Exhibit 10.2

 

**Confidential portions have been omitted pursuant to a request for confidential
treatment and have been filed separately with the Securities and Exchange
Commission (the “Commission”)**

 

AMENDED AND RESTATED TECHNOLOGY License AGREEMENT

 

This Amended and Restated Technology License Agreement (the “Agreement”) is
entered into as of December 21, 2015 (the “Execution Date”) between Hefei
Tianhui Incubator of Technologies Co., Ltd., a corporation organized and
existing under the laws of the People’s Republic of China (“PRC”) and having its
principal place of business at No. 199 Fanhua Road, Heifei, Anhui, China (“HTIT”
or “Licensee”); and Oramed Pharmaceuticals Inc., a Delaware corporation and
Oramed Ltd., a company organized and existing under the laws of the State of
Israel and having a principal place of business at 2/4 Hi-Tech Park, PO Box
39098, Jerusalem, 91390, Israel (collectively referred to as “Oramed”). HTIT and
Oramed are sometimes referred to herein individually as a “Party” and
collectively as the “Parties”.

 

RECITALS

 

Whereas, Oramed is a clinical-stage biopharmaceutical company developing
clinical candidates for the treatment of diabetes by way of oral insulin; and

 

Whereas, HTIT is engaged in the development, manufacture, distribution, sales
and marketing of pharmaceutical products and medical devices in the PRC; and

 

Whereas, Oramed controls rights covering ORMD-0801 (as defined below) and is
engaged in advanced clinical trials and pre-commercialization activities with
respect thereto; and

 

Whereas, Oramed desires to grant Licensee, and Licensee desires to obtain,
exclusive rights to pre-commercialize, manufacture and commercialize product(s)
containing ORMD-0801 in the Licensee Territory, all on the terms and conditions
set forth herein; and

 

Whereas, in the context of the commercialization of ORMD-0801, Licensee shall
pursue and be solely responsible for obtaining Regulatory Approvals as required
for commercializing such product in the Licensee Territory, pursuant to the
terms and conditions of this Agreement.

  

 1

 

 

Now Therefore, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Agreement, the Parties
agree as follows:

 

Article 1

 

Definitions

 

As used in this Agreement, the following initially capitalized terms, whether
used in the singular or plural form, shall have the meanings set forth in this
Article 1.

 

1.1          “Affiliate” means, with respect to a particular Party, a person,
corporation, partnership, or other entity that controls, is controlled by or is
under common control with such Party. For the purposes of this definition, the
word “control” (including, with correlative meaning, the terms “controlled by”
or “under the common control with”) means the actual power, either directly or
indirectly through one or more intermediaries, to direct or cause the direction
of the management and policies of such entity, whether by the ownership of 50%
or more of the voting stock of such entity, or by contract or otherwise.

 

1.2          “CFDA” means the China Food and Drug Administration of the PRC, and
any successors thereof.

 

1.3          “Commercialization,” with a correlative meaning for “Commercialize”
and “Commercializing,” means all activities in the Licensee Territory undertaken
before and after obtaining Regulatory Approvals relating specifically to the
pre-launch, launch, promotion, medical education and medical liaison activities,
marketing, pricing, reimbursement, sale, and distribution of the Products in the
Licensee Territory, including: (a) manufacturing or importing Products for
distribution and sale; (b) strategic marketing, sales force detailing,
advertising, medical education and liaison, and market and Product support; (c)
any post-marketing clinical studies (other than those included in
Pre-Commercialization) for use in generating data to be submitted to Regulatory
Authorities (and all associated reporting requirements); and (d) all customer
support, distribution, invoicing and sales activities.

 

1.4          “Commercialization Milestones” has the meaning set forth in Section
6.2(a).

 

1.5          “Commercialization Plan” has the meaning set forth in Section
6.1(a).

 

1.6          “Commercially Reasonable Efforts” means carrying out of obligations
or tasks by a Party using a level of efforts consistent with the exercise of
good faith and prudent scientific and business judgment in an active and ongoing
program as applied by a Party to the pre-commercialization and commercialization
of its own pharmaceutical products at a similar stage of development and with
similar market potential.

 

1.7          “Confidential Information” means, with respect to a Party, all
reports and other Information of such Party that is disclosed to the other Party
under this Agreement, whether in oral, written, graphic, or electronic form. All
Information disclosed by a Party pursuant to the Mutual Non-Disclosure Agreement
between the Parties dated June 24, 2014, as amended through the Effective Date,
shall be deemed to be such Party’s Confidential Information disclosed hereunder.

 

1.8          “Control” means, with respect to any material, Information, or
intellectual property right that a Party owns or to which a Party has a license,
that such Party has the ability to grant to the other Party access, a license,
or a sublicense (as applicable) to the foregoing on the terms and conditions set
forth in this Agreement.

 

1.9          “Dollar” means a U.S. dollar, and “$” shall be interpreted
accordingly.

 

 2

 

 

1.10       “Effective Date” means the date immediately following the fulfillment
of the following condition: the written consent of the OCS with respect to this
Agreement has been obtained by Oramed in accordance with Section 2.1 (whether
such OCS consent is granted for an associated form of Agreement modified in
accordance with Section 2.1 or for the Execution Date Agreement).

 

1.11        “Execution Date” has the meaning set forth in the Preamble above.

 

1.12        “Execution Date Agreement” has the meaning set forth in Section 2.1.

 

1.13        “Executives” has the meaning set forth in Section 3.1(d).

 

1.14        “Field” means the use of the Product for the treatment of diabetes.

 

1.15        “First Commercial Sale” means the first sale of a Product by the
Licensee or any of its Affiliates or Sublicensees to a Third Party in the
Licensee Territory after Regulatory Approval for such Product has been obtained.

 

1.16        “Governmental Authority” means any multi-national, federal, state,
local, municipal, provincial or other government authority of any nature
(including any governmental division, prefecture, subdivision, department,
agency, bureau, branch, office, commission, council, court or other tribunal).

 

1.17        “Indemnify” has the meaning set forth in Section 11.1.

 

1.18        “Information” means any data, results, technology, business
information and information of any type whatsoever, in any tangible or
intangible form, including know-how, trade secrets, practices, techniques,
methods, processes, inventions, developments, specifications, formulations,
formulae, materials or compositions of matter of any type or kind (patentable or
otherwise), software, algorithms, marketing reports, expertise, test data
(including pharmacological, biological, chemical, biochemical, toxicological,
preclinical and clinical test data), manufacturing know-how and data, analytical
and quality control data, stability data, other study data and procedures.

 

1.19        “Initial Payment” has the meaning set forth in Section 8.1.

 

1.20        “Joint Steering Committee” or “JSC” has the meaning set forth in
Section 3.1(a)

 

1.21        “Laws” means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political subdivision,
domestic or foreign.

 

1.22        “Licensee Inventions” has the meaning set forth in Section 9.1.

 

1.23        “Licensee Regulatory Data” means Regulatory Data generated by or on
behalf of the Licensee (or its Affiliates, Sublicensees and/or contractors)
after the Effective Date in connection with the performance of Licensee’s
activities pursuant to this Agreement.

 

1.24        “Licensee Technology” means all Information that is Controlled by
Licensee, its Affiliates and/or Sublicensees as of the Effective Date or at any
time during the Term and is necessary or useful for Pre-Commercialization,
Commercialization or the manufacture of the Products in accordance with the
terms of this Agreement. For the avoidance of doubt, Licensee Technology does
not include Licensee Inventions.

 

 3

 

 

1.25        “Licensee Territory” means the PRC, Macau and Hong Kong.

 

1.26        “Losses” has the meaning set forth in Section 11.1.

 

1.27        “Milestones” shall mean the Pre-Commercialization Milestones and the
Commercialization Milestones.

 

1.28        “Net Sales” shall mean the gross amount invoiced by or on behalf of
the Licensee, its Affiliates and Sublicensees (in each case, the “Invoicing
Entity”) on sales of Products (whether made before or after the First Commercial
Sale of the Product), less the following: (a) amounts repaid or credited by
reason of rejection or return; (b) to the extent separately stated in the
invoices, any taxes or other governmental charges levied on the production, sale
and/or delivery of a Product which is paid by the Invoicing Entity; and (c)
packing and shipping cost; provided that:

 

(i)        in any transfers of Products between an Invoicing Entity and an
Affiliate of such Invoicing Entity not for the purpose of resale by such
Affiliate, Net Sales shall be equal to the higher of (A) the fair market value
of the Products so transferred, assuming an arm’s length transaction made in the
ordinary course of business; and (B) the actual transfer price; and

 

(ii)        in the event that an Invoicing Entity receives non-monetary
consideration for any Products or in the case of transactions not at arm’s
length between an Invoicing Entity and a non-Affiliate of the Invoicing Entity,
Net Sales shall be calculated based on the fair market value of such
consideration or transaction, assuming an arm’s length transaction made in the
ordinary course of business; and

 

(iii)        sales of Products by an Invoicing Entity to an Affiliate of such
Invoicing Entity for resale by such Affiliate shall not be deemed Net Sales and
Net Sales shall be determined based on the total amount invoiced by such
Affiliate on resale.

 

1.29        “Notification Date” has the meaning set forth in Section 4.8.

 

1.30        “OCS” has the meaning set forth in Section 2.1.

 

1.31        “Oramed Inc.” means Oramed Pharmaceuticals Inc., a Delaware
corporation and the parent of Oramed.

 

1.32        “Oramed Know-How” means all Information that is Controlled by Oramed
or its Affiliates as of the Effective Date and at any time during the Term and
is necessary or useful for the Pre-Commercialization, Commercialization or
manufacture of the Products in the Field in accordance with the terms of this
Agreement. For clarity, Oramed Know-How excludes the Oramed Patents. A summary
of Oramed Know-How as of the Effective Date is set forth on Exhibit B attached
hereto.

 

1.33        “Oramed Patents” means, as of the Effective Date, the Patents set
forth on Exhibit B attached hereto and all Patents in the Licensee Territory
that are related to the foregoing and Controlled by Oramed or its Affiliates
during the Term.

 

1.34        “Oramed Regulatory Data” means Regulatory Data generated by or on
behalf of Oramed (or its Affiliates, licensees or sublicensees) after the
Effective Date, and Controlled by Oramed during the Term.

 

1.35        “Oramed Technology” means the Oramed Patents and Oramed Know-How.

 

 4

 

 

1.36        “ORMD-0801” means the compound known as ORMD-0801 and controlled by
Oramed, described more fully in Exhibit A attached hereto.

 

1.37        “Patent Infringement” has the meaning set forth in Section 9.5(a).

 

1.38       “Patents” means (a) pending patent applications, issued patents,
utility models and designs; (b) reissues, renewals, substitutions,
confirmations, registrations, validations, re-examinations, additions,
extensions, continuations, continued prosecution applications,
continuations-in-part, or divisions of or to any patent applications, issued
patents, utility models or designs; and (c) the equivalent or counterpart of the
foregoing.

 

1.39        “Pre-Commercialization,” with a correlative meaning for
“Pre-Commercialize” and “Pre-Commercializing,” means all activities in the
Licensee Territory relating to preparing and conducting clinical and toxicology
testing, human clinical studies and regulatory activities (such as submissions
of regulatory applications and related activities) with respect to the Products,
together with the manufacturing the Products for the purpose of conducting the
foregoing activities and manufacturing scale-up of the Products necessary for
Commercialization, all for the purpose of obtaining, maintaining or expanding
Regulatory Approval in the Licensee Territory. The foregoing includes
preparation, submission, review, and development of data or information for the
purpose of submission to a Governmental Authority in the Licensee Territory to
obtain Regulatory Approval of Products. Pre-Commercialization shall also include
clinical development and regulatory activities for additional dosage forms or
formulations of a Product after Regulatory Approval of such Product, including
clinical trials initiated following receipt of Regulatory Approval for the
purpose of maintaining or expanding Regulatory Approval or any clinical trial to
be conducted after Regulatory Approval which was mandated by the applicable
Regulatory Authority as a condition of such Regulatory Approval.

 

1.40        “Pre-Commercialization Activities” has the meaning set forth in
Section 4.3(a).

 

1.41        “Pre-Commercialization Costs” has the meaning set forth in Section
4.6.

 

1.42        “Pre-Commercialization Milestones” has the meaning set forth in
Section 4.3(a).

 

1.43        “Pre-Commercialization Plan” has the meaning set forth in Section
4.2(a).

 

1.44        “Premas” means PREMAS Biotech Pvt. Ltd.

 

1.45        “Premas Agreement” means an agreement between Oramed and Premas that
will provide for the transfer by Premas to Oramed (or Oramed’s designee) of
Premas technology for manufacture of the SBTI (Soybean Trypsin Inhibitor) for
the Product.

 

1.46        “Product(s)” means ORMD-0801 in any dosage, form or formulation or
mode of administration, alone or in combination with other therapeutically
active ingredients.

 

1.47        “Product Marks” has the meaning set forth in Section 6.3.

 

1.48        “Regulatory Approval” means, with respect to a Product in the
Licensee Territory or the Retained Territory, as applicable, all approvals,
registrations, licenses or authorizations from the relevant Regulatory Authority
in such country or jurisdiction that is specific to such Product and necessary
to manufacture, market and/or sell such Product.

