legal quorum for Board meetings and its decisions. Legal quorum shall be examined when meeting commences and each time Board makes a resolution.

 

Notwithstanding the above, the legal quorum for the Board's resolution to terminate internal auditor's tenure shall not in any event be less than most Board members.

 

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21.6. Board resolutions will be based on simple majority of attending, voting Directors. Each Director shall have one vote.

 

21.7. The chairman of the Board shall chair each Board meeting. If the chairman of Board is absent, within fifteen (15) minutes of time scheduled for meeting, or if he does not wish to chair the meeting, the Board members present at meeting shall elect one of them to serve as chairman, direct meeting and sign meeting minutes. However, when board votes, the person elected shall not have an additional or decisive vote.

 

21.8. Each Board meeting where a legal quorum is present shall be permitted to fulfil every authority, power of attorney and judgment that according to these regulations are given to board at that time or that are normally utilized by the Board.

 

21.9. The Board shall be permitted to make resolutions without actually convening, with the consent of all Directors entitled to participating in the discussion and voting as to the resolution. In such an event, the chairman of board shall prepare minutes and attach Directors' signatures.

 

21.10. Subject to the provisions of any law, all actions taken by board or under its decision, or by meeting of a board committee or by person serving as board member, shall be valid even if it is later discovered that there has been some flaw in electing these board members or the persons serving as above, or that all or one of them are invalid, just as though each of them were legally elected and had the necessary qualifications for becoming a member of the board or of said committee.

 

21.11. A resolution signed by all Directors (or their alternative Directors) or agreed to in writing (including fax) by all Directors (or their alternative Directors) who are not legally prevented from participating in such resolution; and resolutions made by using any means of communication that allow all Directors who are not legally prevented from participating in such resolution to hear the other Directors simultaneously – shall be valid for all intents just as though they had been made at a properly convened board meeting.

 

22. Board Committee

 

22.1. Board shall be permitted, by a resolution of the majority of Directors constituting Board at that time, to establish committees and appoint Board members as committee members. Subject to the provisions of Companies Law and these Articles, Board may delegate its powers or any part thereof to above committees, and for a special matter, can cancel such delegation from time to time. At least two (2) Directors shall serve on each committee. At least one (1) External Director shall serve on any committee permitted to utilize any of the Board's powers.

 

22.2. When using its powers, any committee established as covered in Article 22.1 above must fulfil all provisions established by the Board. Meetings and actions of each committee shall be conducted according to the provisions contained in these artciles as far as Board's meetings and actions, so long as they are suitable and so long as no provisions by the Board have replaced them.

 

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22.3.  

 

(a) A Resolution made or action taken by board committee according to a power delegated to it by the Board, shall be the same as a board's resolution or action.

 

(b) Notwithstanding this section, on the issues listed below a Board committee shall not be permitted to make resolutions but recommendations only:

 

(1) Establishing general Company policy;

 

(2) Distribution, with the exception of acquiring Company shares according to framework formerly outlined by Board;

 

(3) Establishing Board's postion as to an action requiring general assembly's approval, or as to providing an opinion as per Section 329 of Companies Law;

 

(4) Appointing Directors, if the Board is permitted to do so;

 

(5) Allocating shares or securities convertible to shares or which can be realized as shares – or a series of bonds – unless the share distribution is due to realizing or converting Company securities;

 

(6) Approving financial statements;

 

(7) Approving transactions and actions requiring Board's approval as per Sections 255 and 268 to 275 of Companies Law.

 

22.4. A Board committee shall report to board on ongoing basis of its resolutions or recommendations as determined by Board.

 

22.5. The Board may cancel resolution of committee appointed by it, but such cancellation shall not detract from the validity of a committee resolution acted upon by company towards another person not knowing of its cancellation.

 

However, all actions taken in good faith at board meeting or by a Board committee or by any person serving as Director shall be valid even it is later discovered that there has been some flaw in appointing such Director or person acting as above, or that all or one of them are invalid, just as though each of them were legally appointed and had the necessary qualifications for becoming a Director.

 

23. Minutes

 

23.1. The Company shall document minutes of general assemblies, class meetings, Board meetings and Board committee meetings, and shall keep them in its office for a period of seven (7) years of the assembly or meeting, as the case may be.

 

23.2. Minutes will always contain the following:

 

(a) Day and place where meeting or assembly took place;
(b) Names of attendees, and if they are attorneys or alternative participants, names of those granting power of attorney or appointing, and for a shareholders' meeting, number and types of shares based on which voting is conducted;

 

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(c) Summary of discussions, course of discussions and resolutions made;
(d) Instructions given by board to board committees or CEO;
(e) Documents, reports, approvals, opinions, etc. presented, discussed and/or attached.

 

Such general assembly minutes signed by assembly chairman shall serve as prima facie proof of its contents, and such board or board committee meeting minutes approved and signed by meeting chairman or board chairman shall serve as prima facie proof of its contents.

 

Above provisions shall also apply to written resolutions.

 

24. CEO

 

24.1. The CEO shall be appointed, whether for a fixed or limited period, and dismissed by board through majority of board members.

 

24.2. The CEO shall be responsible for ongoing management of company's affairs as part of policy established by board and subject to its directions.

 

24.3.  

 

(a) The CEO shall have all management and execution powers not granted by Companies Law or by these regulations to any other company agency, and shall be supervised by board.

 

(b) The CEO may delegate some of his powers, with board's approval, to anyone under him. Approval can be general and granted in advance.

 

24.4.  

 

(a) The CEO shall notify the chairman of Board immediately of any exceptional matter meaningful to the Company, and shall submit to board reports on such matters, at such times and at such extent as the board sees fit. Should the Company not have a chairman of the Board, or should he be prevented from fulfilling his duties, CEO shall notify all Board members of such circumstance.

 

(b) The Chairman of Board shall be permitted, as his own initiative or at board's decision, to demand of CEO to report on the Company's affairs.

 

(c) Should such notice or report require board's action, chairman of board shall immediately summon a board meeting to discuss notice or resolve upon required action.

 

25. Local Management

 

25.1. The Board may arrange, from time to time, arrangements for the management of the Company's business in any specific location; whether in Israel or abroad, as it sees fit, and the provisions set forth in Article 25.2, below, shall not derogate from the general authorisations granted the Board under this Article.

 

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25.2. The Board may, at any time and from time to time, establish any local management or local agency to manage the business of the Company in any specific location, in Israel or abroad and can appoint any person to be a member of said local management, or any manager or agent and may determine their salary. The Board may, from time to time, grant any person so appointed any power, authority and freedom of discretion that are granted at that time to the Board, and he may empower any person who is at that time serving as a local member of management to continue in his position even though a position has been vacated there, and any such appointment or such authorisation may be made under the same terms and conditions that the Board will see fit and the Board may at any time terminate the employment of any person who was so appointed and to cancel or amend any such authorisation.

 

26. Registry of Shareholders

 

26.1.  

 

(a) The Company shall administer a registry of shareholders (the " Primary Registry ") and will record in it the following details:

 

(1) For registered share -

 

(a) Name, I.D. number and address of every shareholder, all as was provided to the Company; and

 

(b) Amount of shares and types of shares held by each shareholder, listing their par value, if existent, and if any amount has yet to be paid in consideration for such shares - the amount yet to be paid; and

 

(c) Date of allocation of the shares or the date of transfer to the shareholders, whichever relevant; and

 

(d) If the shares have been marked with serial numbers, the Company shall note, next to the name of each shareholder, the serial numbers of the shares registered in the shareholder's name; and

 

(e) All other details that, by the Companies Law or these Articles of Association, are required or permitted to be registered in the Primary Registry.

 

(2) Bearer Shares -

 

(a) Notification of the facts that bearer shares have been allocated, their date of allocation and the amount of shares that have been allocated; and -

 

(b) The numbering of the bearer shares and of the share certificates.

 

If the share certificate is cancelled by request of the shareholder, the name of the shareholder and the number of shares registered in his name will be registered in the Primary Registry.

 

(3) Dormant Shares - Their numbers and the date they became dormant.

 

(a) The Company may, subject to and in accordance with the provisions of sections 138 and 139 of the Companies Law, maintain an additional shareholders registry outside of Israel.

 

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27. Company Officers

 

27.1. The Company's CEO may, from time to time, appoint officers (except for Directors and a CEO) to the Company to permanent, temporary or special positions, as the CEO so decides from time to time, and similarly, the CEO may terminate the services of one or more of the aforementioned from time to time and at any time, in his absolute discretion.

 

27.2. The CEO can determine, subject to the provisions of the Companies Law, the authority and the role of each officer he so appoints, as well as the terms under which they will fulfil of their position and may demand collateral in the cases and in the amounts he deems necessary.

 

28. Distribution

 

28.1. Subject to all special rights or restrictions granted to particular shares, dividends or share dividends will be distributed and paid to the shareholders relative to the sum of capital paid-up against the par value of the shares held by them, and this without taking into account the premium paid on them.

 

28.2. Decisions on the distribution of dividends will be made by the Company Board. All profits made that are worthy of being distributed as dividends, subject to accepted accounting principles and to the provisions of the Companies Law, will be distributed by the Company to the shareholders, whether as a dividend or by means of the purchase of shares from all shareholders by the Company or a corporation in its control, and this with their being actually received by the Company, and subject to all applicable law.

 

28.3. The Board may delay any dividend, benefit, rights or sums about to be paid for shares in which the Company has a lien and/or charge, and to use any such amount or to realise any benefit and any right and to use the consideration from such realisation to pay off the debts for which the Company holds liens or charges.

 

28.4. The transfer of a share shall not entitle the recipient of the share the right to a dividend or to any other distribution that was decreed after the transfer but before the transfer was registered, however, if the transfer is subject to the Board’s approval, the date of approval shall be used instead of the date the transfer was registered.

 

28.5. In the event of a dividend whose payment is not demanded within seven (7) years from the date of the decision on its distribution, the person entitled to said payment will be deemed to have ceded same and it shall be returned to the Company’s ownership.

 

If not deemed otherwise, any dividend may be paid by cheque or payment order to be sent by mail to the registered address of the Company or individual thereto entitled or, in the event of registration of joint ownership, to that member whose name in the registry is registered first with respect the joint ownership. Any such cheque will be written to the order of the person to whom it is sent. The receipt of the person whose name, on the date of decree of dividend, is listed in the members' registry as a shareholder or, in the event of joint ownership, as one of the joint owners, will serve as release with respect to all the payments made in connection with that given share.

 

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28.6. The Board is entitled to deduct from any dividend, grant or other distribution to be made in connection with shares held by a shareholder, whether held solely or jointly with another shareholder, any sum of money due from him which he must pay by himself or together with another to the Company, against demands for payment or similar.

 

28.7. Subject to Article 28.2, the Board may, in its own discretion, set aside in special funds any sum from the Company’s profits, or the revaluation of its assets, or the relative portion of the assets of the companies connected with it, and to determine the designation of these funds.

 

29. The Internal Auditor

 

29.1. The Company’s Board shall appoint an internal auditor, according to the recommendation of the auditing committee.

 

29.2. The organisational superior of the internal auditor shall be the Chairman of the Board.

 

29.3. The internal auditor shall submit, for the approval of the Board, a proposal for an annual, or periodic, work plan and the Board shall approve same with the amendments it sees fit.

 

29.4. The internal auditor shall operate in accordance with the provisions of the Companies Law.

 

30. The financial Auditor

 

30.1. A financial auditor shall be appointed in every annual meeting and shall serve in this position until the end of the following annual meeting. Notwithstanding the above, the General Assembly may, in a majority decision of the shareholders, appoint an financial auditor for a longer period that shall not exceed the end of the third annual meeting following the meeting in which he was appointed.

 

30.2. The General Assembly may terminate the appointment of the financial auditor .The fee of the financial auditor for auditing activity will be set by the General Assembly and in accordance with Section 165 of the Companies Law.

 

30.3. The fee of the accountant for additional services to the Company which are not auditing activities will be set by the Board.

 

31. Transactions Requiring Special Authorisation

 

31.1. A transaction of the Company with one of its officers and a transaction of the Company with another person with whom a Company Officer has a personal interest, and which is not an irregular transaction, requires authorisation of the Board alone, all subject to the fifth chapter of the sixth part of the Companies Law.

 

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31.2. The Company is not allowed to enter into a transaction with related parties for a period of three years commencing on the date said related party became a controlling holder in the Company, this unless as a result of the completion of the transaction the related party becomes a controlling holder holding no less than 75% of the Company’s share capital, and all subject to the fifth chapter of the sixth part of the Companies Law.

 

For this purpose, “Control” as defined in the Securities Law.

 

32. Merger

 

The authorisation of a merger requires a regular majority of shareholder votes and subject to the provisions of Section 320(A1) of the Companies Law.

 

33. Notices

 

33.1. Subject to the provisions of Article 15.6 of these Articles, a notice on the general assembly shall be given only to shareholders registered in the primary registry and entitled to participate in the general assemblies, who have provided addresses in Israel. Any other person shall not be entitled to receive notices about general assemblies.

 

33.2. When the Company has grounds to assume that the address provided by a shareholder is no longer his address, such a shareholder shall be deemed as not having provided an address to the Company, in each of the following cases:

 

(a) When the Company sent him to the address he provided a registered letter in which he was requested to either confirm that the said address is still his address or to notify the Company of a new address, and the Company did not receive a reply within thirty (30) days of the date the letter was posted by the Company at the post office.

 

(b) When the Company posted a registered letter to the address he provided and the Postal Authority, whether with or without the return of the letter, notified the Company that the letter was not delivered to the given address because he is unknown at that address or for any other reason.

 

33.3.  

 

(a) The Company may deliver any notice and any document to a shareholder by hand delivery or by delivering via mail to the address provided to the Company. If a notice was sent by mail, the notice shall be deemed fully performed if the letter containing the notice bore the address provided to the Company and if it was sent with appropriate postage, and as long as the opposite has not been proved, it shall be deemed delivered within seventy-two (72) hours of posting at the post office by the Company when the address is in Israel, and when the address is abroad - within ten (10) days from posting at the post office by the Company.

 

(b) The Company may send notices to shareholders whether they are holders of registered shares and whether they are holders of bearer shares, by publication of the notice at least once in two daily newspapers of broad circulation in the Hebrew language as set forth in Article 15.6 above, and the date of publication in the newspaper shall be deemed the date the notice was received by the shareholders.

 

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(c) Nothing in the above paragraphs (a) and (b) shall be deemed as imposing any obligation on the Company to give a notice to whoever did not provide the Company with an address in Israel.

 

33.4. The Company may give notice to partners in a share by sending the notice to the partner whose name first appears in the Shareholders Registry for that share.

 

33.5. Any and all documents or notices sent by the Company in accordance with the provisions of this article shall be deemed properly sent despite the death, bankruptcy or liquidation of said shareholder (whether or not the Company knew), as long as no other was registered as a shareholder in his place, and sending and delivery as set forth above shall for all purposes be deemed sufficient for all parties interested in those shares.

 

33.6. The unwitting failure to send notice to a shareholder, or the non-receipt of such a notice by a shareholder shall not derogate from the validity of any resolution accepted in such an assembly.

 

34. Liquidation of the Company

 

In the event of liquidation of the Company, whether willingly or otherwise, the following provisions shall apply, unless specifically set forth otherwise in these Articles or in the terms under which a given share was issued:

 

(a) The liquidator shall first use all of the Company’s assets for the payment of its debts (the Company’s remaining assets after the payment of its debts shall hereinafter be referred to as the “ Surplus Assets ”).

 

(b) Subject to any special rights attached to shares, the liquidator shall distribute the Surplus Assets amongst the shareholders pari passu their par value.

 

(c) With the Company’s permission by a resolution that was accepted in the General Assembly by a regular majority of shareholders’ votes, the liquidator may distribute the Surplus Assets of the Company, or any portion thereof, in their original physical form amongst the shareholders, and may also transfer any asset of the Surplus Assets to a trustee in a trust for the benefit of the shareholders, all as the liquidator deems fit.

 

35. Exemption from Liability

 

The Company may, by resolution reached in the manner set forth in the Companies Law, exempt in advance any of its officers from all or part of their responsibilities due to breach of their duty of care to it, however, in accordance with Sections 259(b) and 311 of the Companies Law, the Company may not exempt in advance a Director from its responsibilities to it due to a breach of the duty of care in distribution.

 

36. Liability Insurance

 

Subject to the provisions of the Companies Law, the Company may, by resolution reached in the manner set forth in the Companies Law, obtain liability insurance for an officer of the Company due to liability he may incur as the result of an action performed in his position as an officer, entirely or partially, in each of the following:

 

(a) Breach of duty of care towards the Company or towards another person;

 

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(b) Breach of his duty of trust to the Company, as long as the officer acted in good faith and had a reasonable basis to presume that his action will not be detrimental to the Company;

 

(c) A financial obligation that he will be subject to for the benefit of another person.

 

37. Indemnity

 

Subject to the provisions of the Companies Law, the Company may, by resolution reached in the way set forth in the Companies Law, indemnify an officer for a financial obligation or expense as set forth in paragraphs (a), (b) and (c) below, which the officer made or was subject to due to an action performed in his position as an officer:

 

(a) A financial obligation he was subjected to for the benefit of another person by court ruling, including court rulings made following a compromise or an arbitrator’s ruling authorized by a court, as long as the commitment to indemnify be limited to events that, in the Board’s opinion, are expected in light of the Company’s actual activities when the commitment to indemnify was given, and to a sum or to a degree that the Board deemed reasonable under the circumstances, and that in the commitment to indemnify will be stated those events that in the Board’s opinion are to be expected in light of the Company’s actual activities at the time the commitment was made and also the sum or the degree which the Board deemed reasonable under the circumstances;

 

(b) Reasonable litigation expenses including lawyer’s fees, which the officer incurred as a result of an investigation or a procedure held against him by an authority authorized to conduct such investigation or procedure, and that were concluded without the filing of an indictment against him but with the imposition of a financial liability instead of criminal procedures for offences that do not require proof of criminal intent;

 

In this article - the conclusion of procedures without the filing of an indictment in a matter for which a criminal investigation was opened - means the closing of a case in accordance with Section 62 of the Criminal Procedure Law (combined version), 1982 (hereinafter in this paragraph: the “ Criminal Procedure Law ”) or stay of procedures by the Attorney General under Section 231 of the Criminal Procedure Law. “A financial liability instead of criminal proceedings” - A financial liability imposed by law as an alternative to criminal proceedings, including an administrative fine under the Administrative Offences Law, 1985, a fine for an offence deemed a finable offence under the provisions of the Criminal Procedure Law, a financial sanction or a financial penalty;

 

(c) Reasonable litigation expenses including lawyer’s fees, which the officer incurred or that a court ruled he must pay, in a procedure instigated against him by the Company or in its name or by another person, or in a criminal charge from which he was found cleared, or in a criminal charge in which he was convicted for a crime that does not require proof of criminal intent.

 

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38. Binding the Company

 

38.1. The signature of any person who has been appointed by the Board from time to time, either generally or for a specific case, whether by himself or together with additional persons, together with the Company’s seal or stamp will bind the Company.

 

38.2. The Board may determine different signatory rights for different dealings of the Company and set the financial limitations for which each signatory is authorised to sign.

 

39. Amendment of these Articles of Association

 

These Articles of Association may be amended by resolution the shareholders in the general assembly, by regular majority of votes of the participating shareholders, and notwithstanding all of the above in these Articles of Association, the passing of a resolution that constitutes an amendment of a provision of these Articles of Association, directly or indirectly, will require the resolution of the shareholders in the general assembly, in a regular majority of the votes of the participating shareholders.

 

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Exhibit 4.1

 

EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

This Employment Agreement (“Agreement”) dated February 22, 2011, effective as of an employment starting date to be decided between the parties and that will occur not later than March 20, 2011 (“Effective Date”), by and between Can-Fite Biopharma Ltd., an Israeli company with its principal offices in 10 Bareket Street, Petach Tikva, Israel, (the “Company”), and Barak Singer (I.D. Number: 029092509), an individual whose address is 23 Yeshoron Street, Hod Hasharon, Israel (the “Employee”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ Employee as its Vice President of Business Development (or any other title to be agreed upon between the Company and the Employee), and Employee desires to be employed by the Company in such capacity, on the terms and conditions set forth below:

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants herein contained, the parties hereto agree as follows:

 

1. DEFINITIONS .

 

1.1. Capitalized terms shall have the meanings ascribed to them in this Agreement.

 

2. EMPLOYMENT; DUTIES .

 

2.1. The Company hereby employs Employee, and Employee hereby accepts employment, to serve in a position of Vice President of Business Development (or any other title to be agreed upon between the Company and the Employee) on the terms and conditions set forth below.

 

2.2. Employee shall have responsibility for performing such other services and duties as are normally incident to the position held by Employee and are commensurate with Employee’s background, education and professional standing and as are requested, from time to time, of Employee by the Company’s management. The Employee shall report to the Company’s CEO.

 

2.3. Unless otherwise agreed by the Company, Employee shall perform his duties hereunder at the Company’s facilities in Israel, which are currently located at Petach Tikva, Israel. Employee hereby acknowledges that the Company may change the location of its facilities to a new location, and agrees that, subject to applicable law, such change, in and of itself, will not be deemed to have adversely changed Employee’s terms of employment hereunder, provided that the distance between the Company’s present and new facilities will not exceed 60 kilometers.

 

 
 

 

2.4. Employee shall devote his or her entire business time, attention and efforts to the performance of his or her duties and responsibilities under this Agreement and the business and affairs of the Company. Unless otherwise agreed in writing by the Company, Employee shall not during the term of this Agreement be engaged (whether or not during normal business hours) in any other business or professional activity whether or not such activity is pursued for gain, profit or other pecuniary advantage.

 

2.5. The Employee shall be employed by the Company on a full time basis. The Employee’s employment with the Company is in accordance with the standard Company policy regarding work days and organized holidays, which may be amended at any time by the management of the Company, provided such policy does not violate any applicable laws. The Company’s policy, as of the date hereof, is to operate five (5) days a week (Sunday to Thursday (inclusive)) and that all standard Jewish holidays shall be regarded as organized holidays.

 

2.6. With regard to this Agreement and with regard to the Employee’s employment with the Company, no other agreement; or provision from any other agreement; or custom, or customary practice which exists or which will come into existence in the future between the Company and its employees, will be applicable to the employment relationship between the Company and the Employee.

 

3. TERM .

 

Employee’s employment with the Company shall commence on the Effective Date and, subject to Section 8 below, shall be for an indefinite period of time; provided, however, that termination of the employment of the Employee shall be upon sixty days (60) days prior written notice to the other party (the “Advance Notice”). In the event of termination of employment, the Employee, if requested by the Company, shall continue to render his services, and shall be paid his regular compensation up to the date of termination. Notwithstanding the aforesaid, the employment may be terminated for “cause” pursuant to Section 8  hereof in which case employment shall cease immediately.

 

4. COMPENSATION AND BENEFITS

 

As compensation for the performance of his duties on behalf of the Company, Employee shall be entitled to the compensation set forth in Schedule A attached hereto. The “Salary” (as defined in Schedule A) and the other benefits payable to Employee hereunder shall be reviewed on an annual basis, in accordance with the Company’s general practice.

 

The Employee will also receive options according to the Company’s stock option plan and subject to the approval of the Board of Directors, as detailed in Schedule A.

 

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5. REPRESENTATIONS AND WARRANTIES BY EMPLOYEE

 

Employee hereby represents and warrants to the Company as follows:

 

5.1. Neither the execution and delivery of this Agreement nor the performance by Employee of his or her duties and other obligations hereunder violate or will violate any statute, law, determination or award, or conflict with or constitute a default under (whether immediately, upon the giving of notice or lapse of time or both) any prior employment agreement, contract, or other instrument to which Employee is a party or by which he or she is bound.

 

5.2. Employee has the full right, power and legal capacity to enter and deliver this Agreement and to perform his or her duties and other obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Employee enforceable against him or her in accordance with its terms. No approvals or consents of any persons or entities are required for Employee to execute and deliver this Agreement or perform his or her duties and other obligations hereunder.

 

6. NONDISCLOSURE AND COMPETITVE ACTIVITY

 

6.1. The terms of the undertaking attached hereto as Schedule B , which will be signed and executed as of the date hereof shall be incorporated herein and constitute an integral part of this Agreement for any purpose.

 

7. REMEDIES .

 

7.1. If Employee breaches any or all of the covenants set forth in Schedule B attached hereto, the Company will be entitled to file a claim with an Israeli court for the following remedies:

 

7.1.1. Damages from Employee;

 

7.1.2. In addition to its right to damages and any other rights it may have, to obtain injunctive or other equitable relief to restrain any breach or threatened breach or otherwise to specifically enforce the provisions of Schedule B attached hereto, it being agreed that money damages alone would be inadequate to compensate the Company and would be an inadequate remedy for such breach.

 

7.2. The rights and remedies of the parties to this Agreement are cumulative and not alternative.

 

8. TERMINATION .

 

8.1. Employee’s employment hereunder shall commence on the Effective Date, and shall continue for the period set forth in Section 3 hereof unless sooner terminated upon the first to occur of the following events:

 

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8.1.1. The Employee has reached the “Retirement Age”, as such term is defined in the Equal Retirement Age for the Employee Act - 1987, as shall be amended from time to time.

 

8.1.2. The death or disability of Employee (for purposes of this Section 8 “disability” shall be deemed to have occurred if Employee is unable, due to any physical or mental disease or condition, to perform his normal duties of employment for 120 days in any 12-month period).

 

8.1.3. The Company’s decision to cease the employment of the Employee, other than for “cause”, subject to the Advance Notice period.

 

8.1.4. The Employee’s decision to cease hiss employment with the Company, subject to the Advance Notice period.

 

8.2. Termination by the Company for just cause . Any of the following actions or omissions by Employee shall constitute just cause:

 

8.2.1. Material breach by Employee of any of the covenants set forth in Schedule B attached hereto;

 

8.2.2. Material breach by Employee of any provision of this Agreement other than Schedule B attached hereto which is not cured by Employee within fifteen (15) days after his receipt of notice thereof from the Company containing a description of the breach or breaches alleged to have occurred;

 

8.2.3. Any act of moral turpitude by Employee or action by Employee to intentionally harm the Company.

 

8.3. Termination by Employee for just cause . Any of the following actions or omissions by the Company shall constitute just cause:

 

8.3.1. Material breach by the Company of any provision of this Agreement which is not cured by the Company within fifteen (15) days after its receipt of notice thereof from Employee containing a description of the breach or breaches alleged to have occurred;

 

8.3.2. Any action by the Company to intentionally harm Employee.

 

8.4. Upon termination pursuant to Section 8.1 above, Employee (or his estate or guardian in the event of termination pursuant to subsection 8.1.1 above) shall be entitled to receive the Salary accrued but unpaid as of the date of termination, and accrued vacation pay and all other payments required by law and/or by this Agreement. The Company will be entitled to deduct from the Employee Salary any amount owed by the Employee to the Company, due to (a) any equipment and property belonging to the Company and not returned by the Employee within fifteen (15) days after his receipt of notice thereof from the Company containing a description of such equipment or property belonging to the Company, or (b) any other amount paid to the Employee in excess of the Employee Salary.