 

 5

 

 

1.49        “Regulatory Authority” means, in a particular country or regulatory
jurisdiction, any applicable Governmental Authority responsible for granting
Regulatory Approval. In the Licensee Territory, the primary Regulatory Authority
is the CFDA and any other parallel or successor authority within the Licensee
Territory.

 

1.50        “Regulatory Data” means data and filings generated and prepared for
the purpose of obtaining Regulatory Approval including analytical and
manufacturing data and clinical data relating to the Products.

 

1.51        “Regulatory Data Costs” means costs actually incurred or paid by a
Party and reasonably attributable to the generation of Regulatory Data,
including, by way of example, costs incurred or paid in the conduct of
associated clinical trials, statistical analysis of clinical data, manufacturing
scale-up and patient recruitment. The Parties shall consult with each other and
mutually agree on an appropriate mechanism for establishing Regulatory Data
Costs, which mechanism shall be approved by the JSC (or directly by the Parties
if the JSC is disbanded).

 

1.52        “Regulatory Filings” means, with respect to the Products, any
submission to a Regulatory Authority of any appropriate regulatory application
specific to Products, and shall include any submission to a regulatory advisory
board and any supplement or amendment thereto.

 

1.53        “Retained Territory” means all countries and territories in the
world outside the Licensee Territory.

 

1.54        “Royalty Term” has the meaning set forth in Section 8.3(b).

 

1.55        “Sublicense” shall mean any right granted, license given, or
agreement entered into, by the Licensee to or with any other person or entity,
under or with respect to or permitting any use of any of the Oramed Technology
(or any part thereof) or otherwise permitting the pre-commercialization,
manufacture, marketing, distribution and/or sale of Products (regardless of
whether such grant of rights, license given or agreement entered into is
referred to or is described as a sublicense or as an agreement with respect to
the pre-commercialization and/or manufacture and/or sale and/or distribution
and/or marketing of Products) upon written approval from Oramed.

 

1.56        “Sublicense Agreement” has the meaning set forth in Section 2.4

 

1.57        “Sublicensee” shall mean a person or entity granted a Sublicense in
accordance with Section 2.4, provided that in no event will the term
“Sublicensee” include any sublicensee of Sublicensee.

 

1.58        “Subsequent Payment” shall have the meaning set forth in Section
8.2.

 

1.59        “Swisscaps” means SWISSCAPS AG.

 

1.60        “Swisscaps Agreement” means an agreement between Oramed and
Swisscaps that will provide for the transfer by Swisscaps to Oramed (or Oramed’s
designee) of Swisscaps technology for manufacture of Product capsules.

 

1.61        “Taxes” means taxes (other than income taxes), duties, tariffs or
other governmental charges levied on the sale of Products, including consumption
taxes.

 

1.62        “Term” means the term of this Agreement, as determined in accordance
with Article 13.

 

 6

 

 

1.63        “Territory” means the Licensee Territory or the Retained Territory,
as applicable.

 

1.64        “Third Party” means any person or entity other than Oramed or HTIT
or an Affiliate of any of them.

 

1.65        “Valid Claim” means, with respect to any country in the Licensee
Territory: (a) a claim of an issued and unexpired patent (as may be extended
through supplementary protection certificate or patent term extension or the
like) included within the Oramed Patents to the extent such claim has not been
(i) held invalid or unenforceable by a non-appealed or un-appealable decision of
a competent court or government agency or other appropriate body of competent
jurisdiction and has not been admitted invalid through disclaimer or dedication
to the public, and (ii) has not expired, been determined to be unenforceable,
been cancelled, withdrawn, abandoned, or (b) a claim of a pending patent
application included within the Oramed Patents.

 

Article 2

EFFECTIVE DATE AND LicenseS

 

2.1          Effective Date. The Parties acknowledge that the Office of the
Chief Scientist of the Ministry of Economy of the State of Israel (the “OCS”)
must consent to this Agreement before this Agreement is made effective. Oramed
shall use its best efforts to obtain the written consent of the OCS to this
Agreement in the form executed by the Parties as of the Execution Date
(“Execution Date Agreement”) within 60 days after the Execution Date. If the OCS
has not provided such consent during such 60 day period, then Oramed shall have
the right, and Licensee shall have the right to require Oramed, to continue to
use its best efforts to obtain such consent. In addition, Oramed will keep
Licensee informed as to the progress of such request for consent and shall
consult with Licensee in good faith with respect thereto. The Parties
acknowledge that it may be necessary prior to the Effective Date to modify the
Execution Date Agreement to comply with the requests of the OCS and the Parties
shall consider any such proposed modifications in good faith; provided, however,
that (i) all financial obligations that may be imposed by the OCS as a
pre-condition to obtaining OCS consent to this Agreement shall be the sole
responsibility of Oramed; (ii) the Parties will cooperate in good faith to
minimize financial and non-financial obligations (which obligations must be
commercially reasonable) that may be imposed by the OCS as a pre-condition to
obtaining OCS consent to this Agreement; and (iii) after the Parties have
considered any such proposed modifications in good faith, no Party shall be
required to agree to any modifications to the Execution Date Agreement that
would have a material adverse impact on such Party whether under the Execution
Date Agreement or otherwise. Notwithstanding anything herein to the contrary,
other than this Section 2.1 and Sections 8.1 and 13.4, the provisions of this
Execution Date Agreement shall not be effective until the Effective Date. From
and after the Effective Date, the entire Agreement shall be in full force and
effect.

 

2.2          License Grant. Subject to the terms of this Agreement, Oramed
hereby grants to Licensee:

 

(a)         Pre-Commercialization License: As of the Effective Date, and subject
to Section 4.1(a), an exclusive, royalty-bearing license, with the right to
grant sublicenses, subject to Section 2.4, under the Oramed Technology, solely
to engage in Pre-Commercialization Activities in the Field in the Licensee
Territory and to make and have made Products for such Pre-Commercialization
Activities; and

 

 7

 

 

(b)         Commercialization License: Commencing following payment of the
Subsequent Payment, an exclusive, royalty-bearing license, with the right to
grant sublicenses, subject to Section 2.4, under the Oramed Technology, to
Commercialize the Products in the Field in the Licensee Territory and to import,
make and have made Products for Commercialization in the Licensee Territory; and

 

(c)         Oramed Regulatory Data: As of the Effective Date, subject to Section
4.7(d), an exclusive, fully-paid, royalty-free license, with the right to grant
sublicenses, subject to Section 2.4 below, to use Oramed Regulatory Data to
Pre-Commercialize and Commercialize the Products in the Licensee Territory,
including the right to use any and all such Oramed Regulatory Data in any
Regulatory Filings in the Licensee Territory, subject to the terms and
conditions of this Agreement.

 

For the avoidance of doubt, subject to the termination provisions in Section
8.2, the licenses set forth above shall be effective prior to Licensee’s payment
of the Service Agreement Milestone Payments. Notwithstanding the foregoing, it
is expressly acknowledged, understood and agreed that Oramed retains all rights
to Pre-Commercialize and Commercialize Products, and make and have made
Products, and to exploit without limitation and grant licenses under its rights
in the Oramed Technology and the Oramed Regulatory Data, outside of the Licensee
Territory, at its sole discretion and without restriction or obligation to
Licensee. Without the prior written consent of the Licensee, neither Oramed nor
any Third Party shall Pre-Commercialize, make, have made, use, sell, offer for
sale, have sold, import and otherwise Commercialize the Products in the Licensee
Territory.

 

2.3          Licenses to Oramed. Subject to the effectiveness of this Agreement,
Licensee hereby grants to Oramed an exclusive, fully-paid, royalty-free license,
(with the right to grant sublicenses through multiple tiers), to use Licensee
Regulatory Data to Pre-Commercialize, make, have made, use, sell, offer for
sale, have sold, import and otherwise Commercialize the Products in the Retained
Territory, including the right to use any and all Licensee Regulatory Data in
any Regulatory Filings in the Retained Territory.

 

2.4          Sublicenses.

 

(a)         Subject to the terms set out herein, Licensee shall have the right
to grant sublicenses under the licenses granted in Section 2.2 to its Affiliates
and/or Third Parties only with the prior written consent of Oramed; provided,
however, that Licensee may not grant a sublicense prior to the completion by
Licensee of a Phase I Clinical Trial. Oramed may not grant sublicenses under the
licenses granted in Section 2.3 to its Affiliates and/or Third Parties without
the prior written consent of the Licensee. Notwithstanding the foregoing,
Licensee may sublicense under the license granted in Section 2.2 to Hefei
Tianmai Biotechnology Development Co., Ltd. without the prior written consent of
Oramed.

 

(b)        The sublicensing Party shall remain responsible for the performance
of the obligations hereunder by each of its respective Sublicensees. The
sublicensing Party shall, within 30 days after granting any sublicense, notify
the other Party in writing of the grant of such sublicense and provide the other
Party with a true and complete copy of the sublicensing agreement. Each
sublicense agreement shall be consistent with the terms and conditions under
this Agreement. Each Party shall, in each agreement under which it grants a
sublicense under the licenses set forth in Section 2.2 or 2.3, as applicable
(each, a “Sublicense Agreement”), include the following terms and conditions:
the Sublicensee is required to provide the following to the sublicensing Party
if such Sublicense Agreement terminates: (i) the assignment and transfer of
ownership and possession of all Regulatory Filings and Regulatory Approvals held
or possessed by such Sublicensee, and (ii) the assignment of, or a freely
sublicenseable exclusive license to, all intellectual property Controlled or
developed by such Sublicensee with a Valid Claim covering the
Pre-Commercialization or Commercialization of the Products in the Field in the
applicable Territory that was created by or on behalf of such Sublicensee during
the exercise of its rights or fulfillment of its obligations pursuant to such
Sublicense Agreement. In no event may the sublicensing Party’s Sublicensee be
entitled to grant further sublicenses.

 

 8

 

 

2.5           Negative Covenants. Licensee covenants that it will not, and it
will not permit any of its respective Affiliates, Sublicensees or any Third
Party to use or practice any Oramed Technology outside the scope of the license
granted under Section 2.2 above or otherwise in contravention of the terms of
this Agreement. Oramed covenants that it will not, and it will not permit any of
its Affiliates, sublicensees or any Third Party to use or practice any Licensee
Technology outside the scope of the license granted to it under Section 2.3 or
otherwise in contravention of the terms of this Agreement.

 

2.6          Oramed Retained Rights; No Implied License. Oramed retains the
right to practice and license the Oramed Technology outside the scope of the
licenses granted to Licensees in Section 2.2. Except as set forth herein,
neither Party shall acquire any license or other intellectual property interest,
by implication or otherwise, under any trademarks, patents or patent
applications Controlled by the other Party.

 

2.7         Activities Outside of a Party’s Territory. As to such countries
outside of their respective Territory, each Party (i) shall not, and will ensure
that its Affiliates and Sublicensees will not, engage in any advertising or
promotional activities relating to the Product directed primarily to prospective
purchasers of the Product located in the other Party’s Territory, and shall use
Commercially Reasonable Efforts to ensure that Commercialization activities
conducted by or on behalf of such Party via the Internet or other global
electronic means or methods are only targeted to persons within the Field and in
its Territory, and (ii) shall not, and will ensure that its Sublicensees will
not, take orders from any prospective purchaser of the Product located in
countries in the other Party’s Territory. If a Party or its Sublicensees
receives any order from a prospective purchaser of Product located in a country
in the other Party’s Territory, such Party or Sublicensee shall promptly refer
that order to the other Party and shall not accept any such order or deliver or
tender (or cause to be delivered or tendered) any Product under such order. If
either Party has a reasonable basis to conclude that its customer, sublicensee
or distributor, or a customer, sublicensee or distributor of the other Party, is
engaged in the sale or distribution of Products outside of the selling Party’s
Territory, then the selling Party shall take all reasonable steps (including
cessation of sales to such customer, sublicensee or distributor) necessary to
limit such sale or distribution outside such Party’s Territory.

 

2.8         Cooperation by the Parties. The Parties shall cooperate in good
faith to effectively and efficiently implement the objectives of this Agreement.

 

Article 3

Overview AND Management

 

3.1         Joint Steering Committee.

 

(a)         Formation and Purpose. Within 30 days of the Effective Date, the
Parties will establish a joint steering committee (the “Joint Steering
Committee” or “JSC”) to oversee and coordinate the Pre-Commercialization and
Commercialization activities with respect to the Products in the Field in the
Licensee Territory. The JSC shall also be a forum for the exchange of
information between the Parties.

 

 9

 

 

(b)         Members. Not later than 30 days from the Effective Date, Oramed
shall appoint 2 representatives to the JSC, and HTIT shall appoint 2
representatives to the JSC. Each Party shall ensure that its representative(s)
shall have sufficient seniority and expertise within the applicable Party to
make decisions arising with the scope of the JSC’s responsibilities. The JSC may
change its size from time to time by agreement of the Parties, provided that the
JSC shall at all times consist of an equal number of representatives of Oramed,
on the one hand, and Licensee. Each of Oramed and HTIT may replace its
respective JSC representatives at any time upon written notice to the other
Party. The JSC may invite non-members to participate in the discussions and
meetings of the JSC where appropriate (and subject to such individuals being
subject to mutually acceptable binders of confidentiality), provided that such
participants shall have no voting authority at the JSC. The JSC shall have a
chairperson, who shall serve for a term of one year, and who shall be selected
alternately, on an annual basis, by Oramed or Licensee. The initial chairperson
shall be selected by HTIT. The role of the chairperson shall be to convene and
preside at meetings of the JSC and to ensure the preparation of minutes, but the
chairperson shall otherwise have no additional powers or rights of any kind
beyond those held by the other JSC representatives.

 

(c)         Meetings. The JSC shall meet at least quarterly during the Term
unless the Parties mutually agree in writing to a different frequency for such
meetings; provided, however, that there should be an in-person meeting at least
once per year at a location and time agreed by the Parties (the “In-person
Meeting”). No later than 15 days prior to any scheduled meeting of the JSC, the
chairperson of the JSC shall prepare and circulate an agenda for such meeting
and, as soon as practicable, materials for the meeting; provided, however, that
either Party may propose additional topics to be included on such agenda prior
to such meeting. The JSC may meet in person, by videoconference or by
teleconference (except for the In-person Meeting which shall, obviously, be
in-person). Each Party will bear the expense of its respective JSC members’
participation in JSC meetings. Meetings of the JSC shall be effective only if at
least one representative of each of Oramed, on the one hand, and Licensee, on
the other hand, is present or participating in such meeting. The chairperson of
the JSC will be responsible for preparing reasonably detailed written minutes of
all JSC meetings that reflect, without limitation, material decisions made at
such meetings. The JSC chairperson shall send draft meeting minutes to each
member of the JSC for review within 15 days after each JSC meeting. The members
of the Committee shall have 15 days to provide comments. The JSC chairperson
shall incorporate timely received comments and distribute revised minutes to all
members of the JSC for their final review and approval by the later of 45 days
after the relevant meeting or the next regularly scheduled meeting of the JSC.
For clarity, if the JSC is not able to approve any minutes, it shall thereafter
be deemed to be a dispute and shall be subject to the dispute resolution set
forth in Section 3.1(d).

 

(d)        JSC Actions. Unless otherwise set forth in this Agreement, the JSC
will take action by unanimous consent, with each of Oramed and Licensee having a
single vote on the JSC, irrespective of the number of representatives actually
in attendance at a meeting. In the event of a disagreement between the Oramed’s
representatives and Licensee’s representatives of the JSC, the matter may be
referred to one senior executive of each Party (i.e., the Chief Executive
Officer or Chief Operating Officer of such Party or the chairman of the Board of
Directors of such Party, the “Executives”) for resolution. If such Executives
cannot resolve the matter within 15 days, then (i) if the matter arises prior to
the commencement by Licensee of a Phase I Clinical Trial in the Licensee
Territory, the Executive of Oramed shall have the final decision-making
authority on such matter; and (ii) if the matter arises subsequent to the
commencement by Licensee of a Phase I Clinical Trial in the Licensee Territory,
the Executive of HTIT shall have the final decision-making authority on such
matter; provided, further, in all cases, that any final determination made by
such Executive shall be consistent with the terms of this Agreement and involve
close consultation with the JSC.

 

3.2          Costs of Governance. The Parties agree that the costs incurred by
each Party in connection with its participation in the JSC shall be borne solely
by such Party.

 

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3.3          Discontinuation of JSC. The JSC shall continue to exist throughout
the Term unless the Parties unanimously agree to disband the JSC.

 

3.4         Technical Assistance. Upon the request of reasonable request of
Licensee, and on terms as may be agreed between the Parties, Oramed will provide
technical assistance to Licensee to support the use of Oramed Technology by
Licenses in the Licensee Territory.

 

Article 4

PRE-COMMERCIALIZATION

 

4.1          Overview of Pre-Commercialization.

 

(a)        Overview. Oramed Ltd. shall be responsible for Pre-Commercialization
Activities in the Licensee Territory, under the oversight of the JSC, as set
forth in this Agreement, with the goal of obtaining Regulatory Approval for
Products in the Licensee Territory. It is expressly agreed that HTIT shall be
Oramed’s exclusive designee for the fulfillment of Oramed’s obligations as
aforesaid and shall comply with the terms set out herein.

 

(b)        Consultation. Oramed shall provide advice, suggestions and
constructive feedback on Licensee’s Pre-Commercialization strategy, plans and
activities in the Licensee Territory (especially in view of Oramed’s desire to
achieve (to the extent appropriate) global harmonization of Product
pre-commercialization activities worldwide), either through the JSC or directly
to Licensee if the JSC is disbanded. Such consultation shall also include advice
and assistance concerning Licensee’s efforts to scale-up, as set forth in
Section 4.2(a). Licensee will reasonably and in good faith consider any advice,
suggestions, constructive feedback, comments and recommendations that Oramed may
have in this regard.

 

4.2          Pre-Commercialization Plan.

 

(a)        General. The initial plan for the Pre-Commercialization of the
Products is set out in Exhibit C attached hereto, as the same may be further
updated or amended from time to time as set forth in Section 4.2(b), (the
“Pre-Commercialization Plan”). The Pre-Commercialization Plan describes (i) the
proposed overall program of Pre-Commercialization in the Licensee Territory,
including clinical trials and associated timelines; (ii) timelines for key
Regulatory Authority meetings, filing of applications for Regulatory Approval,
and receipt of Regulatory Approvals, (iii) the tasks and responsibilities of
Licensee under the Pre-Commercialization Plan, and (iv) an associated
comprehensive budget for Pre-Commercialization Costs of Licensee. In the event
of any inconsistency between the Pre-Commercialization Plan and this Agreement,
the terms of this Agreement shall prevail. Oramed shall on an ongoing basis
afford Licensee access to complete Oramed Technology, associated manufacturing
processes and updates thereto as necessary for Licensee to independently
manufacture Products as detailed in the Pre-Commercialization Plan, such
Products to be used solely within the scope of the licenses granted to Licensee
in this Agreement. Licensee shall at its expense scale-up the Oramed Technology
in order to manufacture the Agreed Batch Sizes on a reproducible basis as set
forth in the Pre-Commercialization Plan. Oramed shall, until the parties succeed
in manufacturing three consecutive batches of the Agreed Batch Size of
substantially similar quality and content, be obligated to provide ongoing
consulting, advice and assistance services in order to support the scale-up
process, including cooperating to provide access to Oramed Technology,
associated manufacturing processes and updates thereto as set forth in the
Pre-Commercialization Plan. The “Agreed Batch Size” means any batch size,
provided that Oramed’s obligations hereunder shall not apply to batch sizes in
excess of 100,000 capsules.

 

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(b)         Updates to Pre-Commercialization Plan. From time to time during the
Term, and at least on a semi-annual basis, Oramed and/or Licensee may propose
relevant and reasonable updates and amendments, as appropriate, to the
then-current Pre-Commercialization Plan, and shall submit same to the JSC. Any
such updates and amendments shall require the approval of the JSC. Following the
granting of such approval, each updated or amended Pre-Commercialization Plan
shall become effective and supersede the previous Pre-Commercialization Plan.

 

4.3          Pre-Commercialization Activities

 

(a)         Licensee shall use Commercially Reasonable Efforts to carry out
those activities designated for performance by Licensee in the
Pre-Commercialization Plan, including all activities necessary to seek and
obtain Regulatory Approval for the Products in the Field in the Licensee
Territory (the “Pre-Commercialization Activities”). Notwithstanding anything to
the contrary herein, provided that Oramed executes the Premas and Swisscaps
Agreements, Licensee shall meet the Pre-Commercialization milestones set out in
Exhibit D hereto (the “Pre-Commercialization Milestones”).

 

(b)         Licensee shall conduct all Pre-Commercialization Activities in
accordance with the Pre-Commercialization Plan, including milestones set out
therein, and standard scientific principles.

 

(c)         The status, progress and results of Pre-Commercialization Activities
shall be discussed at meetings of the JSC, and Licensee shall provide the JSC
with a written summary report on the status and progress of such
Pre-Commercialization Activities at least 15 days prior to each scheduled JSC
meeting, or, if the JSC meeting occurs less frequently than once per calendar
quarter, on a quarterly basis. If the JSC has been disbanded, such status,
progress and results shall be reviewed directly between the Parties on at least
a quarterly basis. In addition, Licensee shall make available to Oramed such
information about Pre-Commercialization Activities as may be reasonably
requested by Oramed from time to time.

 

(d) Clinical Trials. As set forth in Exhibit C, Oramed will work with Licensee
to initiate a Phase II study in the Licensee Territory under the same protocol
used in Oramed’s Phase IIb United States clinical trial. This study will be
fully funded by Licensee. Moreover, in the event that Oramed has not provided a
third party with all rights to commercialize the Product in the United States,
and as a result is managing the United States Phase III clinical study itself,
at least one site involved in such clinical trial will be located in the
Licensee Territory and such trial will be under the same protocol used in the
Phase III United States study. This study in the Licensee Territory will be
fully funded by Licensee.

 

4.4          Beginning on the Effective Date and continuing through receipt of
first Regulatory Approval, Oramed shall have the right (but not the obligation)
to have representatives of Oramed attend at the facilities of Licensee and
Licensee’s Affiliates, Sublicensees and any authorized Third Parties involved in
the Pre-Commercialization and manufacture of Products, for the purpose of
visiting such facilities, meeting with personnel involved in
Pre-Commercialization and manufacture, or accessing Product-related information
available at these facilities. Licensee shall cooperate with Oramed and its
representatives in all respects, and shall cause Licensee’s Affiliates,
Sublicensees and any authorized Third Parties as aforesaid to cooperate in all
respects with Oramed and its representative’s involved with the performance of
the foregoing activities.

 

4.5          Compliance.

 

(a)         Each Party agrees that in performing its obligations under this
Agreement: (i) it shall comply in all material respects with all applicable
Laws; and (ii) it will not employ or engage any Person who has been debarred by
any regulatory authority, or, to such Party’s knowledge, is the subject of
debarment proceedings by a regulatory authority.

 

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(b)         Licensee shall have the right to engage subcontractors for the
performance of its obligations under the Pre-Commercialization Plan, provided
that Licensee shall ensure that such subcontractor(s) are bound by written
obligations of confidentiality and invention assignment consistent with those
contained in this Agreement. Licensee shall remain fully liable to Oramed for
any act or omission of any such subcontractors.

 

(c)         Licensee shall maintain complete, current and accurate records of
all work conducted by it under the Pre-Commercialization Plan (including all
CMC-related activities), and all data and other Information resulting from such
work. Such records shall fully and properly reflect all work done and results
achieved in the performance of the Pre-Commercialization Activities in good
scientific manner appropriate for regulatory and patent purposes. Oramed shall
have the right to review all records maintained by Licensee at reasonable times,
upon a reasonable written request.

 

4.6           Pre-Commercialization Costs. Licensee shall bear all costs
incurred in carrying out the Pre-Commercialization activities
(“Pre-Commercialization Costs”). All approvals and certificates from the
Regulatory Authority in the Licensee Territory shall be applied for and issued
in the name of the Licensee.

 

4.7           Performance of Clinical Trials and Access to Regulatory Data.

 

(a)                Notwithstanding Section 2.7 (Activities Outside of a Party’s
Territory), Oramed, its Affiliates and their Sublicensees, in coordination with
Licensee, shall have the right to conduct clinical trials and other studies in
connection with the Oramed Technology in the Licensee Territory for the purpose
of generating Regulatory Data in support of regulatory submissions to the
regulatory authorities in the Retained Territory.

 

(b)                Licensee shall, in a timely manner and in compliance with all
applicable Laws, provide Oramed with the right to use any and all Licensee
Regulatory Data in accordance with Section 2.3.

 

(c)                Oramed shall, in a timely manner and in compliance with all
applicable Laws, provide Licensee with the right to use any and all Oramed
Regulatory Data in accordance with Section 2.2(c).

 

(d)                Licensee shall provide Oramed with summary reports generated
in the conduct of Pre-Commercialization Activities, as well as written summaries
of the regulatory filings regarding the Products in the Licensee Territory upon
completion of applicable clinical trials. All Information provided hereunder
(including such summary reports and written summaries) shall be in English and
shall include sufficient information to enable Oramed to understand each study
and its results. In addition, upon reasonable request by Oramed, Licensee shall
provide access to its facility(ies) and to the facilities of Licensee’s
Affiliates, Sublicensees and any authorized Third Parties involved in
Pre-Commercialization Activities to the extent necessary to enable Oramed and
its representatives to review on-site the study-specific portions of detailed
Product-related analyses, raw data generated by such entities related to
Products, Information, written Product-related reports, and regulatory filings
that are made a part of, are related to, or are quoted in such summary reports
or such written summaries.

 

(e)                Licensee shall ensure that in the event that it enters into
any agreement with one or more Third Parties for Pre-Commercialization and
Commercialization activities (each a “Third Party Partner”), that its
contractual agreement(s) with such Third Party Partners include the right to
transfer to Oramed any additional Regulatory Data generated or developed by such
Third Party Partner for use in seeking regulatory approval. Licensee shall
remain fully liable to Oramed for any act or omission of any such Third Party
Partners.

 

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(f)                 Confidentiality. All pre-clinical, analytical, non-clinical,
and clinical data and associated reports disclosed by one Party to the other
under this Agreement shall be deemed Confidential Information of the disclosing
Party, subject to the permitted uses and disclosures described in this Section
4.7 (including pursuant to the licenses granted under Section 2.2).