 

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9. NOTICES

 

All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt (a) five (5) days after deposit with the Postal Service, if delivered by mail, (b) upon delivery, if delivered by hand, or (c) one (1) business day after the business day of facsimile transmission.

 

10. MISCELLANEOUS

 

All documents, exhibits and Schedules attached to this Agreement constitute an integral part hereof. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable, and no provision shall be deemed dependent upon any other covenant or provision unless so expressed herein. This Agreement and all Schedules attached hereto contain the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein. No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto. The rights, benefits, duties and obligations under this Agreement shall inure to, and be binding upon, the Company, its successors assigns and any successor to the Company or to all or substantially all of the Company’s business and/or assets, and upon Employee and his or her legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. This Agreement constitutes a personal service agreement, and the performance of Employee’s obligations hereunder may not be transferred or assigned by Employee. The failure of either party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith or with any other term, condition or provision hereof, and said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of either party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party. The headings of sections are inserted for convenience and shall not affect any interpretation of this Agreement. This Agreement may be executed by any of the parties hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

 

11. GOVERNING LAW

 

This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Israel, and the sole and exclusive place of jurisdiction in any matter arising out of or in connection with this Agreement shall be applicable courts in Tel-Aviv.

 

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[The remainder of this page is left intentionally blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

    Can-Fite Biopharma Ltd. (the “Company”)
       
Date:   22/2/2011   By: /s/ Pnina Fishman
    Title: Pnina Fishman, CEO
       
    Employee
       
Date:   _______      
     
    /s/ Barak Singer
    Barak Singer

 

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SCHEDULE A

 

COMPENSATION

 

(a) Monthly Salary .

The Company shall pay Employee an aggregate monthly salary of Thirty Thousand New Israeli Shekels (NIS 30,000), (the the “Salary”) . Accordingly, the Salary shall be inclusive of all overtime and other similar compensation and shall be payable not later than the 10th day of each month with respect to the preceding month, in accordance with the Company’s payroll practices. The Employee shall be entitled to receive cost-of-living adjustments “Tosefet Yoker” or other statutory or mandatory required increase in salary. The Company shall deduct from the salary all national insurance fees, health insurance fees, income tax and any other amounts required by law, and shall provide the Employee with requisite documentation regarding such deductions.

 

The duties of the Employee in accordance with this Agreement involve duties that require of him special personal care and loyalty, and therefore the directives of the Work Hours and Rest Law, 1951, or any law to be enacted in its place, will not be applicable to the Employee or to his activities which he will perform for the Company. The Employee will not be entitled to remuneration according to the Work Hours and Rest Law, 1951.

 

(b) Managers Insurance .

Within ten days after the end of each month during the employment of Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company shall pay an aggregate amount equal to 18-1/3% of the Employee’s monthly Salary for the preceding month to a Managers Insurance (Bituach Manahalim) policy (the “ Policy”) and/or a comprehensive pension plan (“Pension Plan”) through an agency and with an insurance company or a pension fund, to be selected by the Employee, to be divided as follows: 8-1/3% towards Severance (the “Company’s Severance Contribution”) ; 5% toward provident (compensation). In addition the Company shall pay up to 2-1/2% of the Employee’s Salary towards loss of (working capacity) disability insurance (depending on the cost to the Company necessary to provide coverage). Similarly, at the beginning of each month the Company shall deduct from the Salary of Employee an amount equal to 5% of the Employee’s monthly Salary for the preceding month, and shall pay such amount as premium payable in respect of the provident compensation component of Policy. In the event the Employee elects to be insured under a Pension Plan, the allocations shall be modified in accordance with the Pension Plans policies, provided, in any event they do not exceed the amounts set forth above.

 

(c) Section 14 of the Severance Compensation Law – 1963 .
(i) It is hereby agreed that upon termination of employment under this Agreement, the Company shall release to the Employee all amounts accrued in the Managers Insurance on account of both the Company’s and Employee’s contributions. It is hereby clearly agreed and understood that the amounts accrued in the Managers Insurance on account the Company’s contribution [i.e. 13.33% of each monthly Salary payment] shall be in lieu and in full and final substation of any severance pay the Employee shall be or become entitled to under any applicable Israeli law.

 

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(ii) The Company hereby waives in advance any right to any amounts accrued in the Managers Insurance, unless the Employee is either not entitled to Severance Pay according to Section 17 of the Severance Compensation Act, 1963, or has withdrawn amounts from the Managers Insurance not due or as a result of an “Entitling Event”, as such term is defined in the General Approval of the Labor Minister, dated June 30, 1998, issued in accordance to the said Section 14 (the “ General Approval”), in which case the Company may have the right to deny the employee only the amounts attributed to the Company’s Severance Contribution accrued in the Managers Insurance.

 

(iii) Sub-Sections (i) and (ii) are in accordance with Section 14 of the Severance Compensation Act, 1963 and the General Approval, a copy of which is attached hereby to this Schedule A as Exhibit A .

 

(d) Study Fund (Keren Hishtalmut) .

At the end of each month, during the employment of the Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company shall pay an amount equal to up to 7-1/2% of the Employee’s monthly Salary for the preceding month (the “ Maximum Amount”), and if such amount exceeds the amount which is qualified for tax purposes for the Employee, the Employee shall bear the tax above the approved qualified tax (the “Tax Amount”), to a Study Fund (Keren Hishtalmut) designated by the Employee (the “Fund”), and shall deduct from the Salary of the Employee an amount equal to up to 2-1/2% of the Employee’s monthly Salary for the preceding month and pay the same to the Fund. Any amounts resulting from the Maximum Amount less the Tax Amount, shall be paid to the Employee after deduction at source of any applicable taxes, payable on the date stated in Section (a) above.

 

(e) Vacation/Sick Leave/Vacation allowance (Recuperation Pay) .

The Employee shall be entitled to Twenty (20) working days of paid vacation annually during the term of this Agreement (prorated for any calendar year during which he is employed hereunder). The Employee may carry forward the unused portion of such vacation for a period of two years only, provided, however, that he use at least 4 days of that portion each year. The value of any unused vacation shall be paid to the Employee, pro rata, on the basis of the Salary, at the end of the month during which such excess vacation time may be accrued. Nothing in this Section may derogate from the Employee’s rights and benefits by applicable law.

 

The Employee will be entitled to eighteen (18) days of fully paid sick leave per year. The Employee may carry forward any unused sick leave, not to exceed the maximum prescribed by law. The Company is entitled to offset any sick leave payment against any monies received by the Employee due to his loss of working capacity insurance.

 

The Employee will be entitled to receive annual payment for Recuperation Days (Dmei Havraa’) at the rate defined by law from time to time for each Recuperation Day.

 

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(f) Company Automobile .

While the Employee is actively employed by the Company, the Company will lease an automobile from a leasing Company, chosen at the Company’s sole discretion, and in the same level as automobiles leased by the senior executives of the Company, and will place such automobile at the disposal of the Employee under the terms of the Company’s general leasing plan (to be provided to the Employee upon provision of the automobile). The make, size and design of the automobile will be subject to the Company’s sole discretion. The Employee shall abide by all traffic laws and regulations, drive cautiously and care for the proper maintenance of the car. The Company shall bear all of the fixed and variable maintenance costs and actual expenses incurred directly in connection with his use of such automobile, including licenses, insurance, gas, repairs, parking at the Company offices, etc. but excluding any fines. The Employee will be compensated for all taxes he will be liable to as a consequence of the benefits of Employee under this Section (“Gilum”) .

 

(g) Out of Pocket Expenses .

The Company shall pay or reimburse the Employee for all normal, usual and necessary expenses incurred or paid by the Employee in the performance of his duties hereunder, against receipt by the Company of appropriate vouchers, receipts or other proof of the Employee’s expenditures, all subject to guidelines regarding such expenses which shall be approved by Board of Directors from time to time.

 

(h) Mobile Phone . The Company shall provide the Employee with the use of a company mobile phone in such a model as is normally granted to employees of the same position as the Employee (the “ Company Mobile Phone”). The Company shall bear all costs of the Company Mobile Phone, including insurance, repairs, related maintenance, phone use and shall also bear the applicable tax liability for the grant of use of the Company Mobile Phone. Immediately upon termination of this Agreement for whatever reason, the Employee will return the Company Mobile Phone to the Company.

 

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THIS UNDERTAKING ( the “Undertaking”) , is entered into as of the ___ day of February, 2011, by Barak Singer, ID No. 029092509, an individual residing at 23 Yeshoron Street, Hod Hasharon, Israel (the “Employee” )

 

WHEREAS the Employee has entered or intends to enter an Employment Agreement (the “Employment Agreement” ), with Can-Fite Biopharma Ltd., an Israeli company (the “Company” ); and

 

WHEREAS the Employee agreed to enter into this Undertaking

 

NOW, THEREFORE, the Employee undertakes and warrants towards the Company and any subsidiary and parent company of the Company as follows:

 

1. ACKNOWLEDGMENT

 

Employee acknowledges that (a) he occupies a position of trust and confidence with the Company and shall continue to occupy such position of trust and confidence with the Company, and has or shall become familiar with the following, any and all of which constitute confidential information of the Company, (collectively, the “Confidential Information” ): (i) any and all trade secrets concerning the business and affairs of the Company, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing and distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures and architectures (and related processes, formulae, compositions, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs, methods and information), of the Company and any other information, however documented, of the Company that is a trade secret within the meaning of applicable law; (ii) any and all information concerning the business and affairs of the Company (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and (iii) any and all notes, analysis, compilations, studies, summaries, and other material prepared by or for the Company containing or based, in whole or in part, on any information included in the foregoing; (b) the business of the Company is international in scope; (c) the products and services of the Company are or shall be marketed throughout the world; (d) the Company competes with or shall compete with other businesses that are or could be located in any part of the world; (e) the provisions of this Undertaking are reasonable and necessary to protect and preserve the Company’s business, and (f) the Company would be irreparably damaged if Employee were to breach the covenants set forth in Sections 2,3, and 4 of this Undertaking. For purposes of this Undertaking, Confidential Information does not include any of the foregoing items which have become publicly known and made generally available through no wrongful act of Employee or of others who were under confidentiality obligations as to item or items involved

 

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2. CONFIDENTIAL INFORMATION

 

2.1 Employee agrees at all times during the term of his employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company or to disclose to any person, firm or corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company. Employee shall not: (i) use any such information, directly or indirectly, for himself or herself or others; and (ii) take any such material or reproductions thereof from the Company’s facilities at any time during his or her employment by the Company except as required in connection with Employee’s duties to the Company. Employee agrees to return all such material and reproductions thereof (whether or not merged with other works) in his or her possession to the Company, promptly upon request and in any event immediately upon termination of employment.

 

2.2 Except with prior written authorization by the Company, Employee agrees not to disclose or publish any of the Confidential Information or material of the Company, its clients, partners, shareholders or suppliers, or any other party to whom the Company owes an obligation of confidence, at any time during or after his or her employment with the Company.

 

2.3 The Employee further agrees that unless the Employee first obtains the prior written approval of the Company or any of it’s authorized representatives, he or she shall neither issue, produce, publish, put out, print, distribute or circulate any article, abstract, commentary, critique or any other kind of publication, nor shall he or she deliver any lecture, either for consideration or without, which includes Confidential Information, material or any other proprietary information or trade secrets of the Company.

 

2.4 Employee agrees, during his or her employment with the Company, not to improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that he or she will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

 

2.5 Employee recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out such Employee’s work for the Company consistent with the Company’s agreement with such third party.

 

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3. INVENTIONS .

 

3.1 Employee has attached hereto, as Exhibit A , a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by Employee prior to his or her employment with the Company (collectively referred to as “Prior Inventions”) , which belong to Employee, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, Employee represents that there are no such Prior Inventions. If in the course of his or her employment with the Company, Employee incorporates into a product, process or machine of the Company a Prior Invention owned by Employee or in which Employee has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine

 

3.2 The Employee will disclose and deliver to the Company for the exclusive use and benefit of the Company any Inventions (which in this paragraph shall mean any discovery, technique, design, formula, method of manufacture, inventions, secret process, improvements, and modifications (whether or not capable of protection by rights in the nature of intellectual property)) which the Employee alone or with one or more others has made or discovered during the Term of Employment and which pertain to or result from any work which the Employee has done or may hereafter do for the Company, promptly upon the making, devising, or discovering of the same, and will give all information and data in his possession as to the exact mode of working, producing, and using the same and also all such explanations and instructions as may in the view of the Company be necessary to enable the full and effectual working, production, or use of the same and will at the expense of the Company furnish it with all necessary plans, drawings, formulae, and models.

 

3.3 The Employee will without charge to but at the expense of the Company execute and do all acts, matters, documents, and things to enable the Company or its nominee to apply for and obtain protection for the Inventions in any or all countries and to vest title in the Company or such nominee absolutely.

 

3.4 The Employee hereby irrevocably appoints the Company to be his attorney in his name and on his behalf to execute and do such acts, matters, documents, and things as aforesaid and generally to use his name for the purpose of giving to the Company (or its nominee) the full benefit of the provisions of this section. In favor of any third party a certificate signed by any director or the secretary of the Company that an instrument or act falls within the authority hereby conferred shall be conclusive evidence that such is the case.

 

3.5 During the Term of Employment and at all times thereafter the Employee will (whether by omission or commission) do nothing to affect or imperil the validity of the protection for the Inventions obtained or applied for by the Company or its nominee pursuant to this paragraph. The Employee will at the direction and expense of the Company render all assistance within his or her power to obtain and maintain such protection or application or any extension thereof.

 

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3.6 Nothing in this Undertaking shall oblige the Company to seek patent or other protection for any Invention nor to exploit any Invention.

 

3.7 The Employee shall promptly disclose to the Company all copyright works or designs originated, conceived, written, or made by him or her alone or with others (except only those works originated, conceived, written, or made by him or her prior to being employed by the Company) and shall until such rights shall be fully and absolutely vested in the Company hold them in trust for the Company.

 

3.8 The Employee hereby assigns to the Company by way of future assignment all copyright, design right, and other proprietary rights, if any, for the full terms thereof throughout the world in respect of all copyright works and designs originated, conceived, written, or made by the Employee (except only those works or designs originated, conceived, written, or made by the Employee wholly outside his or her normal working hours and wholly unconnected with his or her being employed by the Company) during the period of his or her employment hereunder and during all previous periods of employment with the Company.

 

3.9 The Employee will at the request and expense of the Company do all things necessary or desirable to substantiate the rights of the Company under Section 4.8, and it is hereby acknowledged and agreed that the provisions of this paragraph shall survive any termination of the Employment.

 

3.10 For the removal of any doubt, it is hereby clarified that the provisions contained in Sections 4.2 and 4.8 above will apply also to any “Service Inventions” as defined in the Israeli Patent Law, 1967 (the “Patent Law”). However, in no event will such Service Invention become the property of the Employee and the provisions contained in Section 132(b) of the Patent Law shall not apply unless the Company provides in writing otherwise. The Employee will not be entitled to royalties or other payment with regard to any Prior Inventions, Service Inventions or any of the intellectual property rights set forth above, including any commercialization of such Prior Inventions, Service Inventions or other intellectual property rights.

 

4. GENERAL

 

4.1 The Employee acknowledges that the provisions of this Undertaking serve as an integral part of the terms of his employment and reflect the reasonable requirements of the Company in order to protect its legitimate interests with respect to the subject matter hereof. If any provision of this Undertaking (including any sentence, clause or part thereof) shall be adjudicated to be invalid or unenforceable, such provisions shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudicate is made. In addition, if any particular provision contained in this undertaking shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that the provision is enforceable o the fullest extent compatible with applicable law as it shall then appear.

 

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4.2 The provisions of this Undertaking shall remain in full force and effect also following the termination of the employment relationship between the Company and the Employee for whatever reason. This Undertaking shall not serve in any manner as to derogate from any of the Employee’s obligations and liabilities under any applicable law.

 

Signature: /s/ Barak Singer  
  Barak Singer  

 

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Exhibit A

 

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

Title   Date   Identifying Number
    or Brief Description
         
         
         
         
         

 

___ X __ No inventions or improvements

 

_____ Additional Sheets Attached

 

Signature of Employee: /s/ Barak Singer  

 

Print Name of Employee: Barak Singer

 

Date: 22/2/2011

 

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Exhibit 4.2

 

AMENDMENT TO THE EMPLOYMENT AND NON-COMPETITION

AGREEMENT

 

This amendment to the Employment Agreement (the “Amendment” ) dated February 22, 2011 (the “Employment Agreement” ), between Can-Fite Biopharma Ltd., an Israeli company with its principal offices in 10 Bareket Street, Petach Tikva, Israel, (the “Company” ), and Barak Singer (I.D. Number: 029092509), an individual whose address is 23 Yeshoron Street, Hod Hasharon, Israel (the “Employee” ). This Amendment shall be effective on February 28, 2013.

 

WITNESSETH:

 

WHEREAS, the Company desires that the Employee will be employed in a position of Chief Executive Officer (the “CEO” ) of its subsidiary OphthaliX Inc. ( “OphthaliX” ) in addition to his position as Vice President of Business Development of the Company, and Employee desires to be employed by the Company and serve as the CEO of OphthaliX, on the terms and conditions set forth below:

 

The Employee will be employed according to the Employment Agreement under the same terms and conditions, with the following amendments:

 

1.1. The Employee will devote 50% of his business time to OphthaliX and 50% to the Company. OphthaliX and Can-Fite will equally share the costs related to the Employment Agreement.

 

1.2. All rights granted to the Employee according to the Employment Agreement will be retained.

 

1.3. The Salary in Schedule A of the Employment Agreement is amended to Forty Five Thousand New Israeli Shekels (NIS 45,000).

 

1.4. OphthaliX shall have the right, by providing sixty (60) days prior written notice to the Employee and Can-Fite, to terminate the receipt of the services of the Employee as the CEO of OphthaliX.

 

 
 

 

1.5. The following paragraphs are added to Schedule A:

 

1.5.1 Bonus Payments. From the date of the Amendment and during the term of the Employment Agreement, the Employee shall be eligible to receive a success performance bonus based on achieving certain milestones by OphthaliX, as set forth below:

 

a.        Upon successful completion of an equity fundraising of an amount in excess of five million US Dollars (US$5,000,000), the Employee shall be entitled to receive a bonus payment equal to one (1) time the then applicable monthly Salary.

 

b.       Upon commencement of the second phase 3 clinical trial in relation to CF101 for the treatment of dry eye syndrome, the Employee shall be entitled to receive a bonus payment equal to one (1) time the then applicable monthly Salary.

 

1.5.2. Option Award . Subject to (i) the approval of the Board of Directors of OphthaliX; (ii) the continuous employment of the Employee with the Company; and (ii) the execution of an applicable share option agreement with OphthaliX; OphthaliX shall grant to a trustee for the benefit of the Employee an option to purchase Ordinary Shares of OphthaliX representing 1% of OphthaliX’s issued and outstanding share capital (the “Time Based Options” ). The Time Based Options shall be subject to a share option agreement/grant letter, the applicable incentive plan of OphthaliX and other terms and conditions as set forth by the Board of Directors of OphthaliX, including without limitation, vesting schedule and exercise price. The Employee undertakes to execute any and all documents, including a the share option agreement/grant letter, as may be required by OphthaliX in connection with the Time Based Options, and the grant of the Time Based Options shall be subject to the Employee’s fulfillment of the aforesaid undertaking.

 

The Time Based Options shall vest over a period of three (3) years on a quarterly basis over twelve (12) consecutive quarters. The exercise price of the Time Based Options shall equal to the price of OphthaliX’s shares on the public market at the time of the grant.

 

1.5.3. In addition to the aforementioned and subject to (i) the approval of the Board of Directors of OphthaliX; (ii) the continuous employment of the Employee with the Company; and (ii) the execution of applicable share option agreement with OphthaliX; the Employee shall be entitled to options representing 1% of OphthaliX’s equity, upon achievement of certain milestones by the Company (the “Success Based Options”), as set forth below:

 

a.       One third (1/3) of the Success Based Options shall vest upon the commencement of the trading of OphthaliX’s securities on Nasdaq or NYSE MKT LLC (known as Amex); and

 

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b.      One third (1/3) of the Success Based Options shall vest upon completion of an out-license transaction in relation to any product of OphthaliX; and

 

c.      The remaining third (1/3) of the Success Based Options shall vest upon the commencement of a phase 3 clinical trial of CF-101 for Glaucoma (and in the unlikely event that the phase 2 trial is unsuccessful, then OphthaliX’s Board shall allocate a different milestone).

 

The exercise price of the Time Based Options and the Success Based Options shall be equal to the price of OphthaliX’s shares on the public market at the time of the grant.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.

 

    Can-Fite Biopharma Ltd. (the “Company”)
     
Date: 28/2/2013 By: /s/ Pnina Fishman
    Title: Pnina Fishman, CEO
       
    OphthaliX Inc. (“OphthaliX”)
     
Date: 28/2/2013 By: /s/ Pnina Fishman
    Title: Pnina Fishman, Chairman
       
    Employee  
       
Date: 28/2/2013 /s/ Barak Singer
    Barak Singer

 

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Exhibit 4.3

EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

This Employment Agreement ( “Agreement” ) dated June 10, 2003, effective as of an employment starting date to be decided between the parties and that will occur not later than September 1, 2003 ( “Effective Date” ), by and between Can-Fite Biopharma Ltd., an Israeli company with its principal offices in 10 Bareket Street, Petach Tikva, Israel, (the “Company” ), and Moti Farbstein (I.D. Number: 057682205), an individual whose address is 22 Degania Street, Ganei Tikva (the “Employee” ).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ Employee as its Director of Clinical Operations . and Administrative Affairs (or any other title to be agreed upon between the Company and the Employee), and Employee desires to be employed by the Company in such capacity, on the terms and conditions set forth below:

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants herein contained, the parties hereto agree as follows:

 

1.                      DEFINITIONS .

 

1.1.        Capitalized terms shall have the meanings ascribed to them in this Agreement.

 

2.                     EMPLOYMENT; DUTIES .

 

2.1.        The Company hereby employs Employee, and Employee hereby accepts employment, to serve in a position of Director of Clinical Operations and Administrative Affairs (or any other title to be agreed upon between the Company and the Employee) on the terms and conditions set forth below.

 

2.2.        Employee shall have responsibility for performing such other services and duties as are normally incident to the position held by Employee and are commensurate with Employee’s background, education and professional standing and as are requested, from time to time, of Employee by the Company’s management.

 

2.3.        Unless otherwise agreed by the Company, Employee shall perform his duties hereunder at the Company’s facilities in Israel, which are currently located at Petach Tikva, Israel. Employee hereby acknowledges that the Company may change the location of its facilities to a new location, and agrees that, subject to applicable law, such change, in and of itself, will not be deemed to have adversely changed Employee’s terms of employment hereunder, provided that the distance between the Company’s present and new facilities will not exceed 60 kilometers.

 

 
 

 

2.4.        Employee shall devote his or her entire business time, attention and efforts to the performance of his or her duties and responsibilities under this Agreement and the business and affairs of the Company. Employee shall not during the term of this Agreement be engaged (whether or not during normal business hours) in any other business or professional activity whether or not such activity is pursued for gain, profit or other pecuniary advantage.

 

2.5.        The Employee shall be employed by the Company on a full time basis. The Employee’s employment with the Company is in accordance with the standard Company policy regarding work days and organized holidays, which may be amended at any time by the management of the Company, provided such policy does not violate any applicable laws. The Company’s policy, as of the date hereof, is to operate five (5) days a week (Sunday to Thursday (inclusive)) and that all standard Jewish holidays shall be regarded as organized holidays.

 

2.6.        With regard to this Agreement and with regard to the Employee’s employment with the Company, no other agreement; or provision from any other agreement; or custom, or customary practice which exists or which will come into existence in the future between the Company and its employees, will be applicable to the employment relationship between the Company and the Employee.

 

3.                      TERM .

 

Employee’s employment with the Company shall commence on the Effective Date and, subject to Section 7.2 below, shall be for an indefinite period of time; provided, however, that termination of the employment of the Employee shall be upon sixty days (60) days prior written notice to the other party. The aforementioned notwithstanding, termination by the Company during a 3 months period following the Effective Date, termination by the company will be upon a ninety (90) prior written notice; and further provided that if the Company terminates the agreement before the Effective Date, the Employee will be entitled to a 3 months salary and benefits. In the event of termination of employment, the Employee, if requested by the Company, shall continue to render his services, and shall be paid his regular compensation up to the date of termination. Notwithstanding the aforesaid, the employment may be terminated for cause pursuant to Section 7.2 hereof in which case employment shall cease immediately.

 

4.                      COMPENSATION AND BENEFITS

 

As compensation for the performance of his or her duties on behalf of the Company, Employee shall be entitled to the compensation set forth in Schedule A attached hereto. The “Salary” (as defined in Schedule A) and the other benefits payable to Employee hereunder shall be reviewed on an annual basis, in accordance with the Company’s general practice.

 

The employee will in due course receive options according to the Company’s stock option plan and subject to the approval of the Board of Directors.

 

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5.                      REPRESENTATIONS AND WARRANTIES BY EMPLOYEE

 

Employee hereby represents and warrants to the Company as follows:

 

5.1.        Neither the execution and delivery of this Agreement nor the performance by Employee of his or her duties and other obligations hereunder violate or will violate any statute, law, determination or award, or conflict with or constitute a default under (whether immediately, upon the giving of notice or lapse of time or both) any prior employment agreement, contract, or other instrument to which Employee is a party or by which he or she is bound.

 

5.2.        Employee has the full right, power and legal capacity to enter and deliver this Agreement and to perform his or her duties and other obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Employee enforceable against him or her in accordance with its terms. No approvals or consents of any persons or entities are required for Employee to execute and deliver this Agreement or perform his or her duties and other obligations hereunder.

 

6.                      NONDISCLOSURE AND COMPETITVE ACTIVITY

 

6.1.        The terms of the undertaking attached hereto as Schedule B , which was signed by the Employee on June 22, 2003 shall be incorporated herein and constitute an integral part of this Agreement for any purpose.

 

7.                      REMEDIES .

 

7.1.          If Employee breaches any or all of the covenants set forth in Schedule B attached hereto, the Company will be entitled to the following remedies:

 

7.1.1. Damages from Employee;

 

7.1.2. In addition to its right to damages and any other rights it may have, to obtain injunctive or other equitable relief to restrain any breach or threatened breach or otherwise to specifically enforce the provisions of Schedule B attached hereto, it being agreed that money damages alone would be inadequate to compensate the Company and would be an inadequate remedy for such breach.

 

7.1.3. The rights and remedies of the parties to this Agreement are cumulative and not alternative.

 

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7.2.                     TERMINATION .

 

7.3.        Employee’s employment hereunder shall commence on the Effective Date, and shall continue for the period set forth in Section 3 hereof unless sooner terminated upon the first to occur of the following events:

 

7.3.1. The Employee has reached the “Retirement Age”, as such term is defined in the Equal Retirement Age for the Employee Act - 1987, as shall be amended from time to time.

 

7.3.2. The death or disability of Employee (for purposes of this Section 7.2, “disability” shall be deemed to have occurred if Employee is unable, due to any physical or mental disease or condition, to perform his normal duties of employment for 120 days in any 12-month period);

 

7.3.3. Termination by the Company for just cause . Any of the following actions or omissions by Employee shall constitute just cause:

 

7.3.3.1.          Material breach by Employee of any of the covenants set forth in Schedule B attached hereto;

 

7.3.3.2.          Material breach by Employee of any provision of this Agreement other than Schedule B attached hereto which is not cured by Employee within fifteen (15) days after his receipt of notice thereof from the Company containing a description of the breach or breaches alleged to have occurred;

 

7.3.3.3.          Any act of moral turpitude by Employee or action by Employee to intentionally harm the Company.

 

7.3.4. Termination by Employee for just cause . Any of the following actions or omissions by the Company shall constitute just cause:

 

7.3.4.1.          Material breach by the Company of any provision of this Agreement which is not cured by the Company within fifteen (15) days after its receipt of notice thereof from Employee containing a description of the breach or breaches alleged to have occurred;

 

7.3.4.2.            Any action by the Company to intentionally harm Employee.

 

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7.4.                  Upon termination pursuant to Section 7.3 above, Employee (or his or her estate or guardian in the event of termination pursuant to subsection 7.3.1 above) shall be entitled to receive the Salary accrued but unpaid as of the date of termination, and accrued vacation pay and all other payments required by law and/or by this Agreement, The Company will be entitled to deduct and offset any amount owed by the Employee to the Company, including but not limited, to equipment and property belonging to the Company and not returned by the Employee, from the Company’s Severance Contribution, and in this capacity will be entitled to instruct the insurance company to transfer any such amount owed to the Company from any monies held by the insurance company for the benefit of the Employee.

 

8.                      NOTICES

 

All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt (a) five (5) days after deposit with the Postal Service, if delivered by mail, (b) upon delivery, if delivered by hand, or (c) one (1) business day after the business day of facsimile transmission.

 

9.                      MISCELLANEOUS

 

All documents, exhibits and Schedules attached to this Agreement constitute an integral part hereof. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable, and no provision shall be deemed dependent upon any other covenant or provision unless so expressed herein. This Agreement and all Schedules attached hereto contain the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein. No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto. The rights, benefits, duties and obligations under this Agreement shall inure to, and be binding upon, the Company, its successors assigns and any successor to the Company or to all or substantially all of the Company’s business and/or assets, and upon Employee and his or her legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. This Agreement constitutes a personal service agreement, and the performance of Employee’s obligations hereunder may not be transferred or assigned by Employee. The failure of either party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith or with any other term, condition or provision hereof, and said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of either party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party. The headings of sections are inserted for convenience and shall not affect any interpretation of this Agreement. This Agreement may be executed by any of the parties hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

 

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10.                      GOVERNING LAW

 

This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Israel, and the sole and exclusive place of jurisdiction in any matter arising out of or in connection with this Agreement shall be applicable courts in Tel-Aviv.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

      Can-Fite Biopharma Ltd. (the “Company”)
       
Date: 22/6/03   By: /s/ Ilan Cohn
       
      Title: Ilan Cohn, Ph.D., President & CEO
       
      Employee
       
Date: 22/6/03   /s/ Moti Farbstein
      Moti Farbstein

 

6
 

 

SCHEDULE A

 

COMPENSATION

 

(a)            Monthly Salary .

The Company shall pay Employee an aggregate monthly salary of 22,000 New Israeli Shekels (NIS 22,000), which will be comprised of an amount of 16,000 New Israeli Shekels (NIS 16,000) as a base salary (the “Base Salary” ) and an amount of 6,000 New Israeli Shekels (NIS 6,000) as payment for overtime pay (the “Overtime Payment” ) (the Base Salary and the Overtime Payment will, collectively, be referred to herein as the “Salary” ). Accordingly, the Salary shall be inclusive of all overtime and other similar compensation and shall be payable not later than the 10th day of each month with respect to the preceding month, in accordance with the Company’s payroll practices. The Employee shall be entitled to receive cost-of-living adjustments “Tosefet Yoker” or other statutory or mandatory required increase in salary. The Company shall deduct from the salary all national insurance fees, health insurance fees, income tax and any other amounts required by law, and shall provide the Employee with requisite documentation regarding such deductions.

 

The duties of the Employee in accordance with this Agreement involve duties that require of him special personal care and loyalty, and therefore the directives of the Work Hours and Rest Law, 1951, or any law to be enacted in its place, will not be applicable to the Employee or to his activities which he will perform for the Company. The Employee will not be entitled to remuneration according to the Work Hours and Rest Law, 1951.]

 

(b)            Managers Insurance .

Within ten days after the end of each month during the employment of Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company shall pay an aggregate amount equal to 18-1/3% of the Employee’s monthly Salary for the preceding month to a Managers Insurance (Bituach Manahalim) policy (the “Policy” ) and/or a comprehensive pension plan ( “Pension Plan” ) through an agency and with an insurance company or a pension fund, to be selected by the Employee, to be divided as follows: 8-1/3% towards Severance (the “Company’s Severance Contribution” ); 5% toward provident (compensation). In addition the Company shall pay up to 2-1/2% of the Employee’s Salary towards loss of (working capacity) disability insurance (depending on the cost to the Company necessary to provide coverage). Similarly, at the beginning of each month the Company shall deduct from the Salary of Employee an amount equal to 5% of the Employee’s monthly Salary for the preceding month, and shall pay such amount as premium payable in respect of the provident compensation component of Policy. In the event the Employee elects to be insured under a Pension Plan, the allocations shall be modified in accordance with the Pension Plans policies, provided, in any event they do not exceed the amounts set forth above.

 

7
 

 

(c)            Section 14 of the Severance Compensation Law – 1963 .

(i)            It is hereby agreed that upon termination of employment under this Agreement, the Company shall release to the Employee all amounts accrued in the Managers Insurance on account of both the Company’s and Employee’s contributions. It is hereby clearly agreed and understood that the amounts accrued in the Managers Insurance on account the Company’s contribution [i.e. 13.33% of each monthly Salary payment] shall be in lieu and in full and final substation of any severance pay the Employee shall be or become entitled to under any applicable Israeli law.

 

(ii)          The Company hereby waives in advance any right to any amounts accrued in the Managers Insurance, unless the Employee is either not entitled to Severance Pay according to Section 17 of the Severance Compensation Act, 1963, or has withdrawn amounts from the Managers Insurance not due or as a result of an “Entitling Event”, as such term is defined in the General Approval of the Labor Minister, dated June 30, 1998, issued in accordance to the said Section 14 (the “General Approval” ), in which case the Company may have the right to deny the employee only the amounts attributed to the Company’s Severance Contribution accrued in the Managers Insurance.

 

(iii)          Sub-Sections (i) and (ii) are in accordance with Section 14 of the Severance Compensation Act, 1963 and the General Approval, a copy of which is attached hereby to this Schedule A as Exhibit A .

 

(d)            Study Fund (Keren Hishtalmut) .

At the end of each month, during the employment of the Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company shall pay an amount equal to up to 7-1/2% of the Employee’s monthly Salary for the preceding month (the “Maximum Amount” ), but in no event an amount which exceeds the amount which is qualified for tax purposes for the Employee (the “Tax Amount” ), to a Study Fund (Keren Hishtalmut) designated by the Employee (the “Fund” ), and shall deduct from the Salary of the Employee an amount equal to up to 2-1/2% of the Employee’s monthly Salary for the preceding month and pay the same to the Fund. Any amounts resulting from the Maximum Amount less the Tax Amount, shall be paid to the Employee after deduction at source of any applicable taxes, payable on the date stated in Section (a) above ..

 

(e)            Vacation/Sick Leave/Vacation allowance (Recuperation Pay) .

The Employee shall be entitled to Eighteen (18) working days of paid vacation annually during the term of this Agreement (prorated for any calendar year during which he is employed hereunder). The Employee may carry forward the unused portion of such vacation for a period of two years only, provided, however, that he or she use at least 4 days of that portion each year. The value of any unused vacation shall be paid to the Employee, pro rata, on the basis of the Salary, at the end of the month during which such excess vacation time may be accrued. Nothing in this Section may derogate from the Employee’s rights and benefits by applicable law.

 

The Employee will be entitled to eighteen (18) days of fully paid sick leave per year. The Employee may carry forward any unused sick leave, not to exceed the maximum prescribed by law. The Company is entitled to offset any sick leave payment against any monies received by the Employee due to his loss of working capacity insurance.

 

8
 

 

The Employee will be entitled to receive annual payment for Recuperation Days (Dmei Havraa’) at the rate defined by law from time to time for each Recuperation Day.

 

(f)            Company Automobile .

While the Employee is actively employed by the Company, the Company will lease an automobile from a leasing Company, chosen at the Company’s sole discretion, and will place such automobile at the disposal of the Employee under the terms of the Company’s general leasing plan (to be provided to the Employee upon provision of the automobile). The make, size and design of the automobile will be subject to the Company’s sole discretion. The Employee shall abide by all traffic laws and regulations, drive cautiously and care for the proper maintenance of the car. The Company shall bear all of the fixed and variable maintenance costs and actual expenses incurred directly in connection with his use of such automobile, including licenses, insurance, gas, repairs, etc. but excluding any fines. The Employee will be compensated for all taxes he will be liable to as a consequence of the benefits of Employee under this Section (“Gilum”).

 

(g)            Out of Pocket Expenses .

The Company shall pay or reimburse the Employee for all normal, usual and necessary expenses incurred or paid by the Employee in the performance of his duties hereunder, against receipt by the Company of appropriate vouchers, receipts or other proof of the Employee’s expenditures, all subject to guidelines regarding such expenses which shall be approved by Board of Directors from time to time.

 

(h)            Reimbursement of Travel Expenses .

The Employee will be entitled for reimbursement of his actual travel expense from his home to the Company’s facilities and back, against receipt by the Company of appropriate vouchers, receipts or other proof of the Employee’s expenditures, all subject to guidelines regarding such reimbursement of Travel Expenses as shall be set by the Company’s Procedures.

 

9
 

 

 

10
 

 

SCHEDULE B

 

THIS UNDERTAKING (the “ Undertaking ”), is entered into as of the 22 day of June, 2003, by Moti Farbstein, ID No 057682205 , an individual residing at Ganei Tikva (the Employee)

 

WHEREAS the Employee has entered or intends to enter an Employment Agreement (the “ Employment Agreement ”), with Can-Fite Biopharma Ltd., an Israeli company (“the Company”); and

 

WHEREAS the Employee agreed to enter into this Undertaking

 

NOW, THEREFORE, the Employee undertakes and warrants towards the Company and any subsidiary and parent company of the Company as follows:

 

1. ACKNOWLEDGMENT

 

Employee acknowledges that (a) he or she occupies a position of trust and confidence with the Company and shall continue to occupy such position of trust and confidence with the Company, and has or shall become familiar with the following, any and all of which constitute confidential information of the Company, (collectively, the “ Confidential Information ”): (i) any and all trade secrets concerning the business and affairs of the Company, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing and distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures and architectures (and related processes, formulae, compositions, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs, methods and information), of the Company and any other information, however documented, of the Company that is a trade secret within the meaning of applicable law; (ii) any and all information concerning the business and affairs of the Company (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and (iii) any and all notes, analysis, compilations, studies, summaries, and other material prepared by or for the Company containing or based, in whole or in part, on any information included in the foregoing; (b) the business of the Company is international in scope; (c) the products and services of the Company are or shall be marketed throughout the world; (d) the Company competes with or shall compete with other businesses that are or could be located in any part of the world; (e) the provisions of this Undertaking are reasonable and necessary to protect and preserve the Company’s business, and (f) the Company would be irreparably damaged if Employee were to breach the covenants set forth in Sections 2,3, and 4 of this Undertaking.For purposes of this Undertaking, Confidential Information does not include any of the foregoing items which have become publicly known and made generally available through no wrongful act of Employee or of others who were under confidentiality obligations as to item or items involved

 

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2. CONFIDENTIAL INFORMATION

 

2.1 Employee agrees at all times during the term of his or her employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company or to disclose to any person, firm or corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company. Employee shall not: (i) use any such information, directly or indirectly, for himself or herself or others; and (ii) take any such material or reproductions thereof from the Company’s facilities at any time during his or her employment by the Company except as required in connection with Employee’s duties to the Company. Employee agrees to return all such material and reproductions thereof (whether or not merged with other works) in his or her possession to the Company, promptly upon request and in any event immediately upon termination of employment.

 

2.2 Except with prior written authorization by the Company, Employee agrees not to disclose or publish any of the Confidential Information or material of the Company, its clients, partners, shareholders or suppliers, or any other party to whom the Company owes an obligation of confidence, at any time during or after his or her employment with the Company.

 

2.3 The Employee further agrees that unless the Employee first obtains the prior written approval of the Company or any of it’s authorized representatives, he or she shall neither issue, produce, publish, put out, print, distribute or circulate any article, abstract, commentary, critique or any other kind of publication, nor shall he or she deliver any lecture, either for consideration or without, which includes Confidential Information, material or any other proprietary information or trade secrets of the Company.

 

2.4 Employee agrees, during his or her employment with the Company, not to improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that he or she will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

 

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2.5 Employee recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out such Employee’s work for the Company consistent with the Company’s agreement with such third party.

 

3. INVENTIONS .

 

3.1 Employee has attached hereto, as Exhibit A , a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by Employee prior to his or her employment with the Company (collectively referred to as “Prior Inventions” ), which belong to Employee, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, Employee represents that there are no such Prior Inventions. If in the course of his or her employment with the Company, Employee incorporates into a product, process or machine of the Company a Prior Invention owned by Employee or in which Employee has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine

 

3.2 The Employee will disclose and deliver to the Company for the exclusive use and benefit of the Company any Inventions (which in this paragraph shall mean any discovery, technique, design, formula, method of manufacture, inventions, secret process, improvements, and modifications (whether or not capable of protection by rights in the nature of intellectual property)) which the Employee alone or with one or more others has made or discovered during the Term of Employment and which pertain to or result from any work which the Employee has done or may hereafter do for the Company, promptly upon the making, devising, or discovering of the same, and will give all information and data in his possession as to the exact mode of working, producing, and using the same and also all such explanations and instructions as may in the view of the Company be necessary to enable the full and effectual working, production, or use of the same and will at the expense of the Company furnish it with all necessary plans, drawings, formulae, and models.

 

3.3 The Employee will without charge to but at the expense of the Company execute and do all acts, matters, documents, and things to enable the Company or its nominee to apply for and obtain protection for the Inventions in any or all countries and to vest title in the Company or such nominee absolutely.

 

3.4 The Employee hereby irrevocably appoints the Company to be his attorney in his name and on his behalf to execute and do such acts, matters, documents, and things as aforesaid and generally to use his name for the purpose of giving to the Company (or its nominee) the full benefit of the provisions of this section. In favor of any third party a certificate signed by any director or the secretary of the Company that an instrument or act falls within the authority hereby conferred shall be conclusive evidence that such is the case.

 

13
 

 

3.5 During the Term of Employment and at all times thereafter the Employee will (whether by omission or commission) do nothing to affect or imperil the validity of the protection for the Inventions obtained or applied for by the Company or its nominee pursuant to this paragraph. The Employee will at the direction and expense of the Company render all assistance within his or her power to obtain and maintain such protection or application or any extension thereof.

 

3.6 Nothing in this Undertaking shall oblige the Company to seek patent or other protection for any Invention nor to exploit any Invention.

 

3.7 The Employee shall promptly disclose to the Company all copyright works or designs originated, conceived, written, or made by him or her alone or with others (except only those works originated, conceived, written, or made by him or her prior to being employed by the Company) and shall until such rights shall be fully and absolutely vested in the Company hold them in trust for the Company.

 

3.8 The Employee hereby assigns to the Company by way of future assignment all copyright, design right, and other proprietary rights, if any, for the full terms thereof throughout the world in respect of all copyright works and designs originated, conceived, written, or made by the Employee (except only those works or designs originated, conceived, written, or made by the Employee wholly outside his or her normal working hours and wholly unconnected with his or her being employed by the Company) during the period of his or her employment hereunder and during all previous periods of employment with the Company.

 

3.9 The Employee will at the request and expense of the Company do all things necessary or desirable to substantiate the rights of the Company under Section 4.8, and it is hereby acknowledged and agreed that the provisions of this paragraph shall survive any termination of the Employment.

 

3.10 For the removal of any doubt, it is hereby clarified that the provisions contained in Sections 4.2 and 4.8 above will apply also to any “Service Inventions” as defined in the Israeli Patent Law, 1967 (the “Patent Law” ). However, in no event will such Service Invention become the property of the Employee and the provisions contained in Section 132(b) of the Patent Law shall not apply unless the Company provides in writing otherwise. The Employee will not be entitled to royalties or other payment with regard to any Prior Inventions, Service Inventions or any of the intellectual property rights set forth above, including any commercialization of such Prior Inventions, Service Inventions or other intellectual property rights.

 

14
 

 

4. GENERAL

 

4.1 The Employee acknowledges that the provisions of this Undertaking serve as an integral part of the terms of his employment and reflect the reasonable requirements of the Company in order to protect its legitimate interests with respect to the subject matter hereof. If any provision of this Undertaking (including any sentence, clause or part thereof) shall be adjudicated to be invalid or unenforceable, such provisions shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudicate is made. In addition, if any particular provision contained in this undertaking shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that the provision is enforceable o the fullest extent compatible with applicable law as it shall then appear.

 

4.2 The provisions of this Undertaking shall remain in full force and effect also following the termination of the employment relationship between the Company and the Employee for whatever reason. This Undertaking shall not serve in any manner as to derogate from any of the Employee’s obligations and liabilities under any applicable law.

 

Signature: /s/ Moti Farbstein  
  Moti Farbstein  

 

15
 

 

Exhibit A

 

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

Title Date Identifying Number
    or Brief Description
     
     
     
     
     
     
     

 

x No inventions or improvements

 

¨ Additional Sheets Attached

 

Signature of Employee /s/ Moti Farbstein  
     
Print Name of Employee: Moti Farbstein  

 

Date: 22/6/03  

 

16
 

 

SCHEDULE A

 

COMPENSATION

 

(a) Monthly Salary .

The Company shall pay Employee an aggregate monthly salary of Twenty Two Thousand New Israeli Shekels (NIS 22,000), (the the “ Salary ”). Accordingly, the Salary shall be inclusive of all overtime and other similar compensation and shall be payable not later than the 10th day of each month with respect to the preceding month, in accordance with the Company’s payroll practices. The Employee shall be entitled to receive cost-of-living adjustments “Tosefet Yoker” or other statutory or mandatory required increase in salary. The Company shall deduct from the salary all national insurance fees, health insurance fees, income tax and any other amounts required by law, and shall provide the Employee with requisite documentation regarding such deductions.

 

The duties of the Employee in accordance with this Agreement involve duties that require of him special personal care and loyalty, and therefore the directives of the Work Hours and Rest Law, 1951, or any law to be enacted in its place, will not be applicable to the Employee or to his activities which he will perform for the Company. The Employee will not be entitled to remuneration according to the Work Hours and Rest Law, 1951.

 

(b) Managers Insurance .

Within ten days after the end of each month during the employment of Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company shall pay an aggregate amount equal to 18-1/3% of the Employee’s monthly Salary for the preceding month to a Managers Insurance (Bituach Manahalim) policy (the “ Policy ”) and/or a comprehensive pension plan (“ Pension Plan ”) through an agency and with an insurance company or a pension fund, to be selected by the Employee, to be divided as follows: 8-1/3% towards Severance (the “ Company’s Severance Contribution ”); 5% toward provident (compensation). In addition the Company shall pay up to 2-1/2% of the Employee’s Salary towards loss of (working capacity) disability insurance (depending on the cost to the Company necessary to provide coverage). Similarly, at the beginning of each month the Company shall deduct from the Salary of Employee an amount equal to 5% of the Employee’s monthly Salary for the preceding month, and shall pay such amount as premium payable in respect of the provident compensation component of Policy. In the event the Employee elects to be insured under a Pension Plan, the allocations shall be modified in accordance with the Pension Plans policies, provided, in any event they do not exceed the amounts set forth above.

 

(c) Section 14 of the Severance Compensation Law – 1963 .

(i) It is hereby agreed that upon termination of employment under this Agreement, the Company shall release to the Employee all amounts accrued in the Managers Insurance on account of both the Company’s and Employee’s contributions. It is hereby clearly agreed and understood that the amounts accrued in the Managers Insurance on account the Company’s contribution [i.e. 13.33% of each monthly Salary payment] shall be in lieu and in full and final substation of any severance pay the Employee shall be or become entitled to under any applicable Israeli law.

 

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(ii) The Company hereby waives in advance any right to any amounts accrued in the Managers Insurance, unless the Employee is either not entitled to Severance Pay according to Section 17 of the Severance Compensation Act, 1963, or has withdrawn amounts from the Managers Insurance not due or as a result of an “Entitling Event”, as such term is defined in the General Approval of the Labor Minister, dated June 30, 1998, issued in accordance to the said Section 14 (the “General Approval”), in which case the Company may have the right to deny the employee only the amounts attributed to the Company’s Severance Contribution accrued in the Managers Insurance.

 

(iii) Sub-Sections (i) and (ii) are in accordance with Section 14 of the Severance Compensation Act, 1963 and the General Approval, a copy of which is attached hereby to this Schedule A as Exhibit A .

 

(d) Study Fund (Keren Hishtalmut) .

At the end of each month, during the employment of the Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company shall pay an amount equal to up to 7-1/2% of the Employee’s monthly Salary for the preceding month (the “Maximum Amount”), but in no event an amount which exceeds the amount which is qualified for tax purposes for the Employee (the “Tax Amount”), to a Study Fund (Keren Hishtalmut) designated by the Employee (the “Fund”), and shall deduct from the Salary of the Employee an amount equal to up to 2-1/2% of the Employee’s monthly Salary for the preceding month and pay the same to the Fund. Any amounts resulting from the Maximum Amount less the Tax Amount, shall be paid to the Employee after deduction at source of any applicable taxes, payable on the date stated in Section (a) above ..

 

(e) Vacation/Sick Leave/Vacation allowance (Recuperation Pay) .

The Employee shall be entitled to Eighteen (18) working days of paid vacation annually during the term of this Agreement (prorated for any calendar year during which he is employed hereunder). The Employee may carry forward the unused portion of such vacation for a period of two years only, provided, however, that he or she use at least 4 days of that portion each year. The value of any unused vacation shall be paid to the Employee, pro rata, on the basis of the Salary, at the end of the month during which such excess vacation time may be accrued. Nothing in this Section may derogate from the Employee’s rights and benefits by applicable law.

 

The Employee will be entitled to eighteen ( 18) days of fully paid sick leave per year. The Employee may carry forward any unused sick leave, not to exceed the maximum prescribed by law. The Company is entitled to offset any sick leave payment against any monies received by the Employee due to his loss of working capacity insurance.

 

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The Employee will be entitled to receive annual payment for Recuperation Days (Dmei Havraa’) at the rate defined by law from time to time for each Recuperation Day.

 

(f) Company Automobile .

While the Employee is actively employed by the Company, the Company will lease an automobile from a leasing Company, chosen at the Company’s sole discretion, and will place such automobile at the disposal of the Employee under the terms of the Company’s general leasing plan (to be provided to the Employee upon provision of the automobile). The make, size and design of the automobile will be subject to the Company’s sole discretion. The Employee shall abide by all traffic laws and regulations, drive cautiously and care for the proper maintenance of the car. The Company shall bear all of the fixed and variable maintenance costs and actual expenses incurred directly in connection with his use of such automobile, including licenses, insurance, gas, repairs, etc. but excluding any fines. The Employee will be compensated for all taxes he will be liable to as a consequence of the benefits of Employee under this Section (“Gilum”).

 

(g) Out of Pocket Expenses .

The Company shall pay or reimburse the Employee for all normal, usual and necessary expenses incurred or paid by the Employee in the performance of his duties hereunder, against receipt by the Company of appropriate vouchers, receipts or other proof of the Employee’s expenditures, all subject to guidelines regarding such expenses which shall be approved by Board of Directors from time to time.

 

(h) Reimbursement of Travel Expenses .

The Employee will be entitled for reimbursement of his actual travel expense from his home to the Company’s facilities and back, against receipt by the Company of appropriate vouchers, receipts or other proof of the Employee’s expenditures, all subject to guidelines regarding such reimbursement of Travel Expenses as shall be set by the Company’s Procedures.

 

19

 

Exhibit 4. 4

 

CONSULTING AGREEMENT

 

CONSULTING AGREEMENT (the “Agreement”), dated as of September 27, 2005, by and between CAN-FITE BIOPHARMA LTD., an Israeli Company, whose address is 10 Bareket Street, Petach Tikva, Israel (the “Company”), and BioStrategics Consulting Ltd through its President, Dr. Michael H. Silverman, whose place of business is 9 Elizabeth Road, Marblehead, MA, USA (the “ CONSULTANT ”).

 

WHEREAS, the Company is currently engaged in the research and development of therapeutics that function through binding to or interacting with adenosine receptors (the “ Field ”);

 

WHEREAS, the CONSULTANT has the necessary know-how, qualifications and experience in the Field required in order to provide the consulting services as herein set forth;

 

WHEREAS, the Company desires to appoint the CONSULTANT as a Medical Director, and the CONSULTANT desires to be appointed by the Company, as a consultant to the Company in a role of Medical Director and in connection thereof, to provide to the Company with medical and clinical research and development consulting services in the Field (the “ Services ”), as hereinafter set forth.