 

4.8          Performance of Phase IIb Study and Notification. Licensee
acknowledges that, as of the Execution Date, Oramed is sponsoring a multi-center
Phase IIb clinical study involving the Product outside the Licensee Territory
(the “Oramed Study”). Oramed will keep Licensee reasonably informed about the
progress of the Oramed Study from time to time. Oramed will provide Licensee
with written notice upon the issuance by Oramed or the issuance by Oramed Inc.
of a press release disclosing the top-line data from the Oramed Study. The date
on which such notice is provided to Licensee shall be referred to herein as the
“Notification Date”.

 

Article 5

Regulatory Matters

 

5.1          Licensee’s Regulatory Responsibilities.

 

(a)        Licensee shall own all Regulatory Filings and Regulatory Approvals in
the Licensee Territory, and shall be solely responsible for preparing any and
all Regulatory Filings at its sole expense in accordance with the
Pre-Commercialization Plan, subject to the terms of this Article 5. Oramed shall
consult with Licensee as Licensee may reasonably request from time to time in
connection with the preparation and filing of such Regulatory Filings.

 

(b)        Licensee shall keep Oramed informed of any material regulatory
developments specific to Products throughout the Licensee Territory, and Oramed
may contribute to the regulatory plans and strategies for the Products in the
Licensee Territory, in each case through the JSC or directly to HTIT if the JSC
has been disbanded.

 

(c)        Licensee shall be solely responsible for any discussions with any
Regulatory Authority related to any Pre-Commercialization in the Field in the
Licensee Territory, provided that Licensee will inform Oramed of any material
discussions in advance to the extent practicable, and will reasonably consider
any input from Oramed in preparation for such discussions.

 

(d)        To the extent permitted by the applicable Regulatory Authority in the
Licensee Territory and as requested by Oramed, Licensee shall allow
representatives of Oramed to participate in any material scheduled conference
calls and meetings between Licensee and the Regulatory Authority at Oramed’s own
expense. If Oramed elects not to participate in such calls or meetings, Licensee
shall keep Oramed reasonably informed of the discussions between Licensee and
the Regulatory Authority that take place during such calls or meetings.

 

(e)        With respect to all Regulatory Filings made by Licensee and/or its
Affiliates and Sublicensees and any authorized Third Parties on their behalf in
the Licensee Territory, Licensee shall, and shall ensure that such entities
will: (i) submit only data and information that are free from fraud or material
falsity; (ii) not use bribery or the payment of illegal gratuities in connection
with its Regulatory Filings for the Products; and (iii) submit only data and
information that are accurate in all material respects for purposes of
supporting Regulatory Approval.

 

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5.2          Additional Regulatory Negative Covenants. If either Oramed or
Licensee believes that the other Party, as the case may be, is taking or intends
to take any action with respect to the Products that would reasonably be
expected to have a material adverse impact upon the regulatory status of the
Products in the Retained Territory or the Licensee Territory, as applicable,
such Party shall have the right to bring the matter to the attention of the JSC
(or directly to such Party if the JSC is disbanded). Without limiting the
foregoing, with respect to the Products, unless the Parties otherwise agree in
writing: (a) Licensee shall not communicate with any Regulatory Authority having
jurisdiction in the Retained Territory, unless so ordered by such Regulatory
Authority, in which case Licensee shall provide immediately to Oramed written
notice of such order; (b) Licensee shall not submit any Regulatory Filings or
seek Regulatory Approvals for the Products in the Retained Territory; (c) Oramed
shall not communicate with any Regulatory Authority having jurisdiction in the
Licensee Territory, unless so ordered by such Regulatory Authority, in which
case Oramed shall provide immediately to Licensee written notice of such order;
and (d) Oramed shall not submit any Regulatory Filings or seek Regulatory
Approvals in the Licensee Territory (other than in connection with clinical
trials as permitted pursuant to Section 4.7(a)).

 

5.3          Recalls. If any Regulatory Authority issues or requests a recall or
takes a similar action in connection with the Product in a Party’s Territory, or
if a Party determines that an event, incident or circumstance has occurred that
may result in the need for a recall or market withdrawal of Product in such
Party’s Territory, such Party will promptly notify the other Party thereof in
writing and by telephone, email or facsimile and use Commercially Reasonable
Efforts to promptly discuss such event, incident or circumstance with the other
Party in order to jointly determine the appropriate course of action (except in
the case of a recall mandated by a Regulatory Authority in the applicable
Territory, in which case a Party may act without such advance notice but will
notify the other Parties as soon as possible), and shall provide to the other
Party copies of all relevant correspondence, notices and the like. Subject to
the foregoing sentence, Licensee will retain ultimate responsibility for
deciding whether to conduct a recall of Products in the Licensee Territory and
the manner in which any such recall will be conducted; and Oramed will retain
ultimate responsibility for deciding whether to conduct a recall of Products in
the Retained Territory and the manner in which any such recall will be
conducted.

 

Article 6

Commercialization

 

6.1          Overview of Commercialization in the Licensee Territory.

 

(a)         Overview. Licensee will be solely responsible for all aspects of the
Commercialization of Products in the Licensee Territory, which shall be
conducted in compliance with all applicable Laws and in accordance with a
Commercialization plan for the Territory to be prepared by Licensee and provided
to Oramed reasonably in advance of the First Commercial Sale (the
“Commercialization Plan”). Such Commercialization Plan shall include the
activities and timelines in preparation for the launch of each such Product and
after such Product launch, and shall be updated on at least an annual basis by
Licensee.

 

(b)        Consultation. Oramed shall provide advice, suggestions and
constructive feedback on the Licensee’s commercialization strategy, plans and
activities, either through the JSC or directly with Licensee once the JSC is
disbanded. Licensee will reasonably and in good faith consider any advice,
suggestions, constructive feedback, comments and recommendations that Oramed may
have with respect to Licensee’s commercialization of the Product.

 

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6.2          Licensee’s Performance.

 

(a)         Commercial Diligence. Licensee shall use Commercially Reasonable
Efforts to Commercialize Products throughout the Licensee Territory. Without
limiting the generality of the foregoing, Licensee shall conduct all
Commercialization activities in accordance with the Commercialization Plan, with
a level of effort that is consistent with industry standards and is designed to
maximize the overall commercial opportunity for the Product, and shall use
Commercially Reasonable Efforts to launch the first Product in the Licensee
Territory within six (6) months after obtaining Regulatory Approval and to
market Products following such launch. Notwithstanding anything to the contrary
herein, Licensee shall meet the Commercialization milestones set out in Exhibit
D hereto (the “Commercialization Milestones”).

 

(b)        Reports. From and after the date that is six (6) months before the
anticipated date of First Commercial Sale, Licensee shall update Oramed at least
once in each calendar quarter regarding Licensee’s Commercialization activities,
including at Oramed’s reasonable request providing annual sales guidance
forecasts. In addition, from and after the date that is six (6) months before
the anticipated date of First Commercial Sale, Licensee shall present a written
quarterly report to Oramed summarizing Licensee’s Commercialization activities
pursuant to this Agreement, at a level of detail reasonably requested by Oramed
and sufficient to enable Oramed to determine Licensee’s compliance with its
diligence obligations pursuant to this Section 6.2. In addition to such
quarterly updates and written reports, upon the reasonable request of Oramed,
Licensee shall provide to Oramed on an interim basis then-current
Commercialization figures and data of Licensee and its Sublicensees and
Affiliates that are reportable to Oramed under this Agreement. For clarity, all
reports and information shared with Oramed pursuant to this Section 6.2(b) shall
be deemed Licensee’s Confidential Information as per Article 12.

 

6.3          Trademark. As soon as a Party determines the trademarks to be used
in commercializing the Products in its respective Territory, such Party shall
promptly notify the other Party and thereafter, as between the Parties, shall
have the exclusive right to use such trademark(s) throughout its Territory.
Licensee shall have the right to brand the Product in the Licensee Territory
using Licensee’s related trademarks and any other trademarks and trade names
Licensee determines reasonably appropriate for the Product subject to the
consent and approval of Oramed in connection thereto (“Product Marks”), which
consent and approval shall not be unreasonably withheld. Licensee shall own all
rights in and to the Product Marks and will be responsible for filing,
prosecution, maintenance and defense of all registrations of the Product Marks,
and will be responsible for the payment of any costs relating to filing,
prosecution, maintenance and defense of all Product Marks, in the Territory.
Licensee shall not, and shall ensure that its Affiliates and Sublicensees will
not, make any use of any trademark similar to the trademark used by Oramed in
commercializing the Products in the Retained Territory. Unless expressly
required by applicable Law or otherwise expressly agreed in writing by Oramed,
Licensee may not use the corporate name, trademark or logo of Oramed, Oramed
Inc. or/and of their respective Affiliated entities for any purpose. Should such
use become required as a result of applicable Law or other written agreement
between the Parties, such usage shall be in strict compliance with Oramed’s
then-current guidelines for such name, trademark or logo usage.

 

Article 7

manufacturing

 

7.1          Manufacture by or on Behalf of Licensee. Licensee shall be solely
responsible for the manufacture and supply of Product for use in
Pre-Commercialization and Commercialization, including for clinical and
commercial purposes. Manufacture of Products for use in Pre-Commercialization
and Commercialization will be performed in the Licensee Territory, and shall be
performed solely by Licensee. Licensee shall ensure that all manufacture of
Product meets GMP standards or their equivalent in the Licensee Territory and
Oramed Product specifications. Licensee shall bear all costs and expenses
incurred in connection with the manufacture and supply of the Products for the
Licensee Territory, including all clinical manufacturing costs and the cost of
qualifying its facilities.

 

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7.2          Manufacture of Product for Oramed. Upon Oramed’s request, Licensee
agrees to manufacture and supply Product to Oramed (or Oramed’s designee(s)) for
resale in the Retained Territory on a cost-plus 8% basis.

 

Article 8

 

Financial TERMS AND REPORTING

 

8.1          Initial Payment. Within 20 days of the Execution Date, Licensee
shall pay US $3,000,000 (the “Initial Payment”) to Oramed. It is expressly
agreed that, upon release to Oramed, the Initial Payment shall be non-refundable
and non-creditable except as agreed in Section 13.4 of the Agreement.

 

8.2          Subsequent Payment. Except the Initial Payment, Licensee shall pay
Oramed the subsequent payment in accordance with the Payment Schedule as set
forth in Exhibit F1 (the “Subsequent Payment”). In addition, Licensee shall pay
Oramed the additional service agreement milestones payments in accordance with
the Payment Schedules set forth in Exhibit F2 and F3 (the “Service Agreement
Milestone Payments”). Failure to make the Subsequent Payment and the Service
Agreement Milestone Payments in full upon satisfaction by Oramed of the
applicable milestones shall be deemed a material breach of this Agreement giving
rise to Oramed’s right to terminate this Agreement pursuant to Section 13.2.

 

8.3          Royalties.

 

(a)        Royalty Rates. The Licensee shall pay to Oramed a running royalty of
the Applicable Rate on Net Sales during the Royalty Term. The “Applicable Rate”
means 10%, provided however, that the Applicable Rate shall be reduced to (a)
8%, if neither of the Premas Agreement or Swisscaps Agreement is executed within
10 months of the Effective Date or (b) 9%, if only one of the Premas Agreement
or Swisscaps Agreement is executed within 10 months of the Effective Date or (c)
5%, if following the expiration of the last-to-expire Valid Claim of an Oramed
Patent covering the use, import, manufacture or Commercialization of such
Product in the Licensee Territory, a generic equivalent for the Product is
released in the Licensee Territory by a Third Party that is followed by a
reduction of at least 50% in the retail price of the relevant Product in the
Licensee Territory.

 

(b)        Royalty Term. The royalty payment obligation under this Section 8.3
shall apply, on a Product-by-Product basis in the Licensee Territory, during the
period of time beginning upon the First Commercial Sale of such Product in the
Licensee Territory, and ending upon the later of: (i) the expiration of the
last-to-expire Valid Claim of an Oramed Patent covering the use, import,
manufacture or Commercialization of such Product in the Licensee Territory; and
(ii) 15 years after the First Commercial Sale of such Product in the Licensee
Territory (such period, the “Royalty Term”).

 

8.4          Payments and Reports. Within 30 days after the end of each calendar
quarter commencing from First Commercial Sale, Licensee shall deliver to Oramed
a report containing the following information for the prior calendar quarter:

 

(i)            the number of units of Products sold by Licensee, its Affiliates
and any party acting on its or their behalf (including Sublicensees);

 

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(ii)           the gross amount invoiced for the Product sold by Licensee, its
Affiliates and any party acting on its or their (including Sublicensees);

 

(iii)          a calculation of Net Sales, including an itemized listing of
deductions permitted under the definition of Net Sales; and

 

(iv)          a calculation of the total amount payable to Oramed in U.S.
Dollars, together with the exchange rates used for conversion.

 

Concurrent with the delivery of each report delivered pursuant to the foregoing,
Licensee shall remit to Oramed all amounts due with respect to Net Sales and
other payments due for the applicable calendar quarter. If no royalties or other
payments are due to Oramed for such reporting period, the report shall so state.
In addition, Licensee shall provide Oramed, within 60 days after the end of each
calendar year during the Term, commencing at the end of the calendar year in
which First Commercial Sale occurred, with a report, certified by an independent
certified public accountant, relating to royalties and other payments due to
Oramed pursuant to this Agreement in respect of the previous calendar year and
containing the same details as those specified above in respect of the previous
calendar year.