 

NOW THEREFORE, in consideration of the mutual undertakings and premises herein contained, the parties hereto hereby agree as follows:

 

1. The Appointment

 

1.1 Subject to the terms hereof, the Company hereby appoints the CONSULTANT, and the CONSULTANT hereby agrees to be appointed by the Company as a CONSULTANT to the Company in connection with the Services to be provided by the CONSULTANT pursuant to Section 2 hereof. In rendering the Services hereunder, the CONSULTANT shall be deemed to be, and he is, an independent contractor, and neither this Agreement nor the performance of any of the terms hereof will or will be deemed to constitute or create any other relationship between the Company and the CONSULTANT.

 

1.2 Without derogating from any other provision herein, the CONSULTANT acknowledges and agrees that during the term hereof (a) the Company is free at all times to appoint other consultants, or to use its own employees, in connection with any of the services to be provided by the CONSULTANT pursuant to Section 2 hereof, and (b) the CONSULTANT will exercise reasonable care and diligence to prevent, and will not take, any action or condition which could result in a conflict with, or prejudicial to, the interests of the Company.

 

1
 

 

2. Representations of the CONSULTANT

 

The CONSULANT hereby represents to the Company that:

 

2.1 He has the know-how, experience, qualifications and capacity to provide the Services to the Company in the Field as set forth in this Agreement.

 

2.2 The execution, delivery and the terms of this Agreement (i) will not constitute a default or breach of any agreement or other instrument to which the CONSULTANT in party or by which he is bound, and (ii) does not require the consent of any person or entity.

 

2.3 In performing his Services hereunder, the CONSULTANT shall not utilize any proprietary information of any third party.

 

2.4 He is not employed, providing consulting services, has rights of representation, marketing agency or any other right whatsoever of any other company or entity which competes, directly or indirectly, with the Company and the business currently carried on by the Company.

 

2.5 He will not, now or in the future, have any claim or claims whatsoever to any right of any kind except as set forth in this Agreement.

 

2.6 To the best of his knowledge, this Agreement and the provision of the Services by the CONSULANT are not in conflict and do not breach any law, rule or regulation that govern the CONSULTANT.

 

3. Extent and Scope of Services

 

3.1 During the term hereof, the CONSULTANT shall provide the services to the Company, to the affairs and business of the Company and during such period will provide the Company with such consulting services as may be reasonably requested of it, from time to time, by the CEO of the Company or any other person or firm designated by the CEO. The consulting concerns clinical and medical research and development activities within the Field.

 

3.2 The CONSULTANT shall render the Services, as required by the Company, on such dates, at such time as shall be required by the Company, from his home office, and/or any other location agreed upon between the parties.

 

3.3 During the term hereof, the CONSULTANT shall keep the Company currently informed as to his activities hereunder and shall, periodically, provide the Company with written reports setting forth the Services provided by him.

 

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3.4 The parties hereby agree that the CONSULTANT is not deemed to be an agent or a representative of the Company and therefore does not possess any authority, whether actual or apparent, to represent the Company or to contractually commit the Company in any way or manner.

 

4. Compensation

 

In consideration of the services provided to the Company by the CONSULTANT hereunder, the Company shall compensate the CONSULTANT as follows:

 

4.1 The Company agrees to pay the CONSULTANT a Consulting fee of three hundred twenty-five US dollars ($325) per hour. The aforementioned notwithstanding, the maximal pay for any single day’s work, will not exceed US$ 2,600.

 

4.3 It is agreed by the parties hereto that reasonable pre-approved expenses in written incurred by the CONSULTANT in the discharge of his duties under this Agreement, including travel expenses will be borne by the Company, and reimbursed forthwith on request.

 

4.4 In calculating the time incurred by the CONSULTANT, traveling time shall not be included in the calculation. In the reimbursement of expenses as set forth in Section 4.3 above, it is agreed that the Company will reimburse CONSULTANT for air travel in a coach class or equivalent, unless agreed otherwise before a specific travel.

 

4.5 Payment and reimbursement shall be made to such bank account, as the CONSULTANT will indicate, within twenty-one (21) business days from the date of obtaining such invoices by the Company.

 

4.6 The payment provided by this Agreement shall be made to the CONSULTANT after deduction of all taxes and deductions at source required by law to be deducted. The parties hereto agree, that all taxes, social insurance payments, pension payments, health insurance and any other such payments, shall be borne solely by the CONSULTANT. The Company shall not pay nor be liable to pay any taxes upon the payment to the CONSULTANT of any remuneration as set forth in this Agreement. CONSULTANT hereby undertakes to indemnify and reimburse the Company for any amounts claimed or levied on the Company due to taxes, social insurance payments, pension payments, health insurance and any other such payments resulting from any payment made by the Company to the CONSULTANT under this Agreement

 

4.7 The Company shall not undertake any social insurance premiums, pension payment and health insurance on the name of the CONSULTANT.

 

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4.8 The CONSULTANT shall undertake, at his own expense, sufficient insurance coverage against illness, injuries and/or damages incurred by him in connection of his render of services in accordance with this Agreement.

 

5. Confidential Information

 

5.1 In the course of providing services to the Company hereunder, The CONSULTANT may have access to, and become familiar with, “Confidential Information” of the Company (as hereinafter defined). The CONSULTANT shall at all times hereinafter maintain in the strictest confidence all such Confidential Information and shall not divulge any Confidential Information to any person, firm or corporation with the prior written consent of the Company. For purposes hereof, “ Confidential Information ” shall mean all information in any and all medium which is confidential by its nature, including, without limitation, data, technology, know-how, inventions, discoveries, designs, processes, formulations, models, and/or trade and business secrets relating to any line of business in which the Company is involved. Confidential Information will also include the Company’s marketing and business plans relating to current, planned, old or future products.

 

5.2 The CONSULTANT shall not use Confidential Information for, or in connection with, the development, manufacture or the use of any product or for any other purpose whatsoever except as and to the extent provided in this Agreement or in any other subsequent agreement between the parties.

 

5.3 Notwithstanding the foregoing, Confidential Information shall not include information which the CONSULTANT can evidence to the Company by appropriate documentation; (i) is in, or enters the public domain otherwise than by reason of a breach hereof by the CONSULTANT; (ii) is known by The CONSULTANT at the time of disclosure thereof by the Company; (iii) is independently developed by the CONSULTANT without recourse to Confidential Information; or (iv) is rightfully transmitted or disclosed to the CONSULTANT by a third party which owes an obligation of confidentiality with respect to such information.

 

5.4 All Confidential Information made available to, or received by, the CONSULTANT shall remain the property of the company, and no license or other rights in or to the Confidential Information is granted hereby, the obligation of the CONSULTANT is not to use any Confidential Information disclosed pursuant to this Agreement except as provided in this Agreement, shall remain in effect indefinitely, and the CONSULTANT shall be prohibited from disclosing any such Confidential Information during the term of this Agreement thereafter.

 

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5.5 All files, records, documents, drawings, specifications, equipment and similar items relating to the business of the Company, whether prepared by the CONSULTANT or otherwise coming into his possession, and whether classified as Confidential Information or not, shall remain the exclusive property of the Company. Upon termination or expiration of this Agreement, or upon request by the Company, the CONSULTANT shall promptly turn over to the Company all such files, records, reports analysis, documents and other material of any kind concerning the Company which the CONSULTANT obtained, received or prepared pursuant to this Agreement.

 

6. Proprietary Information

 

6.1 Definition of “Proprietary Information”. Contractor understands that the Company possesses and will possess Proprietary Information which is important to its business or proposed business. In addition, Company frequently conducts business and receives information from other parties with which it has a business relationship (collectively, “Business Affiliates”) that is confidential in nature. For purposes of this Agreement, “Proprietary Information” is all information, whether conveyed orally or in writing or in any other intangible or tangible form, that was or will be developed, created, or discovered by or on behalf of the Company, or which became or will become known by, or was or is conveyed to the Company (including, without limitation, “Results” as defined above), which has or may have commercial value to the Company or to the Company or to Business Affiliates. “Proprietary Information” may include, but is not limited to, patents, copyrights, trade secrets, techniques, data, databases, sketches, drawings, models, inventions (whether patentable or not), works of authorship, know-how, processes, apparatus, equipment, formulae and confidential information related to the current future and proposed products and services of the Company, and also includes, without limitation, Company’s respective information concerning research, clinical studies, experimental work, development, design details and specifications, formulations, competitive analyses, chemical compounds and variations thereof, excipients and other ingredients, masking and flavoring strategies, clinical and product development plans, engineering, financial information, pricing, procurement requirements, purchasing, manufacturing, customer lists, business forecasts, sales and merchandising and marketing plants and information, the duties, salaries and terms of compensation of employees or Business Affiliates of the Company. “Proprietary Information” also includes proprietary or confidential information of any other third party who may disclose such information to Company or Contractor in the course of Company’s business.

 

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6.2 Ownership of Proprietary information; Assignment. All ownership rights in Proprietary Information and any other intellectual or industrial property of any sort anywhere in the world (collectively “Rights”) shall be the sole and exclusive property of the Company. Contractor hereby assigns to the Company (and shall ensure any employees or agents of Contractor shall assign) any Rights Contractor may have or acquire in such Proprietary Information by performing the Services hereunder. At all times, both during the term of this Agreement and after its termination, Contractor will keep in confidence and trust and will not use or disclose any Proprietary Information or anything related to it without the prior written consent of an officer of the Company. Contractor shall take appropriate measures to ensure that its employees and agents, if any, arc bound to the requirements set forth in such a manner that such party and/or its successor(s) will be able to honor its/their confidentiality and nonuse obligations under this Agreement. Contractor acknowledges that any disclosure or unauthorized use of proprietary Information will constitute a material breach of this Agreement and cause substantial harm to the Company for which monetary damages would not be a fully adequate remedy and therefore, in the event of any such breach, in addition to any other available remedies, the Company shall have the right to seek injunctive relief without the need to secure a bond

 

7. Non-Competition

 

7.1 The CONSULTANT shall not at any time during the term of this Agreement, directly or indirectly, engage in (as owner, stockholder, partner, director, officer, employee, consultant or otherwise, except as an investor in a corporation whose stock is publicly traded and in which he holds less than 3% of the outstanding shares) any business, which competes in any way with the Company’s business.

 

7.2 The CONSULTANT shall not at any time during the term of this Agreement and for two (2) years thereafter, solicit any employee, customer, or supplier of the Company to cease or change its legal or business relationship with the Company.

 

8. Terms and Termination

 

8.1 Subject to provisions of Section 7.3 of this Agreement shall take effect from the date set out above as of which this Agreement is deemed to be entered into and shall continue in full force and effect for a period of one (1) year from such dale, Unless terminated as provided herein, the Agreement will be automatically renewed for consecutive one year periods.

 

8.2 Notwithstanding Section 7.1 above, either party may given notice to the other party terminating this Agreement by providing the other party with thirty (30) days prior written notice. However, in accordance with the provisions of Section 7.3 hereof, either party may given notice to the other party terminating this Agreement immediately upon the occurrence of the events specified in Section 7.3 below.

 

8.3 (a)     The Company shall have the right to terminate this Agreement “for cause”, at any time, by giving the CONSULTANT notice of termination “for cause”, slating the reasons constituting the “cause”. In such event, this Agreement shall be terminated as to the lime of delivery of the said notice. For purposes hereof “cause” shall mean (a) a breach of trust by the CONSULTANT, including without limitation, acts of moral turpitude, theft, embezzlement or self-dealing; (b) the disclosure of Confidential Information of or in relation to the Company to any third party; or (c) material breach by the CONSULTANT of this Agreement, such breach not remedied within (30) thirty days after service of notice by the Company on the CONSULTANT specifying the breach complained or and (if remediable) requiring remedy of it.

  

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(b)     The CONSULTANT shall have the right to terminate this Agreement “for cause”, at any lime, by giving to the Company notice of termination “for cause”, stating specifically the reasons constituting the “cause”, in such event, this Agreement shall be terminated as of the time of delivery of the said Notice. For the purposes hereof “cause” shall mean (a) a material breach by the Company of this Agreement which breach shall not have been remedied within (30) thirty days of service of a notice in writing by the CONSULTANT on the Company requiring remedy of such breach; or (b) the Company becoming bankrupt or insolvent or ceasing or threatening to cease to carry on business or being unable to pay its debts as they fall due or a receiver or other encumbrances being appointed to the undertaking and assets, or any material part thereof of the Company; or (c) a change in the controlling shareholders of the Company, such that persons not currently controlling the Company become controlling shareholders of the Company. For the purpose of this section, the term “control” means controlling the management of the Company by either (1) holding or owning more than 50% of the voting shares of the Company, or (2) having the right to designate more than 50% of the directors of the Company.

 

9. Miscellaneous

 

9.1 Any notice under this Agreement shall be in writing, to the addresses of the Company or the CONSULTANT as set out above, and shall be deemed to have been duly given for all purposes (ft) seven (7) days after delivery of documents to a courier such as FedEx for dispatch to either party; or (b) upon manual delivery, to the respective addresses or faxes set forth above or to such other address of which notice as aforesaid has actually been received.

 

9.2 This Agreement is the entire agreement between the parlies with respect to the subject matter hereof, and supersedes all prior understandings, agreements and discussions between them, either written or oral, with respect to such subject matter.

 

9.3 This Agreement shall not be modified or amended except by a written instrument signed by the parties hereto. No waiver or failure to act with respect to any breach or default hereunder, subsequent breach or default, whether of similar or of different nature.

 

9.4 This Agreement shall be governed by, interpreted and construed in accordance with the laws of the State of Israel. The competent court in Tel Aviv, Israel shall have sole and exclusive jurisdiction regarding any dispute or claim arising hereunder.

 

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9.5 Unless provided to the contrary in this Agreement, the CONSULTANT shall not assign this Agreement to any third party, in whole or in part. The Company may assign this Agreement to any of its affiliate, upon the provision of written notice to the CONSULTANT.

 

9.6 Any provision hereof which is found to be invalid, illegal or unenforceable under any applicable provision of valid laws, shall be amended to the extent required to render it valid, legal and enforceable under such laws (or deleted if no such amendment is feasible), and such amendment or deletion shall not effect the enforceability of the other provisions hereof.

 

9.7 The Parties agree that failure of either party at any time to require performance by the other Party of any of the provisions herein shall not operate as a waiver of the right of that party to request siriet performance of the same or like provisions, or any other provisions hereof, at a later time.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

 

CAN-FITE BioPharma Ltd .   T he CONSULTANT
         
By: /s/ Pnina Fishman   By: /s/ Michael H. Silverman
Dr. Pnina Fishman   Dr. Michael H. Silverman

 

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Exhibit 4. 5

 

SERVICE MANAGEMENT AGREEMENT

 

THIS AGREEMENT is between Can-Fite Biopharma Ltd., an Israeli company, whose address is 10 Bareket Street, Petach Tikva, Israel (the “Company”) and F.D. Consulting International and Marketing Ltd., an Israeli company, whose address is City Gate Building, Ben Gurion Street, Herzliya, Israel. (“Manager”), for services as hereinafter provided is entered as of June 27 2002 (“Effective Date”).

 

1. ENGAGEMENT OF SERVICES.

 

The Company hereby retains Manager, and Manager hereby agrees to be retained by the Company on the terms and conditions contained herein in order to provide the Company with such services set forth herein (the “Services”). Services will be rendered to the best of Manager’s ability, in accordance with the terms of this Agreement. The Services will be performed by Prof. Pnina Fishman, who will serve as the Company’s Chief Scientific Officer (“Pnina”). Pnina personally agrees to abide to all the terms and conditions hereto, including without limitation, the obligations of non competition, assignment of inventions and confidentiality. The Services are the active management of the Company’s research and devlopment activites and such other actions as are associated with the role of CSO of a biotech company.

 

l.l. Manager shall perform such services and duties as are normally incident to the position of Chief Scientific Officer and are commensurate with Pnina’s background, education and professional standing or as are requested of the Manager by the Board. In carrying out these functions, Manager shall work at the direction of and subject to the approval of, and shall report to, the Board of Directors of the Company.

 

1.2. Unless otherwise agreed between the parties, Manager shall perform its duties hereunder at the Company’s facilities in Israel only , provided, however, that Manager acknowledges and agrees that the performance of its duties hereunder may require significant international travel.

 

Manager understands and acknowledges that its services to the Company are essential and that the business and affairs of the Company shall require dedication and all of Pnina’s business time. It is agreed that Pnina is being engaged in a management position which requires a special degree of skill and devotion, and therefore Manager undertakes to perform the duties and assignments imposed in the scope of its Services to the Company with devotion, honesty and fidelity, subject to the Company’s policy as amended from time to time, and to dedicate to the performance of the said Services all of Pnina’s know-how, qualifications and experience and all the reasonable time, diligence and attention required for the performance thereof efficiently, with fidelity and in accordance with the requirements of this Agreement, and to use its best endeavors in order to advance the affairs and business of Company and the realization of its objectives.

 

 
 

 

1.3. Manager declares that it is not presently involved, and it undertakes not to become involved in the future, for so long as Pnina is providing Services hereunder to the Company, in any obligations towards any third party whatsoever which entail any form of conflict of interest with his Services to the Company.

 

2. COMPENSATION.

 

In consideration of the Services rendered and to be rendered by Manager in accordance with this Agreement, the Company hereby agrees to pay Manager a monthly amount of Thirteen Thousand Three hundred and Thirty Three US Dollars (US$13,333) (the “Monthly Payment” ) which equals an annual compensation of One Hundred and Sixty Thousand US Dollars (US$160,000)(the “Compensation” ). Such amount shall not include VAT which shall be added to each Monthly Payment.. Unless otherwise agreed between the parties hereto, the Board of Directors of the Company shall, on an annual basis, each year of the term hereof, review and consider an increase in the Compensation paid to the Manager for the next 12-month period based on the Manager’s achievments in the preceding period.

 

Manager acknowledges and confirms that the Compensation includes remuneration for all its Service for the Company and it shall not be entitled to any further remuneration or payment whatsoever unless specifically agreed on in this Agreement. Further, Manager acknowledges that as of the date hereof Company has no debts or liabilities to it whatsoever including without limitation any debts or liabilities due to it for any prior Services provided to the Company before the date hereof.

 

The Company shall pay or reimburse Manager for all normal, usual and necessary expenses incurred or paid by Manager in the performance of its duties hereunder in accordance with such Expense Reimbursement Policy as may from time to time be adopted by the Board.

 

The Board will set for the Manager certain annual milestones to be achieved during each calendar year. Upon the fulfillment of such annual milestones, such fullfilment to be determined at the sole discretion of the Board of Directors of the Company, the Manager will be entitled to receive an annual bonus to be decided by the Board.

 

At the Board of Directors sole discretion, Manager shall be entitled to participate in a stock option plan approved by the Board. Any options to be issued as aforesaid, if at all, shall be issued under the Manager’s name, it being clarified that the number of options to be issued to the Manager, if any, shall be decided by the Board of Directions at its sole discretion taking into account Pnina’s position and contribution to the Company.

 

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In addition, Manager shall be provided with a Company owned (or leased) automobile (the “Car”) for the use of the Manager (or Pnina), the type and make as agreed between the Company and the Manager with an engine size not less than 1,600 cc. Any and all cost related to the purchase or lease of the Car shall be borne by the Company except that any taxes related thereto and traffic fines shall be paid solely by the Manager or Pnina, as applicable.

 

For the duration of this Agreement, the Manager shall be entitled to the use of a cellphone owned by the Company. The Company shall pay any and all expenses related to the use of such cellphone.

 

3. INDEPENDENT MANAGER RELATIONSHIP

 

3.1 Nature of Relationship . Manager’s relationship with the Company will be that of an independent Manager and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Both parties hereby expressly state that employee-employer relationship does not exist between the Manager (or Pnina) and the Company. Notwithstanding the aforesaid, the Manager (or Pnina) may have fiduciary duties towards the Company due to other positions the Manager (or Pnina) may hold, such as directorship, appointment as Chief Scientific Officer e.t.c.Pnina shall sign and execute the Indemnification Letter attached hereto as Exhibit 3.1 .

 

3.2 Manager Responsible for Taxes and Records . Manager will be solely responsible for all tax returns and payments required to be filed with or made to any, state or local tax authority with respect to Manager’s performance of services and receipt of compensation under this Agreement.

 

4. NON-COMPETITION

 

4.1 The Manager understands and recognizes that its services to the Company are special and unique and agrees that during the term of this Agreement and for a period of twelve (12) months after the termination of this Agreement it shall not in any manner, directly or indirectly, on behalf of itself or any person, firm, partnership, joint venture, corporation or other business entity (“Person”), either for its own account, or as an advisor, partner, joint venturer, executive, agent, consultant, licensor, licensee, salesperson, officer, director or shareholder or in any other capacity whatever of a Person, enter into or engage in any business which is engaged in any activities competing directly with products or services offered by the Company. Notwithstanding the aforesaid, after the termination of this Agreement, Manager (or Pnina) may be active and engage in research activities which may compete directly with the products or services offered by the Company provided that they are solely for pure academic purposes with no a priori intention to be commercialized.

 

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4.2 During the period of this Agreement and for a period of twelve (12) months after the termination of this Agreement, the Manager shall not interfere directly or indirectly, including personally or in any business in which he is an officer, director or shareholder with or disrupt or attempt to disrupt the Company’s business relationship with any of its customers, partners, shareholders or suppliers, or solicit any of the employees of the Company.

 

5. CONFIDENTIAL INFORMATION

 

5.1 The Manager agrees that during the course of its engagement or at any time after expiration or termination thereof, it will not disclose or make accessible to any Person, any information of the Company which is, by its nature, confidential, including, without limitation, information concerning products, services and technology, both current and under development, promotion and marketing programs, lists, trade secrets and other confidential and proprietary business information (collectively, “Confidential Information”) of the Company, except to the extent required by law. The Manager shall not use any such information, directly or indirectly, for itself or others except as required in connection with its duties to the Company. The Manager agrees to return all such material and reproductions thereof (whether or not merged with other works) in its possession to the Company promptly upon request and in any event immediately upon termination of this Agreement. For purposes of this Agreement, Confidential Information shall not include information which (i) is in, or enters the public domain otherwise than by reason of a breach of this Agreement by Manager; or (ii) is proved to have been known to Manager prior to the commencement of his association with the Company either as a service provider or a director.

 

5.2 The Manager understands that the Company is engaged in a continuous program of research, development, production and marketing in connection with its business and that, as an essential part of his service with the Company, it is expected to make new contributions to and create inventions of value for the Company. Manager agrees to share with the Company all its knowledge and experience.

 

5.3 From and after the date Manager first became associated with the Company; Manager undertakes and covenants that it will promptly disclose in confidence to the Company all inventions, improvements, designs, original works of authorship formulas, concepts, techniques, methods, systems, processes, compositions of matter, computer software programs, databases, mask works, and trade secrets, all which are related to the Company’s business including current or anticipated research and development, whether or not patentable, copyrightable or protectable as trade secretes, that are made or conceived or first reduced to practice or created by it, either alone or jointly with others during the period of its engagement by the Company whether or not in the course of its service to the Company (“Inventions”).

 

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5.4 The Manager hereby irrevocably assigns to the Company all right, title and interest it may have or acquire in all Inventions that (a) are or were developed, whole or in part on Company’s time or with the use of any equipment, supplies, facilities or trade secrets of the Company, (b) result directly from any work performed by it for the Company, or (c) relate to the Company’s business or current or anticipated research and development (“Company Inventions”), and agrees that all such Company Inventions shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith.

 

5. 5 Manager further agrees to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights on said Company Inventions in any and all countries. Manager will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Manager obligation under this Section 5.5 will continue beyond the termination of his Agreement with the Company, provided that the Company will compensate Manager at a reasonable rate after such termination for time or expenses actually spent by Manager at the Company’s request on such assistance. The Manager hereby irrevocably appoints the Secretary of the Company as its attorney-in-fact to execute documents on its behalf for this purpose.

 

5.6 The Manager hereby irrevocably transfers and assigns and will transfer and assign in the future to the Company (a) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Company Invention; and (b) any and all “Moral Rights” (as defmed below) that he may have in or with respect to any Company Invention. Manager also hereby forever waives and agrees never to assert any and all Moral Rights he may have in or with respect to any Company Invention, even after termination of its service for the Company. “ Moral Rights ” mean any rights to any Invention, other than that defined under subsection (a) of this Section 5.6.

 

5.7 Inventions, if any, patented or unpatented, which Manager made prior to the commencement of his engagment with the Company are excluded from the scope of this Agreement. To preclude any possible uncertainty, Exhibit A (Previous Inventions) attached hereto is a complete list of all Inventions that Manager have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of his engagment with the Company, (collectively referred to as “ Prior Inventions ”). If no such disclosure is attached, Manager represents that there are no Prior Inventions.

 

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6. TERM; TERMINATION

 

The Manager shall commence providing the Services to the Company on the Effective Date and shall continue unless terminated by either party (“Termination Without Cause”) provided that the terminating party provided at least three (3) months advance written notice of such termination to the other party (the “Notice Period” ). This Agreement shall terminate immediately upon the expiry of the Notice Period. Notwithstanding the aforesaid, the Company may terminate this Agreement immediatly without having to provide the Notice Period in any of the following events: (a) a serious breach of trust including but not limited to theft, embezzlement, self-dealing; (b) any willful failure to perform competently any of his fundamental functions or duties hereunder which is not remedied by Manager within a reasonable time of having been requested to do so by the Company; (c) Manager (or Pnina) is convicted by a competent court of law of a dishonorable criminal offence ( ) or (d) without Company’s prior approval, Pnina ceases to perform the services on behalf of the Manager.

 

In the event of Termination Without Cause by the Company, the period set out in Section 4.1 and 4.2 above shall be reduced to six (6) months.

 

7. GENERAL PROVISIONS

 

7.1 Cooperation. The parties will cooperate with each other in order to implement this Agreement in accordance with the intent of the parties thereof.

 

7.2 Governing Law. This Agreement will be governed and construed in accordance with the laws of the State of Israel.

 

7.3 Entire Agreement . This agreement sets forth the entire understanding and agreement of the parties as the subject matter of this Agreement,. It may not be changed orally but only by a written document signed by both parties. The obligations set out in Sections 4 and 5 of this Agreement shall apply also with regard to the duration where Manager (or Pnina) was previously assoicated with the Company.