 

8.5          Payment Method, Currency and Late Payments. All payments due
hereunder shall be made in U.S. Dollars by wire transfer of immediately
available funds to Oramed’s bank account, the details of which are set out in
Exhibit E hereto. Payment shall be made directly from a Chinese bank account of
Licensee. Where Net Sales are calculated in currencies other than U.S. Dollars,
they will be converted into U.S. Dollars using the Bank of China “Middle Rate”
on the last business day of the applicable calendar quarter. If Oramed does not
receive payment of any sum due to it on or before the due date, simple interest
shall thereafter accrue on the sum due until the date of payment at the per
annum rate of 10% or the maximum rate allowable by applicable Law, whichever is
lower, compounded monthly.

 

8.6          Records; Audits. Licensee will maintain (and will cause its
Affiliates and Sublicensees to maintain) complete and accurate records in
sufficient detail to permit Oramed or its representatives to confirm the
accuracy of the calculation of payments under this Agreement, as well as to
confirm Pre-Commercialization Costs and Regulatory Data Costs. Upon reasonable
prior notice, such records shall be available during regular business hours for
a period of 3 years from the end of the calendar year to which they pertain for
examination at the expense of Oramed, by an independent certified public
accountant selected by Oramed and reasonably acceptable to Licensee, for the
purpose of verifying the accuracy of the financial reports or payments furnished
by Licensee pursuant to this Agreement. Any amounts shown to be owed but unpaid
shall be paid within 30 days from the accountant’s report, plus interest (as set
forth in Section 8.5) from the original due date. Oramed shall bear the full
cost of such audit unless such audit discloses an underpayment by Licensee of
more than 3% of the amount due, in which case Licensee shall bear the full cost
of such audit.

 

8.7          Taxes. Amounts due hereunder are exclusive of value added, sales,
excise and similar taxes, all of which shall be added to payments made hereunder
in accordance with applicable law and regulations. The Parties shall use all
reasonable and legal efforts to reduce or eliminate Tax or similar obligations
in respect of the Initial Payment, Subsequent Payment, royalties, and any other
payments made by Licensee to Oramed under this Agreement, to the extent
permitted by applicable law.

 

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8.8          Withholding and Similar Taxes. Amounts due hereunder are inclusive
of any withholding and similar taxes, all of which shall be withheld and
deducted directly from payments made hereunder in accordance with applicable law
and regulations. To the extent Licensee is required under applicable law in the
Licensee Territory to withhold taxes from any amounts due to Oramed under this
Agreement, Licensee shall (a) pay the amounts of such taxes to the proper
governmental authority in the Licensee Territory in a timely manner, (b)
promptly transmit to Oramed an official certificate or other documentation of
the payment of any such withholding taxes paid, including copies of receipts or
other evidence reasonably required and sufficient to enable Oramed to document
such tax withholdings adequately for purposes of claiming foreign tax credits
and similar benefits, if available. Oramed shall provide Licensee any tax forms
that may be reasonably necessary in order for Licensee to not withhold tax or to
withhold tax at a reduced rate under an applicable bilateral income tax treaty.
Oramed shall use reasonable efforts to provide any such tax forms to Licensee at
least 30 days prior to the due date for any payment for which Oramed desires
that Licensee apply a reduced withholding rate. Each Party shall provide the
other with reasonable assistance to enable the recovery, as permitted by
applicable Law, of withholding taxes or similar obligations resulting from
payments made under this Agreement, such recovery to be for the benefit of the
Party bearing such withholding tax. Licensee shall require its Affiliates and
Sublicensees to cooperate with Oramed in a manner consistent with this Section
8.8

 

Article 9

Intellectual Property

 

9.1          Ownership of Inventions. It is expressly agreed that Oramed Ltd. is
the exclusive owner of the Oramed Technology, and shall be the owner of any
know-how and inventions related to the Products generated under this Agreement
made by employees, agents, or independent contractors of Oramed, (“Oramed
Inventions”), it being agreed that Oramed Inventions, if any, shall be included
within the scope of the licenses granted pursuant to Section 2.2. Know-how and
inventions other than Oramed Inventions that are made by employees, agents, or
independent contractors of the Licensee (as well as know-how and inventions made
by its Affiliates and/or Sublicensees), in the course of conducting their
activities under this Agreement, together with all intellectual property rights
therein, (“Licensee Inventions”) shall be the exclusive property of the
Licensee.

 

9.2          Disclosure of Inventions. Licensee shall promptly disclose to
Oramed any invention disclosures, or other similar documents, submitted to them
by their respective employees, agents or independent contractors (as well their
respective Affiliates and/or Sublicensees) describing Oramed Inventions.

 

9.3          Joint Inventions. Inventions other than Oramed Inventions that are
jointly arrived at in the course of the Parties’ conducting their activities
under this Agreement (“Joint Inventions”) shall be jointly owned by the Parties.
In such event, Licensee may exploit such Joint Inventions in the Licensee
Territory and Oramed may exploit such Joint Inventions in the Retained
Territory. The parties shall collaborate in good faith with respect to seeking
appropriate protection for Joint Inventions, if any. For the purpose of clarity,
the Licensee shall have the exclusive right to further exploit the Oramed
Inventions and/or the Joint Inventions in the Licensee Territory, according to
the terms of this Agreement, without any payment to Oramed other than the
payments agreed in this Agreement.

 

9.4          Prosecution of Patents.

 

(a)         General. The Parties shall cooperate with each other to achieve (to
the extent appropriate) global harmonization of filing, prosecution and
maintenance of Oramed Patents.

 

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(b)        Oramed Prosecuted Patents. Subject to the terms of this section,
Oramed shall have the sole right to prepare, file, prosecute and maintain all
Oramed Patents in the Licensee Territory, (the “Oramed Prosecuted Patents”). All
Oramed Prosecuted Patents shall be prepared, filed, prosecuted and maintained
through a law or patent attorney firm selected by Oramed, at Oramed’s expense.
Oramed will consult, or will instruct its patent counsel to consult with
Licensee regarding the content of patent applications contained within the
Oramed Prosecuted Patents, the prosecution thereof and the content of
communications with the relevant patent agencies in the Licensee Territory.
Oramed shall reasonably consider comments by Licensee with respect to the
foregoing so long as such comments are received by Oramed a reasonable amount of
time in advance of any filing deadlines. To avoid doubt, Oramed has and shall
retain sole discretion with respect to the preparation, filing, prosecution and
maintenance of all Oramed Patents in the Retained Territory; provided, however,
that Oramed shall be required to obtain the prior written consent of Licensee
prior to abandoning any Oramed Patents in the Licensee Territory, such consent
not to be unreasonably withheld, conditioned or delayed.

 

(c)        HTIT Prosecuted Patents. Subject to the terms of Section 9.1, HTIT
shall have the sole right at its sole discretion to prepare, file, and prosecute
the patent applications claiming the Licensee Inventions in the Licensee
Territory (“HTIT Prosecuted Patents”). All HTIT Prosecuted Patents shall be
prepared, filed, prosecuted and maintained through a law or patent attorney firm
selected by HTIT, at HTIT’s expense.

 

(d)        Cooperation in Prosecution. Each Party shall provide the other Party
all reasonable assistance and cooperation in the efforts provided above in this
Section 9.4, including providing any necessary powers of attorney and executing
any other required documents or instruments for such efforts (without charge to
the other Party).

 

(e)        No Warranty. Nothing contained herein shall be deemed to be a
warranty by any Party that such Party can or will be able to obtain patents on
patent applications included in the Oramed Technology or the Licensee
Technology, or that any of the Oramed Patents or HTIT Prosecuted Patents will
afford adequate or commercially worthwhile protection.

 

9.5          Infringement of Patents by Third Parties.

 

(a)         Notification. Each Party shall promptly notify the other Party in
writing of any existing or threatened infringement of the Oramed Patents and/or
Oramed Prosecuted Patents in the Licensee Territory through the
Pre-Commercialization or Commercialization by a Third Party, of which such Party
becomes aware, and of any declaratory judgment, opposition, or similar action
alleging the invalidity, unenforceability or non-infringement of any of the
Oramed Patents and/or Oramed Prosecuted Patents in the Licensee Territory
(collectively “Patent Infringement”).

 

(b)        Patent Infringement.

 

(1)          For any Patent Infringement, each Party shall share with the other
Party all Information available to it regarding such alleged infringement.
Licensee shall have the first right, but not the obligation, to bring an
appropriate suit or other action in the Licensee Territory against any person or
entity engaged in such Patent Infringement, subject to Section 9.5(b)(2) through
9.5(b)(4) below. If Licensee fails to institute and prosecute an action or
proceeding in the Licensee Territory to abate the Patent Infringement within a
period of 60 days after the first notice is delivered under Section 9.5(a), then
Oramed shall have the right but not the obligation to commence a suit or take
action in the Licensee Territory to enforce the applicable Oramed Prosecuted
Patents against such Third Party perpetrating such Patent Infringement, at its
own cost and expense. In the event that Oramed exercises such right to commence
such suit or to take action in the Licensee Territory regarding such Patent
Infringement, Licensee shall reasonably cooperate with Oramed in connection with
such Oramed Prosecuted Patent enforcement efforts.

 

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(2)          Each Party shall provide to the Party enforcing any such rights
under this Section 9.5(b) reasonable assistance in such enforcement, at such
enforcing Party’s request and expense, including joining such action as a party
plaintiff if required by applicable Law to pursue such action. The enforcing
Party shall keep the other Parties regularly informed of the status and progress
of such enforcement efforts and shall reasonably consider the other Party’s
comments on any such efforts.

 

(3)          Each Party shall bear all of its own internal costs incurred in
connection with its activities under this Section 9.5(b). In the event a Party
commences a Patent Infringement action in the Licensee Territory, it shall bear
all external costs and expenses for such action.

 

(4)         The Party not bringing an action with respect to Patent Infringement
under this Section 9.5(b) shall be entitled to separate representation in such
matter by counsel of its own choice, and its own expense, but such Party shall
at all times cooperate fully with the Party bringing such action.

 

(c)        Infringement other than a Patent Infringement. For any and all
infringements of any Oramed Prosecuted Patent other than a Patent Infringement
(including the enforcement of Oramed Patents against infringement in the
Retained Territory), as between the Parties, Oramed shall have the sole and
exclusive right to bring an appropriate suit or other action against any person
or entity engaged in such other infringement, in its sole discretion, and as
between the Parties Oramed shall bear all related expenses and retain all
related recoveries. Oramed shall keep Licensee regularly informed of the status
and progress of such enforcement efforts and shall reasonably consider
Licensee’s comments on any such efforts where appropriate, in Oramed’s
discretion.

 

(d)        Settlement. Licensee shall not settle any claim, suit or action
brought under this Section 9.5 involving Oramed Patents and/or Oramed Prosecuted
Patents without the prior written consent of Oramed. In the Licensee Territory,
Oramed shall not settle any claim, suit or action brought involving Oramed
Patents and/or Oramed Prosecuted Patents without prior written consent of
Licensee, such consent not to be unreasonably withheld, conditioned or delayed.
Nothing in this Article 9 shall require Oramed to consent to any settlement that
would have an adverse impact upon any Oramed Patent in the Retained Territory,
or to the pre-commercialization, commercialization, manufacture, use,
importation, offer for sale or sale of Products in the Retained Territory.

 

(e)        Allocation of Proceeds. The enforcing Party shall retain monetary
damages recovered from any Third Party in a suit or action brought by it under
this Section 9.5 after first reimbursing the Parties for any expenses incurred
by the Parties in such litigation (including, for this purpose, a reasonable
allocation of expenses of internal counsel); provided, however, that, in the
event Licensee is the Party bringing suit, Licensee shall pay Oramed 30% of the
amount of such recovery which is retained by Licensee after such reimbursement.

 

9.6          Infringement of Third Party Rights in the Licensee Territory. If
the Licensee becomes the subject of a lawsuit brought by a third party
unaffiliated with Licensee or Licensee’s customers or sublicensees, that the
manufacture, use or sale of the Product or technology actually transferred under
the Swisscap or Premas Agreements infringes the intellectual property rights of
such unaffiliated third party in the Licensee Territory, then Oramed shall
defend such lawsuit as required pursuant to Section 11.1 and shall make
reasonable commercial efforts to procure for Licensee the intellectual property
rights in the Licensee Territory necessary such that Licensee’s manufacture, use
or sale of the Product in the Licensee Territory shall not infringe the
intellectual property rights of such third party. The foregoing shall not apply
to the extent Oramed is not required to defend and indemnify the applicable
claim pursuant to Section 11.1

 

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Article 10

Representations And Warranties

 

10.1        Mutual Representations and Warranties. Each Party hereby represents
and warrants that, as of the Effective Date:

 

(a)        Corporate Existence and Power. It is a company or corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction in which it is incorporated, and has full corporate power and
authority and the legal right to own and operate its property and assets and to
carry on its business as it is now being conducted and as contemplated in this
Agreement, including the right to grant the licenses granted by it hereunder.

 

(b)        Authority and Binding Agreement. It has the corporate power and
authority and the legal right to enter into this Agreement and perform its
obligations hereunder; it has taken all necessary corporate action on its part
required to authorize the execution and delivery of the Agreement and the
performance of its obligations hereunder; and the Agreement has been duly
executed and delivered on behalf of such Party, and constitutes a legal, valid,
and binding obligation of such Party that is enforceable against it in
accordance with its terms, subject to and limited by: (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws generally applicable to
creditors’ rights; and (ii) judicial discretion in the availability of equitable
relief.