 

7.4 Severability: Waiver. If any provision of this Agreement is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The Company and Manager agree to replace any invalid provision with a different provision, which most closely approximates the intent and economic effect of the invalid provision. The waiver of any breach by either party will not operate or be interpreted as a waiver of any other or subsequent breach by such party.

 

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7.5 Successors and Assigns. Neither this Agreement nor any of the rights or obligations of each party hereto arising under this Agreement may be assigned or transferred without prior written consent from the other party hereto.

 

7.6 Headings. Titles or headings to the sections of this Agreement are not part of the terms of this Agreement, but are inserted solely for convenience.

 

7.7 Notices. All notices, requests and other communications under this Agreement must be in writing and must be mailed by registered or certified, postage prepaid and return receipt requested, or delivered by hand to the party to whom such notice is required or permitted to be given. If mailed, any such notice will be considered to have been given three business days after it was mailed, as evidenced by the postmark. If delivered by hand, any such notice will be considered to have been given when received by the party to whom notice is given, as evidenced by written and dated receipt of the receiving party. The mailing address for notice to either party will be the address shown on the signature page of this agreement. Either party may change its mailing address by notice as provided by this Section 7.7.

 

In Witness whereof the parties have executed this Agreement on the date above.

 

Can-Fite Biopharma Ltd.   F.D. Consulting International and Marketing Ltd.
     
/s/ Ilan Cohn   /s/ Pnina Fishman
By: Ilan Cohn   By: Prof. Pnina Fishman
Title: CEO   Title:    

 

I hereby personally agree to abide to all the terms and conditions hereto.

 

/s/ Pnina Fishman  
Pnina Fishman  

 

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Exhibit A

 

All patents and patent applications relating to the use of IVIG (Intravenous Gamma Globulin) or fractions thereof in cancer treatment that were assigned to ARP Biomed.

 

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Exhibit 4. 6

 

Canfite BioPharma ACP10004

 

 

Master Services Agreement

 

Accellient Partners LLC

A Massachusetts Limited Liability Company

 

1000 Winter Street

Suite 2000

Waltham, Massachusetts 02451

USA

 

  Page 1 of 11 CONFIDENTIAL
 

 

Canfite BioPharma ACP10004

 

MASTER SERVICES AGREEMENT

 

Effective 10 May 2010 (the "Effective Date"), Accellient Partners, LLC , (“ACCELLIENT PARTNERS”) located at 1000 Winter St., Suite 2000, Waltham, MA 02451 and Canfite BioPharma Ltd . (“CLIENT”) located at 10 Bareket Street, Petach-Tivka, 49170, Israel, seek to enter into an agreement whereby ACCELLIENT PARTNERS shall provide consulting and project management services to CLIENT.

 

The scope of work and services shall be outlined in one or more Work Orders (each a “Work Order”). Upon agreement to the terms of such Work Order, ACCELLIENT PARTNERS shall perform the consulting services for CLIENT described in such Work Order (the “Services”). Each Work Order may but is not required to be attached hereto, from time to time, collectively, as Exhibits. Each Work Order which shall be subject to the provisions of this Agreement, is made fully a part hereof. Regardless of whether a Work Order is attached to a copy of this Agreement, it is understood and agreed that this Agreement shall control the relationship of CLIENT and ACCELLIENT PARTNERS with respect to any and all Work Orders.

 

Accordingly, ACCELLIENT PARTNERS and CLIENT agree as follows:

 

1. Services. CLIENT hereby retains ACCELLIENT PARTNERS and ACCELLIENT PARTNERS agrees to undertake and complete the consulting services (“Consulting Services”) as CLIENT may from time to time request.

 

a) ACCELLIENT PARTNERS’ Personnel. ACCELLIENT PARTNERS has, and if necessary will engage, employees, subcontractors and/or consultants (“ACCELLIENT PARTNERS’ Personnel”) with the proper skill, training and experience to provide the Consulting Services. Before providing Consulting Services, all ACCELLIENT PARTNERS’ Personnel must have agreed in writing to confidentiality obligations at least as stringent as those set forth in this Agreement. ACCELLIENT PARTNERS agrees to have an agreement in place with all ACCELLIENT PARTNERS’ Personnel that assigns and otherwise effectively vests in ACCELLIENT PARTNERS all rights to the products of their work.

 

b) Third Party Confidential Information. ACCELLIENT PARTNERS agrees not to disclose or incorporate confidential information of any other person, firm, corporation, institution or other entity in connection with any of the Consulting Services.

 

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Canfite BioPharma ACP10004

 

c) Subcontracting. ACCELLIENT PARTNERS may subcontract the performance of certain of its obligations hereunder to qualified third parties, provided that ACCELLIENT PARTNERS notifies CLIENT of the proposed subcontractor and identifies the specific Consulting Services to be performed by the subcontractor. At the request of CLIENT, ACCELLIENT PARTNERS agrees to provide CLIENT with a copy of ACCELLIENT PARTNERS’ agreement with any subcontractors rendering Consulting Services, which copy may be redacted to eliminate any confidential information.

 

2.  Payment . In consideration of CLIENT’s acceptance of this AGREEMENT, CLIENT shall pay ACCELLIENT PARTNERS as specified in the Work Order for Consulting Services provided by ACCELLIENT PARTNERS.

 

3. Records. All papers, records, data, documents, and other materials, including copies, electronic and optical media, and computerized records that ACCELLIENT PARTNERS possesses or creates as a result of performing Consulting Services hereunder (collectively "Records") are the sole and exclusive property of CLIENT. ACCELLIENT PARTNERS shall use commercially reasonable efforts to maintain all Records in a safe and secure manner during the term of this Agreement and for one year after expiration or earlier termination of this AGREEMENT (or such shorter period specified by CLIENT), after which time ACCELLIENT PARTNERS may dispose of all non-original Records. Original GMP, GLP, GCP study Records and original regulatory submission documents will be returned to the CLIENT or sent to permanent secure off site storage at CLIENT’S expense. ACCELLIENT PARTNERS shall make any and all Records available for inspection or duplication by CLIENT's authorized representatives, with notice, and shall deliver the same at any time to a location specified by written instruction of CLIENT to ACCELLIENT PARTNERS.

 

4.  Debarment.  ACCELLIENT PARTNERS warrants and represents that neither ACCELLIENT PARTNERS nor, to its knowledge, any ACCELLIENT PARTNERS Personnel has ever been, nor is currently, debarred under the Federal Food, Drug and Cosmetic Act. ACCELLIENT PARTNERS further represents and warrants that it has not and shall not knowingly use in any capacity the services of any individual, corporation, partnership, or association that has been debarred under the Federal Food, Drug and Cosmetic Act. In the event ACCELLIENT PARTNERS or any ACCELLIENT PARTNERS personnel becomes debarred or receives a notice of an action or threat of an action with respect to debarment, ACCELLIENT PARTNERS shall immediately notify CLIENT, and CLIENT shall have the right to terminate this AGREEMENT immediately upon written notice to ACCELLIENT PARTNERS without any further obligation or liability hereunder.

 

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5. Inventions. All inventions, (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas, techniques and information in possession of ACCELLIENT PARTNERS on or before the Effective Date of this Agreement (collectively "ACCELLIENT PARTNERS INVENTIONS") shall be owned exclusively by ACCELLIENT PARTNERS. Any improvements to or developments of ACCELLIENT PARTNERS INVENTIONS made after the effective date of this Agreement shall belong exclusively to ACCELLIENT PARTNERS. Improvements to ACCELLIENT PARTNERS INVENTIONS made under the terms of this Agreement shall be made available to CLIENT by way of a nonexclusive worldwide royalty-free license which ACCELLIENT PARTNERS hereby grants to CLIENT. CLIENT shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, sui generis database rights and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all deliverables, reports, inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas, techniques, improvements and information, other than ACCELLIENT PARTNERS INVENTIONS, made or conceived or reduced to practice, in whole or in part, by ACCELLIENT PARTNERS in connection with the Consulting Services or any Proprietary Information (as defined below) (collectively, “CLIENT Inventions”) and ACCELLIENT PARTNERS will promptly disclose and provide all CLIENT Inventions to CLIENT. ACCELLIENT PARTNERS hereby makes all assignments necessary to accomplish said assignment and will take such additional steps as reasonably necessary, at CLIENT's direction and expense (including ACCELLIENT PARTNERS' costs for ACCELLIENT PARTNERS' employees and consultants' time), to prepare necessary documents in connection with the assignment.

 

6. Confidentiality .

 

a) ACCELLIENT PARTNERS agrees that all Inventions and all other business, technical and financial information (including, without limitation, the identity of and information relating to customers or employees of CLIENT) ACCELLIENT PARTNERS learns, creates or obtains in connection with Services or that are received by or for CLIENT in connection with the Consulting Services, constitute “Client Proprietary Information” except as required or necessary by law or regulation. ACCELLIENT PARTNERS, however, shall not be obligated under this paragraph 6 with respect to information ACCELLIENT PARTNERS can document: (i) is or becomes readily publicly available without restriction through no fault of ACCELLIENT PARTNERS; (ii) was known to ACCELLIENT PARTNERS prior to the date of this Agreement and is not subject to another confidentiality obligation to Client; or (iii) was developed or discovered by ACCELLIENT PARTNERS without reference to CLIENT Proprietary Information.

 

b) Upon termination and as otherwise requested by CLIENT, ACCELLIENT PARTNERS will promptly return to CLIENT all items and copies containing or embodying CLIENT Proprietary Information, except that ACCELLIENT PARTNERS may keep copies of its own compensation records and CLIENT Proprietary information as may reasonably be required for ACCELLIENT PARTNERS to comply with law or regulation, and this Agreement.

 

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7. Warranties and Representations. ACCELLIENT PARTNERS warrants and represents the following:

 

a) The Consulting Services will be performed in a professional and workmanlike manner consistent with the highest prevailing applicable industry standards.

 

b) Neither the Consulting Services nor any part of this Agreement is or will be inconsistent with any obligation ACCELLIENT PARTNERS may have to any other party.

 

c) THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT ARE THE SOLE AND EXCLUSIVE WARRANTIES MADE BY ACCELLIENT PARTNERS TO CLIENT. THERE ARE NO OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE PRODUCTS, MATERIALS, OR SERVICES TO BE SUPPLIED UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

 

8. Termination. The term of this AGREEMENT shall begin on the Effective Date and shall remain in force until the conclusion of the project or for 2 (two) years whichever comes first (the “Initial Term”), and this AGREEMENT will automatically renew under the same terms on a month-to-month basis until the renewal is terminated by either party upon delivery to the other party of thirty (30) days written notice.

 

a) Termination by CLIENT: CLIENT may immediately terminate this Agreement at any time upon written notice to ACCELLIENT PARTNERS in the event of a breach of this Agreement by ACCELLIENT PARTNERS which cannot be cured ( e.g., breach of the confidentiality obligations). Further, following the expiration of the Initial Term, CLIENT may terminate this AGREEMENT without cause by giving thirty (30) days prior written notice to ACCELLIENT PARTNERS.

 

b)  Termination by ACCELLIENT PARTNERS : ACCELLIENT PARTNERS may terminate this Agreement upon thirty (30) days prior written notice to CLIENT if CLIENT breaches this Agreement and such breach is not cured within the notice period.

 

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c)  Effect of Expiration or Termination . Upon expiration or termination of this Agreement, neither ACCELLIENT PARTNERS nor CLIENT will have any further obligations under this Agreement, except that (a) ACCELLIENT PARTNERS will terminate all Consulting Services in progress in an orderly manner as soon as practical and in accordance with a schedule agreed to by CLIENT, unless CLIENT specifies in the notice of termination that Consulting Services in progress should be completed, (b) ACCELLIENT PARTNERS will deliver to CLIENT any Records in its possession or control and all Inventions developed through expiration or termination, (c) CLIENT will pay ACCELLIENT PARTNERS any monies due and owing CLIENT, up to the time of termination or expiration, for Consulting Services actually performed and all authorized expenses actually incurred, (d) ACCELLIENT PARTNERS will promptly refund to CLIENT any monies paid by CLIENT in advance for Consulting Services not rendered, (e) ACCELLIENT PARTNERS will immediately return to CLIENT all Proprietary Information and copies thereof provided to ACCELLIENT PARTNERS under this Agreement except for one (1) copy which ACCELLIENT PARTNERS may retain solely to monitor ACCELLIENT PARTNERS’ surviving obligations of confidentiality, and (f) the terms, conditions and obligations under Sections 2, 3, 4, 5, 7(c) and 10 through 15 will survive expiration or termination for any reason.

 

9. Relationship of the Parties. Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent contractor and not as partner, joint venturer, or agent of the other and shall not bind nor attempt to bind the other to any contract. ACCELLIENT PARTNERS is an independent contractor and is solely responsible for all taxes, withholdings, and other statutory or contractual obligations of any sort.

 

10. Indemnification :

a) ACCELLIENT PARTNERS will indemnify and hold harmless CLIENT and its Affiliates and their officers, directors, employees and agents from and against any liability, loss, damage, action, claim or expense (including reasonable attorney’s fees) (collectively, “Losses”) actually incurred and arising from any third party claim relating to (a) a failure by ACCELLIENT PARTNERS to perform the Services materially in accordance with the terms of this Agreement or any such applicable law(s) or regulation(s); or (b) ACCELLIENT PARTNERS’ gross negligence or willful misconduct; in each case save for any Losses for which CLIENT is obligated to indemnify ACCELLIENT PARTNERS hereunder.

 

b) CLIENT will indemnify and hold harmless ACCELLIENT PARTNERS and its Affiliates and their officers, directors, employees and agents from and against any Losses arising from any third party claim relating to (a) CLIENT's research, development, manufacturing, commercialization, exploitation, use or sale of a product; (b) the use or sale of or exposure to a product or any material provided to ACCELLIENT PARTNERS by CLIENT; (c) ACCELLIENT PARTNERS' or CLIENT's use of any of CLIENT's Intellectual Property Rights or any claims of infringement based on any materials or requests for Services provided by CLIENT to ACCELLIENT PARTNERS under this Agreement, or (d) ACCELLIENT PARTNERS' performance of the Services in compliance with this Agreement, in each case save for any Losses for which ACCELLIENT PARTNERS is obligated to indemnify CLIENT hereunder.

 

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c) The indemnified party will notify the indemnifying party forthwith upon becoming aware of the claim, and take all action reasonably requested by the indemnifying party to avoid, compromise or defend the claim, and any proceedings in respect of the claim, subject to the indemnified party being indemnified by the indemnifying party as provided in this Section, and secured to its reasonable satisfaction against all costs and expenses which may be incurred by doing so. The indemnified party’s failure to so notify the indemnifying party or take all action reasonably requested by the indemnifying party will not relieve the indemnifying party of its obligations under this Section unless the indemnifying party is materially prejudiced thereby.

 

11.  Insurance . ACCELLIENT PARTNERS carries, with financially sound and reputable insurers, worker’s compensation insurance with benefits determined by statute.

 

12. Limitation on Liability. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, ACCELLIENT PARTNERS’S LIABILITY TO CLIENT UNDER THIS AGREEMENT FOR ANY BREACH OF THIS AGREEMENT WILL NOT EXCEED AN AMOUNT EQUAL TO THE TOTAL AMOUNT ACTUALLY PAID BY CLIENT TO ACCELLIENT PARTNERS . IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), WHETHER OR NOT FORESEEABLE, ARISING FROM OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER THEREOF.

 

13. Assignment. Except as provided in Section 1(c), this Agreement may not be assigned by ACCELLIENT PARTNERS without the prior written consent of CLIENT. No assignment will relieve either party of the performance of any accrued obligation that such party may then have under this Agreement.

 

14.  Use of Name . Neither party may use the other party’s name in any form of advertising, promotion or publicity, including press releases, without the prior written consent of the other party. ACCELLIENT PARTNERS, however, consents to the use by CLIENT of ACCELLIENT PARTNERS’ name and likeness in written materials and oral presentations to current or prospective customers, partners, investors or others, provided that the materials or presentations accurately describe the nature of ACCELLIENT PARTNERS’ relationship with or services to CLIENT. This section does not restrict a party’s ability to use the other party’s name in filings with the Securities and Exchange Commission, FDA, or other governmental agencies, when required to do so.

 

15. Notice. All notices under this Agreement shall be in writing, and shall be deemed given when personally delivered, or three (3) days after being sent by prepaid certified or registered U.S. mail to the address of the party to be noticed as set forth herein or such other address as such party last provided to the other by written notice.

 

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Canfite BioPharma Ltd. AP Contract Number

 

16. Irreparable Injury: Any breach of Section 6 that may cause irreparable harm to CLIENT for which damages would not be an adequate remedy, and, therefore, CLIENT will be entitled to seek injunctive relief with respect thereto in addition to any other remedies.

 

17. Miscellaneous: The failure of either party to enforce its rights under this Agreement at any time for any period shall not be construed as a waiver of such rights. No changes or modifications or waivers to this Agreement will be effective unless in writing and signed by both parties. In the event that any provision of this Agreement shall be determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. This Agreement shall be governed by and construed in accordance with the laws of Massachusetts without regard to the conflicts of laws provisions thereof. Headings herein are for convenience of reference only and shall in no way affect interpretation of the Agreement.

 

The duly authorized representatives of ACCELLIENT PARTNERS and CLIENT have executed this Consulting Agreement on the date first written above.

 

ACCELLIENT PARTNERS LLC   CANFITE BIOPHARMA LTD
     
By: /s/ William Kerns   By: /s/ Pnina Fishman
Name: William Kerns   Name: Pnina Fishman
Title: CEO   Title: CEO
Tel: 978.456.9975   Tel: +972-3-9241114
Email: bill.kerns@accellient.com   Email:  pnina@canfite.co.il

 

23 May 2010 Page 8 of 11 CONFIDENTIAL
 

 

Canfite BioPharma ACP10004

 

Exhibit 1

 

WORK ORDER #1

 

Management of Drug Development Programs

 

Effective Date of Work Order: 10 May 2010

 

This Work Order (“Work Order”) is between ACCELLIENT PARTNERS Inc. (“ACCELLIENT PARTNERS”) located at 1000 Winter St., Suite 2000, Waltham, MA 02451 and Canfite BioPharma Ltd. (“CLIENT”) located at 10 Bareket Street, Petach-Tivka, 49170, Israel and relates to the Consulting Services Agreement dated 10 May 2010 (the “CSA”), which is incorporated by reference herein. Pursuant to the CSA, ACCELLIENT PARTNERS has agreed to perform certain services in accordance with written work orders, such as this one, entered into from time-to-time.

 

SCOPE OF WORK

ACCELLIENT PARTNERS shall provide pharmaceutical and/or device consulting and project management services to CLIENT in the areas of:

 

Due diligence, investor support, discovery candidate selection, drug substance and drug product manufacturing, analytical chemistry, formulation development, pharmacology, metabolism, bioanalytical method development, pharmacokinetics, toxicology, regulatory submissions and/or clinical development (the “Field”) in pursuit of therapeutic products and/or devices as well as providing services outside of the Field with mutual written agreement of the parties.

 

Specifically this project covers full development support for Canfite BioPharma.

 

FEES

In consideration of CLIENT’s acceptance of this AGREEMENT, CLIENT shall pay ACCELLIENT PARTNERS at the rates specified below for Consulting Services provided by ACCELLIENT PARTNERS.

 

Table 1. ACCELLIENT PARTNERS’ RATES

 

    Consulting        
Consultant   Rate (/hr)     Travel Rate (/hr)  
CEO   $ 350     $ 175  
COO   $ 250     $ 125  
Executive VP   $ 300     $ 150  
Principal (eg. PhD)   $ 250-350     $ 137-175  
Associate (eg. eCTD/Regulatory Docs/PM)   $ 150-200     $ 75-100  
Clinician (eg., MD)   $ 400-450     $ 200-225  

 

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FIXED COST ACTIVITIES

APTUIT CONSULTING will invoice client $1200.00 monthly for US office support, (mail, phone, general administration), US agent fees, Sharepoint filing and document maintenance and retention.

 

Additional consulting services requested outside of those above may also be provided at the rates outlined in Table 1.

 

ACCELLIENT PARTNERS shall bill CLIENT monthly for all Consulting Services and each invoice shall provide a detailed accounting by project and tasks and the total hours spent working on each task. The invoice shall include all office meetings, conferences, phone discussions, email correspondence, research, and report preparation. Travel time between the hours of 1800 and 0800 will be billed at 50% of the regular consulting rate as specified in Table 1. Work performed outside ACCELLIENT PARTNERS’ offices will be billed in 4 hour increments for site visits local to the consultant; additional time be billed in one hour increments; work performed at sites that require air/rail travel will be billed minimally at 8 hours per day with additional hours in 1 hour increments; work performed in ACCELLIENT PARTNERS’ offices will be billed in 15 minute increments. ACCELLIENT PARTNERS’ fee schedule is subject to change with sixty (60) day written notification. Changes in rates will be deemed accepted by the CLIENT thirty (30) days from the notice of such change.

 

In addition to its other duties of payment under this Agreement, CLIENT agrees to pay all fees incurred by ACCELLIENT PARTNERS including pass-through expenses, unless CLIENT provides written notice to ACCELLIENT PARTNERS to cease providing services. Upon receipt of such written notice, ACCELLIENT PARTNERS shall cease work for the CLIENT and invoice client for fees and pass through expenses incurred through the receipt of notice.

 

CLIENT shall pre-pay or reimburse ACCELLIENT PARTNERS for all out-of-pocket expenses incurred by ACCELLIENT PARTNERS in the performance of the Consulting Services. Such expenses include, but are not limited to, express mail delivery, travel, meals, taxis and lodging. Telephone calls are not reimbursable. All airline travel shall be via commercial airline at full refundable coach fare for travel less than 5 hours or full business (international) or first (North America) class fare for travel greater than 5 hours. Expenses will be itemized on each invoice.

 

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Canfite BioPharma Ltd. AP Contract Number

 

INVOICES

Invoices should be sent to:

 

Client Name: Canfite BioPharma, Ltd.
Contact Name: Motti Farbstein
Address: 10 Bareket Street, Petach-Tivka, 49170,  Israel
Email Address: Motti@canfite.co.il
Telephone Number: +972-3-9241114

 

Each invoice is payable upon presentation, net 30 days, unless disputed in writing. Undisputed amounts not paid within 30 days are subject to interest charges at a rate of 1.5% per month. Such interest will be accrued and added to subsequent billings. In the event that legal proceedings are required to collect fees and expenses owed, CLIENT shall pay all reasonable attorneys'fees and other costs of collection.

 

PAYMENTS

All payments must be made in US dollars drawn on a US Bank. It is preferred that CLIENTS remit payment by wire transfer, especially for international payments. Invoicing directions are stated on the invoice.

 

The duly authorized representatives of ACCELLIENT PARTNERS and CLIENT have executed this Work Order on the date first written above.

 

ACCELLIENT PARTNERS LLC   CANFITE BIOPHARMA LTD
     
By: /s/ William Kerns   By: /s/ Pnina Fishman
Name: William Kerns   Name: Pnina Fishman
Title: CEO   Title: CEO
Tel: 978.456.9975   Tel: +972-3-9241114
Email: bill.kerns@accellient.com   Email:  pnina@canfite.co.il

 

23 May 2010 Page 11 of 11 CONFIDENTIAL

 

 

Exhibit 4. 7

 

PUBLIC HEALTH SERVICE

 

PATENT LICENSE AGREEMENT— EXCLUSIVE

 

COVER PAGE

 

For PHS internal use only:

 

  Patent License Number:    
       
  L-249-2001/0    
       
  Serial Number(s) of Licensed Patent(s) and/or Patent Application(s):
       
  08/091.109: 08/163,324: 5,773,423    
       
  Licensee:    
       
  Can-Fite BioPharma, Ltd.    
       
  Cooperative Research and Development Agreement (CRADA) Number (if applicable):
   
       
       
  Additional Remarks:    
       
       
       
       
       
       
       
  Public Benefit(s):    
       
       

 

This Patent License Agreement, hereinafter referred to as the “Agreement”, consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A (List of Patent(s) and/or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D (Modifications), Appendix E (Benchmarks), and Appendix F (Commercial Development Plan). The Parties to this Agreement are:

 

1) The National Institutes of Health (“NIH”), the Centers for Disease Control and Prevention (“CDC”), or the Food and Drug Administration (“FDA”), hereinafter singly or collectively referred to as “ PHS ”, agencies of the United States Public Health Service within the Department of Health and Human Services ( “DHHS” ); and

 

2) The person, corporation, or institution identified above and/or on the Signature Page, having offices at the address indicated on the Signature Page, hereinafter referred to as “Licensee”.

 

CONFIDENTIAL PHS Patent License Agreement— Exclusive L-249-01/0 with CanFite

Model 980611a Page 1 of 23, December 3, 2002, FILE: L249010FINAL

 

 
 

 

PHS PATENT LICENSE AGREEMENT —EXCLUSIVE

 

PHS and Licensee agree as follows:

 

1. BACKGROUND

 

1.01 In the course of conducting biomedical and behavioral research, PHS investigators made inventions that may have commercial applicability.

 

1.02 By assignment of rights from PHS employees and other inventors, DHHS , on behalf of the United States Government, owns intellectual property rights claimed in any United States and/or foreign patent applications or patents corresponding to the assigned inventions. DHHS also owns any tangible embodiments of these inventions actually reduced to practice by PHS .

 

1.03 The Secretary of DHHS has delegated to PHS the authority to enter into this Agreement for the licensing of rights to these inventions.

 

1.04 PHS desires to transfer these inventions to the private sector through commercialization licenses to facilitate the commercial development of products and processes for public use and benefit.

 

1.05 Licensee desires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, and/or marketable products for public use and benefit.

 

2. DEFINITIONS

 

2.01 “Benchmarks” mean the performance milestones that are set forth in Appendix E.

 

2.02 “Commercial Development Plan” means the written commercialization plan attached as Appendix F.

 

2.03 “First Commercial Sale” means the initial transfer by or on behalf of Licensee or its sublicensees of Licensed Products or the initial practice of a Licensed Process by or on behalf of Licensee or its sublicensees in exchange for cash or some equivalent to which value can be assigned for the purpose of determining Net Sales .

 

2.04 “Government” means the Government of the United States of America.

 

2.05 “Licensed Fields of Use” means the fields of use identified in Appendix B.