 

(c)        No Conflict. The execution and delivery of this Agreement, and the
performance by such Party of its obligations under this Agreement, including the
grant of rights to the other Party pursuant to this Agreement, does not and will
not: (i) conflict with, nor result in any violation of or default under any
instrument, judgment, order, writ, decree, contract or provision to which such
Party is otherwise bound; (ii) give rise to any lien, charge or encumbrance upon
any assets of such Party or the suspension, revocation, impairment, forfeiture
or non-renewal of any material permit, license, authorization or approval that
applies to such Party, its business or operations or any of its assets or
properties; or (iii) conflict with any rights granted by such Party to any Third
Party or breach any obligation that such Party has to any Third Party.

 

(d)        Required Consents. It has obtained, or is not required to obtain, the
consent, approval, order, or authorization of any Third Party, or has completed,
or is not required to complete, any registration, qualification, designation,
declaration or filing with, any Governmental Authority, in connection with the
execution and delivery of this Agreement and the performance by such Party of
its obligations under this Agreement, including any grant of rights to the other
Party pursuant to this Agreement.

 

10.2        Additional Representations and Warranties of Oramed. For purposes of
this Section 10.2, the phrase “the knowledge of Oramed” means the actual
knowledge of Oramed’s executive officers, after reasonable inquiry. Oramed
hereby represents and warrants that, as of the Execution Date:

 

(a)        Oramed has all necessary rights in and to the Oramed Technology and
has the right to grant Licensees the licenses set out in Section 2.2;

 

 22

 

 

(b)        It has not received any written notice from any Third Party asserting
or alleging that research or development of any Product by Oramed infringed or
misappropriated or infringes or misappropriates the intellectual property rights
of such Third Party;

 

(c)        There are no actual, pending, or to the knowledge of Oramed, alleged
or threatened adverse actions, suits, claims, interferences or formal
governmental investigations involving the Products or the Oramed Technology
relating to the Products by or against Oramed in or before any court,
governmental or regulatory authority; and

 

(d)        To the knowledge of Oramed, there is not any pending claim or
litigation which alleges that its use of the Oramed Technology has violated the
intellectual property rights of any Third Party.

 

(e)        Subject to Section 2.1, and to the knowledge of Oramed as of the
Execution Date, there are no additional limitations or restrictions (including
but not limited to the licensing of any Third Party, the paying to any Third
Party and the reliance on the patent of any Third Party) which will affect the
use of Oramed Technology by the Licensee.

 

10.3        Additional Representations and Warranties of Licensee. For purposes
of this Section 10.3, the phrase “the knowledge of Licensee” means the actual
knowledge of Licensee’s executive officers, after reasonable inquiry. Licensee
hereby represents and warrants that, as of the Execution Date:

 

(a)        Licensee has all necessary rights in and to the Licensee Technology
and has the right to grant Oramed the licenses set out in Section 2.3;

 

(b)        Licensee has not received any written notice from any Third Party
asserting or alleging that the Licensee Technology infringed or misappropriated
or infringes or misappropriates the intellectual property rights of such Third
Party;

 

(c)        There are no actual, pending, or to the knowledge of Licensee,
alleged or threatened adverse actions, suits, claims, interferences or formal
governmental investigations involving the Licensee Technology by or against
Licensee in or before any court, governmental or regulatory authority; and

 

(d)        To the knowledge of Licensees, there is not any pending claim or
litigation which alleges that its use of the Licensee Technology has violated
the intellectual property rights of any Third Party.

 

10.4        Disclaimer. Licensee acknowledges and understands that the Products
are the subject of ongoing clinical trials and that Oramed cannot and does not
assure the safety or efficacy of the Products, or that the Products will be
approved by any Regulatory Authority in the Licensee Territory or elsewhere, or
that the Products will be commercially viable or successful.

 

10.5        Oramed hereby makes the special warranties to the Licensee: (a)
Oramed will grant Licensee rights to all Oramed Technology and Oramed Regulatory
Data in accordance with the terms of this Agreement; and (b) to the knowledge of
Oramed as of the Execution Date, the manufacture, sale, offer for sale, import
of the Products by Licensee in the Licensee Territory would not infringe any
intellectual property rights of any Third Party. EXCEPT AS EXPRESSLY STATED IN
THIS ARTICLE 10, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT (OTHER THAN AS SET FORTH ABOVE), OR
NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, IS MADE OR
GIVEN BY OR ON BEHALF OF A PARTY.

 

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Article 11

Indemnification

 

11.1        Indemnification by Oramed. Oramed hereby agrees to defend, hold
harmless and indemnify (collectively, “Indemnify”) Licensee and its directors,
officers, employees, sublicensees and customers (the “Licensee Indemnitees”)
from and against any and all liabilities, expenses or losses, including
reasonable legal expenses and attorneys’ fees (collectively “Losses”) in each
case resulting from Third Party suits, claims, actions and demands (each, a
“Third Party Claim”) arising out of (a) a breach of Oramed’s representations and
warranties set forth in Article 10 or (b) any claim by a third party
unaffiliated with Licensee or Licensee’s customers or sublicensees, that the
manufacture, use or sale of the Product or technology actually transferred under
the Swisscap or Premas Agreements infringes the intellectual property rights of
such unaffiliated third party in the Licensee Territory. Oramed’s obligation to
Indemnify the Licensee Indemnitees pursuant to this Section 11.1 shall not apply
to the extent that (i) the Licensee Indemnitees fail to comply with the
indemnification procedures set forth in Section 11.3 and Oramed’s defense of the
relevant Losses is materially prejudiced by such failure, or (ii) any Losses
arise from, are based on, or result from the negligence, violation of law or
willful misconduct of any Licensee Indemnitee or Licensee Sublicensee or from
any activity for which Licensee is obligated to Indemnify Oramed under Section
11.2 or (iii) to the extent the Third Party Claim relates to any technology,
materials or manufacturing processes that are not owned or developed by Oramed.

 

11.2        Indemnification by Licensee. Licensee hereby agrees to indemnify
Oramed, its Affiliates, and their respective directors, officers and employees
(the “Oramed Indemnitees”) from and against any and all Losses in each case
resulting from Third Party Claims arising out of (a) a breach of any of
Licensee’s obligations under this Agreement, including Licensee’s
representations and warranties set forth in Article 10; and (b) the
Pre-Commercialization, manufacture, use, handling, storage, sale or other
Commercialization or disposition of Products in the Licensee Territory by or on
behalf of Licensee, its Affiliates and/or Sublicensees, including as a result of
any infringement claims or product liability claims. Licensee’s obligation to
Indemnify the Oramed Indemnitees pursuant to this Section 11.2 shall not apply
to the extent that (i) the Oramed Indemnitees fail to comply with the
indemnification procedures set forth in Section 11.3 and Licensee’s defense of
the relevant Losses is materially prejudiced by such failure, or (ii) any Losses
arise from, are based on, or result from the negligence or willful misconduct of
any Oramed Indemnitee or from any activity for which Oramed is obligated to
indemnify the Licensee Indemnitees under Section 11.1.

 

11.3        Procedure. The indemnified Party shall provide the indemnifying
Party with prompt written notice of the Third Party Claim which might give rise
to an indemnification obligation pursuant to this Article 11 indicating the
nature of the claim and the basis therefore. The indemnifying Party shall have
the right, at its option, to assume the defense of, at its own cost and by its
own counsel, any such Third Party Claim involving the asserted liability of the
indemnified Party. If any indemnifying Party shall undertake to compromise or
defend any such asserted liability, it shall promptly notify the indemnified
Party of its intention to do so, and the indemnified Party shall agree to
cooperate with the indemnifying Party and its counsel in the compromise of, or
defense against, any such asserted liability; provided, however, that the
indemnifying Party shall not, as part of any settlement or other compromise,
admit to liability for which the indemnifying Party is not fully indemnifying
the indemnified Party or agree to an injunction with respect to activities of
the indemnified Party without the written consent of the indemnified Party, not
to be unreasonably withheld, conditioned or delayed. Notwithstanding an election
by the indemnifying Party to assume the defense of any Third Party Claim as set
forth above, such Indemnified Party shall have the right (at its own cost if the
indemnifying Party has elected to assume such defense) to employ separate
counsel and to participate in the defense of any Third Party Claim. All costs
incurred by an indemnified Party in connection with enforcement of its rights
under Sections 11.1 or 11.2, as applicable, shall also be reimbursed by the
indemnifying Party promptly after final determination that such indemnified
Party is entitled to such indemnification by the indemnifying Party.

 

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11.4        Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES OR LOSS OF PROFITS
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, AND TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NOTHING IN THIS SECTION 11.4 IS
INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS
OF ANY PARTY UNDER SECTIONS 11.1 OR 11.2, OR DAMAGES AVAILABLE FOR A PARTY’S
BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 12, OR FOR LICENSEE’S BREACH OF
THE SCOPE OF THE LICENSE RIGHTS GRANTED UNDER THIS AGREEMENT.

 

11.5        Insurance. Licensee shall procure and maintain insurance, including
product liability insurance, adequate to cover its obligations under this
Agreement and which are consistent with normal business practices of global
pharmaceutical companies at all times during which any Product is being
clinically tested in human subjects or commercially distributed or sold by
Licensee, its respective Affiliates and/or Sublicensees, and for a period of 7
years thereafter. It is understood that such insurance shall not be construed to
create a limit of Licensee’s liability with respect to its indemnification
obligations under this Article 11.

 

Article 12

Confidentiality

 

12.1        Confidentiality. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, each Party agrees that,
for the Term and for a period of 7 years thereafter, it shall keep confidential
and shall not publish or otherwise disclose and shall not use for any purpose
other than as provided for in this Agreement (which includes the exercise of any
rights or the performance of any obligations hereunder) any Confidential
Information of the other Party. The foregoing confidentiality and non-use
obligations shall not apply to any portion of the Confidential Information that
the receiving Party can demonstrate by competent written proof:

 

(a)         was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;

 

(b)        was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party;

 

(c)        became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;

 

(d)        is subsequently disclosed to the receiving Party by a Third Party who
has a legal right to make such disclosure; or

 

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(e)         is subsequently independently discovered or developed by the
receiving Party without the aid, application, or use of the disclosing Party’s
Confidential Information, as evidenced by a contemporaneous writing.

 

12.2       Authorized Disclosure. Notwithstanding the obligations set forth in
Section 12.1, a Party may disclose the other Party’s Confidential Information
and the terms of this Agreement (which terms shall be the Confidential
Information of both Parties) to the extent:

 

(a)        such disclosure: (i) is reasonably necessary for filing or
prosecuting Patent rights as contemplated by this Agreement; or (ii) is
reasonably necessary for prosecuting or defending litigation as contemplated by
this Agreement; or

 

(b)        such disclosure is reasonably necessary: (i) to such Party’s
directors, attorneys, independent accountants or financial advisors for the sole
purpose of enabling such individuals to provide advice to the receiving Party,
provided that in each such case on the condition that such directors, attorneys,
independent accountants and financial advisors are bound by confidentiality and
non-use obligations consistent with those contained in this Agreement; or (ii)
to actual or potential investors or acquirers solely for the purpose of
evaluating an actual or potential investment or acquisition; provided that in
each such case on the condition that such actual or potential investors or
acquirers are bound by confidentiality and non-use obligations consistent with
those contained in the Agreement; or

 

(c)        such disclosure is required by judicial or administrative process,
provided that in such event such Party shall promptly inform the other Party of
such required disclosure and provide the other Party an opportunity to challenge
or limit the disclosure obligations. Confidential Information that is disclosed
by judicial or administrative process shall remain otherwise subject to the
confidentiality and non-use provisions of this Article 12, and the Party
disclosing Confidential Information pursuant to law or court order shall take
all steps reasonably necessary, including seeking of confidential treatment or a
protective order, to ensure the continued confidential treatment of such
Confidential Information; or

 

(d)        such disclosure is reasonably necessary to its collaborators in its
respective Territory (including clinical research organizations, hospitals,
doctors, consultants, subcontractors and Affiliates) for the purpose of
Pre-Commercialization and/or Commercialization activities, solely for the
purpose of carrying out such collaboration, on the condition that such
collaborators are bound by confidentiality and non-use obligations consistent
with those contained in the Agreement; or

 

(e)        such disclosure is required by applicable Law, including without
limitation U.S. federal or state securities laws and regulations.

 

12.3        Publication. In the event that Licensee, its Affiliates and/or
Sublicensee, as may be applicable, desire to publish or otherwise present or
disclose papers containing results of and other information regarding
Pre-Commercialization and/or Commercialization of Products, including oral
presentations and abstracts, (i) they shall ensure that such disclosures do not
contain any Oramed Confidential Information; and (ii) they shall provide a copy
of any such disclosures to Oramed and shall not make any such disclosures until
they have received the prior written consent of Oramed which Oramed may give or
withhold in its sole discretion.

 

 26

 

 

12.4        Publicity; Use of Names. Subject to Section 12.2 and the rest of
this Section 12.4, no disclosure of the terms of this Agreement may be made by
any Party or its Affiliates, and no Party shall use the name, trademark, trade
name or logo of any other Party, its Affiliates or their respective employee(s)
in any publicity, promotion, news release or other public disclosure relating to
this Agreement or its subject matter, without the prior express written
permission of such other Party, except as may be required by Law.