 

2.06 “Licensed Patent Rights” shall mean:

 

a) Patent applications (including provisional patent applications and PCT patent applications) and/or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from such applications, divisions, and continuations, and any reissues, reexaminations, and extensions of all such patents;

 

b) to the extent that the following contain one or more claims directed to the invention or inventions disclosed in a) above: i) continuations-in-part of a) above; ii) all divisions and continuations of these continuations-in-part; iii) all patents issuing from such continuations-in-part, divisions, and continuations; iv) priority patent application(s) of a) above; and v) any reissues, reexaminations, and extensions of all such patents;

 

CONFIDENTIAL PHS Patent License Agreement— Exclusive L-249-01/0 with CanFite

Model 980611a Page 2 of 23, December 3, 2002, FILE: L249010FINAL

 

 
 

 

c) to the extent that the following contain one or more claims directed to the invention or inventions disclosed in a) above: all counterpart foreign and U.S. patent applications and patents to a) and b) above, including those listed in Appendix A.

 

Licensed Patent Rights shall not include b) or c) above to the extent that they contain one or more claims directed to new matter which is not the subject matter disclosed in a) above.

 

2.07 “Licensed Process(es)” means processes which, in the course of being practiced would be within the scope of one or more claims of the Licensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction.

 

2.08 “Licensed Product(s)” means tangible materials which, in the course of manufacture, use, sale, or importation would be within the scope of one or more claims of the Licensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction.

 

2.09 “Licensed Territory” means the geographical area identified in Appendix B.

 

2.10 “Net Sales” means the total gross receipts for sales of Licensed Products or practice of Licensed Processes by or on behalf of Licensee or its sublicensees, and from leasing, renting, or otherwise making Licensed Products available to others without sale or other dispositions, whether invoiced or not, less returns and allowances, packing costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separately invoiced), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted. No deductions shall be made for commissions paid to individuals, whether they be with independent sales agencies or regularly employed by Licensee, or sublicensees, and on its payroll, or for the cost of collections.

 

2.11 “Practical Application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and in each case, under such conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law or Government regulations available to the public on reasonable terms.

 

2.12 “Research License” means a nontransferable, nonexclusive license to make and to use the Licensed Products or Licensed Processes as defined by the Licensed Patent Rights for purposes of research and not for purposes of commercial manufacture or distribution or in lieu of purchase.

 

3 GRANT OF RIGHTS

 

3.01 PHS hereby grants and Licensee accepts, subject to the terms and conditions of this Agreement , an exclusive license under the Licensed Patent Rights in the Licensed Territory to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import any Licensed Products in the Licensed Fields of Use and to practice and have practiced any Licensed Processes in the Licensed Fields of Use.

 

CONFIDENTIAL PHS Patent License Agreement— Exclusive L-249-01/0 with CanFite

Model 980611a Page 3 of 23, December 3, 2002, FILE: L249010FINAL

 

 
 

 

3.02 This Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of PHS other than Licensed Patent Rights regardless of whether such patents are dominant or subordinate to Licensed Patent Rights .

 

4. SUBLICENSING

 

4.01 Upon written approval by PHS , which approval will not be unreasonably withheld, Licensee may enter into sublicensing agreements under the Licensed Patent Rights .

 

4.02 Licensee agrees that any sublicenses granted by it shall provide that the obligations to PHS of Paragraphs 5.01-5.04, 8.01, 10.01, 10.02, 12.05, and 13.07-13.09 of this Agreement shall be binding upon the sublicensee as if it were a party to this Agreement . Licensee further agrees to attach copies of these Paragraphs to all sublicense agreements.

 

4.03 Any sublicensee granted by Licensee shall provide for the termination of the sublicense, or the conversion to a license directly between such sublicensees and PHS , at the option of the sublicensee, upon termination of this Agreement under Article 13. Such conversion is subject to PHS approval and contingent upon acceptance by the sublicensee of the remaining provisions of this Agreement .

 

4.04 Licensee agrees to forward to PHS a copy of each fully executed sublicense agreement postmarked within thirty (30) days of the execution of such agreement. To the extent permitted law, PHS agrees to maintain each such sublicense agreement in confidence.

 

5. STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 

  5.01 (a) PHS reserves on behalf of the Government an irrevocable, nonexclusive, nontransferable, royalty-free license for the practice of all inventions licensed under the Licensed Patent Rights throughout the world by or on behalf of the Government and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the Government is a signatory. Prior to the First Commercial Sale , Licensee agrees to provide PHS reasonable quantities of Licensed Products or materials made through the Licensed Processes for PHS research use.

 

(b) In the event that Licensed Patent Rights are Subject Inventions made under a Cooperative Research and Development Agreement (CRADA), Licensee grants to the Government, pursuant to 15 U.S.C. 3710a(b)(l)(A), a nonexclusive, nontransferable, irrevocable, paid-up license to practice Licensed Patent Rights or have Licensed Patent Rights practiced throughout the world by or on behalf of the Government. In the exercise of such license, the Government shall not publicly disclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of 5 U.S.C. 552(b)(4) or which would be considered as such if it had been obtained from a non-Federal party. Prior to the First Commercial Sale, Licensee agrees to provide PHS reasonable quantities of Licensed Products or materials made through the Licensed Processes for PHS research use.

 

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5.02 Licensee agrees that products used or sold in the United States embodying Licensed Products or produced through use of Licensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from PHS .

 

5.03 Licensee acknowledges that PHS may enter into future Cooperative Research and Development Agreements (CRADAs) under the Federal Technology Transfer Act of 1986 that relate to the subject matter of this Agreement . Licensee agrees not to unreasonably deny requests for a Research License from such future collaborators with PHS when acquiring such rights is necessary in order to make a Cooperative Research and Development Agreement (CRADA) project feasible. Licensee may request an opportunity to join as a party to the proposed Cooperative Research and Development Agreement (CRADA).

 

5.04 (a) In addition to the reserved license of Paragraph 5.01 above, PHS reserves the right to grant nonexclusive Research Licenses directly or to require Licensee to grant nonexclusive Research Licenses on reasonable terms. The purpose of this Research License is to encourage basic research, whether conducted at an academic or corporate facility. In order to safeguard the Licensed Patent Rights , however, PHS shall consult with Licensee before granting to commercial entities a Research License or providing to them research samples of materials made through the Licensed Processes .

 

(b) In exceptional circumstances, and in the event that Licensed Patent Rights are Subject Inventions made under a Cooperative Research and Development Agreement (CRADA), the Government, pursuant to 15 U.S.C. 3710a(b)(1)(B), retains the right to require the Licensee to grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive sublicense to use Licensed Patent Rights in Licensee’s field of use on terms that are reasonable under the circumstances; or if Licensee fails to grant such a license, the Government retains the right to grant the license itself. The exercise of such rights by the Government shall only be in exceptional circumstances and only if the Government determines (i) the action is necessary to meet health or safety needs that are not reasonably satisfied by Licensee ; (ii) the action is necessary to meet requirements for public use specified by Federal regulations, and such requirements are not reasonably satisfied by the Licensee ; or (iii) the Licensee has failed to comply with an agreement containing provisions described in 15 U.S.C. 37l0a(c)(4)(B). The determination made by the Government under this Article is subject to administrative appeal and judicial review under 35 U.S.C. 203(2).

 

6. ROYALTIES AND REIMBURSEMENT

 

6.01 Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue royalty as set forth in Appendix C within thirty (30) days from the date that this Agreement becomes effective.

 

6.02 Licensee agrees to pay to PHS a nonrefundable minimum annual royalty as set forth in Appendix C. The minimum annual royalty is due and payable on January 1 of each calendar year and may be credited against any earned royalties due for sales made in that year. The minimum annual royalty for the first calendar year of this Agreement is due and payable within thirty (30) days of execution of this license and may be prorated according to the fraction of the calendar year remaining between the effective date of this Agreement and the next subsequent January 1.

 

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6.03 Licensee agrees to pay PHS earned royalties as set forth in Appendix C.

 

6.04 Licensee agrees to pay PHS benchmark royalties as set forth in Appendix C.

 

6.05 Licensee agrees to pay PHS sublicensing royalties as set forth in Appendix C.

 

6.06 A patent or patent application licensed under this Agreement shall cease to fall within the Licensed Patent Rights for the purpose of computing earned royalty payments in any given country on the earliest of the dates that a) the application has been abandoned and not continued, b) the patent expires or irrevocably lapses, or c) the claim has been held to be invalid or unenforceable by an unappealed or unappealable decision of a court of competent jurisdiction or administrative agency.

 

6.07 No multiple royalties shall be payable because any Licensed Products or Licensed Processes are covered by more than one of the Licensed Patent Rights .

 

6.08 On sales of Licensed Products by Licensee to sublicensees or on sales made in other than an arm’s -length transaction, the value of the Net Sales attributed under this Article 6 to such a transaction shall be that which would have been received in an arm’s-length transaction, based on sales of like quantity and quality products on or about the time of such transaction.

 

6.09 With regard to expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the Licensed Patent Rights incurred by PHS prior to the effective date of this Agreement , Licensee shall pay to PHS , as an additional royalty, within sixty (60) days of PHS ’s submission of a statement and request for payment to Licensee, an amount equivalent to such patent expenses previously incurred by PHS .

 

6.10 With regard to expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the Licensed Patent Rights incurred by PHS on or after the effective date of this Agreement , PHS, at its sole option, may require Licensee:

 

(a) to pay PHS on an annual basis, within sixty (60) days of PHS ’s submission of a statement and request for payment, a royalty amount equivalent to all such patent expenses incurred during the previous calendar year(s); or

 

(b) to pay such expenses directly to the law firm employed by PHS to handle such functions. However, in such event, PHS and not Licensee shall be the client of such law firm.

 

In limited circumstances, Licensee may be given the right to assume responsibility for the preparation, filing, prosecution, or maintenance of any patent application or patent included with the Licensed Patent Rights. In that event, Licensee shall directly pay the attorneys or agents engaged to prepare, file, prosecute, or maintain such patent applications or patents and shall provide to PHS copies of each invoice associated with such services as well as documentation that such invoices have been paid.

 

6.11 Licensee may elect to surrender its rights in any country of the Licensed Territory under any Licensed Patent Rights upon ninety (90) days written notice to PHS and owe no payment obligation under Article 6.10 for patent-related expenses incurred in that country after ninety (90) days of the effective date of such written notice.

 

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7. PATENT FILING, PROSECUTION, AND MAINTENANCE

 

7.01 Except as otherwise provided in this Article 7, PHS agrees to take responsibility for, but to consult with, the Licensee in the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights and shall furnish copies of relevant patent-related documents to Licensee .

 

7.02 Upon PHS’s written request, Licensee shall assume the responsibility for the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights and shall on an ongoing basis promptly furnish copies of all patent-related documents to PHS . In such event, Licensee shall, subject to the prior approval of PHS , select registered patent attorneys or patent agents to provide such services on behalf of Licensee and PHS . PHS shall provide appropriate powers of attorney and other documents necessary to undertake such actions to the patent attorneys or patent agents providing such services. Licensee and its attorneys or agents shall consult with PHS in all aspects of the preparation, filing, prosecution and maintenance of patent applications and patents included within the Licensed Patent Rights and shall provide PHS sufficient opportunity to comment on any document that Licensee intends to file or to cause to be filed with the relevant intellectual property or patent office.

 

7.03 At any time, PHS may provide Licensee with written notice that PHS wishes to assume control of the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights . If PHS elects to assume such responsibilities, Licensee agrees to cooperate fully with PHS , its attorneys, and agents in the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights and to provide PHS with complete copies of any and all documents or other materials that PHS deems necessary to undertake such responsibilities. Licensee shall be responsible for all costs associated with transferring patent prosecution responsibilities to an attorney or agent of PHS’s choice.

 

7.04 Each party shall promptly inform the other as to all matters that come to its attention that may affect the preparation, filing, prosecution, or maintenance of the Licensed Patent Rights and permit each other to provide comments and suggestions with respect to the preparation, Filing, prosecution, and maintenance of Licensed Patent Rights, which comments and suggestions shall be considered by the other party.

 

8. RECORD KEEPING

 

8.01 Licensee agrees to keep accurate and correct records of Licensed Products made, used, sold, or imported and Licensed Processes practiced under this Agreement appropriate to determine the amount of royalties due PHS . Such records shall be retained for at least five (5) years following a given reporting period and shall be available during normal business hours for inspection at the expense of PHS by an accountant or other designated auditor selected by PHS for the sole purpose of verifying reports and payments hereunder. The accountant or auditor shall only disclose to PHS information relating to the accuracy of reports and payments made under this Agreement . If an inspection shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then Licensee shall reimburse PHS for the cost of the inspection at the time Licensee pays the unreported royalties, including any late charges as required by Paragraph 9.08 of this Agreement . All payments required under this Paragraph shall be due within thirty (30) days of the date PHS provides Licensee notice of the payment due.

 

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8.02 Licensee agrees to have an audit of sales and royalties conducted by an independent auditor at least every two (2) years if annual sales of the Licensed Product or Licensed Processes are over two (2) million dollars. The audit shall address, at a minimum, the amount of gross sales by or on behalf of Licensee during the audit period, terms of the license as to percentage or fixed royalty to be remitted to the Government, the amount of royalty funds owed to the Government under this Agreement, and whether the royalty amount owed has been paid to the Government and is reflected in the records of the Licensee . The audit shall also indicate the PHS license number, product, and the time period being audited. A report certified by the auditor shall be submitted promptly by the auditor directly to PHS on completion. Licensee shall pay for the entire cost of the audit.

 

9 REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

 

9.01 Prior to signing this Agreement, Licensee has provided to PHS the Commercial Development Plan at Appendix F, under which Licensee intends to bring the subject matter of the Licensed Patent Rights to the point of Practical Application. This Commercial Development Plan is hereby incorporated by reference into this Agreement . Based on this plan, performance Benchmarks are determined as specified in Appendix E.

 

9.02 Licensee shall provide written annual reports on its product development progress or efforts to commercialize under the Commercial Development Plan for each of the Licensed Fields of Use within sixty (60) days after December 31 of each calendar year. These progress reports shall include, but not be limited to; progress on research and development, status of applications for regulatory approvals, manufacturing, sublicensing, marketing, importing, and sales during the preceding calendar year, as well as plans for the present calendar year. PHS also encourages these reports to include information on any of Licensee’s public service activities that relate to the Licensed Patent Rights . If reported progress differs from that projected in the Commercial Development Plan and Benchmarks, Licensee shall explain the reasons for such differences. In any such annual report, Licensee may propose amendments to the Commercial Development Plan, acceptance of which by PHS may not be denied unreasonably. Licensee agrees to provide any additional information reasonably required by PHS to evaluate Licensee’s performance under this Agreement . Licensee may amend the Benchmarks at any time upon written consent by PHS . PHS shall not unreasonably withhold approval of any request of Licensee to extend the time periods of this schedule if such request is supported by a reasonable showing by Licensee of diligence in its performance under the Commercial Development Plan and toward bringing the Licensed Products to the point of Practical Application as defined in 37 CFR 404.3(d). Licensee shall amend the Commercial Development Plan and Benchmarks at the request of PHS to address any Licensed Fields of Use not specifically addressed in the plan originally submitted.

 

9.03 Licensee shall report to PHS the dates for achieving Benchmarks specified in Appendix E and the First Commercial Sale in each country in the Licensed Territory within thirty (30) days of such occurrences.

 

9.04 Licensee shall submit to PHS within sixty (60) days after each calendar half-year ending June 30 and December 31 a royalty report setting forth for the preceding half-year period the amount of the Licensed Products sold or Licensed Processes practiced by or on behalf of Licensee in each country within the Licensed Territory, the Net Sales, and the amount of royalty accordingly due. With each such royalty report, Licensee shall submit payment of the earned royalties due, If no earned royalties are due to PHS for any reporting period, the written report shall so state. The royalty report shall be certified as correct by an authorized officer of Licensee and shall include a detailed listing of all deductions made under Paragraph 2.10 to determine Net Sales made under Article 6 to determine royalties due.

 

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9.05 Licensee agrees to forward semi-annually to PHS a copy of such reports received by Licensee from its sublicensees during the preceding half-year period as shall be pertinent to a royalty accounting to PHS by Licensee for activities under the sublicense.

 

9.06 Royalties due under Article 6 shall be paid in U.S. dollars. For conversion of foreign currency to U.S. dollars, the conversion rate shall be the New York foreign exchange rate quoted in The Wall Street Journal on the day that the payment is due. All checks and bank drafts shall be drawn on United States banks and shall be payable, as appropriate, to “NIH/Patent Licensing.” All such payments shall be sent to the following address: NIH, P.O. Box 360120, Pittsburgh, PA 15251-6120. Any loss of exchange, value, taxes, or other expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely by Licensee. The royalty report required by Paragraph 9.04 of this Agreement shall accompany each such payment, and a copy of such report shall also be mailed to PHS at its address for notices indicated on the Signature Page of this Agreement .

 

9.07 Licensee shall be solely responsible for determining if any tax on royalty income is owed outside the United States and shall pay any such tax and be responsible for all filings with appropriate agencies of foreign governments,

 

9.08 Interest and penalties may be assessed by PHS on any overdue payments in accordance with the Federal Debt Collection Act. The payment of such late charges shall not prevent PHS from exercising any other rights it may have as a consequence of the lateness of any payment.

 

9.09 All plans and reports required by this Article 9 and marked “confidential” by Licensee shall, to the extent permitted by law, be treated by PHS as commercial and financial information obtained from a person and as privileged and confidential, and any proposed disclosure of such records by the PHS under the Freedom of Information Act (FOIA), 5 U.S.C. §552 shall be subject to the predisclosure notification requirements of 45 CFR §5.65(d).

 

9.10 Licensee shall submit to PHS a satisfactory clinical research and development plan for the non- prime indications listed in Appendix B within six (6) months from the date that this Agreement becomes effective. That development plan will include new Appendix E performance benchmarks and updating of the Appendix F Commercial Development Plan as necessary to encompass the clinical development of the non-prime indications. PHS will notify Licensee in writing as to whether the development plan submitted is satisfactory. If PHS determines the clinical research and development plan submitted by Licensee to be unsatisfactory, Licensee will be notified in writing of any deficiencies and Licensee will be provided with an additional ninety (90) days to remedy the deficiencies. Acceptance of said clinical research and development program for the non-prime indications shall not be unreasonably withheld and which shall take into account Licensee’s ongoing efforts and normal drag development standards for obtaining FDA approval for multiple indication prophylactic and therapeutic products. If PHS reasonably determines that Licensee did not submit a satisfactory development plan during the ninety day period, PHS may withdraw the non-prime indications from the Appendix B Licensed Fields of Use upon written notification to the Licensee. Licensee agrees that withdrawal under this Paragraph of the non-prime indications is not subject to further remedies under Article 13. Withdrawal of the non-prime indications under this Paragraph by PHS shall not affect Licensee rights under the Licensed Patent Rights for the Appendix B prime Licensed Fields of Use indications.

 

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9.11 Licensee agrees to use reasonable efforts to provide (itself or through a sublicensee) education programs and materials to the United States public with respect to the indications listed in the Licensed Fields of Use. Furthermore, following regulatory approval for marketing Licensed Products in the United States, Licensee agrees to establish or provide through a sublicensee an indigent patient access program for Licensed Products (or to include Licensed Products in an existing indigent patient access program), in accordance with customary and standard industry practice, such that reasonable quantities of Licensed Products may be provided to qualified indigent citizens of the United States who are not covered under any public or private health plan. Licensee further agrees, following regulatory approval for marketing Licensed Products in the United States, and as part of its marketing and product promotion, to develop (itself or through a sublicensee) written educational materials (including, for example brochures and advertisements) directed to patients and physicians detailing the Licensed Products and therapeutic uses thereof.

 

10 PERFORMANCE

 

10.01 Licensee shall use its reasonable best efforts to bring the Licensed Products and Licensed Processes to Practical Application. “Reasonable best efforts” for the purposes of this provision shall include adherence to the Commercial Development Plan at Appendix F and performance of the Benchmarks at Appendix E. The efforts of a sublicensee shall be considered the efforts of Licensee .

 

10.02 Upon the First Commercial Sale, until the expiration of this Agreement, Licensee shall use its reasonable best efforts to make Licensed Products and Licensed Processes reasonably accessible to the United States public.

 

11. INFRINGEMENT AND PATENT ENFORCEMENT

 

11.01 PHS and Licensee agree to notify each other promptly of each infringement or possible infringement of the Licensed Patent Rights, as well as any facts which may affect the validity, scope, or enforceability of the Licensed Patent Rights of which either Party becomes aware.

 

11.02 Pursuant to this Agreement and the provisions of Chapter 29 of title 35, United States Code, Licensee may: a) bring suit in its own name, at its own expense, and on its own behalf for infringement of presumably valid claims in the Licensed Patent Rights; b) in any such suit, enjoin infringement and collect for its use, damages, profits, and awards of whatever nature recoverable for such infringement; and c) settle any claim or suit for infringement of the Licensed Patent Rights provided, however, that PHS and appropriate Government authorities shall have the first right to take such actions. If Licensee desires to initiate a suit for patent infringement, Licensee shall notify PHS in writing. If PHS does not notify Licensee of its intent to pursue legal action within ninety (90) days, Licensee will be free to initiate suit. PHS shall have a continuing right to intervene in such suit. Licensee shall take no action to compel the Government either to initiate or to join in any such suit for patent infringement. Licensee may request the Government to initiate or join in any such suit if necessary to avoid dismissal of the suit. Should the Government be made a party to any such suit, Licensee shall reimburse the Government for any costs, expenses, or fees which the Government incurs as a result of such motion or other action, including any and all costs incurred by the Government in opposing any such motion or other action. In all cases, Licensee agrees to keep PHS reasonably apprised of the status and progress of any litigation. Before Licensee commences an infringement action, Licensee shall notify PHS and give careful consideration to the views of PHS and to any potential effects of the litigation on the public health in deciding whether to bring suit.

 

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11.03 In the event that a declaratory judgment action alleging invalidity or non-infringement of any of the Licensed Patent Rights shall be brought against Licensee or raised by way of counterclaim or affirmative defense in an infringement suit brought by Licensee under Paragraph 11.02, pursuant to this Agreement and the provisions of Chapter 29 of Title 35, United States Code or other statutes, Licensee may: a) defend the suit in its own name, at its own expense, and on its own behalf for presumably valid claims in the Licensed Patent Rights; b) in any such suit, ultimately to enjoin infringement and to collect for its use, damages, profits, and awards of whatever nature recoverable for such infringement; and c) settle any claim or suit for declaratory judgment involving the Licensed Patent Rights -provided, however, that PHS and appropriate Government authorities shall have the first right to take such actions and shall have a continuing right to intervene in such suit. If PHS does not notify Licensee of its intent to respond to the legal action within a reasonable time, Licensee will be free to do so. Licensee shall take no action to compel the Government either to initiate or to join in any such declaratory judgment action. Licensee may request the Government to initiate or to join any such suit if necessary to avoid dismissal of the suit. Should the Government be made a party to any such suit by motion or any other, action of Licensee, Licensee shall reimburse the Government for any costs, expenses, or fees which the Government incurs as a result of such motion or other action. If Licensee elects not to defend against such declaratory judgment action, PHS, at its option, may do so at its own expense. In all cases, Licensee agrees to keep PHS reasonably apprised of the status and progress of any litigation. Before Licensee commences an infringement action. Licensee shall notify PHS and give careful consideration to the views of PHS and to any potential effects of the litigation on the public health in deciding whether to bring suit.

 

11.04 In any action under Paragraphs 11.02 or 11.03, the expenses including costs, fees, attorney fees, and disbursements (Action-related Expenses) shall be paid by Licensee. The value of any recovery less Action-elated Expenses made by Licensee through court judgment or settlement shall be treated as Net Sales and subject to earned royalties.

 

11.05 PHS shall cooperate fully with Licensee in connection with any action under Paragraphs 11.02 or 11.03. PHS agrees promptly to provide access to all necessary documents and to render reasonable assistance in response to a request by Licensee .

 

12. NEGATION OF WARRANTIES AND INDEMNIFICATION

 

12.01 PHS offers no warranties other than those specified in Article 1.

 

12.02 PHS does not warrant the validity of the Licensed Patent Rights and makes no representations whatsoever with regard to the scope of the Licensed Patent Rights, or that the Licensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties.

  

12.03 PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.

 

12.04 PHS does not represent that it will commence legal actions against third parties infringing the Licensed Patent Rights .

 

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12.05 Licensee shall indemnify and hold PHS, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage in connection with or arising out of; a) the use by or on behalf of Licensee, its sublicensees, directors, employees, or third parties of any Licensed Patent Rights; or b) the design, manufacture, distribution, or use of any Licensed Products, Licensed Processes or materials by Licensee , or other products or processes developed in connection with or arising out of the Licensed Patent Rights . Licensee agrees to maintain a liability insurance program consistent with sound business practice.

 

13. TERM, TERMINATION; AND MODIFICATION OF RIGHTS

  

  13.01 This Agreement is effective when signed by all parties and shall extend to the expiration of the last to expire of the Licensed Patent Rights unless sooner terminated as provided in this Article 13.

 

  13.02 In the event that Licensee is in default in the performance of any material obligations under this Agreement , including but not limited to the obligations listed in Article 13.05, and if the default has not been remedied within ninety (90) days after the date of notice in writing of such default, PHS may terminate this Agreement by written notice and pursue outstanding amounts owed through procedures provided by the Federal Debt Collection Act.

 

  13.03

In the event that Licensee becomes insolvent, files a petition in bankruptcy, has such a petition filed against it, determines to file a petition in bankruptcy, or receives notice of a third party’s intention to file an involuntary petition in bankruptcy, Licensee shall immediately notify PHS in writing. Furthermore, PHS shall have the right to terminate this Agreement immediately upon Licensee’s receipt of written notice.

 

  13.04 Licensee shall have a unilateral right to terminate this Agreement and/or any licenses in any country or territory by giving PHS sixty (60) days written notice to that effect.

 

  13.05 PHS shall specifically have the right to terminate or modify, at its option, this Agreement, if PHS determines that the Licensee: 1) is not executing the Commercial Development Plan submitted with its request for a license and the Licensee cannot otherwise demonstrate to PHS’s satisfaction that the Licensee has taken, or can be expected to take within a reasonable time, effective steps to achieve Practical Application of the Licensed Products or Licensed Processes; 2) has not achieved the Benchmarks as may be modified under Paragraph 9.02; 3) has willfully made a false statement of, or willfully omitted, a material fact in the license application or in any report required by the license Agreement ; 4) has committed a material breach of a covenant or agreement contained in the license; 5) is not keeping Licensed Products or Licensed Processes reasonably available to the public after commercial use commences; 6) cannot reasonably satisfy unmet health and safety needs; or 7) cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.02 unless waived. In making this determination, PHS will take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by Licensee under Paragraph 9.02. Prior to invoking this right, PHS shall give written notice to Licensee providing Licensee specific notice of, and a ninety (90) day opportunity to respond to, PHS’s concerns as to the previous items 1) to 7). If Licensee fails to alleviate PHS’s concerns as to the previous items 1) to 7) or fails to initiate corrective action to PHS’s satisfaction, PHS may terminate this Agreement.

 

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13.06 When the public health and safety so require, and after written notice to Licensee providing Licensee a sixty (60) day opportunity to respond, PHS shall have the right to require Licensee to grant sublicenses to responsible applicants, on reasonable terms, in any Licensed Fields of Use under the Licensed Patent Rights, unless Licensee can reasonably demonstrate that the granting of the sublicense would not materially increase the availability to the public of the subject matter of the Licensed Patent Rights. PHS will not require the granting of a sublicense unless the responsible applicant has first negotiated in good faith with Licensee .

 

13.07 PHS reserves the right according to 35 U.S.C. §209(f)(4) to terminate or modify this Agreement if it is determined that such action is necessary to meet requirements for public use specified by federal regulations issued after the date of the license and such requirements are not reasonably satisfied by Licensee.

 

13.08 Within thirty (30) days of receipt of written notice of PHS’s unilateral decision to modify or terminate this Agreement, Licensee may, consistent with the provisions of 37 CFR 404.11, appeal the decision by written submission to the designated PHS official. The decision of the designated PHS official shall be the final agency decision. Licensee may thereafter exercise any and all administrative or judicial remedies that may be available.

 

13.09 Within ninety (90) days of expiration or termination of this Agreement under this Article 13, a final report shall be submitted by Licensee . Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense, due to PHS shall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicenses may elect to convert their sublicensees to direct licenses with PHS pursuant to Paragraph 4.03. Unless otherwise specifically provided for under this Agreement , upon termination or expiration of this Agreement, Licensee shall return all Licensed Products or other materials included Within the Licensed Patent Rights to PHS or provide PHS with certification of the destruction thereof.

 

13.10 Non-exclusive License Agreement L-042-00/0 between Licensee and PHS shall terminate on the date that this Agreement becomes effective.

 

14. GENERAL PROVISIONS

 

14.01 Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of the Government to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right by the Government or excuse a similar subsequent failure to perform any such term or condition by Licensee .

 

14.02 This Agreement constitutes the entire agreement between the Parties relating to the subject matter of the Licensed Patent Rights, and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by this Agreement.

 

14.03 The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, such determination shall not in any way affect the validity or enforceability of the remaining provisions of this Agreement.

 

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14.04 If either Party desires a modification to this Agreement, the Parties shall, upon reasonable notice of the proposed modification by the Party desiring the change, confer in good faith to determine the desirability of such modification. No modification will be effective until a written amendment is signed by the signatories to this Agreement or their designees.

 

14.05 The construction, validity, performance, and effect of this Agreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia.

 

14.06 All notices required or permitted by this Agreement shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other Party at the address designated on the following Signature Page, or to such other address as may be designated in writing by such other Party. Notices shall be considered timely if such notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier. Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service. Private metered postmarks shall not be acceptable as proof of timely mailing,

 

14.07 This Agreement shall not be assigned by Licensee except: a) with the prior written consent of PHS, such consent not to be withheld unreasonably; or b) as part of a sale or transfer of substantially the entire business of Licensee relating to operations which concern this Agreement. Licensee shall notify PHS within ten (10) days of any assignment of this Agreement by Licensee, and Licensee shall pay PHS, as an additional royalty, one percent (1 %) of the fair market value of any consideration received for any assignment of this Agreement within thirty (30) days of such assignment.

 

14.08 Licensee agrees in its use of any PHS -supplied materials to comply with all applicable statutes, regulations, and guidelines, including PHS and DHHS regulations and guidelines. Licensee agrees not to use the materials for research involving human subjects or clinical trials in the United States without complying with 21 CFR Part 50 and 45 CFR Part 46. Licensee agrees not to use the materials for research involving human subjects or clinical trials outside of the United States without notifying PHS, in writing, of such research or trials and complying with the applicable regulations of the appropriate national control authorities. Written notification to PHS of research involving human subjects or clinical trials outside of the United States shall be given no later than sixty (60) days prior to commencement of such research or trials.

 

14.09 Licensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including the Export Administration Act of 1979 and Arms Export Control Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities. The transfer of such items may require a license from the cognizant Agency of the U.S. Government or written assurances by Licensee that it shall not export such items to certain foreign countries without prior approval of such agency. PHS neither represents that a license is or is not required or that, if required, it shall be issued.

 

14.10 Licensee agrees to mark the Licensed Products or their packaging sold in the United States with all applicable U.S. patent numbers and similarly to indicate “Patent Pending” status. All Licensed Products manufactured in, shipped to, or sold in other countries shall be marked in such a manner as to preserve PHS patent rights in such countries.

 

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14.11 By entering into this Agreement, PHS does not directly or indirectly endorse any product or service provided, or to be provided, by Licensee whether directly or indirectly related to this Agreement . Licensee shall not state or imply that this Agreement is an endorsement by the Government, PHS, any other Government organizational unit, or any Government employee. Additionally, Licensee shall not use the names of NIH, CDC, PHS, or DHHS or the Government or their employees in any advertising, promotional, or sales literature without the prior written consent of PHS.

 

14.12 The Parties agree to attempt to settle amicably any controversy or claim arising under this Agreement or a breach of this Agreement, except for appeals of modifications or termination decisions provided for in Article 13. Licensee agrees first to appeal any such unsettled claims or controversies to the designated PHS official, or designee, whose decision shall be considered the final agency decision. Thereafter, Licensee may exercise any administrative or judicial remedies that may be available,

 

14.13 Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to 37 CFR Part 404 shall not be immunized from the operation of state or Federal law by reason of the source of the grant.

 

14.14 Paragraphs 4.03, 8.01, 9.05-9.07, 12.01-12.05, 13.08, 13.09, and 14.12 of this Agreement shall survive termination of this Agreement .

 

SIGNATURES BEGIN ON NEXT PAGE

 

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PHS PATENT LICENSE AGREEMENT— EXCLUSIVE

 

SIGNATURE PAGE

 

For PHS:

 

/s/ Jack Spiegel   12/31/2002
Jack Spiegel, Ph.D.   Date
Director, Division of Technology Development and Transfer    
Office of Technology Transfer    
National Institutes of Health    

 

Mailing Address for Notices:

 

Office of Technology Transfer

National Institutes of Health

6011 Executive Boulevard, Suite 325

Rockville, Maryland 20852-3804 U.S.A.

 

For Licensee (Upon, information and belief, the undersigned expressly certifies or affirms that the contents of any statements of Licensee made or referred to in this document are truthful and accurate.):

 

by:    
     
/s/ Ilan Cohn   1/29/2003
Signature of Authorized Official   Date
     
ILAN COHN, Ph.D.    
Printed Name    
     
President & CEO    
Title    
     
Official and Mailing Address for Notices:    
     
P.O. Box 7537    
Petach Tikva 49170    
ISRAEL    

 

Any false or misleading statements made, presented, or submitted to the Government , including any relevant omissions, under this Agreement and during the course of negotiation of this Agreement are subject to all applicable civil and criminal statutes including Federal statutes 31 U.S.C. § 3801-3812 (civil liability) and 18 U.S.C. § 1001 (criminal liability including fine(s) and/or imprisonment).

 

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APPENDIX A—Patent(s) or Patent Application(s)

 

Patent(s) or Patent Application(s):

 

U.S.P.A. 08/091.109 filed July 13, 1993

U.S.P.A. 08/163,324 filed December 6, 1993 which a continuation-in-part of 08/091,109

U.S.P.A. 08/274,628 filed July 13, 1994 which is a continuation-in-part of 08/163,324 and which issued June 30, 1998 as U.S. Patent 5,773,423

PCT/US94/07835, based on 08/274,628 and filed July 13, 1994

European patent application 94923445.4 with priority to PCT/US94/07835

National patents in Europe based on said European application.

 

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APPENDlX B—Licensed Fields of Use and Territory

 

Licensed Fields of Use:

 

I. Any A3 agonist falling within the Licensed Patent Rights for the therapeutic treatment of the following indications:

 

a. Clinical indication that are of prime interest to Licensee (“ the Prime Indications ”) and for which there are specific benchmarks for performance under Appendix F:

 

1. Myeloprotection - an adjunctive treatment to chemotherapy for the purpose of reducing myelotoxicity;
2. Anti-cancer - a treatment intended to inhibit growth of cancer cells;
3. Stem cell mobilization - to induce migration of progenitor cells to the peripheral blood system for their harvesting and subsequent engraftment in a recipient (typically an autologous engraftment);

 

b. Other clinical indications (“ the non-prime indications ”) for which specific benchmarks for performance will be submitted as required by licensee :

 

1. Treatment of viral infections a treatment intended to alleviate viral infections or the symptoms associated therewith;
2. Arthritis a treatment intended to alleviate the disease or the symptoms associated therewith.

 

II. The following A3 agonist compounds falling within the Licensed Patent Rights : N6 -(3-iodobenzyl)-adenosine- 5’-N-methyluronamide (IB-MECA) and 2-Cl-N6-(3-iodobenzyl)-adenosine-5’-N-methyluronamide (C1-IB-MECA) for all therapeutic uses.

 

Licensed Territory: Worldwide

 

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APPENDIX C—Royalties

 

Pursuant to Section 6.01, Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue royalty in the amount of Two Hundred Twenty-Five Thousand Dollars ($225,000). The license issue royalty shall be payable according to the following schedule:

 

A first payment of Fifty Thousand Dollars ($50,000) shall become due and payable within 30 days of execution of this license.

 

A second payment of Seventy Five Thousand Dollars ($75,000) shall become due and payable on the six month anniversary date of execution this license.

 

A third and final payment of One Hundred Thousand Dollars ($100,000) shall become due and payable on the one-year anniversary date of the execution of this license.

 

Pursuant to Section 6.02, Licensee agrees to pay to PHS a nonrefundable minimum annual royalty in the amount of fifty thousand dollars ($50,000).

 

Pursuant to Section 6.03, Licensee agrees to pay PHS earned royalties on Net Sales by or on behalf of Licensee and its sublicensees, calculated on an annual basis in each calendar year and graded as follows:

 

Royalties of five and one half percent (5.5%) on an amount of annual Net Sales of Licensed Products or on practice of Licensed Processes in the Licensed Territory of up to and including twenty-five million U.S. dollars ($25,000,000);

 

Royalties of four and one half percent (4.5%) on an amount of annual Net Sales of Licensed Products or on practice of Licensed Processes in the Licensed Territory between twenty five million U.S. dollars ($25,000,000) and one hundred million US Dollars ($ 100,000,000);

 

Royalties of four percent (4.0%) on an amount of annual Net Sales of Licensed Products or on practice of Licensed Processes in the Licensed Territory of greater than and including one hundred million U.S. dollars ($100,000,000).

 

Licensee shall be entitled to a reduction in the earned royalty rate to be paid to PHS in an amount equal to the earned royally rate Licensee must pay to Aderis Pharmaceuticals Inc. under the agreement which became effective May 6, 2002 for the manufacture and sale of Licensed Products or practice of Licensed Processes in the Licensed Territory .

 

Pursuant to Section 6.04, Licensee agrees to pay PHS benchmark royalties as follows:

 

Twenty Five Thousand ($25,000) Dollars payable within sixty (60) days after the initiation of the first Phase I clinical trials (or its equivalent) per indication.

 

Seventy Five Thousand ($75,000) Dollars payable within sixty (60) days after the initiation of the first Phase II clinical trials (or its equivalent) per indication.

 

One Hundred Thousand ($100,000) Dollars payable within sixty (60) days after the initiation of the first Phase III clinical trials (or its equivalent) per indication.

 

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Five Hundred Thousand ($500,000) Dollars payable within ninety (90) days after each FDA (or its equivalent) approval in each major market area (U.S.A., Europe, or Japan) per indication.

 

Pursuant to Section 6.05, Licensee agrees to pay PHS sublicensing royalties as follows;

 

Twenty percent (20%) of any monetary consideration received from each sublicense, but not including royalties on Net Sales for which royalties will only be due under Section 6.03. Licensee may credit benchmark royalties due under Section 6.04 against sublicensing royalties due on consideration received by Licensee from sublicensee for milestones achieved by a sublicensee when such milestones are substantially similar to the benchmarks described above for Section 6.04.

 

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APPENDIX D—Modifications

 

PHS and Licensee agree to the following modifications to the Articles and Paragraphs of this Agreement :

 

None

 

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APPENDIX F—Commercial Development Plan

 

See “Business Plan” dated November 11, 2001 included with Application. Benchmarks for performance specifically listed in Appendix E are controlling if in conflict with this or any other “Business Plan”.

 

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APPENDIX E—Benchmarks and Performance

 

Licensee agrees to the following Benchmarks for its performance under this Agreement and, within thirty (30) days of achieving a Benchmark , shall notify PHS that the Benchmark has been achieved.

 

Regulatory Benchmarks for the Prime Indications

 

I. For the Stem cell mobilization therapeutic indication (pre-clinical and Phase I studies using IB-MECA have already been accomplished)

 

1. Initiate FDA Phase II/III clinical trials or foreign equivalent clinical trials by the end of the fourth quarter of 2003.
2. Submission of a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of the fourth quarter of 2004.

 

II. For the Myeloprotection therapeutic indication (pre-clinical and Phase I studies using IB-MECA have already been accomplished):

 

1. Initiate FDA Phase II clinical trials or foreign equivalent clinical trials by the end of the fourth quarter of 2003.
2. Initiate FDA Phase III clinical trials or foreign equivalent clinical trials by the end of the fourth quarter of 2004.
3. Submission of a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of the second quarter of 2006.

 

III. For the Anti-cancer therapeutic indication (pre-clinical and Phase I studies using IB-MECA have already been accomplished):

 

1. Initiate FDA Phase II clinical trials or foreign equivalent clinical trials by the end of the first quarter of 2003.
2. Initiate FDA Phase III clinical trials or foreign equivalent clinical trials by the end of the third quarter of 2004.
3. Submission of a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of the first quarter of 2006.

 

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Exhibit 4. 8

 

PUBLIC HEALTH SERVICE

 

FIRST AMENDMENT TO EXCLUSIVE PATENT LICENSE AGREEMENT - L-249-2001/0

 

AMENDMENT L-249-2001/1

 

This Amendment, L-249-2001/1, (“First Amendment”) of the Exclusive Patent License L-249-2001/0 (“Agreement”) is made between the National Institutes of Health (“NTH”), the Centers for Disease Control and Prevention (“CDC”), or the Food and Drug Administration (“FDA”), hereinafter singly or collectively referred to as (“PHS”), agencies of the United States Public Health Service within the Department of Health and Human Services (“DHHS”) through the Office of Technology Transfer, NIH, having an address at 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804, U.S.A. and Can-Fite BioPharma, Ltd. having offices at the address indicated on the Signature Page, hereinafter referred to as “Licensee”.

 

Whereas, Licensee desires to add an option to discontinue or drop development of a Licensed Field of Use without penalty upon written notification of PHS of a decision to do so;

 

Whereas, Licensee desires to amend the existing Benchmarks included in Appendix E - Benchmarks and Performance of the Agreement.

 

Whereas, Licensee desires to add Benchmarks for “Non-prime” Indications to Appendix E of the Agreement.

 

Whereas, PHS and Licensee are mutually willing to amend the Agreement to accommodate the desire for providing an option to discontinue or drop a Licensed Field of Use without penalty and for modifying Appendix E - Benchmarks and Performance.

 

Now therefore, PHS and Licensee, intending to be bound, hereby mutually agree to the following:

 

A. The Agreement shall be modified as follows:

 

1.      Paragraph 9.02 shall have added the following two sentences:

 

Licensee may discontinue or drop commercial development of any Licensed Field of Use identified in Appendix B provided that Licensee notifies PHS in writing within thirty (30) days of making such a decision, and provided that one or more of the remaining Licensed Fields of Use continues to be developed. Upon such notification, PHS will amend the Agreement to reflect this removal from the Licensed Fields of Use and Benchmarks.

 

2.    Appendix E - Benchmarks and Performance shall be deleted in its entirety and be replaced with a new Appendix E - Benchmarks and Performance that shall now read:

 

APPENDIX E -Benchmarks and Performance

 

Licensee agrees to the following Benchmarks for its performance under this Agreement and, within thirty (30) days of achieving a Benchmark, shall notify PHS that the Benchmark has been achieved.

 

Regulatory Benchmarks for the Prime Indications

 

I. For the Myeloprotection therapeutic indication:

 

1. Initiate FDA Phase I or Phase I/II clinical trial or foreign equivalent by the end of third quarter 2006.

 

2. Initiate FDA Phase lib clinical efficacy trial or foreign equivalent by the end of fourth quarter 2007.

 

3. Initiate FDA Phase III clinical trial or foreign equivalent by the end of second quarter 2009.

 

A-173-2004

First Amendment (L-249-2001/1) of Exclusive Patent License Agreement (L-249-2001/0)

PHS: Can-Fite Biopharma, Ltd. -FINAL [08/02/05]

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  FIRST AMENDMENT TO PHS LICENSE AGREEMENT L-249-2001/0

 

4. Submit a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of fourth quarter 2010.

 

II. For the Stem Cell Immobilization therapeutic indication:

 

1. Initiate FDA Phase I clinical trial or foreign equivalent by the end of second quarter 2007.
2. Initiate FDA Phase II clinical efficacy trial or foreign equivalent by the end of first quarter 2008.
3. Initiate FDA Phase II clinical trial or foreign equivalent by the end of second quarter 2009.
4. Submit a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of fourth quarter 2010.

 

III. For the Anti-cancer therapeutic indication (for Cl-IB-MECA):

 

1. Initiate FDA Phase I or Phase I7II clinical trial or foreign equivalent by the end of third quarter 2006.
2. Initiate FDA Phase lib clinical efficacy trial or foreign equivalent by the end of second quarter 2007.
3. Initiate FDA Phase III clinical trial or foreign equivalent by the end of second quarter 2008.
4. Submit a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of second quarter 2010.

 

Regulatory Benchmarks for the Non-Prime Indications

 

I. For the Anti-viral therapeutic indication:

 

1. Initiate FDA Phase I clinical trials or foreign equivalent by the end of second quarter 2007.
2. Initiate FDA Phase II clinical trials or foreign equivalent by the end of fourth quarter 2008.
3. Initiate FDA Phase III clinical trials or foreign equivalent by the end of second quarter 2010.
4. Submit a New Drug Application (NDA) by the end of fourth quarter 2012.

 

II. For the Arthritis therapeutic indication: (Phase I and II studies using IB-MECA have already been accomplished for this indication):

 

1. Initiate FDA Phase lib clinical efficacy trials or foreign equivalent in rheumatoid arthritis by the end of second quarter of 2006.
2. Initiate FDA Phase III clinical trials or foreign equivalent by the end of fourth quarter of 2007.
3. Submit a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of fourth quarter 2009.

 

B. Licensee agrees to pay PHS a nonrefundable First Amendment execution fee in the amount of twenty five thousand ($25,000) dollars. This First Amendment Execution Fee will be payable within thirty (30) days of conclusion of an equity or debt financing from non-affiliated third parties or a merger with or an acquisition by another corporation.

 

C. All terms and conditions of the Agreement not herein amended remain binding and in effect;

 

D. The execution date of this First Amendment shall be the date when it has been signed by all parties; and

 

B. The Agreement, and this First Amendment constitute the entire understanding between PHS and Licensee and supersede all prior agreements and understandings with respect to Materials and Licensed Products.

 

A-173-2004

First Amendment (L-249-2001/1) of Exclusive Patent License Agreement (L-249-2001/0)

PHS: Can-Fite Biopharma, Ltd. -FINAL [08/02/05]

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SIGNATURES BEGIN ON THE NEXT PAGE

FIRST AMENDMENT TO PHS LICENSE AGREEMENT L-249-2001/0

 

SIGNATURE PAGE

 

For PHS :

 

/s/ Steven M. Ferguson   8/4/05
Steven M. Ferguson   Date
Director, Division of Technology Development and Transfer    
Office of Technology Transfer    
National Institute of Health    

 

Mailing Address for Notices:

 

Chief, License Monitoring & Enforcement Branch

Office of Technology Transfer

National Institutes of Health

6011 Executive Boulevard, Suite 325

Rockville, Maryland 20852-3804 U.S.A.

 

For Licensee (Upon, information and belief, the undersigned expressly certify or affirm that the contents of any statements of Licensee made or referred to in this document are truthful and accurate.):

 

By:    
     
/s/ Pnina Fishman   August 15, 2005
Pnina Fishman   Date
Chief Executive Officer    

 

Official and Mailing Address for Notices:

 

Can-Fite BioPharma, Ltd.

10 Bareket Street

Kiryat Matalon, P.O. Box 7537

PetachTikva 49170

ISRAEL

 

A-l 73-2004

First Amendment (L-249-2001/1) of Exclusive Patent License Agreement (L-249-2001/0)

PHS: Can-Fite Biopharma, Ltd. -FINAL [08/02/05]

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Exhibit 4. 9   

NATIONAL INSTITUTES OF HEALTH

 

SECOND AMENDMENT TO L-249-2001/0

 

This is the second amendment (“ Second Amendment ”) of the agreement by and between the National Institutes of Health (“ NIH ”) or within the Department of Health and Human Services (“ HHS ”), and Can-Fite BioPharma, Ltd. having an effective date of January 29, 2003 and having NIH Reference Number L-249-2000/0, as amended by the first amendment to the agreement, having an effective date of August 15,2005, and having NIH reference Number L-249-2000/1 (“ First Amendment ”) (hereinafter collectively referred to as the “ Agreement ”). This Second Amendment , having NIH Reference Number L-249-2001/2, is made between the NIH through the Office of Technology Transfer, NIH , having an address at 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804, U.S.A., and Can-Fite BioPharma, Ltd. (“Can-Fite”), having an office at 10 Bareket Street, Kiryat Matalon, P.O.Box 7537, Petach Tikva 49170, Israel, the (“ Licensee ”). This second Amendment includes, in addition to the amendments made below, 1) a Signature Page and 2) Attachment 1 (Royalty Payment Information).

 

Whereas, the NIH and the Licensee desire that the Agreement be amended a second time as set forth below in order to accommodate the desire to discontinue or drop Licensed Fields of Use and for modifying Appendix E - Benchmarks and Performance.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the NIH and the Licensee , intending to be bound, hereby mutually agree to the following:

 

Appendix E - Benchmarks and Performance shall be deleted in its entirety and be replaced with a new Appendix E - Benchmarks and Performance that shall now read:

 

APPENDIX E –Benchmarks and Performance

 

Licensee agrees to the following Benchmarks for its performance under this Agreement and, within thirty (30) days of achieving a Benchmark , shall notify PHS that the Benchmark has been achieved.

 

Regulatory Benchmarks for the Prime Indications

 

For the Anti-cancer therapeutic indication (for C1-IB-MECA):

 

1. Initiate FDA Phase I clinical trial or foreign equivalent by the end of first quarter 2008.

 

2. Initiate FDA Phase I/II clinical trial or foreign equivalent by the end of third quarter 2009.

 

3. Initiate FDA Phase II clinical efficacy trial or foreign equivalent by the end of the second half of 2013. (Anti-viral indication will also be evaluated as part of this study where patients with Liver Cancer and infected with Hepatitis B and C will be enrolled. The plan is to follow the viral load in each patient all along the study period).

 

4. Initiate FDA Phase III clinical trial or foreign equivalent by the end of the first quarter of 2015.

 

5. Submit a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of second quarter 2017.

 

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CONFIDENTIAL    
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Regulatory Benchmarks for the Non-Prime Indications

 

I. For the Arthritis therapeutic indication: (Phase I and II studies using IB-MECA have already been accomplished for this indication):

 

1. Initiate FDA Phase IIb clinical efficacy trials or foreign equivalent in rheumatoid arthritis by the end of second quarter of 2006.
2. Initiate FDA Phase III clinical trials or foreign equivalent by the end of second half of 2013.
3. Submit a New Drug Application (NDA) (or its equivalent) to the FDA (or its foreign equivalent) for a Licensed Product or Process by the end of fourth quarter 2016.

 

1) Within sixty (60) days of the execution of this Second Amendment, the Licensee shall pay the NIH an amendment issue royalty in the sum of Twenty Five Thousand US Dollars ($25,000), and payment options may be found in Attachment 1.

 

2) In the event any provision(s) of the Agreement is/are inconsistent with Attachment 1, such provision(s) is/are hereby amended to the extent required to avoid such inconsistency and to give effect to the payment information in such Attachment 1.

 

3) All terms and conditions of the Agreement not herein amended remain binding and in effect.

 

4) The terms and conditions of this Second Amendment shall, at the NIH’ sole option, be considered by the NIH to be withdrawn from Licensee’s consideration and the terms and conditions of this Second Amendment, and the Second Amendment itself, to be null and void, unless this Second Amendment is executed by the Licensee and a fully executed original is received by the NIH within sixty (60) days from the date of the NIH’s signature found at the Signature Page.

 

5) This Second Amendment is effective upon execution by all parties.

 

SIGNATURES BEGIN ON NEXT PAGE

 

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CONFIDENTIAL    
Second Amendment of L-249-2001/0 Final - Can-Fite December 27, 2012
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SECOND AMENDMENT TO L-249-2001/0

 

SIGNATURE PAGE

 

In Witness Whereof, the parties have executed this Second Amendment on the dates set forth below. Any communication or notice to be given shall be forwarded to the respective addresses listed below.

 

For the NIH :

 

/s/ Richard U. Rodriguez   1-11-13
Richard U. Rodriguez   Date
Director, Division of Technology Development and Transfer    
Office of Technology Transfer    
National Institutes of Health    

 

Mailing Address or E-mail Address for Agreement notices and reports:

 

Chief, Monitoring & Enforcement Branch, DTDT

Office of Technology Transfer

National institutes of Health

6011 Executive Boulevard, Suite 325

Rockville, Maryland 20852-3804 U.S.A.

 

E-mail: LicenseNotices_Reports@mail.nih.gov

 

For the Licensee ( U pon information and belief, the undersigned expressly certifies or affirms that the contents of any statements of the Licensee made or referred to in this document are truthful and accurate.);

 

 /s/ Pnina Fishman   2-4-13
Signature of Authorized Offical   Date

 

Name: Pnina Fishman

Title: CEO

 

I. Official and Mailing Address for Agreement notices:

 

Pnina Fishman
Name
 
CEO
Title

 

A-182-2007    
     
CONFIDENTIAL  
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Mailing Address:

 

Can-Fite BioPharma, Ltd.
 