 

(a)         Notwithstanding anything contained in this Agreement to the
contrary, a Party may disclose this Agreement and its terms in securities
filings with the U.S. Securities Exchange Commission (“SEC”), the China
Securities Regulatory Commission (“CSRC”), Israel Securities Authority (“ISA”)
or other regulatory agency (collectively, “Securities Agencies”) or exchange
where a Party’s securities are traded (or equivalent foreign agency or exchange)
(collectively, “Exchanges”) to the extent required by Law after complying with
the procedure set forth in this Section 12.4. In such event, the Party seeking
such disclosure will prepare a draft confidential treatment request and a
proposed redacted version of this Agreement to request confidential treatment
for this Agreement, and the other Party agrees to promptly (and in any event, no
more than 7 days after receipt of such confidential treatment request and
proposed redactions (or such lesser period of time as required by Law)) give its
input in a reasonable manner in order to allow the Party seeking disclosure to
file its request within the time lines proscribed by applicable Securities
Agencies and/or Exchanges. The Party seeking such disclosure shall exercise
Commercially Reasonable Efforts to obtain confidential treatment of the
Agreement from applicable agency or exchange as represented by the redacted
version reviewed by the other Party.

 

(b)        Further, each Party acknowledges that the other Party may be legally
required to make public disclosures (including in filings with Securities
Agencies and/or Exchanges) of the execution and delivery of this Agreement as
well as certain material developments or material information generated under
this Agreement and agrees that each Party may make such disclosures as required
by Law; provided, however, that the Party seeking such disclosure first provides
the other Party with a copy of the proposed disclosure, and provided further
that (except to the extent that the Party seeking disclosure is required to
disclose such information to comply with applicable Law) if the other Party
demonstrates to the reasonable satisfaction of the Party seeking disclosure,
within 3 days of such Party’s providing the copy, that the public disclosure of
previously undisclosed information will materially adversely affect the
pre-commercialization or commercialization of a Product being pre-commercialized
or commercialized in the applicable Territory, the Party seeking disclosure will
remove from the disclosure such specific previously undisclosed information as
the other Party shall reasonably request to be removed.

 

(c)         During the Term, each Party shall have the right to issue a press
release or make a public announcement concerning the material terms of this
Agreement or the Pre-Commercialization or Commercialization under this
Agreement. If a Party desires to issue such a press release or make such a
public announcement, it shall provide the other Party with reasonable advance
notice of the content thereof. The other Party shall have the right to review
and comment on such proposed press release or announcement and the Party
proposing such press release or public announcement shall take into
consideration and incorporate when appropriate the comment from the other Party;
provided, however, that in the event that a Party does not respond within 3 days
of the date on which the announcement was provided to such Party, the Party
desiring to issue the release or make the announcement may proceed to do so.

 

(d)        The Parties agree that after a public disclosure pursuant to Sections
12.4(a), (b) or (c) has been reviewed and approved by the other Party (or be
deemed to have been approved), the disclosing Party may make subsequent public
disclosures or issue a press release disclosing the same content as was
contained in such public disclosure without having to obtain the other Party’s
prior consent and approval.

 

(e)         Licensee acknowledges and agrees that Oramed may furnish a fully
executed copy of this Agreement to Oramed Inc.

 

 27

 

 

12.5        Equitable Relief. Each Party acknowledges that a breach of this
Article 12 may not reasonably or adequately be compensated in damages in an
action at law and that such a breach shall cause the other Party irreparable
injury and damage. By reason thereof, each Party agrees that the other Party may
be entitled, in addition to any other remedies it may have under this Agreement
or otherwise, to seek preliminary and permanent injunctive and other equitable
relief from any court of competent jurisdiction to prevent or curtail any breach
of the obligations relating to Confidential Information set forth herein by the
other Party.

 

Article 13

Term And Termination

 

13.1       Term. The Term of this Agreement will commence on the Effective Date
and, unless earlier terminated pursuant to this Article 13, shall remain in
effect until the cessation of all Commercialization in the Licensee Territory.
Upon the expiration of the Royalty Term, the licenses granted to Licensee
pursuant to Section 2.2 shall become fully-paid up, royalty-free.

 

13.2       Termination for Breach.

 

(a)       Notice. If either Oramed believes that HTIT is in material breach of
this Agreement, or if HTIT believes that Oramed is in material breach of this
Agreement, then the Party holding such belief, as the case may be (the
“Non-Breaching Party”) may deliver written notice of such breach to the other
Party, as the case may be (the “Notified Party”). The Notified Party shall have
30 days after receipt of such notice to cure such breach.

 

(b)       Failure to Cure. If the Notified Party fails to cure the breach as
provided for in Section 13.2(a), then the Non-Breaching Party may terminate this
Agreement immediately upon written notice to the Notified Party.

 

(c)       Disputes. If a Party gives notice of termination under this Section
13.2 and the other Party disputes whether such termination is proper under this
Section 13.2, then the issue of whether this Agreement may properly be
terminated (i.e., whether a material breach occurred or whether a material
breach was cured) shall be resolved in accordance with Article 14. If as a
result of such dispute resolution process it is determined that the notice of
termination was proper, then such termination shall be deemed to have been
effective 30 days following the date of the notice of breach. If, as a result of
such dispute resolution process, it is determined that the notice of termination
was improper, then no termination shall have occurred and this Agreement shall
remain in effect.

 

13.3       Termination for Convenience. Licensee shall have the right to
terminate this Agreement in its entirety for any reason or no reason at all by
providing Oramed with at least 90 days’ prior written notice of such
termination; provided, however, that in no event may Licensee exercises such
right to terminate hereunder following the First Commercial Sale.

 

 28

 

 

13.4       Termination Prior to Effective Date. Notwithstanding anything to the
contrary in this Article 13, (A) either Oramed or Licensee may terminate this
Agreement upon written notice to the other following a response from the OCS and
each Party’s discharge of its obligations under Section 2.1, with no liability
to any other Party (i) advising that the OCS does not grant its consent to the
Execution Date Agreement or a modified Execution Date Agreement, as such
modified Execution Date Agreement and the process for modification are described
in Section 2.1; or (ii) as contemplated in Section 2.1(iii); (B) Oramed may
terminate this Agreement upon written notice to Licensee in the event that the
OCS imposes materially adverse obligations or consequences (with financial or
otherwise) on Oramed as a pre-condition to obtaining OCS consent to this
Agreement; or (C) either Oramed or Licensee may terminate this Agreement upon
written notice to the other Party as set forth in the last paragraph of Section
13.2(b). The provisions of Sections 2.1, 8.1 and this Section 13.4 shall survive
such termination, but all other terms, provisions, representations, rights and
obligations contained in this Agreement shall terminate. If either party shall
terminate this Agreement pursuant to this Section 13.4, then Oramed shall refund
to HTIT the Initial Payment plus and additional USD500,000.

 

13.5       Effect of Termination of the Agreement.

 

(a)           Upon any termination of this Agreement the following shall apply:

 

(1)       Transition Assistance. Licensee shall provide such assistance, at
Oramed’s request and cost, as may be reasonably necessary for Oramed to commence
or continue Pre-Commercializing or Commercializing Products in the Licensee
Territory, to the extent Licensee is then performing or have performed such
activities, including transferring or amending, as appropriate, upon request of
Oramed, any agreements or arrangements with Third Party vendors to sell Products
in the Licensee Territory. To the extent that any such contract between Licensee
and Third Parties is not assignable to Oramed, Licensee shall arrange a
transition period in which to provide such services with the goal of promptly
transitioning the arrangement to Oramed.

 

(2)       Licenses. Except as otherwise stated above in this Section 13.5, the
licenses granted in Article 2 shall terminate.

 

(3)       No Refunds. In no event shall Oramed be obligated to refund any
amounts paid by Licensee under this Agreement except for the Initial Payment in
the event of termination under Section 13.4.

 

(b)           Accrued Obligations. In any event, expiration or termination of
this Agreement shall not relieve the Parties of any liability which accrued
hereunder prior to the effective date of such expiration or termination or to
which a Party may be contractually committed as of such effective date nor
preclude a Party from pursuing all rights and remedies it may have hereunder or
at law or in equity with respect to any material breach of this Agreement, nor
prejudice a Party’s right to obtain performance of any obligation.

 

13.6       Bankruptcy. All rights and licenses granted under this Agreement by a
Party to another Party are, and shall otherwise be deemed to be, for purposes of
applicable bankruptcy laws, licenses of rights to “intellectual property”. The
Parties agree that a Party shall retain and may fully exercise all of its rights
in the event of a bankruptcy by the other Party. The Parties further agree that
in the event of the commencement of a bankruptcy proceeding by or against one
Party under applicable law, the other Party shall be entitled to complete access
to any such intellectual property pertaining to the rights granted in the
licenses hereunder of the Party by or against whom a bankruptcy proceeding has
been commenced and all embodiments of such intellectual property.

 

13.7       Survival. The following provisions shall survive any expiration or
termination of this Agreement for the period of time specified: The provisions
of Article 1, to the extent definitions are embodied in the following listed
Articles and Sections of this Agreement; Articles 11, 12, 14 and 15; and
Sections 4.7 (with respect to Regulatory Data generated prior to the effective
date of termination or expiration), Sections 8.2 and 8.3 (with respect to
milestones achieved, and royalty payments and reports concerning Net Sales made,
prior to the effective date of termination or expiration), 8.4 through 8.8, 9.1
through 9.3, 10.5, 13.6, and this Section 13.7. In addition, any other
provisions either required to interpret and enforce the Parties’ rights and
obligations under this Agreement shall also survive, but only to the extent
required for the full observation and performance of this Agreement, or which by
their express terms, survive such expiration or termination of this Agreement.

 

 29

 

 

Article 14

Dispute Resolution

 

14.1       Disputes. The Parties recognize that disputes as to certain matters
may from time to time arise during the Term which relate to either Party’s
rights or obligations hereunder. It is the objective of the Parties to establish
procedures to facilitate the resolution of disputes arising under this Agreement
in an expedient manner by mutual cooperation and without resort to litigation.
To accomplish this objective, the Parties agree to follow the procedures set
forth in this Article 14 to resolve any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement, if and when a
dispute arises under this Agreement.

 

14.2       Internal Resolution. With respect to all disputes arising between the
Parties under this Agreement, including any alleged breach under this Agreement
or any issue relating to the interpretation or application of this Agreement, if
the Parties are unable to resolve such dispute within 30 days after such dispute
is first identified by a Party in writing to the other Parties, the Parties
shall refer such dispute to the Executives of the Parties for attempted
resolution by good faith negotiations within 30 days after such notice is
received.

 

14.3       Binding Arbitration. If the Executives are not able to resolve such
disputed matter within 30 days and either Party wishes to pursue the matter,
each such dispute, controversy or claim shall be referred to and finally
determined by arbitration by the Singapore International Arbitration Center
(“SIAC”) in accordance with its arbitration rules then in effect before a panel
of three (3) arbitrators; it being clarified that Oramed shall select one
arbitrator, Licensees (collectively) shall select one arbitrator, and the two
arbitrators so selected shall select the third arbitrator who shall not be a
national of either Israel or China; provided, however, that failure of a Party
to select its arbitrator within a reasonable time (not to exceed 30 days) shall
result in the arbitrator being selected by the SIAC Rules. The place of
arbitration shall be Singapore. The language to be used in the arbitral
proceedings shall be English. The dispute, controversy or claim shall be decided
in accordance with the law of Hong Kong. Judgment on the arbitration award may
be entered in any court having jurisdiction thereof. The Parties agree that:

 

(a)           Either Party may apply to the arbitrator(s) for interim injunctive
relief until the arbitration award is rendered or the controversy is otherwise
resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or provisional
relief necessary to protect the rights or property of that Party pending the
arbitration award. The arbitrators shall have no authority to award punitive or
any other type of damages not measured by a Party’s compensatory damage (it
being clarified that this shall not derogate from their right to award costs, as
per the immediately following sentence). Each Party shall bear its own costs and
expenses and attorneys’ fees and an equal share of the arbitrators’ fees and any
administrative fees of arbitration; provided, however, that the arbitrators
shall be entitled to award costs and, if so, they shall provide explanations for
any such determination.

 

(b)           A Party shall be entitled to deduct or otherwise offset any damage
finally awarded under a proceeding initiated under this Section 14.3 against
payments due under this Agreement, subject to any other decision of the
arbitrators.

 

 30

 

 

(c)       Except to the extent necessary to confirm an award or as may be
required by law, neither a Party nor an arbitrator may disclose the existence,
content, or results of an arbitration without the prior written consent of the
other Party. In no event shall an arbitration be initiated after the date when
commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable statute of limitations
under the laws of the Hong Kong.

 

(d)       Notwithstanding the foregoing, neither Party shall be prevented from
seeking injunctive relief from a court of competent jurisdiction including but
not limited to the situation contemplated in Section 12.5 (to prevent or curtail
any breach of the obligations relating to Confidential Information as set forth
in Article 12).