10 Bareket Street
 
P.O.Box 7537
 
Petach Tikva 49170, Israel

 

Email Address: pnina@canfite.co.il
   
Phone: +972-3-9241114
   
Fax: +972-3-9249378

 

II. Official and Mailing Address for Financial notices (the Licensee ’s contact person for royalty payments):

 

Motti Farbstein
Name
 
CFO
Title
 
Mailing Address:
 
Can-Fite BioPharma, Ltd.
 
10 Bareket Street
 
P.O.Box 7537
 
Petach Tikva 49170, Israel

 

Email Address: motti@canfite.co.il
   
Phone: +972-3-9241114
   
Fax: +972-3-9249378

 

Any false or misleading statements made, presented, or submitted to the Government, including any relevant omissions, under this Agreement and during the course of negotiation of this Agreement are subject to all applicable civil and criminal statutes including Federal statutes 31 U.S.C. §§3801-3812 (civil liability) and 18 U.S.C. § 1001 (criminal liability including fine(s) or imprisonment).

 

A-182-2007    
     
CONFIDENTIAL    
Second Amendment of L-249-2001/0 Final - Can-Fite December 27, 2012
Model 09-2006 (updated 8-2012) Page 4 of 6 L-249-2001/2

 

 
 

 

ATTACHMENT 1-ROYALTY PAYMENT OPTIONS

 

The OTT License Number MUST appear on payments, reports and correspondence.

 

Automated Clearing Honse (ACH) for payments through U.S. banks only

 

The NIH encourages its licensees to submit electronic funds transfer payments through the Automated Clearing House (ACH). Submit your ACH payment through the U.S. Treasury web site located at: https://www.pay.gov. Locate the “ NIH Agency Form” through the Pay.gov “Agency List”.

 

Electronic Funds Wire Transfers

 

The following account information is provided for wire payments. In order to process payment via Electronic Funds Wire Transfer sender MUST supply the following information within the transmission:

 

Drawn on a U.S. bank account via FEDWIRE should be sent directly to the following account:

 

Beneficiary Account: Federal Reserve Bank of New York or TREAS NYC
Bank: Federal Reserve Bank of New York
ABA# 021030004
Account Number: 75080031
Bank Address: 33 Liberty Street, New York, NY 10045
Payment Details: License Number (L-XXX-XXXX)
  Name of the Licensee

 

Drawn on a foreign bank account should be sent directly to the following account. Payment must be sent in U.S. Dollars (USD) using the following instructions:

 

Beneficiary Account: Federal Reserve Bank of New York/ITS or FRBNY/ITS
Bank: Citibank N.A. (New York)
SWIFT Code: CITIUS33
Account Number: 36838868
Bank Address: 388 Greenwich Street, New York, NY 10013
Payment Details (Line 70): NIH 75080031
  License Number (L-XXX-XXXX)
  Name of the Licensee
Detail of Charges (line 7la): Charge Our

 

A-182-2007    
     
CONFIDENTIAL    
Second Amendment of L-249-2001/0 Final - Can-Fite December 27, 2012
Model 09-2006 (updated 8-2012) Page 5 of 6 L-249-2001/2

 

 
 

 

Checks

 

All checks should be made payable to “ NIH Patent Licensing”

 

Checks drawn on a U.S. bank account and sent by US Postal Service should be sent directly to the following address:

 

National Institutes of Health ( NIH )

P.O. Box 979071

St. Louis, MO 63197-9000

 

Checks drawn on a U.S. bank account and sent by overnight or courier should be sent to the following address:

 

US Bank

Government Lockbox SL-MO-C2GL

1 005 Convention Plaza

St. Louis, MO 63101

Phone: 314-418-4087

 

Checks drawn on a foreign bank account should be sent directly to the following address:

 

National Institutes of Health ( NIH )

Office of Technology Transfer

Royalties Administration Unit

6011 Executive Boulevard

Suite 325, MSC 7660

Rockville, Maryland 20852

 

A-182-2007    
     
CONFIDENTIAL    
Second Amendment of L-249-2001/0 Final - Can-Fite December 27, 2012
Model 09-2006 (updated 8-2012) Page 6 of 6 L-249-2001/2

 

 

 

 

Exhibit 4. 10

 

LICENCE AGREEMENT

 

between

 

THE UNIVERSITY OF LEIDEN

 

And

 

CAN-FITE

 

Index to Clauses

 

    Page
     
1. Definitions 1.
     
2. Duration 2.
     
3. Transfer of Technical information 2.
     
4. Grant of rights 3.
     
5. Payment 3.
     
6. Records and reports 4.
     
7. Confidentiality 5.
     
8. Indemnity 6 .
     
9. Performance 6.
     
10. Patents 8 .
     
11. Termination 9 .
     
12. General 9 .
     
13. Notices 10.
     
14. Governing law 10 .
     
Schedule Part 1 - Patent Rights  
     
[Schedule Part 2 – Commercial Development Plan]  

 

 
 

 

  LICENCE AGREEMENT
  Among
   
  Leiden University, having its administrative office at
  Rapenburg 70, 2333 RA Leiden, The Netherlands
  (“Leiden”)
  Hereinafter also referred to as “the Licensor”
  And
  Can-Fite Biopharma, Ltd. of 10 Bareket Street, Petach-
  Tikva, Israel
  incorporated under the laws of the State of Israel (“Can-Fite”)

 

WHEREAS:

 

1. Leiden is the joint owner along with the National Institutes of Health of the Patent Rights (more fully defined below) and both are entitled to the benefit of the applications for patents. Pursuant to the terms of a separate inter-institutional agreement between Leiden and the National Institutes of Health, Leiden hereby enters into this licence agreement on behalf of both joint owners. [ ]

 

3. Can-Fite is a biopharmaceutical company with expertise and capability to further develop the Patent Rights and wishes to have the exclusive right to do so in return for entering the following obligations.

 

4. The Licensor has agreed to grant the following licence to Can-Fite, all as subject to the terms hereinafter specified.

 

NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:-

 

1. Definitions

 

In this Agreement the following terms shall have the following meanings unless the context otherwise requires:

 

  “Commencement Date ”   means the date of final signature of this Agreement by all parties;
       
  “Effective Date”   means the priority filing date of the first of the Patent Rights;
       
  “Net Sales Value”   means the invoiced sales value of the Products in an arm’s length transaction exclusively for money after deduction of normal trade discounts actually granted and of any credits actually given by Can-Fite for defective goods and excluding or making proper deductions for any costs of packing, insurance, carriage and freight and Value Added Tax or other sales tax and, in the case of export orders, any import duties or similar applicable governmental levies or export insurance costs subject in all cases to the same being separately charged on customer invoices. In   any sale or other disposal of any Products or part thereof otherwise than in any arm’s length transaction exclusively for money, the fair market price (if higher) in the relevant country of disposal shall be substituted for the Net Sales Value;

 

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  “Patent Rights”   means (i) the patents and applications, short particulars whereof are set out in Part 1 of the Schedule hereto;
       
      (ii) all patent applications that may hereafter be filed in the Territory by or on behalf of The Licensor which either are based on or claim priority from any of the foregoing patents and applications; and
       
      (iii) all patents which may be granted pursuant to any of the foregoing patent applications;
       
  “Inventors”   means Prof. Adriaan Ijzerman, Zhan-Guo Gao, Aniko Goblyos, Johannes Brussee and Prof. Kenneth Jacobson;
       
  “Practical Application”   means to manufacture, in the case of a composition or product, under such conditions as to establish that the invention is being utilized;
       
  “Products”   means all therapeutic or diagnostic agents whose manufacture, development or use is covered by the Patent Rights;
       
  “Schedule”   means the Schedule annexed hereto;
       
  “Technical Information”   means all know-how, experience, drawings, designs, circuit diagrams, computer programs and all other technical information relating to the Products and which might reasonably be of commercial interest to either party in the design, manufacture or supply of the Products ;
       
  “Territory”   means the countries of the world where Patent Rights are pending or subsist;
       
  “Agreement Date”   The last of the dates in which this Agreement was signed by Licensor or Can-Fite.

 

2. Duration

 

2.1 This Agreement shall commence on the Commencement Date and shall continue in force in each country of the Territory until the expiry of the last to expire of the Patent Rights in such country unless earlier terminated in accordance with the later provisions of this Agreement..

 

3. Transfer of Technical Information

 

3.1 Upon specific request made by Can-Fite to Leiden, at any time during the pendency of this agreement, Leiden will provide all Technical Information that has not previously been disclosed and that is reasonably necessary or desirable to enable Can-Fite to exercise its rights under this Agreement or will cause the Inventors to provide such Technical Information. Can-Fite can also approach the Inventors directly for such Technical Information.

 

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4. Grant of Rights

 

4.1 Subject to Articles 4.4-4.6 below, the Licensor hereby grants to Can-Fite:

 

4.1.1 an exclusive licence under the Patent Rights to develop and manufacture Products; and

 

4.1.2 an exclusive licence to use, sell or otherwise deal in Products manufactured under the licence of Clause 4.1.1 anywhere in the Territory.

 

4.2 If requested by Can-Fite, the parties hereto agree to execute a formal licence agreement for the purposes of registering any patent licence granted pursuant to Clause 4.1 above in the respective official register of one or more patents or patent applications within the Patent Rights.

 

4.3 Can-Fite shall be entitled to sub-license to third parties under the rights granted provided that any such third party will execute an undertaking by which he shall abide by all terms and conditions as stipulated herein . Can-Fite shall notify the Licensor of any sub-licence granted within thirty days of entering such a sub-licence and shall send a copy of all such sub-licences entered into, which copy shall be held in confidence. In addition, Can-Fite shall share revenue with the Licensor from such sub-licensing activity in accordance with Clause 5 below.

 

4.4 The parties acknowledge that the United States Government shall have the irrevocable, royalty-free, paid-up right to practice and have practiced the Patent Rights throughout the Territory by or on behalf of the United States Government and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the United States Government is a signatory. Any license granted by the Licensor under the terms of this Agreement shall be subject to this right of the United States Government.

 

4.5 The Parties acknowledge that the United States Government (acting through its agent National Institutes of Health) reserves the right to require the Licensor, or Can-Fite, to grant sublicenses to responsible applicants, on terms that are reasonable under the circumstances when necessary to fulfill health or safety needs or when necessary to meet requirements for public use specified by United States Federal regulations.

 

4.6 For the avoidance of doubt, the Licensor reserves the right to grant research licenses on reasonable terms and conditions. The purpose of these research licenses is to encourage basic research, whether conducted at an academic or corporate facility.

 

4.7 Can-Fite acknowledges that its licence granted hereunder for the Patent Rights is subject to the provisions of 37 C.F.R. Part 401 and the rights retained by the United States Government, including the requirement for substantial manufacture in the United States as stated in Paragraph 11.1 of 37 C.F.R Part 401.

 

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5. Payment

 

5.1 Within thirty (30) days of the Commencement Date, Can-Fite shall pay to the Licensor a license signing fee (“Signing Fee”) of twenty five thousand Euros (Euro 25,000).

 

5.2 In addition, as of the year of 2009, Can-Fite shall pay to the Licensor an annual non-refundable minimum royalty of ten thousand Euros (Euro 1 0,000) (“Minimum Annual Royalty”) within sixty (60) days of the start of each calendar year.

 

5.3 Can-Fite agrees to pay to the Licensor a royalty of three percent (3%) on Net Sales Value provided that Can-Fite shall be entitled to a credit of one-half percent (0.5%) against the royalty rate for each percent point in excess of two percent (2.0%) that Can-Fite must pay to an unaffiliated licensor for the manufacture and sale of Products. Said credit, however, shall not reduce the earned royalty due to the Licensor below two percent (2.0%) of Net Sales value.

 

Can-Fite agrees to pay the Licensor milestone payments in relation to the undernoted key milestones being achieved by Can-Fite or a sublicensee as follows:

 

  1. Start of Phase I studies EURO 50,000
  2. Start of Phase II studies EURO 100,000
  3. Upon initiation of Phase III studies EURO 200,000
  4. Upon marketing approval EURO 500,000

 

Each of these milestone payments will be due only once per patent contained in the Patent Rights.

 

5.4 Can-Fite agrees to pay the Licensor sublicensing royalties as follows:

 

(a)     Two percent (2%) of the Net Sales Value generated by a sublicensee;

 

(b)     Ten percent (10%) of all non-creditable and non-refundable consideration received for granting a sublicense. Fees paid expressly for research and development of Products and Processes, such as clinical trial support, shall be excluded.

 

5.5 In the event that Can-Fite shall transfer to a transferee that aspect of its business involving this agreement, Can-Fite agrees to pay the Licensor an assignment royalty of ten percent 10%) of all payments received for such a transfer of this agreement, provided, however, that no such royalty shall be owed to the Licensores in the event that the foregoing transfer is part of or results from a merger, consolidation or other reorganization of the Can-Fite or from a sale, exchange or other transfer of all or substantially all of its assets. For the removal of any doubt, for any transaction in which an assignment royalty as stipulated in this clause 5.5 will be due, no sublicensing royalty will be payable, as set out in Clause 5.4; and vice versa. Further Can-Fite will ensure that the transferee will be bound by the terms of this agreement, including, but not limited to, the payment of royalties set out in Clauses 5.1 to 5.4 above as well as that set out in this clause 5.5..

 

5.7 Payments due under Clauses 5.3 and 5.5 shall be made to Leiden within [30] days of the end of each calendar year in respect of royalties accruing on Products invoiced in that calendar year failing which interest shall be payable at the rate of three per centum above the Base Lending Rate.

 

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5.8 All sums due under this Agreement shall be made in full without deduction of taxes, charges and other duties that may be imposed except in so far as any such deduction may be credited in full by the Licensor against the Licensor’s own tax liabilities. The parties agree to cooperate in all respects necessary to take advantage of such double taxation agreements as may be available.

 

5.9 For the avoidance of doubt, Leiden shall make arrangements to share the revenue received under this Clause 5 with National Institutes of Health, all in accordance with the terms of a separate interinstitutional agreement.

 

6. Records and Reports

 

6.1 Can-Fite agrees to keep true and accurate records and books of account containing all data necessary for the determination of sums payable under Clause 5 which records and books of account shall upon reasonable notice by the Licensor be open at all reasonable times during business hours for inspection by the Licensor or their duly authorised agent for the purpose of verifying the accuracy of Can-Fite’s reports hereunder. The accountant may take copies of the records and books of account but shall not disclose to the Licensor any information relating to the business or affairs of Can-Fite other than such information as properly should have been contained in any statement required to be furnished by Can-Fite to the Licensor. The Licensor shall be solely responsible for the costs of the accountant unless he certifies that any reports are inaccurate in any material respect in which event Can-Fite shall reimburse the Licensor for all his costs.

 

6.2 Can-Fite shall submit to Leiden within [30] days of the end of each calendar year a statement setting forth the quantity of Products made, used or sold, the Net Sales Value of Products and all income associated with sublicensing activity, for the immediately preceding calendar year.

 

6.3 The Licensor agree to maintain confidential all commercially sensitive information received with respect to Can-Fite’s operations pursuant to the foregoing Clauses 6.1 and 6.2, while reserving the right to publicly disclose all sums due and/or payable under Clause 5.

 

7. Confidentiality

 

7.1 Each party agrees to maintain secret and confidential all Technical Information obtained from the others pursuant to this Agreement, to respect the other’s proprietary rights therein, to use the same exclusively for the purposes of this Agreement, and to disclose the same only to those of its employees and sub-licensees pursuant to this Agreement (if any) to whom and to the extent that such disclosure is reasonably necessary for the purpose of this Agreement.

 

7.2 The foregoing obligations of Clause 7.1 above shall not apply to Technical Information or other information which:

 

(1) prior to receipt thereof from one party was in the possession of the other and at its free disposal;

 

(2) is subsequently disclosed to the recipient party without any obligations of confidence by a third party who has not derived it directly or indirectly from the other parties;

 

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(3) is or becomes generally available to the public in printed publications in general circulation through no act or default of the recipient party or its agents or employees.

 

7.3 Notwithstanding the foregoing provisions, the parties and any sub-licensees pursuant to this Agreement shall be entitled to disclose Technical Information of the other to actual or potential customers for Products in so far as such disclosure is reasonably necessary to promote the sale or use of Products.

 

7.4 Each party shall procure that all its employees and sub-licensees pursuant to this Agreement (if any) who have access to any information of the other to which the obligations of Clause 7 apply shall be made aware of and subject to these obligations.

 

8. Indemnities

 

8.1 The Licensor warrant that at the Commencement Date all Technical Information disclosed or to be disclosed to Can-Fite hereunder is or will be, to the best of the Licensor’s knowledge and belief, accurate (provided always that the Licensor will promptly correct any significant errors in the Technical Information subsequently discovered by the Licensor), but subject the Licensor shall be under no further liability to Can-Fite in respect of the Technical Information or of the manufacture, use, sale or other disposition of Products.

 

8.2 Can-Fite shall be exclusively responsible for the technical and commercial development of the Products and for incorporating any modifications or developments thereto that might be necessary or desirable and for all Products sold or supplied by Can-Fite and accordingly Can-Fite shall indemnify each of the joint owners in respect of all costs, damages and expenses incurred as a result of use by Can-Fite, its employees, agents or sub-licensees of the Patent Rights or any claims by third parties in tort or otherwise against either or both the joint owners or arising in any way out of the use of any of the Technical Information or Products by Can-Fite.

 

8.3 Can-Fite hereby undertakes and agrees to be solely responsible at its own cost and expense for dealing with and for any liability arising from any contractual, tort or other claims or proceedings concerning the Products or their development, production, marketing, distribution or sale in particular product liability claims or proceedings.

 

9. Performance

 

9.1 During the continuance of this Agreement:

 

9.1.1 Can-Fite shall use its reasonable commercial efforts to develop the Products. Can-Fite will submit a commercial development plan within 12 months from the Agreement Date. The commercial development plan will then be incorporated into this Agreement as Part 2 of the Schedule. It is understood that it is within the nature of research and development that development route and the expected timelines may change and that the commercial development plan may have to be modified. Accordingly, Can-Fite may request Licensor from time to time to amend the commercial development plan, a request which will not be unreasonable denied.

 

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9.1.2 Can-Fite shall use its best endeavours to implement the commercial development plan submitted under Art 9 .1.1 above , and to implement Parctical Application of the Patent Rights failing which the provisions of Art 11.3 shall apply;

 

9.1.3 Can-Fite shall not act as agent of The Licensor and specifically not give any indication that it is acting otherwise than as principal and in advertising or selling Products not make any representation or give any warranty on behalf of The Licensor.

 

9.1.4 Any sublicenses granted by Can-Fite shall provide for the termination of the sublicense, or the conversion to a license directly between the sublicensees and Leiden, at the option of the sublicensee, upon termination of this agreement.

 

9.1.5 Can-Fite agrees that Products used or sold in the United States shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from National Insitutes of Health

 

9.1.6 Prior to the first commercial sale, Can-Fite agrees to provide the Licensor with reasonable quantities of Products for research use by each of the Licensor and National Institutes of health. In order to safeguard the Patent Rights, however, each of the joint owners shall consult with Can-Fite before providing to commercial entities research samples of Products.

 

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10. Patents

 

10.1 It is acknowledged by all parties that Can-Fite has borne all costs associated with the prosecution of the Patent Rights since the Effective Date. In addition it is now agreed that this responsibility shall continue from the Commencement Date such that for the duration of this Agreement, Can-Fite shall at its own cost diligently prosecute to grant all subsisting patent applications within the Patent Rights in at least the Primary Territories, as defined below, so as to secure the broadest monopoly reasonably obtainable consistent with avoiding serious prejudice to the validity of such granted patents and shall maintain all patents within the Patent Rights in force for the full terms thereof. Said Primary Territories include the US, UK, France, Germany, Italy, Switzerland, Japan, Canada and Australia.

 

10.2 In the event of any infringement by a third party of any of the Patent Rights in the Territory on such a scale as to affect prejudicially Can-Fite’s business in the Products to a substantial extent, Can-Fite may take all legitimate steps to halt such infringement. Can-Fite may request the Licensor or any of the Inventors or any other inventor of the Patent Rights to lend its names to such proceedings and provide reasonable assistance subject to Can-Fite giving them an indemnity in respect of all costs, damages and expenses that they may incur including any award of costs against them [in so far as the aggregate of all such costs and damages may exceed that recoverable under the next following provisions]. Where such infringement proceedings are conducted by Can-Fite under the name of the Licensor, Can-Fite may apply all royalties due under Clauses 5.2 and 5.3 subsequent to the date of notification by Can-Fite to the Licensor of the relevant infringement to defray any costs directly incurred by Can-Fite (excluding award of costs in favour of third parties) provided however that the total liabilities or waiver of royalties of the Licensor hereunder shall in no circumstances exceed the sum of all royalties due subsequent to that date and up to the date of the delivery of the final decision in the relevant infringement proceedings and provided further that this provision shall only apply subject to Can-Fite exercising all due diligence in pursuing the proceedings to a conclusion. Any damages recovered shall be dealt with in a manner which shall be fair and reasonable as between the Licensor and Can-Fite.

 

10.3 As at the Commencement Date, to the best of the Licensor’s knowledge and belief the exercise of the rights granted or to be granted to Can-Fite hereunder will not result in the infringement of valid patents of third parties. Subject thereto, the Licensor gives no warranty in this respect and do not give Can-Fite any indemnity against costs, damages, expenses or royalties arising out of proceedings brought against Can-Fite or any customer of Can-Fite by any third party. Should Can-Fite be sued for infringement of any patent or patents of the third party by reason of its operation of the Process or manufacture, use or sale of the Products, the Licensor shall, on request, assist Can-Fite in its defence to such action to the extent that in all the circumstances it is reasonable to do so but shall otherwise be under no obligations in respect thereof. All costs of any such action shall be borne by Can-Fite to whom shall belong all sums that may be recovered from the third party.

 

10.4 If at any time during this Agreement Can-Fite directly or indirectly opposes or assists any third party to oppose the grant of letters patent on any patent application within the Patent Rights or disputes or directly or indirectly assists any third party to dispute the validity of any patent within the Patent Rights or any of the claims thereof, the Licensor shall be entitled at any time thereafter to terminate all or any of the licences granted hereunder forthwith by notice thereof to Can-Fite.

 

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11. Termination

 

11.1 If any party is in breach of any of its obligations and, in the case of a breach capable of remedy, it shall not have been remedied by the defaulting party within 90 days of written notice specifying the breach and requiring its remedy, or if Can-Fite becomes apparently insolvent, has a receiver or administrator appointed over the whole or any part of its assets, enters into any compound with creditors, or has an order made or resolution passed for it to be wound up (otherwise than in furtherance of a scheme for amalgamation or reconstruction) then the Licensor or, in the case of breach, the party not in breach of the obligation or condition, may forthwith terminate this Agreement by written notice without prejudice to the accrued rights of either party.

 

11.2 On termination of this Agreement for any reason, Can-Fite shall continue to have the right for a period of twelve (12) months from the date of termination to complete deliveries on contracts in force at that date and to dispose of Products already manufactured subject to payment to the Licensor of royalties thereon in accordance with Clause 5 above.

 

11.3

 

11.3 .1 During the term of this Agreement, the Licensor may terminate this Agreement when:

 

(a) it is determined by the Licensor in discussion with National Institutes of Health Office of Technology Transfer that:

 

(i) Termination is necessary to alleviate health or safety needs which are not reasonably satisfied by Can-Fite;

 

(ii) Termination is necessary to meet requirements for public use specified by Federal law or regulations and these requirements are not reasonably satisfied by Can-Fite; or

 

(iii) Termination is necessary because the requirements of 35 U.S.C. §204 have not been satisfied or waived or because a licensee of the exclusive right to use or sell the Patent Rights in the United States is in breach of its agreement obtained pursuant to Section 204; and

 

(b) Can-Fite has been notified of this determination and has been given at least ninety (90) days to provide a response to this determination, and the response is deemed to be unsatisfactory by the Licensor, in consultation with National Institutes of Health.

 

11.4 A copy of the fully executed inter-institutional agreement between the Licensor and the National Institutes of Health shall be sent to Can-Fite no later than six months from the Agreement Date, failing which Can-Fite shall be entitled to terminate the Licence Agreement with immediate effect on giving written notice to the Licensor and thus will transfer all management of the Patent Rights to the Licensor, for the future expense of the Licensor. Patent costs incurred by Can-Fite prior to termination under this Article 11.4 shall be promptly reimbursed by the Licensor.

 

12. General

 

12.1 This Agreement shall be binding upon and ensure to the benefit of the parties hereto and their respective legal successors but shall not otherwise be assignable by Can-Fite without the written consent of the Licensor, which consent shall not be unreasonably withheld.

 

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12.3 Each and every provision of this Agreement shall be read (where possible) as entirely independent and severable from the other provisions. In all cases where a provision of this Agreement is reducible, invalid or unenforceable in terms of any legislation or other legal authority, such provision shall not affect the validity of the remaining portion of this Agreement which shall remain in force and effect as if this Agreement had been granted with no such provision and it is hereby declared the intention of the parties that they would have executed the remaining portion of this Agreement without including therein any such provisions.

 

12.4 A failure by a party to exercise or enforce any rights conferred upon it by this Agreement shall not be deemed to be a waiver of any such rights or operate so as to bar the exercise or enforcement thereof at any subsequent time or times.

 

12.7 The text of any press release or other communication to be published by or in the media concerning the subject matter of this Agreement shall require the approval of each party.

 

13. Notices

 

13.1 Any notice required to be given hereunder by any party shall be in writing and shall be served by sending the same by registered post to the address of the other party as given herein.

 

13.2 Any notice to the Licensor shall be sufficiently served if addressed to:

 

Leiden, marked for the attention of the Director of Research & Innovation Services, LURIS, Poortgebouw Noord, Rijnsburgerweg 10, 2333A Leiden , The Netherlands; and

 

13.3 Any notice to Can-Fite shall be sufficiently served if addressed to Can-Fite Biopharma, Ltd., P.O. Box 7537, Petach-Tikva 49170, Israel and marked for the attention of Chief Operating Officer.

 

14. Governing Law

 

This Agreement and all matters relating thereto shall be governed by the laws of the Netherlands.

 

Signed on behalf of the Licensor       
         
Signed /s/ H. Wite Best   Date 11/02/2009
         
Name H. Wite Best      
         
Designation Vice Chair Executive Board    

 

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