 

Article 15

Miscellaneous

 

15.1       Entire Agreement; Amendment. This Agreement, including the exhibits
hereto, sets forth the complete, final and exclusive agreement and all the
covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto with respect to the subject matter
hereof and supersedes, as of the Effective Date, all prior agreements and
understandings between the Parties with respect to the subject matter hereof.
There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the Parties other
than as are set forth herein and therein. No subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the Parties unless
reduced to writing and signed by an authorized officer of each Party.

 

15.2       Force Majeure. A Party shall be excused from the performance of its
obligations under this Agreement to the extent that such performance is
prevented by force majeure and the non-performing Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the non-performing Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the reasonable control
of the non-performing Party, including an act of God or terrorism, involuntary
compliance with any regulation, law or order of any government, war, civil
commotion, epidemic, failure or default of public utilities or common carriers,
destruction of production facilities or materials by fire, earthquake, storm or
like catastrophe. Notwithstanding the foregoing, a Party shall not be excused
from making payments owed hereunder because of a force majeure affecting such
Party. If a force majeure event persists for more than 90 days, then the Parties
will discuss in good faith the modification of the Parties’ obligations under
this Agreement in order to mitigate the delays caused by such force majeure.

 

15.3       Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement, and
shall be addressed to the appropriate Party at the address specified below or
such other address as may be specified by such Party in writing in accordance
with this Section 15.3, and shall be deemed to have been sufficiently given for
all purposes when received, if in writing and personally delivered, one (1) day
following facsimile or email transmission (receipt verified) or two (2) days
following overnight express courier service (signature required), prepaid, to
the Party for which such notice is intended, at the address set forth for such
Party below.

 

If to Oramed:        Oramed Ltd.

  2/4 Hi-Tech Village

  PO Box 39098

  Jerusalem, 91390, Israel

  Attention: Chief Executive Officer

  With a copy to: Chief Financial Officer

  Fax: +972 (2) 566-0004

  Email: yifat@oramed.com

 

 31

 

 

With copies to (which shall not constitute notice):

 

  Yigal Arnon & Co., Law Offices

  22 Rivlin Street

  Jerusalem, Israel

  Attention: Daniel Green, Adv.

  Fax:       +972-2-623-9236

  Email:    danielg@arnon.co.il

 

If to HTIT:                                  Hefei Tianhui Incubator of
Technologies Co., Ltd.

  No. 199 Fanhua Road, Heifei, Anhui, China

  Attention: Ms. Coco Lee

  Fax:       +86-551-6384-9089

  Email:    lixiaopeng@htbt.com.cn

 

With copies to (which shall not constitute notice):

 

  Grandall Law Firm

  23-25F, No. 968 Beijing West Road, Shanghai, China

  Attention: Mr. Simon Fang

  Fax:       +8621-52433323

  Email:    simonfang@grandall.com.cn

 

15.4       No Strict Construction; Headings. This Agreement has been prepared
jointly and shall not be strictly construed against any Party. Ambiguities, if
any, in this Agreement shall not be construed against any Party, irrespective of
which Party may be deemed to have authored the ambiguous provision. The headings
of each Article and Section in this Agreement have been inserted for convenience
of reference only and are not intended to limit or expand on the meaning of the
language contained in the particular Article or Section.

 

15.5       Assignment. Licensee may not assign or transfer this Agreement, in
whole or in part, including by way of change of control, without the prior
written consent of Oramed. Any permitted assignee shall, in writing to Oramed,
expressly agree to be bound by the terms of this Agreement. Oramed may not
assign or transfer its rights or obligations under this Agreement without the
prior written consent of Licensee. Notwithstanding the foregoing, Oramed may
without the consent of Licensee assign all of its rights and obligations
hereunder to any of its Affiliates or to any purchaser of all or substantially
all of its assets, or to any successor corporation resulting from any merger or
consolidation of such party with or into such corporation; provided, however,
that if Oramed executes the Premas Agreement or Swisscap Agreement within 10
months of the Effective Date then Oramed shall notwithstanding any such
assignment retain all of its obligations under this Agreement towards Licensee
until the date that Licensee succeeds in manufacturing three consecutive batches
of the Agreed Batch Size of substantially similar quality and content. Any
permitted assignee shall, in writing to Oramed and HTIT, expressly agree to be
bound by the terms of this Agreement. Assignments in violation of this provision
shall be void.

 

 32

 

 

15.6       Performance by Affiliates. Each Party may discharge any obligations
and exercise any right hereunder through any of its Affiliates, and when any
such Affiliate is discharging such obligations or exercising such right, the
terms and conditions of this Agreement applicable to such Party also shall be
applicable to such Affiliate; provided, however, that prior to HTIT engaging any
of its Affiliates to so discharge HTIT’s obligations and/or exercise any of
HTIT’s rights as aforesaid, as the case may be, HTIT shall obtain Oramed’s prior
written consent to such engagement. Each Party hereby guarantees the performance
by its Affiliates of such Party’s obligations and/or exercise of such Party’s
rights under this Agreement, and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance. Any breach by
a Party’s Affiliate of any of such Party’s obligations and/or exercise of such
Party’s rights under this Agreement shall be deemed a breach by such Party, and
the other Party may proceed directly against such Party without any obligation
to first proceed against such Party’s Affiliate.

 

15.7       Further Actions. Both Parties agree to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

 

15.8       Severability. If any one or more of the provisions of this Agreement
is held to be invalid or unenforceable by any court of competent jurisdiction
from which no appeal can be or is taken, the provision shall be considered
severed from this Agreement and shall not serve to invalidate any remaining
provisions hereof. The Parties shall make a good faith effort to replace any
invalid or unenforceable provision with a valid and enforceable one such that
the objectives contemplated by the Parties when entering this Agreement may be
realized.

 

15.9       No Waiver. Any delay in enforcing a Party’s rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party’s rights to the future enforcement of its
rights under this Agreement, except with respect to an express written and
signed waiver relating to a particular matter for a particular period of time.

 

15.10     Independent Contractors. Each Party shall act solely as an independent
contractor, and nothing in this Agreement shall be construed to give either
Party the power or authority to act for, bind, or commit the other Party in any
way. Nothing herein shall be construed to create the relationship of partners,
principal and agent, or joint-venture partners between the Parties.

 

15.11     No Third Party Beneficiaries. Except for rights and obligations
specifically referred to herein that apply to Affiliates, sublicenses or
licensees of the Parties, nothing in this Agreement is intended to confer on any
Person other than Oramed or Licensee any rights or obligations under this
Agreement, and there are no intended Third Party beneficiaries to this
Agreement.

 

15.12     English Language. This Agreement was prepared in the English language,
which language shall govern the interpretation of, and any dispute regarding,
the terms of this Agreement. To the extent this Agreement requires a Party to
provide to the other Party Information, correspondence, notice or other
documentation, such Party shall provide such Information, correspondence, notice
or other documentation in the English language.

 

15.13     Governing Law. This Agreement and all disputes arising out of or
related to this Agreement or any breach hereof shall be governed by and
construed under the Laws of Hong Kong without giving effect to any choice of law
principles that would require the application of the laws of a different state.
The applicability of the United Nations Convention on Contracts for the
International Sale of Goods of 1980 is hereby expressly excluded.

 

 33

 

 

15.14       Construction. Except where expressly stated otherwise in this
Agreement, the following rules of interpretation apply to this Agreement: (a)
“include,” “includes” and “including” are not limiting and shall be deemed to be
followed by “without limitation”; (b) definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms; (c)
references to an agreement, statute or instrument mean such agreement, statute
or instrument as from time to time amended, modified or supplemented; (d)
references to a Person are also to its permitted successors and assigns; (e) the
plain meaning of the description for a defined term, and other headings to this
Agreement are for convenience only, and shall have no force or effect in
construing or interpreting any of the provisions of this Agreement or any other
legal effect; (f) references to “Parties”, “Article”, “Section”, “Exhibit” or
“Schedule” refer to the Parties to, an Article or Section of, or any Exhibit or
Schedule to, this Agreement, unless otherwise indicated; (g) the word “will”
shall be construed to have the same meaning and effect as the word “shall” and
vice versa; (h) the word “or” has, except where otherwise indicated or where the
context otherwise requires, the inclusive meaning represented by the phrase
“and/or”; and (i) references to dollars are references to U.S. Dollars.

 

15.15       Counterparts. This Agreement may be executed in one or more
counterparts by original or facsimile signature, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.

 

15.16       Exhibits. The following exhibits, attached hereto, form an integral
part hereof:

 

  Exhibit A: Description of ORMD-0801   Exhibit B: Oramed Patents and Oramed
Know-How   Exhibit C: Pre-Commercialization Plan   Exhibit D: Milestones  
Exhibit E: Oramed Banking Information   Exhibit F1: License Payment Schedule  
Exhibit F2: Premas Agreement Payment Schedule   Exhibit F3: Swisscaps Agreement
Payment Schedule   Exhibit G General Requirement and Document List

 

[Remainder of page left intentionally blank. Signature page follows
immediately.]

 

 34

 

 

[Signature page to License Agreement]

 

In Witness Whereof, the Parties have executed this Agreement in duplicate
originals by their duly authorized officers as of the Execution Date.

 

Oramed Ltd.   Hefei Tianhui Incubator of Technologies Co., Ltd.          

By:

/s/ Nadav Kidron  

By:

/s/ Gao Xiao Ming

Name:

Nadav Kidron  

Name:

Gao Xiao Ming

Title: Chief Executive Officer   Title: Chairman           Oramed
Pharmaceuticals Inc.              

By:

/s/ Nadav Kidron      

Name:

Nadav Kidron       Title: Chief Executive Officer      

 

 35

 

 

Exhibit A

 

Description of ORMD-0801

 

ORMD-0801 is Oramed’s proprietary insulin capsule. The capsule is made up of the
following components:

 

-           [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

 

-           [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

 

-          [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

 

-           [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

 

 36

 

 

Exhibit B

 

Oramed Patents and Oramed Know-How

 

PATENTS

●Methods and Compositions for Oral Administration of Proteins

 

oPatent #: ZL20098011 (China) oGrant Date: 10-July-2013 oPriority: 61/064,779

 

●Methods and Compositions for Oral Administration of Proteins

 

oApplication #: 200680041231.00 (China) oFiling Date: 4-May-2008 oPriority:
60/713,716

 

●Protease Inhibitor-Containing Compositions, Compositions Comprising Same, And
Methods For Producing And Using Same

 

oApplication #: 201380018355.7 (China) oFiling Date: 31-Jan-2013

 

For the avoidance of doubt the license granted to use this last patent is only
granted for the purposes of the Pre-Commercialization and Commercialization of
the Product, and not for the purpose of manufacturing, using or selling any
other products or any compounds or materials not used in the manufacture, use or
sale of the Product.

 

ORAMED KNOW-HOW

 

Oramed “Know How” related to ORMD-0801 consists of:

 

-Manufacturing/Formulation know-how (“Cookbook”) -Know-how and capabilities for
in vitro/animal testing -Analytical capabilities and methods

 

 37

 

 

Exhibit C

 

Pre-Commercialization Plan

 

[THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

  

 38

 

 

Exhibit D

 

Milestones

  

   Milestone  Timeframe Pre-Commercialization Milestones 1  First patient in
first CT2 clinical study as defined in the Pre-Commercialization Plan (Exhibit
C) involving the administration of the Product in the Licensee Territory 
November 2018 2  First patient in first CT3 clinical study as defined in the
Pre-Commercialization Plan (Exhibit C) involving the administration of the
Product in the Licensee Territory  August 2021 3  Receipt of CFDA marketing
approval for a Product in the Licensee Territory  August 2023 Commercialization
Milestones 4  First Commercial Sale of a Product in the Licensee Territory 
February 2024

 

 39

 

 

Exhibit E

 

Oramed Banking Information

 

Oramed Ltd.

Bank Name: BankHapoalim, Israel
Branch address: 1 Hamrape St., Jerusalem, Israel.

Branch Number: 436

Swift: [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

IBAN:[THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

Account Title/Beneficiary: Oramed Ltd.

Account Number: [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION]

 

 40

 

 

Exhibit F1

 

Payment Schedule

 

1 USD 3,000,000 To be paid to Oramed Ltd. upon the execution of the Technology
License Agreement. 2 USD 6,500,000 [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY
WITH THE COMMISSION] 3 USD 3,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED
SEPARATELY WITH THE COMMISSION]

 

 41

 

 

Exhibit F2: Subsequent Payments

 

Upon the Satisfaction of Milestones for the Premas Agreement

 

1 USD 4,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION] 2 USD 2,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY
WITH THE COMMISSION] 3 USD 2,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED
SEPARATELY WITH THE COMMISSION]

  

 42

 

 

Exhibit F3: Subsequent Payments

 

Upon the Satisfaction of Milestones for the Swisscaps Agreement

 

1 USD 4,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION] 2 USD 2,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY
WITH THE COMMISSION] 3 USD 8,000,000 [THE CONFIDENTIAL PORTION HAS BEEN SO
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED
SEPARATELY WITH THE COMMISSION] 4 USD 2,000,000 [THE CONFIDENTIAL PORTION HAS
BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN
FILED SEPARATELY WITH THE COMMISSION] 5 USD 1,000,000 [THE CONFIDENTIAL PORTION
HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS
BEEN FILED SEPARATELY WITH THE COMMISSION]

 

 43

 

 

Exhibit G

 

General Requirement and Document List

 

[THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

 

 

44